"Deal Or No Deal"

As Charles Dickens famously said at the beginning of The Tale of Two Cities, "It was the best of times, it was the worse of times."

Sometimes I feel that our economy is like that, there is no doubt that there are some very tough markets where our friends in the New Homes Industry are still suffering, and yet there are others who have been able to adapt, and are beginning to thrive and gain significant market share.

So for those of you who are still going through tough times we truly "feel your pain", as we have been there ourselves many times before. To all of you loyal blog readers we are here to help lift you up and inspire you with our monthly dose of real world training strategies that work in this specific market, and current success stories from around the globe.

First our updated good news.

GOOD NEWS METER

According to major news outlets such as MSNBC:

> Housing construction rose in August, and the number of newly laid of workers seeking aid fell unexpectedly last week, adding to signs that the recession has ended.

> Construction of Multifamily, rose 1.5 to an anual rate of 598,000 units.

> Building permits rose 2.7% in August to an annual rate of 579,000.

> August reflected a 25.3% surge in construction of multi family units.

> Regionally construction rose 23.8% in the Northeast, and 0.9% in the midwest.

> Tough Markets such as Broward County in Florida enjoyed 7% appreciation.

"DEAL OR NO DEAL"

Earlier this year I was blessed to have the opportunity to speak at the International Builders Show in Vegas, with famed presenter Charles Clark III, and the topic was Negotiating. We had a standing room crowd of people from every facet of new homes.

Here is an overview of what I discussed. Please keep in my mind that the Official New Home Specialist Negotiation System (sm) takes at least a day if not longer to teach and is accompanied by lengthy workbooks with rheems of offical planned dialogues and role playing opportunities. The following is an abbreviated excerpt of the program I taught at the IBS 2009 in Las vegas.

ESSENTIAL RULES OF NEGOTIATION

> Why do customers negotiate?

Typically, ego, pride, peer/media pressure, behavioral style, culture, and to save face, but very rarely out of financial need. Once we understand this, we can realize that negotiating is just a game, and it is our job to give the customer the satisfaction of feeling as though they have won the game, yet we make the sale at an amount we can afford to accept.

8 ESSENTIAL RULES

1) CREATE A WIN-WIN

"We will never fear to negotiate, but we will never negotiate out of fear."

President John F. Kennedy

Dr. Covey defines a win-win situation as being good for both sides. The customer needs to perceive that they receive a great value, but we also need to ensure that our companies, are also comfortable with the proposals that we are submitting. If not it would either be a lose-win, or a win-lose, neither of which is good for you or your customer.

2) Confirm Ownership

There is no point in even beginning a serious negotiation until the customer has confirmed that they are actually interested in buying your home. Otherwise you will be simply negotiating against yourself, and the customer will merely "shop" your low price around town. So the next time a customer asks whether you will negotiate, reply with words to the effect:

SALES GENIUS

"So this is a home you would like to own?'

If they say yes, then continue. If they say no, then don't be afraid to put your papers away, and explain that you will be happy to help them when they are committed to going ahead.

3) NEGOTIATE OTHER THAN PRICE

Once you have established that yours is a home that your customer would like to own, than it is important to make a list of the facts that will impact the sale, that way you can learn to negotiate items other than price.

Here is the checklist of items to confirm before you enter into a negotiation:
1) Going ahead today
2) Home (model type)
3) Home site/location
4) Included features
5) Luxury choices
6) Financing or cash
a) If financing, have they been recently approved by a lender.
b) If cash, do they have proof of funds to close.
7) Amount of Initial investment
8) Move in date
9) Home to sell
10) Anyone else involved in the buying decision
11) Anything else we should know about (no surprises)
(Then last but not least, ...drum roll please)
12) Total Investment

Admit it, before reading this blog, you thought negotiation was, all about price. Look at all the other elements of the sale we need to focus on first.

4) GET TO GIVE

Once you have verified all of the elements of the sale, and have received your customers proposal, If you are able to come back with a counter proposal, it is important that you get something back in return to keep the negotiating experience authentic for the customer and to cause them to appreciate that they are really getting an exceptional value.

For example,
i) Take occupancy two weeks sooner,
ii) Increase the initial investment
iii) Get your loan approved today
iv) Remove some of your luxury Choices

I grew up selling brand new homes in South Florida, where it was expected to negotiate; and frequently found that there were many rounds of “FACE TO FACE” counter proposals, and each time I would get something a little extra back from the customer.

