The following speech was delivered by Ze Yu Wu during an internal training session for New Coast Realty that took place on Oct. 14, 2015. It was translated for The Globe and Mail by Daisy Xiong, a graduate of UBC's journalism program, and reviewed by another Mandarin speaker, who works in the real-estate industry. The raw audio is available here. The following is a translation of relevant portions of the audio, not a complete transcript.
Ze Yu Wu: Now I start. How to close the deal when the gap between the price of the seller and the price of the buyer is too big? This is very important. Frankly, many team leaders don't know about it although they are very capable. Even they do know, they only know a part of it, not all of it. Let me take a case yesterday for example. It was Lucas's friend. He received offers of $2.6-million, $2.4/5-million. [Inaudible] was the agent. There were many offers that the homeowner didn't take. The homeowner's price is over $3-million. The homeowner changed his agent to [inaudible], and then changed to our agent. It closed at $2.25-million.
Student: That's impossible. He didn't take the offer of 2.6-million at first.
Wu: Yes, you need to use the right strategy. It was charged over $3-million and was closed at $2.25-million. How to suppress homeowner's bottom price and get him to accept the offer, there has to be a combined series of wording. If you say the right thing, his bottom price goes down, and he would take it. If you say the wrong thing, his bottom price goes very high. You need skills. From this case, I got to some conclusions.
Firstly, the homeowner has a nice house, after he changed agents for several times, his bottom price decreased, but not low enough. Secondly, the buyer's agent is also from our team, Meng Li, she gave an offer of $2.2-million and signed the contract. We went to Coquitlam together the day before yesterday. She said the buyer only wanted to pay $2.2-million, no more than that. I said you should try to let your buyer offer more. Do your work. She said $2.25-million will not be accepted by the homeowner. I said, don't worry. Do what you should do, give the offer with a bank draft [deposit] and no subject. The homeowner's agent [inaudible] is very likely to make the deal happen. As expected, yesterday they closed the deal. More importantly, Cui is very skilled in closing offer. Today I will teach you how to close the deal and decrease homeowner's bottom price. You know this method; I know that method. Putting all the ideas together, we have the best method. Let's take this case for example. What do you say that can make the homeowner accept the offer? The homeowner said he would not take any offer that's less than $2.4-million. Don't even take a look. What do you say that can make the homeowner take the offer. You answer. I will write it here. You guys write it down. When you meet the homeowner, say those things. The homeowner will take the offer. I don't say the success rate is 100 per cent, at least 80 per cent.
Male voice: If you don't sell it now, you will never sell it. (Laugh.)
Female voice: The buyer is very genuine.
Wu: Think twice before you say that, what's the consequence?
Students: Don't let you sell the house any more. (Laugh.)
Wu: You answer.
Female voice: No idea.
Wu: Can I say something casually? If it's a house in Richmond, new house, say that rich people like to go to the west side of Vancouver. There are good schools. Real rich people don't want to come to Richmond. The key is that rich people are afraid of earthquake and tsunami. Rich people have the chance to offer 100,000 more dollars without hesitation. It's luchong [bad feng shui], no matter how cheap it is, rich people don't want it. Your house has problems, and rich people don't like them.
Being able to find disadvantages and advantages of houses is an essential skill for agents. You must know the disadvantages and advantages of the house. The best house has disadvantages; the worst house has advantages. This is what an agent must know. If you don't know how to find disadvantages and advantages, you have to change your job. This is basic. It's like you must know 1+1=2. You learned it in the kindergarten.
Student: People all went to the west side of Vancouver.
Wu: It's not about money. Your house is luchong, the facing direction is not good, the ground is not flat, and it's too close to buildings. So rich people don't want it.
Secondly, rich people are afraid of earthquakes and tsunami. This reason [to sell for less] is very powerful. It was the second house I was involved. I said it to the homeowner. He was worried. I was a translator, 15 dollars an hour, I said it to the homeowner and it was sold right away. If one has no long-term considerations, he can hardly avoid troubles every now and then. Write this sentence. Think for 10 or 20 years later, even next life.
The value of houses in Burnaby has more space to increase. If the house is in Vancouver West, say that the price has risen too much and it's no longer a good deal; people are buying houses in Burnaby and Richmond. Or say that the houses in this area are too expensive – so you can suppress the seller's bottom price. [Tell the seller] the stock price [on the Chinese exchange] has decreased a lot, how do people have the money to buy the house? Adding one more sentence, China's supervision on money is very strict now. People want to buy the house, but they can't transfer the money to Canada. It will be more and more difficult to transfer money from China. Sell the house as soon as possible. Adding one more sentence, the house market reached the highest in June and is declining now. Sell the house as soon as possible; $2.25-million is a very good price.
Money can't be transferred now. There are earthquakes, tsunami, and this is luchong. If it's not luchong, I will sell it for $500,000 more. Rich people leave right away if it's luchong. They are all the methods to suppress homeowner's bottom price. That money cannot be transferred is also a good reason. The price has been decreasing since last June. Sell it as soon as possible.
