Dear Tony,
About 90% of my valuations end in the vendor saying to me “your fees are too expensive” and with all my competition dropping their fees to below 1% I am really struggling. What’s the best way to handle this?
This is the most common objection I hear time and time again when training estate agents, so rest assured you’re not alone. However, the way I see most listeners respond is the wrong way by saying “where do I need to be?” By responding like this you are dropping any value you have built up in the valuation and you are showing you are happy to drop your fees.
My advice is to understand if the vendor is happy to instruct you in the first place and the only way to identify this is to take the fee out of the equation. I would achieve this by responding to the vendor as follows: “when you say we are too expensive, who are you comparing us to?” This way you know which competitors you are up against. Once the vendor shares the agents they are speaking with you ask, “if our fees were all the same, who would you choose to sell your home to?”
Now if the vendor chooses another agent you’re stuffed!! However, this shows it was nothing to do with the fees and it was a smokescreen. If, however, the vendor says, “I would choose you” you reply with the following, “I am really pleased to hear that and, so I am clear, why would you choose me?”
Now zip up and let the vendor sell your agency back to you. There is no better salesperson than the customer themselves. Once you have listened to all the reasons the vendor highlights for you being wonderful, respond by saying “isn’t that worth paying that little bit more?” (zip up again)
If you don’t get the desired outcome you can use a technique called ‘sell the difference’. Let’s say you quoted 2% and the vendor says, “you’re too expensive”. You then respond with “when you say we are too expensive, who are you comparing us to?”
Once the vendor shares the names of the other agents you need to find out what they quoted. For argument’s sake let’s say Agency B and C were both 1.5%. You now need to ask what the agencies were offering for their 1.5%. Once you understand this your job is to highlight all the benefits you bring to the table over and above the other agencies for ONLY 0.5%. You are no longer selling yourself for 2% as the vendor is selling at 1.5%, your job is to persuade the vendor to pay that tiny bit more with you.
My last suggestion for handing the ‘your fees are too expensive” objection is as follows. You need to go into the valuation knowing how much money 0.25% and 0.5% are worth. When the vendor says the objection ‘your fees are too expensive’ you reply, ‘it’s not about what you pay it’s about the price we help you achieve’. You need to achieve £500,000, therefore we need to achieve an extra £2,500 to cover the 0.5% difference we’re discussing.
