One of the most fundamental principles of salesmanship is creating urgency. Without it, there is little or no motivation for a buyer or seller to take action. Think about it. As a buyer if there is nothing to lose by waiting why not buy later as opposed to right now.
The most effective way to create urgency is to show a prospect what they stand to lose if they don’t go ahead with their decision to move forward right now. Quite often agents that lack confidence tend to focus exclusively on the benefits of purchasing now. They’re afraid that by presenting the risk of loss they will be viewed as a push salesman. This is truly unfortunate because fear of loss is a far greater motivator than enjoyments of the benefits. A good way to remember this rule is with the following statement:
“FEAR OF LOSS IS FAR GREATER THAN THE ECSTACY FROM GAIN.”
Another application of this principle involves motivation that comes from the application of deadlines. When working with a project it is always best to establish a deadline for completion of the project. DEADLINES STIMULATE THE BODY TO ACT.
For example, consider how deadlines are used in sporting events. If a football game or a basketball game never had a timed deadline, it wouldn’t be near as exciting to play or watch.
One of the single greatest reasons for the delayed real estate recovery is with real estate pricing during the past few years. As agents we know that a buyer must stand to lose something before they’re likely to buy a home. An example of this is when a buyer knows that another buyer wants to buy a home. Because they’re afraid of losing the home, they’re willing to make a decision much more quickly. With the supply of homes increasing for several years now, buyers have actually been motivated to wait because there was a possibility of even better homes being available in the future.
Declining prices also motivate buyers to wait. If a buyer purchases and prices drop, buyers have paid too much. This buyer is much more likely to be motivated to wait because of the fear of paying too much. The same fear exists on a much larger scale with the U.S. economy when prices are declining. Deflation paralyzes activity as buyers wait for a bottom. Because their behavior decreases demand prices drop even further. This vicious cycle is referred to as a negative-feedback loop.
Now that real estate prices have hit bottom in major real estate markets, agents should work diligently to identify ways to create urgency. Many of the buyer closes that we have provided to you are designed specifically to create urgency. Here are some examples:
- Left-Overs – with houses once again selling, buyers should understand that the best houses always go first. They shouldn’t risk being stuck with left-overs.
- Interest Rate – 3.75% fixed rate mortgages enable a buyer to afford a lot more home than they otherwise could purchase as rates go up to 5%, 6%,7%, and even 8%. Show the buyer how much more expensive home they can buy if they take advantage of lower interest rates.
- Quality of Life – most buyers have developed that habit of sitting on the fence because of the fear of declining prices. Replace that fear with the even greater fear of losing years of pleasure because of too great an emphasis on money. Time can never be replaced. If a buyer can afford it, it’s why they work so hard their whole life. Buy the home now and begin to enjoy an even greater quality of life.
The two rules every agent must remember to be successful:
- Creating urgency is critical in getting prospects to take action
- The best way to create urgency is with fear of loss. Remember, “fear of loss is far greater than the ecstasy from gain.”