In This Issue...

• Words from the President
• Reducing Prices - A Five Step Formula
• Know Your Competition - And Beat Them

Words from the President

Thanks for joining me today on your journey toward success as a Real Estate Agent.

The two areas that we'll focus our time on today are Reducing Prices & Knowing Your Competition. Either of these could help you change your life in 2007 if you'll read, absorb, and use the information.

I hope that you'll invest 8 minutes of your precious life with me today and that the information proves to be a blessing to you and your career.

To your achievement of success in life,


Dirk Zeller
CEO
Real Estate Champions, Inc

"Swanepoel Real Estate
Trends Report"

During the past year, the real estate industry has experienced unprecedented change and significant innovation. You’ve no doubt experienced it first hand.

The key to being successful in real estate, or any other career for that matter, is staying apprised of the trends in your industry. If you can see where things are heading, you can utilize new opportunities before your competition.

• Beating your competition to the next wave of opportunities
• Avoiding fads that could set your business back years
• Gaining valuable insights about revealing strategies you can use right now

Learn More Here

Reducing Prices - A Five Step Formula

Pricing recommendations hit troubled waters at two predictable times. One is when clients have unreasonable price expectations that need to be brought into line before the home can be sold. The other is when an agent gets ready to list a property that owners want to sell at an inflated, unrealistic price.

Both circumstances require caution. The following presents advice to follow as you troubleshoot your way through to a successful pricing decision.

When clients have their minds set on a price that is out of line, follow this process to bring their thinking back to reality:

• If you’re dealing with prospective new clients, address the pricing issue at the listing presentation. Don’t think the difference of opinion will just go away, and don’t think you can make an easy adjustment later.

Be proactive. Present your analysis of market realities as they are, not as your client might wish them to be. If you delay the discussion, you’ll just spend the time, effort, and emotion later on when you could and should be using your energy on new business development and other income-producing activities. 

• If clients suggest they “start high and come down later,” gain their agreement to a scheduled price reduction at the listing presentation. In order to start at their desired price, sellers will often say something like, “I’ll reduce the price to your recommendation in 30 days.” When they make such a statement, usually they’re simply trying to end the discussion, hoping they can wait you out and ultimately achieve their target price. That’s why you need to take action and lock in a price reduction agreement right there and then in order to avoid the same discussion a month into the future.
  
  Use the following script as you respond to the seller’s willingness to take action in 30 days:

“Mr. Seller, What I hear you saying is that you will reduce your price in 30 days. Is that correct?  You want to try your price for 30 days, but, after that, we will move to the price I recommended, correct?”

When your client answers yes to both questions (as clients do in nine out of ten presentations, mainly because they have been able to delay the pain and want to move on), proceed with the locking technique, using this script:

“Mr. Seller, since we are both in agreement about a price reduction in 30 days, and due to your business schedule and mine, let’s go ahead and acknowledge your approval of the scheduled price adjustment, post-dated for 30 days from now.”

Though all you’re doing is formalizing your client’s suggestion, the above script will likely be met by a long moment of silence, perhaps accompanied by a confused look. The key to a successful outcome is to sit silently. Whoever speaks first will lose this battle of wills. If you break the silence, almost certainly your client won’t sign the price adjustment form. Wait patiently and in more than half the cases, you will get a signed form agreeing to the upcoming price adjustment.

In the remaining cases, you will at least pave the way for the future reduction, although some sellers will develop selective amnesia on the subject.  If you talk to them 30 days later and hear, “I don’t remember ever talking about having to reduce our price”, you can then remind them that you even asked them to sign a price reduction the night of the listing.  That will usually jog their memory back to reality.

• Begin compiling pricing feedback from the day the listing hits the market. When other agents show the home, follow up by asking them to share their pricing opinions. At the same time, review the prices of comparable homes that have sold while your listing’s been on the market.

When interviewing another agent, really probe to obtain useful feedback.  Ask, “What were the top three things the agent’s client liked about the home?” Ask for suggestions for enhancing the salability of the home.

Most importantly, ask if the price seemed competitive with other homes shown. If the agent says the price felt out of line, ask what price seems more reasonable and then ask if the agent would be willing to scratch out a quick note summarizing the opinion. In future price-reduction discussions you’ll be able to back your own recommendation with recommendations from other experts. In essence, you’ll be demonstrating that the marketplace has spoken in favor of your advice.

• Revisit the price-reduction discussion within weeks of the listing.  If you wait until 30 days have passed, you will have waited too long, and here’s why. It usually takes one or two weeks to re-open the pricing subject, gain a price-reduction agreement, obtain a signature on a price-reduction form, and get the new price posted. Therefore, if you wait a month to get started, the price likely won’t be reduced until week six. Studies repeatedly prove that once a home’s been on the market six to eight weeks, showing activity drops significantly. So if you wait until 30 days to revisit the pricing conversation, your window of marketing activity will be almost closed by the time you finally post the reduction.

• If a phone conversation doesn’t prompt an agreement to a price reduction, schedule a meeting in your office. You raise the odds for a successful outcome exponentially when you make the pricing recommendation in a face-to-face meeting on your own your turf in your professional environment. Don’t meet in the sellers’ home; have the sellers come to your office.

When you call to set the meeting, use the following script, in which the key word is “exposure.”

“Mr. Seller, I need to meet with you later this week to discuss the strategy to increase the exposure of your home.  Would Wednesday or Thursday be better for you?”