The sixth sentence: Bring the bank draft [deposit]. This is a bank draft. For those who offered 2.4-million before, do they have bank draft?
Even offer you $80-million, without bank draft, it's just zero. This is bank draft, so this is the real buyer. Buyers without bank drafts are fake, are useless. As soon as you sign it, the money is yours. Even they offer you $80-million, do they have a bank draft? Even if you sign it, the money may not be yours. This is a bank draft with real money, this is the real offer. Remember to bring the bank draft when you give the offer. In Cui's case, he did his best. After changing agents several times, the homeowner's bottom price decreased. The most important thing is that Cui knew the right thing to say.
If you don't talk to the homeowner, go home. The homeowner still insists on high price and the deal cannot be closed, we agents have to keep traveling around and wasting the time. We would keep burning the gas and no one will reimburse you for that, our company will not reimburse you. No one will consider that for you. You will need money for your children's milk in the future. No one will care about you. You must consider your own interests. Even if our company makes donations, it will not be donated to the staff because you need money for baby milk. You have to think of your own interest.
One more sentence. Normally, the first offer is the best offer, however, parenthesis: it is only a saying to the homeowner, but it will never be true. There will always be higher offers in the next year or in the year after next year. [Laugh.] Student: What if they ask you why it's the best offer?
Wu: It's the rule in this industry. If it has been on sale for so long, people will think there is something wrong with it.
Student: Canadian agents said the same.
Wu: The first offer will never be the best offer, I am sure about this, but you have to say: the first offer is the best offer; an offer with bank draft is the best offer.
Answer me, what to say to suppress the bottom price. Everyone say one sentence, and then we will have a textbook. You guys teach me, I then put them together and organize them, and train you.
Student: You should pay tuition. [Laugh.]
Wu: If I learn one point from you, I pay you $100; if you learn one point from me, you pay me $50.
Student: [Laugh.] Good deal
Wu: I will make more money in the end. [Laugh.]
Wu: Write down the points. Write it for five times.
Student: We know the points, but can't remember it when we are dealing with homeowners.
Wu: That's why you write them down. Read it before you talk to the homeowner. For every point, you write for five times, then you will remember. Otherwise you will forget in practice. Think about what to say.
Student: Talk about disadvantages of the house.
Wu: It may not be luchong, maybe close to the road, maybe the ground is not flat, and maybe there is an electricity pole.
Student: It's a stylish house but doesn't have investment value. It's hard to sell it in the future.
Wu: Many people are saying this is a good house, but you have to tell him the defects of this house. "It is modern style, less painting but more glass. Your house is beautiful, but only young people will like your house, middle-aged and elderly people will not like it. Why? This house's design is modern style, which is only suitable to young people but not to middle-aged and elderly people. People who can afford a house are middle-aged and elderly. Think about this, are young people able to pay $2-million for a house?" Middle-aged and elderly people like classic houses. Your house is for young people, like Ikea, stylish. But stylish things are the easiest ones to get out of fashion. But it's $2-million, not just $500,000.
What if his house is classical style? [Say that] classical style is not good; it is outdated. Right now, only the modern style is popular in the market." In brief, whatever you are telling, the homeowner should think: Yes, it makes sense! The homeowners feel every word I am telling them make sense. Then, you can suppress homeowner's bottom price. This is not good, that is not good, he will think you are very experienced.
Analyzing from the international market to stock market, from the state [policy] to the housing market, and the fact that no more investor immigrants are coming after the federal immigrant investor program was closed.
Student: If you keep talking about problems, will they get offended?
Wu: [Tell homeowners]: I'm doing this for your goodness, because I know about the market. Now it has passed the highest point. Investor immigrants can't come any more. Money cannot be transferred. And the house has those problems. Otherwise, I will sell it for $1-million more. I'm not in the rush. $2.25-million is very good price. Otherwise it's going to be even lower in the market in the future.
I want to get more profit for you, because the higher the price is, the higher the commission I get. This is an offer with bank draft. You can't miss this chance. Don't I want to make more commission? Of course. I'm doing this for your benefit.
Student: What if the homeowner asks: "When you tried to be my agent, you said my house was great. Now you say it has so many problems." [Laugh.]
Wu: [Tell them]: But I later found that it's a stylish house. This is what the guests said. They pointed out the problems and I have to let you know. The guest said it's luchong, the guest said it's made of glass and the children may get hurt. I have to tell you what they say. [Say that], to be honest, I'm very angry when the guest says this is not good, that is not good. I wanted to kick him out. I explained it to him. You must tell what guests say to the homeowner.
Add more, don't buy luchong house again in the future. If it's a house by the road, say don't buy a house by the road next time; if there is a ditch in front of the house, say don't buy a house behind a ditch or electricity pole next time; if the house is quite narrow, say don't buy a narrow house next time, it doesn't look grand; if the house is wide but shallow, say don't buy a shallow house without a garden next time. If it's a stylish house, say don't build a stylish house next time; build a classic one.
[Laughter.] He will listen to you. He will not buy luchong house in the future. Does it make sense?
