Neutralizing the Negotiator

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NegotiationThe fine art of negotiation in this economy is indeed a “fine art.” On the one hand we in the housing industry want the sale so badly we are willing to sacrifice a huge amount of profit to get it. On the other hand, buyers know they can deal and if one builder doesn’t crater, the other one will. Often, the buyer sees a new home as a commodity translated “all locations, construction quality, lifestyle, and housing products are the same … therefore, who has the lowest price in the area is the best deal.”

This is totally fallacious thinking as the Pros in the housing industry know too well. Shoddy workmanship and a misconceived plan in a marginal location will not bring the appraisal a well located, masterfully built and appointed home will. The job of the salesperson is to communicate simply … “There is no free lunch. This is the best time to buy a new home in the history of the housing industry. And, don’t compromise with the single biggest purchase you will ever make. Buy the home that’s best for your family. If rates go down a bit, so be it. If rates go up, you win. Or, try a long-term lock if you fear volatility.

Conversely, with the government printing presses running nonstop, where do you think inflation is going? The only difference between inflation and appreciation is ownership. If it appreciates and you own it, you can cash it. To help you fill the negotiation, here are some tips and tools.


  1. Hold the line! You are a true value for true price builder. True price protects your sacred equity.
  2. Don’t give anything away! If you give them one seed, they’ll take the whole lawn.
  3. Add-to-value is better for everyone, not discounting price. Focus on add-to-value.
  4. If you are empowered to counter the offer, make your first pass at list price or a tad below. Not more than 1% or 2%. Then bring in the value addeds to make the “deal.”
  5. In lieu of a discount, try a 2-1 buy down. Look at the numbers. After 5 years, the buy down recipient is ahead or $1,450.00 vs. a discount of $20,000 on a $300,000 home!
  6. Remind the buyer that when real estate appraisers discover there is random discounting in a community, they take the value of the home to the lowest level of the discount.

“Never forget the power of silence;
that massively disconcerting pause
which goes on and on and may at last
induce an opponent to babble
and backtrack nervously.”
~Lance Morrow


What’s Your Face Saying?

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ExpressionsHave you ever stopped and really looked at the people you see at the airport? I travel a lot and get to see all kinds of people; families, singles, young, old, children, professionals, and those who look like they haven’t a care in the world. What I notice is that most people are not only in a hurry, but are in a hurry with a frown on their face. Those who have smiles and a positive look on their face are like beacons in the night. Those are the people I want sitting next to me on the airplane.

What is your face showing to the world., to your customers, and to your fellow employees? I am reminded of Anthony who is the picture of positive mental attitude.

Anthony, a salesperson in the Midwest, was normally number three or four on a large sales staff. His ranking was consistent, not a flash in the pan. I thought nothing of this until I met this master closer and discovered he was legally blind. Imagine the shock of finding out there was a gentleman selling new homes that could only see fuzzy outlines. He had to walk with a stick. Someone had to drive him to work. There was no touring a prospect through the community. He had to rely upon his prowess as a master demonstrator of his models in order to position his product above the competition. During role plays, you would never know he was blind except for his cane and slight uncertainties. Best of all, you wouldn’t know he had a disability due to his positive mental attitude. One time I asked him what made him perform so far above the others. His answer was a classic.

“Mr. Richey, I see my model homes through a different set of eyes. I’ve had to work very hard to learn the floor plans, to know where the furniture is so I wouldn’t look foolish stumbling over it. I had to understand how the home sits on the site. I had to see the colors through the theater of my mind even if I couldn’t see them myself. I don’t believe I’ve used this disability as a crutch in any way. I believe I’ve sold houses through my sheer love of selling and the passion to help people.”

Anthony’s positive mental attitude created opportunities for success that the person with the frown would not have gotten. Check your face today – a frown or a smile?

