How To Avoid Last Minute Demands
Real estate agents are seeing their deals go up in smoke as the result of last-minute demands, according to ;ref=business" target="_blank">a recent article in the New York Times. Apparently, home buyers are asking for things like major home improvements right at the end of the sales cycle. In the article, Glenn Kelman, CEO of the online broker Redfin was quoted as saying:
"We see buyers who must have learned their moves from the World Wrestling Federation...They think the final smack-down occurs at the inspection, where the seller will be reluctant to refuse any demand because the alternative is putting the house back on the market as damaged goods."Obviously, real estate agents have gotten lazy as the result of decades of easy selling. Now they're reacting with eye-rolling alarm due to the sudden appearance of a tactic that's a day older than God's grandpappy. As any veteran B2B sales rep knows, last minute demands are easy to avoid. Here are the simple rules:
- RULE #1: Price your product appropriately. If your product is overpriced to start with, the customer will naturally expect big discounts. Once you give them the discount, you've set up the pattern of asking for more concessions. Example: "If you check the comparable houses in this area, you'll see we've priced this house to sell. So, no, we're not going to accept an offer of 90% of the asking price."
- RULE #2: Never make a concession without a quid pro quo. If you agree to a lower price than your asking price, make it contingent on some other concession on the part of the buyer. That way the buyer realizes that there's not gonna be any free lunches. Example: "We will agree to a 90 day escrow rather than the 30 days the seller wants, providing you pay 50% of the seller's mortgage for two of those months."
- RULE #3: Always have another buyer in the wings. Make sure that the customer know that if he won't buy at the agreed-upon price, you already have somebody else lined up who will. Don't stop selling until the deal is closed... which when the money changes hands. Example: "Just so you know, we're going to continue to show the house until it's inspected and you've signed off on the entire deal."
- RULE #4: Constantly create uniqueness. A buyer who's willing to throw out a deal because he can't get a last minute concession isn't really convinced that he wants to buy. By continually making the product unique, you make it more difficult for the buyer to walk out. Example: "I just found out that there's a new primary school being built in the next block; that will improve property values in two years."
- RULE #5: Don't be afraid to call the bluff. Much of the time (and even most of the time) last minute demands are only the buyer's way of making sure that he got the best possible deal. In many cases, the buyer secretly wants you to hold firm, because that says the buyer is already getting the best deal. Example: "Uh, no. We're not going to remodel the kitchen for free."