Student: Yes, if he listens to you.
Student: If we can make it sound so real, like boss Wu. [Laugh.]
Wu: I said to a client, don't buy houses near roads again. He has never bought one ever since. I said to one, don't buy houses with swimming pool again. You don't use it often and it's a burden. Canadian people like it, but Chinese don't.
You remind me. You must print out the lowest prices in the neighbourhood to show to the homeowner. "Look! This house was sold at $2-million and I am selling $250,000 more than this price. Will you still not accept this offer? Plus, the market is dropping now." It is very critical to compare with low sale prices in the neighbourhood, which is even more important than all above. Low prices around the house, firstly compare with those in the same district. If there is no [low prices] in the same district, compare with those within the diameter of one, two, three or five kilometres.
Compare prices in the same district. And say don't buy houses near bad schools. It's hard to sell. Investor immigrants don't mind to pay more for houses near good schools. This is a good point. Write those for five times. I can guarantee you to increase sales by 50 per cent. You have to be fluent, won't forget.
[Student talking, having break]
Student: Every time you talk about the price, take your phone out. [Laugh.]
Wu: When you say those to the homeowner, you need to know the right timing to say. Don't irritate the homeowner. Be persuasive.
Student: You have said everything. [Laugh.]
Wu: How much interest do you pay, how much is the tax, how much is the depreciation. If you don't sell it in 10 years, all the electrical appliances have to be replaced. See how much you are losing every day. If you sell the house one month earlier, you earn a couple of thousands. You have to do the math for him.
I haven't finished. $2.25-million, 2 per cent interest, how much do you lose in a month? You lose $40,000 a month. Hydro bills, worn-out prices. If you sell it one month later, you lose tens of thousands of dollars. It's getting older, different style, different price. New styles come out next year. A whole set of wording is ready to come out all the time. You need to be considerate. Don't be kicked out by the homeowner.
Nine-minute break in the translation
Wu: [Tell the homeowner]: "He [the other agent] originally wanted to get the buyer to put an offer on another property. I happen to know him, or it's an agent of our company, he was dragged by me to buy this one. I told that agent I would persuade the homeowner to give him some bonus, and that was how I convinced him. You would have got no offer. Because of my network, I have a client, the agent is from the same company. I asked him to come to buy the house. Without me, you don't even have an offer. The house next door was only sold for $2-million, your one was sold for $2.25-million."
[Still talking to homeowner]: "If we do not give him some [bonus], I will be shame to meet him. Let's give him $20,000, or $50,000." After adding the bonus, [you say]: Sorry, you [buyer's agent] can only have half and I have the other half. But at this time if you are dealing with other companies, be careful with issues that may violate rules. If the other agent is from our team, it can be easily arranged, right? Bonus is so awesome. One year gas expense, one year food expense, almost all expenses can be covered. A bonus will be a couple of tens of thousands dollars. For labour job, you have to work for a whole year, right? This tip is very important.
There are many other methods. I didn't prepare today. The speech is spontaneous. Try to get the bonus. At least half [bonus]. At least half. Try your best to take back $40,000 out of $50,000, it is the most generous to give $10,000 to the selling agent. If I get $20,000, I will give you $2,000, so I can take 80 per cent [sic]. [Laugh.] But be careful. First of all, protect your license before you do anything else, especially the license you worked hard to get. Be sure not to break the rules. Under this principle, you can take other actions. If your license gets revoked [pause]. No matter how much money the deal is worth, even if the deal is right in front of you, don't look at it, it will affect the license.
You say something.
Student: Professor. [Laugh.]
Student: What if there is a gap of a few thousands.
Wu: When this is a couple of thousand dollars gap, remember our rule, and it is also what we should implement, the homeowner should give up some, the buyer should add more, the selling agent should yield some, and the deal will be firm. Our money cannot be touched at all, every penny of our commission cannot be cut.
We should sell the house fast and buy the house fast. Buy a good house quickly, sell the house quickly and buy a better one for our client. This is our principle. If the house doesn't get sold, homeowners will get worried, right? We should relieve concerns of homeowners. Make homeowners satisfied and buy a better house later. Why should I give you back my commission? Not even a penny. I helped you sell it for $250,000 more. Other house in Garden City was for $200,000. If I return the commission, my company will fire me. The company takes half of the commission; I and the other agent share the other half. I only take 25 per cent. Why should I give half of the commission to my company? My company has many clients. My clients came from my company. I can't survive without this system. So I'm willing to give half of the commission to my company. You should ask for more commission. I sold it for $250,000 more. Why don't you give me more commission? If I do a bad deal for you in the future, I won't take your commission.
Five-minute and 45-second break in the translation
Student: It's how we think of it. Who do we serve? If we don't sell the house, we don't make money.
Wu: If you sell the house, you are doing him a favour. This offer is a good offer. Once the house is sold, there is tax. Then you are making contribution to the society. You are helping the client do investment. And you are making contribution to the society. We need to raise our own family; we also need to take the responsibility of the society.