Referrals are the Name of the Game

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washing_head_in_shower_800_clr_6369Remember the old Heather Locklear commercial where she is promoting a shampoo and says she told two friends who told two friends who told two friends and so on? It was a great ad campaign enlisting word-of-mouth referrals to grab their share of the shampoo market.

Word-of-mouth referrals. That is what you want to build your business. Don’t know about you, but I only give referrals on products I REALLY like.

If your company enjoys a sound reputation for delivering what it promises and that reputation is built on substance and not on sand, referrals and a healthy business climate will follow. You can never compromise on doing what is right. If something or someone in the organization has goofed, make it right with the buyer. Don’t fudge. Word travels fast, especially in small areas or small big cities.

A prominent builder cancelled his heavy advertising campaign. Why? Thirty percent of his sales were referrals from previous buyers and twenty percent was internet-driven. You have a gold mine of leads lying in your own backyard if these customers are well-sold and happy. Be kind to their children. Pat their dogs. Compliment them on their landscaping. Report all gripes to the customer service department. Then, having established yourself as that “nice Mr. Jones who did so much for us,” ask them for names, addresses, and phone numbers of anyone that might be interested in a new home.

Perhaps the most unrequited love in new home marketing today is the referral sale. Builders covet them, court them, but very few can consistently count them as their own. Referrals can and should reflect up to one-third of the building firm’s total volume.

But, there are no referrals without quality delivery. Be definition, quality delivery is the synergy of construction, service, and sales working in concert to deliver a highly satisfied buyer plus the dividend of the referral sale.

To build your referral base:

  1. Contact every relative, friend, prospect, unclosed buyer, unclosed customer, and resident owner you can.
  2. Call people who have been out but not bought. Your company spends a considerable amount of money to promote buyers into the model park. It is important that you make the best use of this traffic by having each prospect fill out a visitor’s sheet before leaving.

Just like any other aspect of your business, referral gathering takes a plan, takes effort, and takes discipline. Make this promise:

I know that I have to ask to get referrals, so I will put myself in the position to ask a minimum of ten times from contract writing to one year after move-in. I will see or call five homeowners each week to solicit referrals.

Referrals are the backbone of the professional new home counsellor. While most building firms realize 8% or less referral sales, the sales pro works to realize one-third or more via favorable word-of-mouth.


Quality + Concern & Kindness = Referrals

Raising Prices Can Increase Sales

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When people don’t know the real value of something, they often use price as a quality indicator. You’ve heard the expression that if it costs too little, then it is valued too little. Counselors in the mental health field will tell that unless an investment is made by the one seeking counseling, then the counselee will not be as engaged in the process. Price does matter.

Yes, we all want a great deal, but if you engage too much in the deal, then the quality of your product disappears. Everyone knows that you get what you pay for. You might have a top quality product, but if it is priced too low, then it will be seen as inferior. I for one am willing to pay more money for better quality.

Therefore, HOLD THE LINE ON YOUR PRICING. You may even want to raise your prices. Prove the added value in your homes. If you prove the value, then there is no need to discount. The key to selling in today’s market is differentiation. The salesperson who gives away profit too early an too often is cheapening your product and doing a grave disservice to the company.

You must stem the tide of discounting and deal mongering by training how to sell the base of value and lifestyle, then the focus changes from seeking a deal to the emotional experience. Here are a few methods to neutralize negotiation and appeal to the emotions.

  1. Adding value is better than cutting price. Builders who sell with promotions that add value can persuade buyers to purchase from them because the residual value is higher than the competition’s.
  2. What would you like for us to take out? Once buyers see the value of those extra dollars and what they bring to the home, they are not going to want you to take it out just in order to meet their price demands.
  3. We are a true-value-for-true-price builder. We don’t mark our homes up just so we can mark them down. Sell yhour builder’s integrity and your home’s quality.
  4. The ‘deal’ is in the price. Let them know that your builder has factored into the published price all the deal and discounts just to provide a hassle-free home buying experience.
  5. Let’s look at the four types of housing products: 1) highest price and highest product; 2) higher price, lower product; 3) lower price, higher product; and 4) lowest price, lowest product. Since we are in the highest price, highest product category, we simply can’t go to a lower price. We refuse to build a home in the lowest price and lowest product category. We believe in quality.

