Let’s debunk the myth of price resistance.

Myers Barnes price resistance money price tagYour homes are not overpriced. And it’s not true that your buyer can’t afford it. What’s happening here is a misconception when it comes to price, so let’s debunk the myth of price resistance in new home sales.

True or false? The customer is only concerned with getting the lowest price.

If you said “true”, then you must keep reading. If you answered “false”, keep reading anyway so you can better understand the truth of your “false” insight.

If the statement about price were indeed true, all you’d have to do to sell a home is sharpen your pencil and be prepared to drop your price to the point of extinction. 

The truth is that customers must be concerned with more than price. They want value—which is what they consider to be a fair price for the features and quality of the home. Don’t be swayed by their frequent questioning, like, “How much does this house cost per square foot?” and “What’s the best you will do?” This is especially frustrating when you haven’t even had a chance to fully present your neighborhood and homes. 

Herein lies one of those minor details that separates those who reach the top in new home sales from those who sink.

You’ll never escape price resistance as long as you are selling new homes. 

Accept it. No, embrace it, because when your customers address the price, they are interested—interested enough to ask you to justify your home’s value. Seize this open opportunity to actually sell them on the many benefits of buying one of your homes. Rev up the discussion by serving up one benefit after another until they are convinced that the true value of the new home is reflected in the price—or, better yet, exceeds it!

Two points to price resistance

#1. It always costs too much. Almost every prospect will ask the price of the new home and then, when told, flinch at the figure—a negotiation tactic also known as “The Wince”. Buyers are intoxicated with the idea of obtaining a bargain. This goes back to our basic instinct of wanting something for nothing. We feel good when we know we’ve received the best price possible. However, the paradox is that, regardless of how much you quote for the price, the customer’s initial reaction is likely to be, “Unfortunately, that’s really more than we want to pay.” Reminder: They are rarely honest about this point, so don’t accept this statement as truth.

#2: Price is the common denominator. Why does price come up so early in the sales presentation? Because it represents something we all have in common: the concern for money—or, more accurately, the concern for saving money. We all relate to dollars and cents. We want to keep as much as possible, which means spending as little as possible. 

Are you prompting the objection?

Be honest with yourself right now. Are your prospects objecting to the price—or are you? How do you feel about the pricing of your new homes in relation to the value of the neighborhood and the property? If you have an issue here, you’ll likely convey that subliminal message to your customers. They will pick up on your reluctance through your own hesitation and demeanor. 

How can you even begin to overcome their objections when you feel the same way? Before you can effectively sell your new homes and neighborhood, you must be 100 percent convinced of its value. Ask yourself how you feel about the pricing. If you need to be convinced, revisit the property’s amenities and benefits. Listen to the sales pitch of a colleague. Or find another job.

Some salespeople retreat to bargain-chip incentives, reducing the price, going to almost any extreme to get a sale. Any low-level order taker can give away his or her homes, upgrades, and services at a cheaper price. That’s the easy way to make a sale—but a far less profitable one. The Super Achiever knows the true value of his or her homes and can convincingly convey that worth to the buyer.

A sale comes from communicating value. Cutting price communicates a lack of value! You’re admitting that the home is overpriced. 

You have standard features built into the price of your new homes. You should adopt standard features in your sales process as well. Don’t lower prices just to get a sale, especially when that compromise slices through the profitability for your builder and diminishes the brand value of the company. Believe in your product. More importantly, believe in your power as a new home sales professional.

 

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