In This Issue...
Words of a Champion
Dirk Zeller
CEO
Like they say, all good things come to an end and right now I've got some "closing news" you'll want to pay attention to...
My friend and host of all those amazing live conference calls, Justin Zimmerman, just told me something interesting.
About 6 months ago, he launched a website called "BreakingGroundsLive.com" featuring Webinars from some of the most brilliant minds in real estate on cutting edge issues.
http://www.goodmorningrealestate.com/cmd.php?Clk=2900749
Right now, his Webinar site gives you full access to an entire library of speakers, tools, and content for a pretty cheap price ($1 trial).
But he told me in the near future he's closing access to the full library to new members (and the price might change).
From all the good stuff I've heard from other Agents about this site, like from Kathleen Floryan, you could miss out on learning similar results...
"I have two more closings tomorrow...a total of four for me this month alone. It’s the biggest month I have had since I started in this business, at the toughest time in this industry, in 2006."
http://www.goodmorningrealestate.com/cmd.php?Clk=2900749
I've endorsed the site and the program in the past and felt now was an important time to let you know he's making changes to the program that may affect you.
I think his plans are to close the 'full library' (all 37 Webinars) to new members after the "closing date" and from then, if you join after, you'll only get access to parts of the library at a time.
Well, with all the uncertainty out there, one thing is for sure, Justin knows how to put together quality programs and right now keeping ahead on your real estate education has never been more important.
http://www.goodmorningrealestate.com/cmd.php?Clk=2900749
Check out what might be his final offering of this program and like the old saying...
"A rolling stone gathers no moss"
To Your Success,
Dirk Zeller, CEO
RealEstateChampions.com
P.S. If you're ready to convert more buyers, sell more of your listing inventory, lower your frustrations, increase your confidence, and ultimately increase your income in today's changing markets when other Agents are struggling, it's time you find out how...
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P.P.S. To help you resolve to stay in touch with leads, clients, and referrals you will want to check out our free webinar on the SendOutCards system. This FREE webinar will cover exactly how you can build long-lasting relationships with your clients and cultivate solid referrals with the powerful SOC system. You’ll never forget a birthday, anniversary, or holiday again, and you’ll have the ability to follow up with your clients for 4+ years with just a few clicks! Make sure to reserve your FREE spot today by clicking here.
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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:
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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.
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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.
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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.
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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.
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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.
The truth is that the meeting will in fact lead to increased exposure for the listing, because the factor that most controls exposure is price. If you can move the price into the competitive zone, agents will be more likely to show the home, and ads will more effectively reach a larger group of better buyers.
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The 5-5-5 System of Success
All most Champions need to do is 5-5-5 a day to grow their business. The 5-5-5 System stands for 5 – past client calls a day, 5 – lead follow-up calls a day, and 5 – new contacts a day. That is fifteen contacts total needed each day to reach your production goals. Very few of my clients do more prospecting a day than that. Some of them might have to make a few more lead follow-up calls than that due to their volume of leads. The size of their past client and sphere also can push the numbers up a little for some of them. The vast majority of our Champion Agent clients follow the 5-5-5 System. They use it to create consistency in order to establish and maintain momentum.
Real Estate is a momentum business
One of the challenges for non-champion Agents is to establish and maintain momentum. There is a tremendous amount of energy that is required to create momentum. For us to acquire a certain number of listings and a reasonable number of pending transactions, it requires consistency of resources and effort. Too often, when we get to that state of momentum, we cut the power. If you are in an airplane, it takes a large quantity of fuel and thrust to take off from the runway and achieve cruising altitude of 36,000 feet. You can feel the captain throttle back once you reach cruising altitude. I did say throttle back, not cut the power. If he cut the power, the plane would instantly dive back to the ground.
Too often, Agents get to cruising altitude, and they cut the power of their prospecting and lead follow-up. They could be tired because it takes energy to get a listing inventory. They could be focusing on servicing their clients. The danger with their strategy is they lose momentum. Most Agents’ income goes through up and down cycles at least four times a year. The up and down cycles are caused by their up and down cycles of momentum of prospecting and lead follow-up.
