The Art of Sales (Chapter II)
Before I get started, I want to thank you all for the awesome feedback from Chapter 1. This information I am grateful to have been taught, by a close friend of mine. ممنون بابک.
Chapter two: Back to Basics — Economy
Before we continue, I feel an urgency to explain the behind scenes coverage of any transaction between a buyer, a vendor, or an agent.
It is widely believed, and so it has been taught through the ages, that all that matters is to ‘close the deal’, and move on to the next.
Some agents acquire great skill in their closes, yet they never obtain the necessary knowledge about the national and international economy behind the scenes, that is actually determining the ‘temperature’ of the market. This determination factor is known as ‘The Weapon of Economy’.
Now you may find yourself asking:
What is the Weapon of Economy?
Simply stated, it is the interest of mortgage. The interest is the mover and shaker which controls the economy. The interest is used as an equaliser / manager, for times when the economy is going really high, when the prices are sky rocketing; this term is referred to as an economy that is getting very ‘HOT’.
- ‘What happens when the economy gets really hot?’
First of; everything is in perfect balance. What goes up, comes down. What goes around, comes around. As it heats up, so it cools down. Basically what happens is, that the government proceeds to cool it down again, and so what they do is that they higher the interest, which then brings the economy to chill down.
- ‘How does this happen?’
When the interest is HIGH, it is more expensive for an investor to loan money and invest his money. ‘More expensive’ means High Risk.
So when the economy is shit (is cold), no one buys and no one invests, until the day that the interest is finally lowered, which is when the economy goes up (becomes hot).
So this is interest and this is economy.
That’s why the interest is so crucially important in every fucking country. Usually every trimester, a meeting is held, where they look at where the economy is at the current time, and predict where it will go.
- At these meetings, a decision is made, whether if they should lower, heighten, or if the interest should remain stable.
When it is indicated that the interest is going to go up (EVEN if it is just by one point), it means that the economy is getting hot and that it needs to cool down.
No politician in the world wants the economy to be hot nor cold. The politicians want the economy to be right in the middle, and preferably stay there. So they steer it with the interest (The Weapon of Economy).
That’s the basic knowledge of economy, that which all sales people should know by heart.
As long as the we believe that X price for X property is Very Cheap, we are in a way being fooled by the government, to keep buying and selling.
The government drives this traffic to ensure they keep making money. If there are no transactions made in Spain, in the USA, in Sweden, or in any other given country for that matter, the government won’t get any taxes. For every time you sell something, you have to pay IVA / VAT / MOMS, you name it; TAXES.
- So if suddenly no one buys and no one sells, the government loses money.
- If we don’t use our credit cards every day when we pay for stuff, the bank loses money.
This is exactly why the bank is always warning its clients, that it’s not safe to carry around cash, and that everybody would be better off having a credit card instead. So what interest does the central bank have on our decision to use cash or credit card? You see, every time we use our credit cards and buy a newspaper for one dollar, the kiosk who sold us that newspaper has to pay like 1,5% of the dollar to the bank, due to the transaction being on credit.
This is why the bank makes so much money, when the mortgage is low. The mortgage is now -0,5%. This means that all the banks that get their money from the central bank, actually get paid when they borrow money from it. You understand?
Here is another way of putting it: You borrow money from me, and I pay you every Monday.
The Affect of Interest
This is outstanding! This is the first time in history, that Europe have lowered the interest so much. Japan did the same thing in 1992. Japan’s economy was so hot at first; they were selling everywhere (much like what China is doing today), and when we had the World Economy Crisis back in 1992, it all came crashing down, and so they lowered the interest to 1%.
So now at 1%, people started borrowing money again, and started investing; buying houses, cars, etc. etc..
Today, 27 years later, they still have this low interest rate.
Once you go down to 0% and below, it’s really hard to put up the interest. Sweden’s economy is today one of the best economies of Europe. Currently the rate in Sweden is at -0,5%. Why have they done that?
Because if they don’t do that in Sweden, the value of the country’s currency, rises substantially compared to the $US Dollar and the €EURO, and so it gets very expensive for tourists coming to Sweden, and much more expensive for other countries to buy it’s weapons.
When you bring down the interest, you take down the value of your money. That’s why €1,00EUR, now costs 9,6SEK. It’s been on a rise of 15% since 2015. This increase has turned out to be fantastic for people, who’ve invested since then, yet not so good, for people who’re looking to invest now.
The Art of Sales (Chapter II), has been about basic knowledge of economy, and the behind the scenes factors, that are constantly changing. These factors plays a big role on your clients, and on their decision to act or not. I hope I have been successful in giving you a better understanding of the simple, yet complicated world of economy, and at this point, if some things still remain unclear, I would recommend you to repeat this chapter, until you have made this chapter a part of you.
The key to making this information a part of you, is to feel confident as an expert in front of your clients, who will show much confidence in you.
In the next chapter, we will proceed to learn about various techniques of closing a sale, or as I like to call it; inspiring your client into making a decision.
Stay tuned for next chapter.