So, vow now that you are not going to give in to the call to discount your product. It is only when bulders refuse to discount and sales people sell value that housing will truly be on the road to greatness again.

“Anything that just costs money is cheap.” ~John Steinbeck

Your Philosophy of Selling

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Sold houseA great book to add to your library is Jeffrey Gittomer’s The Little Red Book of Selling. It is a little book that gives short and sweet answers to many questions sales people have about selling. I love his philosophy of selling – because it mirrors my own! – that the best selling has nothing to do with high pressure or manipulation but everything to do with understanding the buying motives of the consumer.

The only way you will ever be able to understand your buyer is to ask questions and more questions and more questions. The more you find out about your buyers, the easier it will be to sell them the home they really want to buy.

Think a moment, on average, how many questions do you ask in a typical sales presentation? Try to keep a rolling tally of the questions you ask. At the end of the presentation, ask yourself if you discovered everything you needed to know about your prospects: buyer characteristics, timeline, hidden move motives such as family or health, financial capability, downpayment monies or cash, pre-qualified for mortgage, size and floor plan preference, schools, community desires, distance to work. Chances are, at the end of your evaluation, you will find that you could have used more questioning. Always ask more questions.

Remember the rule: Ask more questions than information you give out. Make it a 2 for 1 rule – I will ask two questions for every one piece of information I give out. Watch and see if your closing doesn’t improve.

Questions are the sales professionals best friend. You will earn more money for asking the right questions than for knowing the right answers. Intelligent questions allow you to:

  1. Identify clearly the type of prospect with which you are dealing.
  2. Qualify early in the selling process the “go” or “no go” profile which can be an efficient time saver.
  3. Understand the buyer’s current situation such as agenda, hot button interests, and buying stage.
  4. Establish the necessary rapport or comfort level, that is vital for effective communication.
  5. Determine the decision making process and who is instrumental in its processes.
  6. Uncover significant shortfalls or strong suits between you and the competition.
  7. Reinforce credibility and breed confidence by demonstrating a concern for the prospects’ well being.
  8. Encourage a rock solid information flow based on plain and honest dealings.

“Successful people ask better questions, and as a result, they get better answers.” ~Tony Robbins

“Judge a man by his questions rather than his answers.” ~Voltaire

Odd Things Happen!

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Green Rat SnakeOdd things happen! It seems a snake crawled into a transformer and somehow caused power to be cut to 10,000 homes. How do you prevent something like that from happening? Obviously no one even thought about protecting the power station from a snake.

Odd things happen in sales too. The contract is set to be written at 2 p.m. That morning, the couple happen to meet a competing salesperson at the store who convinces them to see her homes. Yep, that sure sale just faded away. This is only good if YOU happened to be the salesperson in the store. Odd things happen both ways.

How do you take the negative “odd” out of the sales process, at least as much as you can?

  1. First and foremost, make sure you have created a true one-of-a-kind – the one right home on the one right home site with the one right financing terms and the one right timetable. If all the “one rights” are not in place, then it will be very easy for the odd snake to slither in and cut power to your sale.
    And, how do you find the one-of-a-kind? By asking questions, lots and lots of questions. You ask questions about interests, hobbies, family, lifestyle, work, dreams, expectations, housing experience, timing, must-haves, etc. Questions will help you find what kind of home the prospects are searching for. Questions will help you narrow down all the possibilities into that special “one” just for them. Keep asking questions until you get there.
  2. Next, confirm you’ve created the one-of-a-kind by asking, “Can you see yourself living here in this lovely home?” If the answer is “yes,” proceed.
  3. Now, ask the closing question. Don’t let this golden opportunity get away from you. Ask for the order.
  4. All that’s left to do now is write the paperwork and obtain the check.
  5. To add a cherry on top, ask for referrals. Keep asking for referrals several times a year. Most referrals are not given until after move in, so keep asking.

