When investing, regardless of the investment vehicle, objectivity is key. While this may seem like a “no brainer” when looking at stocks, bonds, CD’s, etc., it is one of the most difficult things to do when referring to what is often the largest investment in an individual’s portfolio: their primary residence. All sorts of emotions come into play when people think about their “home”, but the reality is that their house is an investment and must be thought of objectively.
The first thing everyone thinks of, when thinking about an investment, is Return. How much money have I made? What is the value today vs. yesterday? When should I sell to maximize my return? We all want our money to count, and to grow as quickly as possible, so we use metrics and mediums to monitor our investments in the hopes that we can beat the market and time our sales correctly; however with property there are no tickers, and we don’t have an NYSE or NASDAQ giving us the exact price of every home in the US (if you say “but we have Zillow” then you need to google error margin, and need to be smacked upside the head!). The only way to really know what a property is worth is by having a local real estate agent run a CMA (comparative market analysis), or Property Evaluation, to determine what your specific property is worth on today’s market.
So if there is only one way to get an accurate read on what your property investment is worth, why is it that homeowners often resist when offered this information for free? Well, I believe there are three reasons that a homeowner may be resisting a free report:
- The agent has not taken the time to explain the true value of the report,
- The agent has not explained the process of creating the report, and how their information is much more accurate than an instant value,
- Or the agent has not created enough of an urgency for the homeowner, and explained that today’s housing market can move at any time.
As Realtors it’s our duty to provide homeowners with all of this information, so that they can make educated decisions regarding their property, but what if they still resist? Allow me answer that question with a question: If you go to the doctor and they say you need antibiotics to cure your illness, and you say “no thanks” do you think they are going to simply say “ok” and let you go, or are they going to explain why you should take them, the risk you are running by not taking them, and insist that you heed their advice? This is not an extreme example. Think about any profession out there, mechanics, accountants, lawyers, etc. and the advice they give you. You have to explain to your clients/prospective clients why they should listen to you. Here are a few things you can do to help convince them that allowing you to provide them with a Free Property Valuation is in their best interest:
It is quick, painless, and requires no obligation.
Most home-owners don’t want the hassle of having someone come to do a home valuation because of the awkward conversation at the end when the agent is trying to convince them to sell, and they have no intention of doing so. Reassure them that there is no obligation here, except to see what their property is valued at.
Even if they aren’t considering selling, they are not wasting your time.
A common “shut down” from a homeowner when offered a free CMA is that they don’t want to waste your time, because they aren’t interested in selling at right now. Remind them that they are not wasting your time but are, instead, receiving a free and valuable service. Explain to them that you are not trying to acquire their business today, you are trying to provide them with some important information about one of the largest investment they have, and hope to establish a business relationship with them for the future.
Remind them that their property is an investment, and should be treated as such.
Help them remember back to when they were young and first opened a savings account and learned about “interest”. It was so exciting to check your profits and see how your money was growing. That’s the sort of excitement you need to instill in home-owners. “Think about the market when you purchased your home– the interest-rate, the value of your home at the time as well as the market as a whole. Don’t you want to know how much money you may have made on your investment?” This should be a “no-brainer” for anyone interested in their own investment portfolio. Ask them if they own stocks, and if they do (or if they did) how often would they check the value of their investment? Why wouldn’t they want to monitor their property’s value just as frequently?
Additionally, you may want to educate yourself and your client on ways to increase their property’s value. Teach them about renovations, upgrades, or enhancements, that may not only benefit them now as they live in the property (increase their enjoyment), but also later when it comes to selling the property. Many home-owners want or need to renovate, but are not aware of what things may actually increase their homes value versus things that are just benefiting their family right now.
They might want to invest in better appliances or cabinetry, or consequently, hold off on expansions or landscaping, depending on what will best benefit them in the long run. Remember — you are not wasting your time with homeowners that don’t turn in to clients right now, you are investing in a relationship that may yield more business in the long run. At some point, these homeowners will probably want to sell, or have friends who will be doing the same, or have children that grow up and need to move, and so on. So, while this option might not seem like it’s turning into immediate opportunities, you are investing in the greater long-term potential business.
Taking the time and opportunity to turn an immediate “no” into a “yes” (or even a “sure/ok”) is the thing our business is built on. Be confident and consistent, and make sure the people you are cold-calling, or door-knocking, know exactly what it is they are turning down. Remember, knowledge is power, and that is a universal trait. It benefits both you and the home-owner. Even one person changing their mind is a huge benefit to you and to them. No strings, no hassle, no problem!!