The word “exposure” leads the sellers to think you’ll be rolling out a whole new marketing strategy for their home. For that, they will gladly clear their calendars.

If you say the meeting is to talk about a price reduction, chances are good that the sellers will try to stall you, after which they may even start ducking your calls. You have to use the right script and right approach.

If you'd like step-by-step training, including the scripts & tools you need to work with sellers pre & post listing presention ...check out my program "How to Create & Deliver a Dynamic Lisitng Presentation™" here.

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Know Your Competition - And Beat Them

With today’s market being more competitive than ever, our skills need to be at their highest levels.  There is more competition to secure listings than ever before.  There are more Agents competing for the same listings than ever before.  Many of those Agents are willing to discount their fees to stay alive.

The real answer in a more competitive marketplace is:

“Don’t wish it were easier – make yourself better.” ~ Dirk Zeller

There will always be someone you are competing against who:

• Has more listings than you do
• Has more market share than you do
• Belongs to a company that is more dominant than yours
• Will do the deal for less money
• Has been in the business longer than you

There will always be an effective strategy that Agents can use to sell against other Agents.  As a Champion Salesperson, you must understand your Competitive Points of Difference and how to convey them to the client.  We need to create points of differentiation, or we will all look the same.  When we look the same, the consumer will select the Agent they perceive to be the lowest risk individual.  The risk evaluation could be based on the commission the Agent charges, the price they are willing to list the home for, or the higher probability of a sale because the Agent does more business or is with a larger company.  Recently, consumers have started viewing risk in terms of the fees we charge – selecting the lower fee Agent.  There are many factors, but it boils down to a perception of risk.  There are a couple of things you can do to tilt the risk in your favor:

• Understand the needs, wants, and desire of the consumer. 

Too often, we enter a presentation opportunity without clearly knowing what the client wants.  What are the initial factors of their decision?  How and when will they make the decision?  What is most important to them?  What is second most important?

We leave our presentation to chance and hope that we hit the “hot button” of the client.  We cannot guess and win consistently.  We must be willing to probe the client before the actual presentation takes place.

• Know your competition.

For some reason, Agents feel like knowing the competition is unethical or dishonest.  I find that to be a naive philosophy.  In sales, our job is to promote our product or service in comparison to the other options; to truthfully expose the advantages of our product or service over the competition.  If we don’t help the consumer comparison shop benefits and services, there are only two outcomes, and neither is acceptable.

• The other Agent does it for us.  This is disastrous and leads to lots of appointments and no contracts.

• Allow the consumer to figure it out.  This lowers our odds of success significantly. 

The consumer will often evaluate the wrong factors.  They can make a decision based on what they hope will happen versus what will really happen.  I remember early in my career losing a number of listings to a top-performing Agent who was working FSBOs, as I was doing.  He had a discount program where, if they sold it, he charged them 2%.  If he sold it, he charged 4%, and a co-op sale was 6%.  I got hammered initially because I let the consumers figure it out for themselves.  Most of them wanted to believe they had a good chance at the 2% or the 4% fee.  The truth was markedly different than their hope.  When I started to show them the actual number of times the other Agent really sold a home at the 2% and 4% commission rate based on the MLS stats, they began to see the light.

Then I further explained that he would make more money by taking the buyer he created from their home to another Agent’s listing and selling them that home for the 3% he would receive from the listing Agent and waiting for their home to sell by a co-op broker.  I then showed them the actual monetary difference that this Agent would make on their $200,000 home by co-oping the sale, taking buyers off their home, and working to sell other Agents’ listings.  He earned $4,000 more in commission income from their home for the same amount of work.  What do you think most Agents would do when faced with this decision?  I would then ask them, “What would you do?” 

We must know the competition.  Who is the competition for each listing presentation you go on?  What competitive advantages do they have over you?  What are their weaknesses?  We all have them.  How do they sell a prospect?

• Close for the contract at the time of the presentation

Too many Agents are leaving the presentation without a contract signed.  The farther the time span from the presentation until the decision by the client and their actual signature – the lower the probability we will secure the listing.   I have never believed in the be-back-listing.  I firmly believe we have one real opportunity to take the listing; that’s at the presentation.  Once we walk out the door without the contract signed, our odds go down exponentially each day the contract remains unsigned.  At the end of a couple of weeks, we have a less than a 10% chance.

At the presentation, you have just completed your case for employment.  They have the clearest picture of your Competitive Points of Difference and why they should hire you.  Once you walk out the door, your benefits and Competitive Points of Difference start to get muddled with all the other Agents.  The clarity they have right now, after your presentation, starts to change over time.  They forget that you are better and gravitate to the cheaper commission or the Agent that will start the listing at a higher price.

The time to secure a signature on a contract is at the appointment.  I can hear it now, “But, Dirk, I don’t want to be too pushy.”  I understand, but you do want to be assertive, confident, and committed to their cause and yours.  If you know you’re the best – tell them.  If you don’t believe it or can’t tell them, you should figure out what you need to learn, do, study, and perfect, so you do believe it.  People are attracted to assertive, confident presentations and sales people.  They are entrusting their largest asset to you, and they want to feel good about their decision.  Show them that you have no doubt that a decision to list with you tonight is the best decision they could make, and they should do it now.

For more information on ways to "Create Market Dominance" by developing competitive points of difference between you and your competition... Click Here.

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