Simply put, intense desire to own reduces the price substantially. Yet, as we all know, even if some prospects ardently desire what you’re offering, you will still hear objections such as, “it costs too much.” For some people, wearing down a salesperson is a sport and to negotiate is a way of life. And, of course, it is a method to offer reassurance to themselves that they are receiving the best value available.

One of the greatest responses to “it costs too much” is to ask, “how far apart are we?” or “how much is too much?” Simple questions such as these will determine what they think your product should cost.

When you know what they are willing to pay versus your actual cost, you are in a position to overcome the objection. Also, given the objection “it costs too much,” you can ask, “in comparison to what?” Again, if it’s a price objection to other availabilities, it is then a matter of presenting the benefits of differentiation over the competition.

Posted In: New Home Sales

Tags: cost, negotiation, New Home Sales Training, price

Most consumers and even many sales professionals may not understand the real urgency of moving now before the interest rates move. However, using the example of rates increasing by merely one percentage point, I’ll illustrate why this is so incredibly important.

Suppose a home is priced at $325,000. Naturally, the customers we consult with and the salespeople we educate represent homes across America that may have prices as low as $150,000 or as high as in the millions of dollars. But we’ll take the median $325,000 purely for example purposes.

Now, keep in mind the difference between cost and price. The price is a one-time event, while the interest rate represents a 30-year on-going cost.

Home Price: $325,000 Home Price: $325,000
Fixed Interest: 7% Fixed Interest: 8%
Terms: 30 years Terms: 30 years
Monthly payment: $2,162 Monthly payment: $2385

Note the difference in payment. A mere 1% increase in interest rates probably seems reasonably small at only $223 per month. However, an increase in the monthly payment over 30 years amounts to a massive increase of $80,280!

Now, using this example, memorize and internalize the following sales dialogue. Use it to convey the urgency that waiting will only cost more money, and that it’s totally to the buyer’s benefit "to move now before interest rates move."

Prospect: "We need to think it over (or) sell our home (or) wait (that is, stall) for whatever reason."

Super-Achiever: "Ms. or Mr. Prospect, may I explain the benefit of moving now, rather than waiting?

Prospect: "OK, sure."

Super-Achiever: "The challenge with waiting involves several factors. First, if you are not aware, interest rates went as low as they could and now have been steadily and consistently rising. As a matter of fact, rising rates are simply inevitable. With this in mind, let me show you how rising interest rates can affect you."

"When acquiring a home, always consider the relationship between cost and price. The price of the home is only $325,000 and is, of course, a one-time consideration and a fixed amount. However, cost is an on-going expense and can dramatically affect the final value of a home. A mere 1% increase in interest rates represents an additional $223 per month or $80,280 over the entire term of a 30-year loan. When you analyze the situation, it’s as if you can say the price of a $325,000 home will now cost $405,280 if interest rates rise by merely another percentage point. So, Ms. or Mr. Prospect, I strongly suggest you consider moving now before the rates move. Does that make sense to you?"

Prospect: "Well, yes, when you put it that way, I guess it makes perfect sense."

With this information and compelling selling strategy, you should be able to make sales opportunities from any move the market and the economy may make. But, of course, the best information won’t benefit you unless you actively put it into application.

Keep Selling,

MYERS

Posted In: New Home Sales Training

Tags: , cost, interest rates, New Home Sales Training, price