By asking sellers just one question, you can articulate your value proposition.
What do discount brokers, iBuyers, For Sale by Owners (FSBOs), the Justice Department, most sellers and many sales associates have in common? They subscribe to The Big Myth, which is they believe homes sell for a fixed price. Let’s take a closer look:
- Discount Brokers: We’ve all heard the ads with the soft female voice posing as a recent seller, “I saved $12,000 by selling my home with ABC Discount Brokerage.” Did she sell her house for top dollar? Her greatest expense may be the money she didn’t make.
- FSBOs: FSBOs indicate their No. 1 reason for doing it themselves is to “save the commission.” They assume the house will sell for the same price as with a broker. Big assumption based on The Big Myth.
- The Justice Department: The Justice Department clearly does not understand our business as they work to unwind the MLS system of cooperation to “save the consumers on commissions.” Again, they believe commissions are an expense and brokers offer little, if any, value.
- iBuyers: iBuyers promote speed and convenience but their formulas are built on the myth of a fixed price.
- Sellers: A seller might say, “I think I’ll list with my niece. She just got her license and could use the money.” What is the seller’s thought process? First, there is a fixed price at which my house will sell (The Big Myth). Second, real estate professionals don’t bring any value to the transaction. Their commission is an expense that I either need to reduce (discount) or direct to my niece.
- Sales Associates: How many sales associates freeze up when asked to reduce their commission? Do they really know how to bring value to the transaction?
The Value Clarification Question. Ask the seller this question:
“ Do you believe your home will sell for a fixed price, or do you believe there is a range of value based on the marketing and negotiating skills of your real estate professional?”
In my experience, most sellers will say, “I guess I didn’t think about that. There is probably a range of value.” Of course, there’s a range of value. Homes sell for wholesale (as-is condition) or retail (move-in ready) and everything in between. There is a range. A proper listing launch with maximum exposure can generate more offers and expand the range of value. A skilled negotiator can expand the range of value as well.
After asking the value clarification question, sales associates need to articulate their value proposition. Here’s what it sounds like:
“My job is to help you get the most value as close as possible to the top of the range. There are five ways I do this:
- We’ll walk through your property together, and I’ll show you ways to enhance the value, so you get top dollar for it.
- Next, I’ll help you with a pricing strategy—not pricing it too high so you scare buyers away or too low, so you leave money on the table.
- Our marketing plan is designed to give you maximum exposure, so we attract more buyers and more contracts. The more buyers and contracts you have, the higher your property will sell in the range of value.
- How important do you believe negotiation is in this market? I’ll help you negotiate the best contract.
- Finally, I’m your transaction manager. There are a lot of moving parts in a real estate transaction. My job is to handle those parts, so your contract closes on time with a minimum of uncertainty and surprises.”
It’s time for our industry to explode The Big Myth and start articulating our value proposition. A seller’s greatest expense is the money they don’t make.