Wednesday, November 28, 2018

Relaxed Home Buyers More Receptive to Buy

Many years ago when I was a General Contractor I learned a valuable lesson in how “not” to sell a couple a new home.

It was a very cold February evening when I met them at my office/showroom for their third meeting. I had done everything they wanted and up until that evening I thought we might be signing a contract that evening.

I owned a beautiful 3 year old German Pinscher named Penny who loved going for rides with me so I took her along.

Well, it turns out the husband be very afraid of big dogs and even though I put Penny in another room they were on edge throughout the entire meeting. At the end they told me they had changed their mind and weren’t going to build a house.

3 months later they signed with a competitor that didn’t own a dog. And for a higher price. Exact same house I had quoted them.

Looking back today at that well deserved lesson in how “Not to Sell” a new home I wondered if there was any evidence that a relaxed new home buyer would be more receptive to buy a house at the asking price and I just found it.

A CBS story in MoneyWatch written in 2011 about the buying habits of relaxed buyers and unrelaxed buyers. Here is a portion of that article:

The experiments, involving 670 students, were structured similarly. In each case, one group of students watched a relaxing video or listened to relaxing music while the other group watched a video or listened to music that had no effect on how relaxed they were. In one experiment, the students were asked how much each of ten products was worth. In another, they were asked how much they would be willing to pay for a particular camera on eBay. In a third experiment, some subjects were encouraged to think more generally before considering a purchase, while others were prepared to look at details instead.
  • Given a list of 10 products, the group of relaxed students said the products were worth more than the non-relaxed ones did.
  • Relaxed students were willing to pay about 11% more than the others when asked to focus on a single product. Asked to imagine they were bidding on a camera on eBay, the relaxed students thought the camera was worth about $2,550 (Prices are in Hong Kong dollars). The others pegged it at an average of $2,293. When the researchers repeated the experiment, the relaxed students were willing to pay $2,419, while the less-relaxed ones said they'd pay $2,174.
  • Focusing on details brings down the price. Before naming a price for the camera, some students were asked to complete sentences such as "An example of a type of pasta is..." which was supposed to encourage them to think concretely. The other group answered questions designed to encourage them to think abstractly, such as, "Macaroni is a type of...." Those students who were not relaxed, and who were primed to pay attention to details, said the camera was worth $2,099-very close to the eBay price of $2,030.
The next time you work on either an estimate or a quote for your buyers you may find a more receptive buyer(s) if you have them in a relaxed position rather than sitting across from them at your desk where it immediately becomes an ‘us’ vs ‘them’ situation. I found over the years that the desk simply becomes a trade-off table.

Why give away legitimate profit while negotiating with unrelaxed buyers when you can possibly get your asking price by moving the whole thing to a ‘sofa-chair’ type setting.

Here are just a couple of things to avoid:
  • Desks if at all possible
  • Pets in the room, obviously
  • Kids running in and out
  • Placing your cell phone in a visible spot (turn it down and put it away)
  • Stacks of paperwork
  • A white board with anything marked in RED

On a side note, you will also be relaxed and two relaxed parties always seem to do great.


Bill Hart said...

Whow Coach...Great copy astute suggestions... sadly most of it starting the use of the table vs the their favorite old traditional desk grandpa use to say in one ear and out the other...the astute will get it and hopeful implement some of your suggestions, but sadly most have the time right now..Your a piece of work Gary! Hertzberg(sp), Marlin, Dale Carnegie et al just never seem to impact most of our homebuilder industry folks, do they? When I did field work for Marlin my GE accounts implicated the rest said..gosh thats a good idea for next years planning and of course..never got around to it...Sad eh!

IL said...

Howdy Coach. This is a great suggestion and we have made note of to our team. I would add that it is best to avoid talking about how busy you were before the meeting or are going to be after. When our suppliers do that it makes me naturally want to find a new supplier even if they have a good product at a good price. Telling others that you are so busy translates that you are too busy to sell a product to them and do a good job doing it.

Thanks for your ongoing work. Isaac