09 May To give a price or not at the presentation
The conversation around price with a potential seller can be the most feared dialogue but Aaron Shiner has a different way of looking at it.
Topic – Exist to list
Mentor – Aaron Shiner
- 2 things every owner wants
- Get it out on the open
- Fear, logic and desire
Kevin: Good morning and welcome to the show. Nice to have your company. I’m Kevin Turner, and today’s show is produced in association with PropertyTree from Rockend, Printforce, LockedOn and View.
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Pre-recoded: More thoughts now from this week’s mentor.
Kevin: Yesterday with our guest mentor, Aaron Shiner, we’re talking about the listing. How to become a great lister, and we talked about the signs to watch out for during the listing presentation, and you talked about the agenda, setting the agenda the day before, Aaron. But yesterday specifically you said, tell me the few things that you want to achieve out of this presentation, or what are the questions that you want answered?
Let’s just spend a little bit of time on that because what if the one of the things they say to you is, Aaron, we want you to tell us what our place is worth? How do you handle that?
Aaron: Yeah, that’s a good question, and, look, there’s typically two things what every owner wants to know, and that is, what’s my house worth? What are you gonna charge me? They’re two of the first questions. But as agents, what we do is we go a really long way around it. They’re typically two of the things that we leave until last. So typically I’ll say, look, there’s three things, what are the three most important things in hiring an agent? What’s most important to you?
Oh, yeah, I wanna know the fee. I wanna know the price, or whatever. I say, fantastic, I’m happy to cover that with you. Is it also okay if we discuss some of the marketing, how we negotiate for you, and how we conduct our opens, because they’re three important things to achieving a great result. And they say, sure. I say, well, look, do you wanna take a seat, and maybe we can go over a few things? It might take 20-30 minutes if that’s okay. And they say, sure.
So now I’ve got permission to not just talk about price or fee, but also talk about some other parts of what’s going on as well, so I’ll always say it like that. If they say, I want to know about fee and prices, I say, sure, love to talk to you about it. Because that is completely different from a lot of other agents. They want to hide it. They want to put it off until the end. But it’s not a dirty secret. I’m quite happy with both my fee and my price. You can’t list with me unless you know what I’m gonna charge.
Just like if I do one on one coaching, or if I’m doing [inaudible 00:02:40] house coaching, or if someone’s subscribing to LockedOn. You can go to the website, you can see what it’s worth, if you wanna know what coaching is, it tells you. It’s the same principle, but for some reason in real estate we’re all so scared to sort of let them know about fee or about price because you don’t want to be shocked, but the reality is consumers have got two feet, and they can walk if they don’t want it.
Kevin: Forgetting fee for a moment, let’s talk about price. It’s a fairly common understanding that most sellers want more than their house is worth. Everyone’s house is their palace, therefore they think it’s the most unique, it’s the most expensive one in the street. So how do you let them down gently at this stage without buying the listing, Aaron?
Aaron: Yeah, okay. Let’s be clear. This just comes down to one of the three primary motivators in any human, and that is desire. Once you know what the three human motivators are, the first one is fear, the second one is logic, and the third one is desire. and when it comes down to it, call it greed, call it desire, call it whatever you like. Typically the way it works people always want what’s best for them. That’s really what you’re coming down to. So when they’re going to sell, they want the absolute most. And when they go to buy, well, obviously they want to save some money and pay the least. And again that just comes down to the human nature component. And I’m cool with that.
So one of the things I’ll always do around pricing is I’ll always have a little idea of what they want before I get there. And be a bit kind of straight out on the phone and say to them, well, what do you want for it? They’re gonna straight up turn around and say, well, you’re the expert, you tell me. And then you’re sort of stuck. But I’ll just ask. Give me a brief description of what it is that your property has. Run me through the features. Oh, it’s three bed, it’s four bed, one car or two. They give me the description. I’ll say, fantastic. We’ve actually sold a couple of properties similar to that over the last couple of months. One of them sold for five. The other one sold for 550. Just so I can do some research, where would you think you are? A little bit above that or a little bit below that? And they might say, oh, well, I reckon we’d be higher. I say, fine, well, why don’t I bring some with a little bit higher price, and why don’t I bring some with a little bit lower price?
And then we can see exactly where it sits for value based on the others. So that’s sort of step one, trying to get pricing by logic. But when I’m actually presenting price, and I’ll always be very frank around price, and I’ll say, I have an opinion of price, and so do you.
We form two opinions, but the reality is this. We’re gonna know if we’re on track or if we’re off track with that price, not based on what I think, or based on what you think, but based on what the market feedback is, and within two weeks there’s only … And I’ve actually got a nice little visual graph. I might be able to give that to you, and you can put that in [REXR 00:05:46], in Real Estate Express Results. I’ve got a visual graph, and it has three outcomes.
And the first outcome is very simple, and it just says, look, if we did no inspections and no offers, which simply means that the market has seen it on the internet, but has chosen not to inspect, and that would typically mean we’re probably 10% over the asking price. So that sort of indicates no inspections and no offers. If we’re getting sort of some inspections, but no offers, typically what that means is people have seen it on the internet, it’s made the top 20 to come and inspect, but it didn’t make the top three, and that typically will mean we’re about 5% over where we need to be. And then the third part of the graph is we’re getting multiple inspections and multiple offers, which means they’ve seen it on the net, it made the top 20 for them to come and inspect. And if we’re getting second inspections and offers it’s also made the top three.
So I’ve got that little visual sort of graph that I can show people and say, so I’ve got an opinion, and you’ve got an opinion, but ultimately the opinion that matters the most is the buyers, and we’re gonna know if we’re on track or off track very, very quickly, not based on what I say, but based on the feedbacks and the actions from the marketplace. And so with price, to discuss or not to discuss, I always will say this. My opinion is just an opinion, and the [inaudible 00:07:05] that I’ll use is I’ll say, if real estate agents were 100% correct 100% of the time, price would never move.
It’s only that when an agent prices a property, then somebody exceeds that expectation, then it sets a benchmark for value in the area, and then that becomes sort of the new standard, and that’s how price goes up and goes down. So I think people are looking at you to deliver a price, and what’s your opinion, but I think you’ve also got to make it very clear that yours is just one opinion, and typically we’ve got to find that buyer who absolutely loves it, falls in love with it, and pays that dream price.
Kevin: Yeah, it’s so obvious to me listening to you there that you’ve got a system, you’re very comfortable with it. You can explain it to the point where the seller then has confidence in you, and you’re virtually taking away the reliance on the price, and saying the most important thing is that we get you to start at a figure that you’re happy with. So well explained, mate. Thank you for that. Because it is one the touchy things, I think, Aaron.
Aaron: It is, and I think the reality is we dance around it as agents. I think let’s just bring it to a head, talk to them about it, because that’s why you’re there. Be authentic, be a straight shooter, and I think it’s really going to help your cause.
Kevin: Absolutely. Aaron Shiner back tomorrow. I want to talk about objections tomorrow when Aaron comes back. We’ll talk to you then, mate. Thank you.
Aaron: Thank you.
Jet : The famous author Stephen King said, get busy living or get dying. I’m Jet Xavier. Have a great day.
Kevin: Thanks, Jet. That’s it for today. Thanks for your company. Look forward to catching up again tomorrow morning.