I saw a television commercial recently with a young couple and their two children sitting patiently on a bench in front of a house with a "For Sale" sign out front. When the husband asks what they’re waiting for, his wife explains they were told to watch the market and wait for a great deal.

Well, let me tell you, there is no reason to wait. Prices and mortgage rates are at historic lows. Homebuyers can purchase a nicer property at prices that would have been laughed at just five years ago. But still the bargain hunter is hovering, eyeing properties like a predator ready to pounce. And when they strike, it’s with an offer that sellers and agents often consider insulting.

In this market, you don’t have the luxury of such sensitivity. Buyers have been conditioned to negotiate the price for a home — regardless of the listed price and how many times it has been reduced. They don’t care about your costs or shrinking profit margins. Why should they? That’s not their problem. It’s yours. If you want to sell a home in a tough economy, you need to recognize that the recession has created a society of bargain hunters that are feeding on the plight of sellers — whether it’s a home, automobile, or consumer goods. They’re savvier than ever before and can smell panic in a seller. So, you’ve got to be prepared to deal with their carnivorous desire for a rock-bottom price.

When you get a ridiculous offer, rejoice! At least you have an offer. The alternative is no offer at all, which leaves you with no opportunity to negotiate. When you get any offer, the buyer is signaling interest. It’s now up to you to rev up your sales skills and take that offer from ridiculous to acceptable.

Myers

Posted In: New Home Sales Training

I was recently talking with a builder who was incensed by the demands of prospective buyers. "They want me to just throw in a furniture package with the deal," he sputtered.

I listened and empathized with his plight. I’ve heard this same frustration voiced by many builders, developers, and new homes sellers in this market. Buyers want ridiculous discount and absurd freebies in order to close the deal. They’ve been handed a market where the buyer dictates and they are feeling choked by the heightened demands.

Let’s take a look at the situation though. The leak in the housing market started to trickle in the first quarter of 2007. Now, 25 months later, the sellers are scurrying to plug that gaping hole in a market that is flooded with short sales and foreclosures. The media, real estate agents, and mortgage companies are telling these buyers that now is a great time to buy. Have you ever heard them advise buyers that it’s not a good time?

As a result of the economic crunch, buyers are making offers that would have been swatted away like a pesky bug just two years ago. But these buyers, while they may appear vulture-like in their approach, are not fools. They resisted the top-of-market buying frenzy, sat on the sidelines to gauge the action, and are now quite enlightened about the status quo of the buyer’s market. They’re ready to play the buying game like a battle to the death. What you call "absurd", these savvy buyers call "realistic."

My advice to you is to be prepared. Know that these crazy offers will come, and that they arise from hopes but not necessarily expectations. Sharpen your negotiating skills and respond to those offers respectfully—because at least you have an offer to negotiate! Communicate the value of your property and justify the price. Work harder to see where you can cut your margins and where your buyer is willing to bend. A ridiculous offer just means you have to work harder and smarter.

Myers

Posted In: New Home Sales Training, New home sales marketing, Real estate courses