(Propnex) Selling strategy and negotiation strategy

Propnex Selling Strategy

Real Estate Market research

Before selling the new listing property, Propnex will use comprehensive real estate market research to offer them all the factual information of the property, such as current customer need, recent property sales, and economic condition. After collected all the information, Propnex will use it to determine the market potential, target market and develop an effective selling strategy for the new listing house.

Pricing strategy

PropNex agents will do some groundwork understand the current price situation, do a comparative study by visiting the URA or HDB website on the latest transacted prices for similar properties, or engage property consultants to provide the current comparative market analysis (CMA) report on its property. With this relevant information, say an indicative value of $1m for the similar type of property and with the current CMA pricing ranging from $950,000 to $1.05m, Propnex will have a clear indication of how much they can price their property to start with and set a comparative price.

When the house is ready to sell, Propnex will set up promotional strategy for the house.

1.    Internet marketing

Whenever there is any Real Estate listing, Propnex agents will market the project extensively throughout the Internet. They will utilise all of the major external property portals (e.g. as iProperty Listings and Property Guru Listings) and public web portal ( e.g. Google, MSN and Yahoo) to ensure the information of the new listing property reaches the maximum number of active buyers searching on the internet. Furthermore, Propnex not only promotes its new listing property on their websites, it also published the listing property information through social networking such as Twitter and Facebook.

2.    Open house

Open house is used by Propnex to promote a new property for sale. In the Open house, Propnex agents will  give potential buyers  a brochure of property  includes property disclosures, well and septic information such as  public information on the property,  homeowner association information, financing options including any relevant financing in place that can be assumed , and opposite season photos where available. Moreover, providing mortgage information from a lender can show financing options and payment estimates. Further, they will prepare to answer the question that a prospective buyer might ask about the house, such as Property tax, the age of the roof and heating and cooling units.

3.    Newspaper and television advertising

 Propnex will spend its advertising budget on newspaper (such as, strait time, business week) and television advertisement to promote its new listing property to the public and support its open house activity, such as telling the public when and where is the open house activity.

4.    Email marketing

Lastly, Propnex will periodically send emails about news and information of the new listing or the open house to their existing customers .Also, it will use email marketing to follow up its potential buyers. For example, within a day of the open house, send a “thank You” email to everyone who took the time to visit your house and ask if they have any question regard the house.

Receive an offer

When Propnex’s agent receives a written offer from a potential buyer, he/she will first find out whether or not the individual is prequalified or preapproved to buy the home. Then Propnex proposes contract to the buyer, taking care to understand what is required of both parties to execute the transaction, such as, offer price, down payment and deposit amount. At this point, the buyer will have three options: accept the contract as is, accept it with changes (a counteroffer), or reject it.  If the buyers accept the contract, there will be no negotiation in the deal, therefore, Propnex agent can skip the negotiation process and close the deal.

Close the deal.

In Close deal, Property agent then will legally transfer the ownership of the property to the buyer. Overall, this is how the Propnex agent sell the new listing property.

Integrative negotiation

However, if the buyers accept the contract but with changes (a counteroffer), a negotiation between the buyer and seller will occur. Normally, Propnex agent will use Integrative negotiation to sell new listing houses.

Buyers sharing information to Propnex agents

During the negotiating, Propnex agents trying to ask the parties to share about as much information as they can, so they are able to understand the other interest. After they understand their situation, they group them into different group and help them to solve their problem.

A)   The cash poor buyer: They have a good income, but never seem to save enough money to buy a house. They have managed to scrape together 5% down payment, but they have no idea where they are going to come up with the closing costs.

Solution: Propnex pay buyer closing costs

Propnex agents will pay some of the buyer’s closing costs; this can help be a great incentive for a buyer to buy their house. Example of closing costs will be legal fees , recording fees and perhaps the remaining portion of the property taxes for the year. Propnex agents usually will put an amount in the offer to purchase. For example, they  would pay the buyer's closing costs up to a maximum amount of $3,000.00.

