PRICE vs. VALUE

An effective negotiator distinguishes the difference between price and value. Although a buyer may negotiate price, their genuine concern is whether or not they are getting a good "value".

When a buyer says, "I will only pay X," what is actually meant is, "That is all I perceive it to be worth to me." That is my perceived "value." Increase perception of value, and the buyer will increase his or her offer to pay a higher price. The feeling of getting a good value is also vital to creating the sense of "winning." It is easy to confuse the difference between price and value, and even many experienced salespeople fail to make the distinctions. Part of the reason is that even the parties involved in negotiation refer to this as an issue over "price." An exception occures when the buyer cannot afford the price, even if it is a good value.

There are many other ways that value, or even more importantly, perceived value, can be increased. Bear in mind, people buy for many different reasons. When they buy, they buy an entire package, not just the sticks and bricks. They buy the location; the view; the convenience to shopping, schools, or work; the neighborhood; the community; the tax rate; the expected growth of the area; or the projection that it will remain rural. Some buy for security; some for convenience; others for the perceived investment potential; and still others for prestige. Inherent in all these motives for buying, and all the reasons that make buyers prefer one house over another, are all the keys to increasing value.

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