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Vendor Management

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Bill Kington, Making Sales in a Tough Market

Starting up a new real estate agency in the middle of the Global Financial Crisis (GFC) was a gamble, but one Bill Kington and Stephen Cromarty were willing to take when they launched Love Realty in Newcastle, NSW, in 2007.

The GFC, interest rate fluctuations and media reports about the real estate market dropping have produced a market where buyers are willing to wait around for a bargain. These buyers need to be inspired to move forward with a sale, instead of sitting on their hands waiting for the market to drop further.

Moving Buyers to Commit

Mr Kington said he asked buyers like this a series of questions to get them thinking. “I ask ‘Where will the market be in five years? Is the population increasing or decreasing, have we got a housing shortage or abundance? Are rents going up or down?” After giving buyers time to process the answers to these questions, he follows up by explaining the market is going to change and they need to act now. Still resistant buyers are then asked how they know the market is still dropping and when it will rise again?

Using the Law to Your Advantage

Love Realty is based in NSW, where legislation stipulates all property offers must be put in writing. Mr Kington uses this legality to his benefit by asking buyers to put offers in writing and then resubmit if rejected. This game of chip and chase doesn’t stop at the vendor’s first “no”, but the agent keeps chipping away until suddenly the vendor realises maybe this figure is the best they will be offered. The added benefit of this technique is the relationship an agent can build with the buyer. By asking the buyer to resubmit their offer several times, it shows the agent is considering their needs, Mr Kington explained.

Key Words in Buyer Management

Use open questions when talking to buyers to direct the conversation towards negotiation. “You’ve always got to ask the buyer what else they’ve looked at, and why didn’t they buy it,” Mr Kington said. The common answer is they did try to buy the property, but someone else came in with a higher offer. This is the agent’s opportunity to explain this scenario will happen again if they don’t act.

Another similar method is the Transparency Technique, where the agent calls all the buyers in front of the owner and lets them know what the other buyers are saying. It can be a powerful tool, showing the vendor and buyers there is a party/s who wants to buy and someone who wants to sell.

Getting Down to the Nitty Gritty

When it comes down to final negotiations with buyers, it can sometimes pay to raise their hackles a bit. Mr Kington asks buyers if the offer is their final price, and if they would pay anymore - even $500, $1000, or $5000 - to secure the property. His clincher is: “You’re OK with me not getting back to you if I find a better offer?” He explains, “What if someone came in straight away and wanted to sign a contract? The owner’s happy, the buyer’s happy – where do you fit into that equation?” This technique tends to get a rise from the buyer and pushes them to the edge of their price range. “We’ve got to understand when a little bit of anger comes out from the buyer you know you’re getting to the end of their game.”

Top 5 Vendor Tools

1. Property Enquiries

Keep a copy of last week’s paper with the number of enquiries for each property. Mark 0, 1, 2 or however many enquiries received on each listing. This technique gives the agent an opportunity to discuss price as a blockage after the owner sees a number of these sheets, particularly when other properties of similar price, or lower price, are receiving enquiries.

2. Marketplace Reports from Complete Data

This one-page report shows the number of Internet inspections, how many ads the vendor has and the agent’s opinion of value, which Mr Kington advises to fill in as per the vendor slips. For example for a property listed by Love Realty for $380,000, Mr Kington put a range of $360,000-$370,000 in the opinion field.

(You can download a copy of the report from the Hot Topics website).

3. Internet Hits and Face-to-Face Meetings

Using the Marketplace Report, Mr Kington adds Love Realty’s Internet hits to the inspections figure, along with hits from and websites on the back, which can quickly add up to hundreds. “It really grinds the point home that it’s a lot of activity,” he said.

Every Monday Mr Kington goes through his vendor list and grades them into A, B and C. “The A’s we want to see every 2-3 weeks, the B’s probably almost as often and the C’s hardly ever.” C-grade vendors receive communication from the agency, but are waiting to come up the ranks before they receive face-to-face attention.

4. Sales from Past 18 Months

Include all properties sold in the previous 18 months with a testimonial or case study, the last advertised price, what the property sold for and the time it spent on the market. Using group intelligence snapshots and this data helps agents work with vendors to bring their asking price and acceptance price closer together.

5. Stock Sheet

This is a printed list of all the vendors an agency is currently looking after. Scan between appointments or in the car to see who to call. “It might be just a quick chat, because one out of every 10 contacts equals a price reduction. You’ve got to put the effort in. If they felt your work, they’ll give you a chance,” Mr Kington explained.

Winning Sentences for Vendors

All agents have sentences they often use with vendors and here is Mr Kington’s list of winning words:

  • “Guys this is the buyer we’ve been waiting for.”
  • “I have a duty to tell you it might get lower.”
  • “What are we going to do with the money here? You’ve got $480,000 and we’re going to put it on the kitchen table and look at it, or are we going to do something with it. What are you going to do with it, just remind me again?”
  • “I know you’d think it was ridiculous if I said let’s put the property on the market for half the price, but it’s just as ridiculous to say there are no buyers around, because if it was half the price there would be plenty of buyers around.
  • So let’s work out where between half price and where we are now we’ve got buyers.”
  • “Why don’t we take this offer as insurance while we look for someone else?”

If an agent has used every technique they have in their armoury and the owner is still resisting accepting a good offer, Mr Kington suggests sending “The Everything Letter”. “When they’ve got an offer and you just know they should be taking it. If they don’t sell it there’s just disaster ahead for them and you’re lying awake thinking of all the reasons they should be selling it?” he explained “Well get up and write them all down and put it in a big, long letter. Think of everything you can, hit them with it and then shut up.

“If the answer is still no the next logical question is, ‘Do you really want to sell?’” Mr Kington said. “If the vendor agrees their agent is competent enough to sell the property, the next question is, ‘Do you think I’m competent enough to nominate the price that’s going to get you sold?’ and state the viable price.” These techniques have proved to be a winning formula for Bill Kington in his 20- year career. Take some tips from this successful agent and secure more listings, more sales and quicker deals.

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Bill Kington, Making Sales in a Tough Market