5) START HIGH STAY HIGH, (IF YOU HAVE TO, THEN COME DOWN SLOWLY)

I'm not talking about the seventies here, but instead, shock your customer with your first counter proposal by coming down by a ridiculously small amount. Be sincere and kill your customer with kindness, but your first return salvo will be a shock to them and reeducate them that their original offer was blatantly ridiculous.

6) ALWAYS COUNTER WITH AN ODD NUMBER

Never meet a customer half way, as what accounting school would ever advocate that formula for doing business, and if you are in a position to counter than make it an odd number so that your customer will believe that your accounting management team has labored over the specifics to give them the best possible value.

For example if your asking price was $300,000, and let’s say your customer offers, $250,000.

(After confirming that they would like to own your home, and acting shocked, and asking “How they arrived at that number?”, as well as explaining that you don’t take offers, and talking about the Smart Selling technique of Checkerboard pricing.)

If you come back with a counter proposal “in person”, after confirming that they could move in two weeks sooner a counter proposal of $1,2345.58, would be apprropriate.
(Say cheese, smile and kill them with kindness, smother them with your closing love!)

Be prepared for the customer to be shocked at first, maybe even a little angry. But by you coming down by such a small amount their next counter proposal will be much higher, until you eventually arrive at a figure you are all comfortable with.

7) NEVER COMMIT
Even if you believe you have arrived at an amount that you feel is acceptable to your company, since you are dealing with someone who wants to win the game, of negotiation, then turn the tables, and instead of letting them see you sweat, make them sweat a little.

If you agree or commit too soon they will think that you have been playing a game and will go home and develop a huge case of buyers remorse, or worse still keep shopping your price around town.

Instead have an addendum pre-written for anything less than full price that they have to sign that states;

“Purchaser acknowledges that they are making an offer that is (substantially) less than the published price and that this offer may be rejected for any reason whatsoever.”

Then you ask them,

SALES GENIUS
“This is somewhat unusual, and there is a strong possibility that your proposal will not be accepted as written (pause). With that in mind, would you still like me to turn it in?”

Think about what you have accomplished,
a) They will go home and wait on tender hooks to see if they have been able to win and purchase your home for the price they want, as opposed to continuing to shop around.
b) If you can accept their proposal they will feel like they have won.
c) If you can’t accept their proposal and need to meet them in person to present your counter proposal then at least you have conditioned them for that, as opposed to inadvertently misleading them by causing them to believe that their offer was acceptable.
d) Sometimes they will not want to take the risk of losing their home and will ask you to go back to the original acceptable asking price.

This happened to a great salesperson named Piera in South Bend, Indiana who tried this technique, after her customers Realtor insisted that they make an offer twenty thousand less than the original asking rice. Piera had the customer sign the addendum. That night the customer called and said that she couldn't sleep and could she go back to the original price. Yes you can! One little technique, made the sale sand saved the company twenty thousand dollars!

8) NEVER NEGOTIATE OVER THE PHONE

If you CALL your customer back to give them your counter proposal, put yourself in their shoes and ask yourself how they should react. They are at home the kids are screaming, the economy is hurting and their favorite team is losing on the TV, and there you are trying to sell them a home.
Since we agree that Buying is emotion backed by logic, where would the more logical place to present your counter proposal be? Exactly, back in your model.

When they are at their current home and they want you to spill the beans they are focused on one thing and one thing only price. Let’s face it they are not going to live in the price; they are going to live in your brand new home.

So tease them into coming back, by saying:

SALES GENIUS
“I would love to give you that information but it’s a little too complicated,
in order to prevent any misunderstandings we need to meet in person.
Is tomorrow morning at 11:15 good, or the afternoon at 4:45 better?”

For those of you out there thinking what if it’s not complicated, I would venture to say from decades of personal experience that anything communicated electronically, as opposed to in person can and usually will be misunderstood.

So in order for you to keep the experience authentic and to raise their buying temperature back up, when they return grab a clip board and walk them slowly back through the model, and the available home or home site. Act as though you are confirming all of the details, but we know that your will have re-created the emotional urgency necessary for them to now make the buying decision.

Then it is safe to sit down and go through your counter proposal, remembering to confirm all the other facts and end with the total investment.

COACHING TIP

I know that negotiating at this level is not for the faint of heart, and it certainly takes some practice.

Please remember though, that you didn’t start this, your customer did by wanting to make you an offer. If you don’t give them the satisfying experience of playing the “Negotiating Game” convincingly they will continue to make ridiculous offers, and keep you on their treadmill as opposed to you gaining control, and making a sale that results in a win-win for both parties.

