Key 3.1 You should sell the marketing process, not your opinion of the price.
John Duncan MBA BCA Licensed Real Estate Salesperson (REAA 2008)
Determining a vendor’s price expectations is important, and the next step is to get an opportunity to confirm the current buyers’ price expectations for the vendor’s property. We recommend you sell the following process to your vendors:
You provide initial advice on presentation, followed by publishing online with a marketing price set as “by negotiation” together with proactive marketing using your SalesPartner database in the first few days, inviting database buyers to preview the property.
You can illustrate that you have active buyers looking for similar properties in the area with the various buyer requirements (no names) reports from your SalesPartner database. You can illustrate the preview invitation process by sending one to the vendor before or during the listing presentation or by showing printed examples. You should point out to the vendor that other salespeople in your office will also be able to invite their buyers to preview the property and a wide range of feedback could be expected. You should also point out that although you will invite a large number of people you only expect the buyers who are strongly interested or attracted to the property to ask for a preview. This preview process should be followed by a critical meeting with your vendor where you determine together the initial phase of marketing and approve the promotion, first phase pricing, and advertising plan.
The strategy options for the initial phase of marketing include:
- An Auction campaign with two or three open homes followed by an Auction day.
- A Closed Tender or Deadline Sale with two or three open homes.
- A negotiating strategy centered around a price, sale range or POA, with two or three open homes.
Why would you recommend one strategy over another for the initial campaign?
The three keys to this decision are:
- Your vendor’s past experience and desire to contribute to the campaign.
- The level of interest uncovered in the preview and from proactive marketing to your databases.
- Your vendor’s motivation and time-frame.
If the property is not sold after three weeks, second phase marketing is crucial. At the conclusion of the initial phase of marketing, you have either sold, are negotiating, or need to reset the price. You should review the presentation and promotion: it’s hard to change the position, so the key to getting the property “In the market” is to concentrate on price.
The primary objective is to discover the price at which you or your colleagues uncover sufficient interest among buyers to start negotiations and ideally spark multiple offers. It is important to note for the vendor that they don’t have to accept any subsequent offers but that experience demonstrates that offers received relatively early in the marketing cycle from competitive situations are usually the best offers.
After two more open homes, you either have interest you can work with or the review process needs to be repeated. Advertising cash prices is another form of price marketing that has been shown to generate more visits to open homes in the second or third phase of marketing.
This process of regularly scheduled marketing reviews illustrated with CMAs, detailed flyers on competing properties and recent sales will help your vendor stay IN the market and not waste an extensive holding time without determining the price level that would attract interest in their property.
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