I’ve told the following story before, but I love it. It shows how an “odd” way of looking at things can reap a harvest of benefit.

Buddy was number one on the sales staff and had been three years running. He was six sales ahead of his arch rival, Vern, with just three days left to the end of the year. He was so sure of winning the sales contest, he went on vacation.

Buddy didn’t take into account Vern’s creative determination.

Vern called every possible prospect and told them he was in a “life and death” contest and asked if they would buy from him this year instead of next year.

On New Year’s Eve, Vern’s hard work had created a traffic jam at the project. Prospects were all over the place. Vern’s wife was helping with the paperwork. A young framer was directing traffic. Vern’s friends were providing the holding action, and Vern was madly writing contracts.

Vern ended that night with ten solid contracts. That’s four more than Buddy. Imagine Buddy’s surprise when he returned from his vacation ready to deposit the $10,000 cash prize into his bank account only to find the money was already in Vern’s account.

Well, here’s the point of the story: leave an opening in your sales process, and sure enough, a little snake can slither in and create a black out. Oops, there goes your sale! All the best laid plans cannot bring it back!

Be a Visonary!

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Thoughtful businessmanVi-sion-ar-y – noun: a person of unusually keen foresight

A paper published by Duke University in 2006 finds that more than 40% of all the actions performed by a person in a single day result from habit, not actual decisions. So, as a new home sales professional, more than 40% of your behaviors are habits. Are they good habits? And, is the 60% not controlled by habits marked by creative thinking? It is too easy to let ruts and habits define us to the point that we can no longer think “outside the box.”

Take a minute. Sit down with a sheet of paper. Write across the top … “Ways to double my sales.” What can you do? Be creative!

Some thoughts:

  • Rev up your referrals! Positive Mental Attitude – No matter how tough things are, start the day with a positive note. Say, “Good morning!” not, “Good grief, it’s morning!”
  • Make others feel good. You are a sales professional. Make everyone you meet every day of your life feel just a wee bit better for meeting you. Find something positive to sell and sell it to everyone even if it is only a smile!
  • People like to buy from people they like! Be happy. Smile. Court enthusiasm. Take action. Embrace pro-fit-uation (proactive selling where the pro fits the right situation to the right prospect at the right time).
  • Maximize your time touring prospects. You can’t sell air, so double your time face-to-face selling. Stay open later. With daylight savings time, promote after supper visits. Service your customers and they will refer to you.
  • Think outside the “batting cage.” Look for new ways to attract buyers to your store. I once owned a baseball batting cage business. When the machines were operating at full capacity, the revenue was stagnant until I constructed pitching mounds as a traffic holding action. The customers paid as much to pitch the balls at the targets to win a free round of batting as the actual round itself!

“Doubling sales is the master closer’s rite of passage.”

An article in Forbes remarked that sales is about building rapport, not breaking it. One of the surest ways to break a sale is to try to “sell” to the customer. No one wants to be “sold.” It smacks of high pressure. Instead, we need to educate our prospects: “Whether you buy from me or someone else, there is information you need to know to make an informed decision.” If your marketing is based on educating the customer, it will attract buyers before they even know they are in the market to buy. How many “just looking” prospects ended up buying because of the education they received about new homes?

So, one of the best way to “think outside the box” is to figure out ways to educate your prospects about what to look for in a new home. Offer a free class on the “7 Things to Look For When Buying a New Home,” or “5 Shortcuts Some Builders Take Which You Want to Avoid.” And of course, one of the surest ways to educate your prospects is to have a top-notch differential demonstration about your product.

You can double your sales, even in tough markets, by some creative thinking.

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