Buxton Mentone director Mathew Cox says there’s a simple way to separate good agents from bad – good agents convince their clients to take out vendor-paid advertising while the lesser agents do not.
Mr Cox, who placed 50th on the Top 100 Agents ranking, says the key to selling the merits of VPA is to persuade vendors it’s not an expense but a way to generate extra profits.
That’s why he uses the words “invest” and “investment” during the listing presentation.
He finds that the best time to raise the issue is at the end of the presentation, once clients have decided to engage his services.
At that point, he says, they’re more receptive to his advice.
The most common objection Mr Cox receives is when vendors claim they only need to invest in online marketing because they found their home on the internet. Here’s how he replies:
“Unfortunately, the sort of people you can sometimes attract via internet-only advertising will be people who will be armed with a lot of information and probably aren’t the buyers who will pay over the top or record prices. They tend to be buyers who say they will pay X and won’t go a cent more based on this sale and that sale. So they’re probably not the buyers we want buying your home.
“We want to attract the people who will get emotionally connected; often that happens through pretty pictures, and pretty pictures are found in magazines and local papers. I’m a strong advocate of those mediums. Pushing into sister suburbs that are 10 or 15 kilometres away is a really important part of my process.’”
Get inside their heads
While Mr Cox likes to discuss VPA at the end of a listing presentation, real estate trainer Josh Phegan believes it’s better to raise the issue about halfway through.
His approach is to begin by discussing the vendor's needs and what they’re looking for in an agent, and to then discuss VPA during the marketing section of the presentation.
Mr Phegan says one of his strategies is to give the client three marketing options – large, medium or small.
“I don’t use any other language, because people understand large, medium and small, and I present large first, because people anchor off what they hear first,” he says.
“If I present the small one first, then the large one is going to seem really expensive, but if I present the large one first, it’s going to make the small one seem very cheap, which creates a note of caution and makes people wonder why it’s so cheap.”
Mr Phegan says agents should also be strategic about how they present the information on paper.
He doesn’t like to use decimal points in the paperwork – $3,500 seems cheaper than $3,500.00 because there are fewer digits.
He also doesn’t think agents should itemise all the different costs – unless asked – because that gives vendors the chance to nitpick.
Don’t wing it
Mr Phegan says case studies are a good way to highlight the benefits of advertising – a point echoed by another real estate trainer, Tom Panos.
Mr Panos says the way to convince clients to invest in high-quality marketing is to prove that they will get a return on investment – that by spending $10,000 now, they will yield an extra $50,000 or $100,000 later. The way to do that, he adds, is to tell stories about previous listings where vendors finished with more money in their pocket because they didn’t skimp on VPA.
As part of the process, agents need to be able to show how specific buyers responded to specific forms of advertising.
“So you’re clearly showing evidence-based case studies – had you not used that media you would not have had those buyers, and had you not have had those buyers you would not have achieved that price,” Mr Panos says.
“You can’t just wing it and say, ‘I think you should do this’. I think you’ve got to say, ‘This is what you need to do. Here are the reasons why, don’t take my word for it – let’s look at the data of some properties we’ve sold recently and work out where the buyers came from.’”
Mr Panos has some dialogues he advises agents to use during listing presentations:
“Mr and Mrs Vendor, we refuse to mis-market your home and apologise later. We wouldn’t do that to you.”
“Mr and Mrs Vendor, I’ve seen lots of owners lose $50,000 or $60,000 at the time of sale because they tried to save a few thousand dollars at the time of marketing. Let me show you how to avoid that mistake.”
“Mr and Mrs Vendor, do you want me to present you with a marketing program that’s going to get you top dollar or do you want me to present you with a marketing program that’s just going to make you happy because it’s cheap? I can give you either.”
“Mr and Mrs Vendor, there are four buyers in the marketplace: the passive buyer, the active buyer, the local buyer and the out-of-area buyer. The way we’re going to get top dollar for your home is not selling it to the first buyer but selling it to the best buyer – and the best buyer is going to come when we use 100 per cent of the marketing resources available to us. If we don’t use 100 per cent of the marketing resources available to us, how will we know we’ve achieved 100 per cent of the potential in the value of your home?”