ROLAND ON THE ROAD

Back in August, the Charlotte SMC organized a Breakfast where I had the honor of being the speaker for the morning.

The topic, was "How to Communicate, Connect and Close more sales.

We had over eighty eager New Home Sales professionals, who welcomed me with that typical Southern Charm for a great program. While I was there I was able to reconnect with the incredibly positive Sales team from Simonini Builders, pictured below.

Also while I was there I spent a day with our old friends at Shea Homes, America's largest family owned builder. We spent the day working on Advanced Negotiation techniques.

Next Stop Maryland to work with the team at Caruso Homes. After initial training from all of us at The New Home Specialists and a "Fast Track" program with myself; here we are on a Saturday morning working on Model Demo role playing. The photo on the right we are standing on the balcony, overlooking the foyer and the salesperson is asking me for the sale, simply by saying:

"Is this the type of home you'd like to own?". Every single member of the team tried it so that they became completely comfortable asking simple but effective closing questions.

Here is a picture of compnay owner, Jeff Caruso and myself at a Washington Redskins game. Who said travel wasn't fun?

Next stop Fayetteville, North Carolina, to continue working with the Caviness and Cates team. Here we are role playing their Closing process.

After training we blew off steam with a night of bowling followed by laser tag. Hailing from Britain, I was a little confused, and tried to kick the ball!

Just last week, I was once again with our pals at Ideal homes in Norman, Oklohoma. The topic was Appointment Setting and then we worked on their Hot Prospects which we call Customer in Process (CIP). They are on track for almost a record setting year and under their fine mangement team are amazing implementers of our processes, and truly a great sales team, acomplishing extraordinary results in this tough market! They have actually increased their market share. We are very proud of them.

If you would like a free copy of the Cip form, please email me at:

Roland@newhomespecialist.com - CIP FORMS

SALES HEROES

This blogs award goes to Ingrid Prang, a delightful young lady in South Florida, who is selling beach front condominiums for Minto Homes. Ingrid had an appointment with a customer who she hadn't met yet, and gave me a call to strategize how to make the sale. After about an hour long conversation; where I effectively took Ingrid through the Customer in Process (CIP) form, we had our strategy in place. I sent Ingrid an email confirming every last detail. A few days later I recieved a thrilling call from Ingrid, saying that the customer came in with his wife, and bought the home on the first visit at full price for $850,000!!! (Remember this is September 2009 in Florida, not 2005!)

Here is a copy of the email with the strategy, so you can see how much preparedness it takes to succeed at the highest level.