If you look at your income swings, you can trace them back to ninety days earlier when you switched away from prospecting and shifted to lead follow-up. You might have even shifted your time almost exclusively to serving listings, buyers, and pending transactions. Prospecting and lead follow-up create production supporting activities. If you engage in prospecting and lead follow-up, you will create opportunities to serve people. Serving people will take more of your time, but you have to avoid letting it take up all of your time.
A Champion does prospecting and lead follow-up even when faced with servicing a lot of clients. Operating with an on/off approach to prospecting and lead follow-up leads to inconsistency of income, burnout, and frustration in your business. Anyone can prospect when they are broke, have no leads, and have plenty of time. It doesn’t take a particular skill or set of disciplines to do that. They are prospecting out of desperation. A Champion prospects even when they have business, prospects, clients and transactions to close.
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Three Truths that Rule Every Real Estate Market
Here’s a fact: Most real estate Agents know too little about the markets in which they operate. That is one of the reasons why consumers think they know more – or at least as much as – their Agents do and why they don’t hold their Agents in higher regard.
Now, here’s a tip: You can give yourself an edge over other Agents and establish yourself as a regional Real Estate Expert simply by doing your homework, researching your market area, and gaining a good understanding of the realities and trends that affect the real estate decisions of your Buyers and Sellers.
A new or newer Agent faces a steep learning curve to acquire market knowledge. It takes time to develop a sixth sense, which is what most Agents use to understand the marketplace. However, rather than waiting to acquire the instincts to make good guesses, you can begin today to acquire data and knowledge that translates almost immediately to power and influence.
Whether you’re in a major metro market or a small town; regardless of the country, the economy, or even the day and age you’re doing business, when you’re in the field of real estate, three core rules apply to your business:
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Real estate is governed by the law of supply and demand. This rule is absolute and without exception. The appreciation of a market, the expectations of Buyers and Sellers, and the velocity of market sales are all dictated by the supply of – and the demand for – real estate for sale.
As a recent example, we saw rapid appreciation and a frenzied response by buyers in the U.S. real estate market in the years 2002 through 2005. This response was caused by the fact that demand for real estate was at an all-time high while the supply was limited. This caused rapid appreciation, with home Sellers receiving multiple offers within days or even hours. At one time during that period, homes in southern California were selling, on average, at 18% above the listed price – the result of a market condition where demand outstripped supply.
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Real estate is governed by the law of cause and effect. Put differently, positive situations cause positive outcomes, and vice versa. For example, a vibrant economic growth leads to a vibrant real estate market and strong appreciation of homes, while loss of jobs and a languishing economy produce exactly the opposite effect.
As a specific example, as the baby boom generation matured, it fueled an explosion in second home purchases so strong that more than 21% of 2004 U.S. home sales were second home purchases – most acquired by aging baby boomers. This created desire for additional housing that affected the construction and home values in second home markets nationwide.
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History will repeat itself. In any marketplace, there are cycles. Periods of rapid real estate appreciation are followed by stagnant periods where values stabilize or even decrease. By acquiring marketplace knowledge, you can foresee trends both for your own benefit and for the benefit of your clients.
For example, in the years of 2002 – 2005, in a number of key U.S. market areas more than 40% of new home loans were being written as low money down, interest only mortgages. These limited-equity position purchases were being made on the assumption – the gamble – that the rapid-appreciation cycle would continue and that housing prices would climb even higher. When the growth trend stops, as it has many times before, home values decline, mortgage balances exceed resale prices, and a large group of home buyers will be forced to walk away from their homes as banks foreclose on a significant number of loans. This will further lower values and stagnate growth, as it has many times before.
By knowing your market and watching regional statistics, you will be prepared and proactive to give yourself an edge and establish yourself as a regional Real Estate Expert. Simply do your homework, research your market area, and gain a good understanding of the realities and trends that affect the real estate decisions of your Buyers and Sellers.
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