B)   Another type of buyer could be the: "I'm going to need money to build that deck, or buy a big screen TV for the family room, or I need all new appliances." These buyers have enough for a down payment and closing costs, but they have nothing left over for the extras.

To deal with this group of people, Propnex agents will offer an upgrade for the purchaser to buy their house. Company may adding extra to entice them to buy the house, for example, adding a

1.           A new hot-tub.

2.           A new 46 inch LCD wall mounted TV.

3.           A Home Theater in the family room.

4.            new appliances of the buyers choice up to a cost of $2,500.00.

However, they will set limits on costs. For example, agents will state that the overall costs must not exceed $8,000.00.

C) How about the: "It's a buyer's market and therefore, I want something extra from the seller!" Yep, when things are tough for the seller, buyers want more than just a good deal for their money, they want a great deal.

Solution: Offer longer home warranty

Company could offer to this group of buyer a longer new home warranty to give a buyer peace of mind. There is a wide range of options available in sellers’ warranty. For example, washer/Dryer, Refrigerator, dishwasher, and whirlpool bathtub It is a policy that covers certain aspects of a property over a given period of time. For example, a new home warranty for proper is 6moths. Thus, company can offer the buyers with a longer new home warranty such as 1 to 2 years.

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D)  Buyers who have a beer budget with champagne taste. They want the big house with all the goodies, but don't want the big payments

Solution: Buying down the mortgage rate

Propnex agents will buy down the mortgage rate to the buyer. As an example, Company could try buying down the rate by 1.5% points, for a 36 month term. This will help buyer to lower down their mortgage payment from per month to per month. Indeed, it will cost company for buying down payment, but company can still benefit from selling out the house and selling it for full price. The buyer is now happy, because their payments are lower for a given period of time. The agent will be sold the house at the full price. Therefore this is considered as a win-win situation.

Overall, by solving customer problem, company will build a strong positive relationship with their customers. Also, the buyer will bring in new customers to Propnex by way of positive word of mouth or by being a great brand ambassador for the company.

Distributive negotiation

Besides using integrative negotiation tactic in selling new listing houses, Propnex will use a different negotiation skill, distributive negotiation, to help its clients to sell their house to buyers.

Prepare before negotiation to gather more information

Before negotiating, Propnex agents will always prepare for negotiating by gathering information. Propnex will engage with property consultants get the current comparative market analysis (CMA) report on the seller’s property. A real estate agent might be able to get inside some of the houses that were just recently sold or have a current offer. With this relevant information, it can indicative value of similar type of property and with the current CMA pricing to Propnex agents. This is a great way to tell if the house is near the proper price point or if there is leeway in negotiating an offer.

Let the other party make the first offer

During the negotiation, Propnex agents will always let the other party speak first. The reason for doing this is because it is quite possible that the other party’s first offer will be better than the first offer you would make. For example, Propnex agent wants to sell a second condo and the owner of the house wish to sell it around $600k. Usually, Propnex agents will not stating their position first, such as state upfront that the owner is going to offer $600k. The reason is because by stating their position first, they have given away valuable information to the other party (you maximum price), and the Propnex agent will use that information to extract the most money possible from them.

Propnex agent will try to pry as much information from the other side

Propnex agent will ask buyer key questions to learn the information on what the other party’s true motivation is. Normally, Propnex agents will ask “why the buyer wants to buy the specific property? “to discover if the buyer is highly motivated . For example, if Propnex agent found out that a buyer wants to buy the house is because the buyer is  moving from out of town due to a job location change , that is probably a very highly-motivated buyer who wants to get settled as fast as possible( especially if children). Then the agent is probably to sell more from the highly motivated buyer.

The only information we should ever reveal are those alternative options

Normally, after viewing the house, the agents will tell the buyer: “I think this is a best house for you. Also, after showing you this house, I am going to show it to another buyer, if he is serious and going to buy this house, you may miss this opportunity. Thus, if you really like this place, you need to make your decision immediately.” By doing this, Propnex agent is telling the buyer that they have alternative options , such as other buyers, which shows they are prepared to walk from the negotiation whenever it suit them. In human nature, the buyer feel worry and agree the deal immediately.