From: Roland Nairnsey Sent: Wednesday, September 09, 2009 3:29 PMTo: Ingrid Subject: Follow up to last nights customer call
Ingrid,
Thanks for calling last night regarding your customer for Villas By the Sea. I am thrilled that you called, as we are truly here as a resource for exactly this purpose to help you strategize, and make those extra sales. As a recap of what we discussed.
Customer Info:
>You have a gentleman interested in a beachfront unit that is in the process of coming back on the market.
>You are asking $865 and he offered $820, which we are unable to accept.,
> He is comparing you to Competitor, which you have done a great job of making his Realtor aware that may not be there to warranty the home or take care of the community guidelines and amenities.
> He may feel that the other unit is larger and has slightly more included features, but unlike yours, it is not directly on the beach front, but is across from the beach.
> He is arriving Sunday night and bringing his wife for the first time to view their unit and our beachfront home and make a decision. He has shared that she is highly emotional, (may be a tiger, expressive).
> They are starting the day with the competitor and ending with you and VBS.
Goal
Since buying is "emotion backed by logic", prepare a presentation that will be highly emotional for the wife, and cause him to see the incredible value he is already getting, so that the sale becomes irresistible; and your meeting culminates in him purchasing at VBS at the correct amount, creating the perfect win-win.
Strategy & Preparation
a) Go over this week at sunrise, and take some photos from the patio of the sun rising over the Ocean and beach and blow them up to large sizes and stick on poster board.
b) Talk to Jack and see if we can figure out how much that home would be to duplicate at today's prices. In other words he was quoted the price it was sold to the previous customer, but what if we were to put it on the market today at full retail, let's hope it should be somewhere in the $900's.
Appointment
a) Meet at your sales office and give them both an animated, detailed, emotional overview of VBS, and there specific OCEANFRONT home, using all the props, and taking them out back to see the beach and dip their toes in the sand. Mention the words "Oceanfront" as much as you can as well as "Quality", "warranty", "Minto care" "financial stability, "peace of mind" as well.
b) Start at the Beach club, and take as long as you can to walk them through every facet of the club, admiring views, and ask them to imagine their twins coming down and enjoying the club with them. Ask them "If they can imagine their family enjoying the beach club this thanksgiving?".
Once they are emotionally involved with the club remind them of the financial stability of Minto and how that will give them peace of mind in knowing that your "Community investment" is very stable, and you won't have any surprises, unlike the uncertainty of the other project that they are looking at.
c) Walk over to their building, stop at the outside and admire the unique architecture of your building, and point out where there home would be.
d) Demonstrate their home, start with going straight back to the patio and spending as much time as humanly possible admiring the OCEANFRONT view. Show them the photos of the sunrise, and ask them "If they could picture waking up to that breathtaking sunrise over their beach every morning?". Also ask them " Wouldn't it be convenient to wake up and go straight down to your beach without having to worry about crossing the street, and at night go for sunset walks on the beach any time you want?"
e) Ask for the sale.
"Do you have any questions before we go back and review the paperwork?"
Followed by ten seconds of profound silence. If they have no objection go back and write it up. If he mentions the price, then say words to the effect of
"I'm so glad you mentioned that, I have something back at the office, regarding this incredible opportunity
which I should have shown you before."
f) When you go back, on your desk, have a written presentation showing what their home should be at today's Retail prices, and what others
coming in would have to pay, and show them their full savings. (If you have confirmed this with Jack first), You can even apologize and say
words to the effect " I really shouldn't have given you that old price, I made a mistake but Jack says if you go ahead today he will honor it."
g) You wait a second and then start filling in the agreement and say :
"How would you like your names to appear on the agreement?"
and start writing.
How does that sound?
Roland

TWO MORE REPEAT HONORABLE MENTIONS

Amy Willey is a past Sales hero. I received this email from her regarding her conversion ratios. Beginning with the end in mind, we must set goals for our selves, and measure, our success, so we know whether we are moving forward and improving or not. Otherwise we are like a rudderless ship. Check out Amy's incredible closing stats!
Roland,

Thanks Roland, I truly appreciate your support! Well the traffic into my community is low, and my conversion ratios are this:

July-- 9 traffic, sold 5 firm homes 55% (All sales were written within week of initial visit)
August--10 traffic, sold 4 firm homes 40%(3sales written within week of initial visit, 1 homeowner referral)September--6 traffic, sold 4 firm homes 66% (1 of these was a contingency that bought in Aug., flipped in Sept. I didn't count the contingency in Aug sales)

I don't like to talk about this, as I don't want to jinx myself, as I am definitely blessed, and I have a sales process from reading your books and putting it together with my mentor, that works.
Best Regards,
Amy

Last but not least is Tonia Abrahamsson who last year was a sales hero by receiving the highest Video shopping score I have ever given, with a whopping 226 out of a possible 250 points. I have been working with her team on Self Generating Qualified Traffic, one of the best sources being Realtors (where budgets allow), and we discussed in detail hosting Realtor Breakfasts. As Nicki Joy says, "It's not what you know, but what you do with what you know". Here is an email I received recently from Tonia:
Hello Roland,
Just wanted to share some exciting news with you.
Artesia has done three Realtor events between end of August and September. To date, we have written 10 purchase agreements between those three offices.
We understand how important it is to reach out to our realtor friends. With the turnover within realtor offices, these regular events always seem to capture a realtor or two that may have not visited our community otherwise.
Hope all is well.
Best Regards,
Tonia

I am very proud of these three incredible sales people, plus all of you out there working so diligently out there in this tough market. Please send me emails with your stories at:
Roland@newhomespecialist.com

Happy Birthday Bob

October 11th is Bob's Birthday. We had a great party in the office. Here he is blowing out the candles on his Miami Dolphins cake!

FREE DOWNLOADS

Remember if you want the audio version of "Deal or no Deal", please write to me at;

roland@newhomespecialist.com - Deal or no Deal.

and/or the Customer in Process (SM) forms (CIP)

roland@newhomespecialist.com - CIP

and I will be happy to send it/them to you.

Last but not least two photos of my beloved son Max, who incredibly is now almost 18 months.

Please write to us with either your questions or success stories.
Meanwhile, stay positive and have a great month of selling
Coach Roland
newhomespecialist.com