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Vendor Management


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John McGrath, Getting the Price Right

Price negotiations are something many agents try to avoid, but if the relationship is handled well at the beginning, it never needs to be an issue.

McGrath CEO John McGrath said the best piece of advice he ever received was to buy and sell a property of his own so he understood what it was like to be in the buyer’s and seller’s shoes and the level of service that was needed. “It’ll take you five years further down your career because you’ll realise the stresses that a vendor goes through,” he explained.

Technology is not always the answer

While technology has made an enormous different to the real estate industry, it has also meant some agents forget face-to-face contact can be the thing that makes all the difference in any negotiation. “One of the most important pieces of advice I was ever given was to be face-to-face with five qualified customers a day, be they buyers, be they sellers, or a combination of both which is going to be normal for most of us. Nothing can replace the fact of you being eyeball-to-eyeball with a qualified buyer closing the deal in the oldfashioned way,” Mr McGrath said, adding this in-person contact was just as important when dealing with a dissatisfied vendor. “We say to our guys, call them daily, meet them face-to-face weekly, follow that up with a written report,” he said. The daily phone call ensures vendors receive sufficient communication from their agent and the meeting and report consolidates everything that has been said during the week.

Be Consistent

When communicating via email, it is important to keep the same tone as if you were speaking in person. “Send it with some passion, some enthusiasm and the same integrity as though you were having that face-to-face,” Mr McGrath said. Over-delivering on service is a sure-fire way to ensure price conversations run smoothly. Showing vendors you care about them through being honest, attention to detail and being organised will make your relationship. “It’s the care factor; it’s listening; it’s giving a damn; it’s crossing the Ts; it’s attention to detail; it’s following through in your promises. They’re the sorts of things that I think really set you apart. And you’ve got to do them every day,” he said.

Thinking Ahead

Doing the work up front and offering explanations of different scenarios will save time and heartache towards to end of negotiations. These scenarios include the best buyer being the first buyer, what happens if no buyers are interested during the first week and the benefits of having a buyer’s guide in advertising.

“We have an agenda that we take them through with practical, real advice around what we expect, based on our experience. And then once you’re going forward on your communication strategy, it’s just so much easier because you’ve laid that foundation up front,” Mr McGrath explained. This honest attitude can reap the same dividends when offering vendors feedback from buyers. “I ask them for permission to give them the total unadulterated, non sugar-coated feedback that I hear from the buyers because they want to know,” he said, adding nobody had ever said no. At the end of the campaign this feedback is still in the vendor’s mind when it comes to the set to sell meeting. Going outside the personal relationships, there are other means by which you can get the price right. One of these is revisiting the marketing strategy regularly – and being willing to change tack if necessary. “If you’re getting the wrong price guide people or the wrong type of buyer, you might need to change the images or the copy. Often I’ll change the main photograph I’m using in an ad if I’m not getting the people there.”

The Pointy End

There are times when it will come down to that conversation about price adjustment to ensure a sale. Real estate agents know the best prices will be realised in the first 30 days, while vendors may think holding off will net them more money. “They want a sale at the best possible price, we know that. But the best possible price is not always the price they’d like to get,” Mr McGrath said. Many vendors are optimistic about price initially because they have seen the property down the road sell for more, or their neighbours told them what it was worth, so it is up to the agent to manage expectations by offering good quality information consistently to back up their arguments. Not only will this information help with any price negotiations, but it will give the agent credibility. An agent can lead a vendor to a decision only so far. It is not the time to be pushy or forceful, but honest and compassionate. “I always say to people, hey if you don’t want to sell it, that’s totally cool. We can rent it for you. You can wait for 12 months. It’s your property and I’m here trying to serve you, but if you’re asking me what is my recommendation, I’d do business today at this offer because I think it’s a good offer,” he explained. At the end of the process of selling, a real estate agent wants to know the vendor has become one of their “raving fans”. 'No complaints' does not necessarily equal a 'happy vendor'. “Unless someone’s given you a raving testimonial or told you how happy they are, they’re quite probably unhappy with the process or the service or the outcome,” Mr McGrath said. To ensure the glowing testimonial is forthcoming, remember regular, honest communication, backed up by quality information, will make getting the right price easy.

 

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John McGrath