In This Issue...
Words of a Champion
Dirk Zeller
CEO
The way to become market-proof is to develop better skills. The most important skills a Sales Person can possess are their sales skills. How are your skills?
I truly believe the sales skills that you possess will separate you from your competition. Your ability to have an actual sales process will enable you to outperform all other Agents in your marketplace. Some of you are saying, “What is a sales process?”
A sales process is the step-by-step, walk through process that you follow to covert a Buyer or Seller. It is the scripts that you use and the questions that you ask. It is the process of first impression, qualifying, evaluating needs, conducting a values conversation, accessing solutions, creating recommendations, and presenting the recommendations in a package that is convincing to the client. It is your ability to handle any resistance to your plan for success for your client and then finally, the closing for agreement and acceptance by your client.
My question is, is your process so defined and developed on the Buyer and Seller side that you put yourself in a position to win every time? The goal for any Champion is to put himself or herself in the position to win every time in life. What can you do to put yourself in the position to win? My whole goal in my career was to position myself as one of the Agents that the Seller was interviewing. I knew that if I had a chance to make the game winning presentation, the vast majority of the time, I would win the listing. How often do you put yourself in that position? Is it enough for you to achieve your goals? Is it enough to develop the “I want the listing, but don’t need the listing” mindset? We, as Agents, must want the business, but not need the business. Your ability to get into the “want it, but not need it” mode is essential to controlling your business. How good is your sales process? Do you really understand the process of sales and are you prepared for each opportunity? If you are not answering with a powerful YES, then you have work to do. We can address these challenges and teach you to create the strength you need to refine your sales process through our coaching and educational products. Be one of the Champion Performers that can answer the above questions with a powerful YES!!!!
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Dirk Zeller, CEO
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The Four Quadrants of a Real Estate Agents Time
I read a good book about eight years ago that is now out of print. It was written by Roger Merrill, who was one of Stephen Covey’s right-hand guys. The book he wrote was called Connections: Quadrant II – Time Management. He used a quadrant process to describe our use of time.
These four quadrants encompass every possible usage and activity of time. We can easily end up in a quadrant during the day that produces little value for our business and us.
Quadrant I: Urgent and important
This is the emergency quadrant. Real Estate Agents spend too much time in this quadrant. We are working to get the transaction closed at the last minute, getting a flyer made for a property, or writing an ad. Our stress level, blood pressure, frustration goes up the more time we spend in this quadrant. This is what I call the “burnout” quadrant. If you are spending large amounts of time here, you will burn out . . . guaranteed.
Quadrant II: Important but not urgent
This is the quadrant of revenue. This is the quadrant of success and effectiveness. When an Agent is spending large amounts of time in this quadrant, their income rises dramatically, and their quality of life follows. Your family time, workout time, and spiritual time are all located in this quadrant. If you slip a day, it’s easy to justify. It’s easy to put it off because you can because there isn’t the urgency or immediate pressure as in Quadrant 1.
Your business growth activities are also located in Quadrant II. Your prospecting and lead follow-up activities are here waiting for you each day. This quadrant is the one you control yourself. It is self-directed. The challenge is that all the other quadrants are frequently externally directed. People in your life, clients, prospects, family, and friends drive you out of this quadrant to the other three quadrants. The high income and quality of life is contained in Quadrant II. The more time you spend in this quadrant, the more money you make and the greater the feeling of success and accomplishment and quality of life.
Quadrant III: Urgent but not important
This quadrant is directed by others. I call this the quadrant of delusion. We are fooling ourselves to think that these urgent needs are helping us achieve a successful business. This quadrant and the activities in there don’t contribute to our important goals of life.
Quadrant IV: Not urgent or important
This is clearly the quadrant of waste. There is usually a lot of wasted time in most people’s days. We can be lead by others into this quadrant. The coffee and doughnut bunch in the office can lead us here. A low motivation prospect whom only wants a little of our time, is in this quadrant. They say, “I am not ready, but if you could send me some information, that would be great” . . . waste!
Our job is to direct our business and time to increase the use of Quadrant II; to not allow others to push us into these other categories because they view something as urgent when it’s not. The most common redirect quadrants for Real Estate Agents are Quadrants I and III. Don’t let the outside focus cause you to spend more time in those quadrants than is absolutely necessary.
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Calculating and Analyzing Real Estate - Part 2
Three key statistics reflect real estate sales success better than any other indicators. These statistics are: Average list price compared to average sales price, average number of days on the market, and average number of listings sold versus listings taken. In this article we will take a look at Average Number of days on the market.
Average days on the market
Your ability to sell a home, on average, in fewer than 30 days clearly conveys to potential sellers your skill and success level. It further indicates your knowledge of competitive pricing.
An agent with a strong track record for quickly moving homes presents a clear competitive advantage to sellers for several reasons:
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Agents that move properties quickly generally achieve higher sale prices and put more money in their sellers’ pockets. Buyers in today’s marketplace are extremely sophisticated. One of the first questions they ask an agent is, “how long has the house been on the market?” Buyers realize that the best homes sell quickly. If they learn a home has been slow to sell, they adjust their initial offer downward accordingly.
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Sellers with newly listed properties have a stronger negotiation position when an offer comes in. If the home has only been on the market a few days, buyers realize that the seller is less likely to offer price concessions.
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Sellers with slow-to-sell homes sacrifice dollars two ways: One, through a lower sale price and, two, through ongoing expenses for a home they no longer want to own. This two-edged sword is the one agents need to point out in order to shorten the time a home languishes on the market. Sellers often want to hold out for a higher offer, but as time goes by that higher offer becomes less likely to arrive. Contrary to the beliefs of many clients, sellers don’t make more money by waiting, say, 120 days rather than accepting an offer in the first 30 days from listing. In fact, studies show that they receive less and less over time. And while they wait, they need to make additional mortgage payments that do little to reduce their debt or increase their equity.
By showing that your listings have lower-than-average days on the market, you’ll present proof that prospective sellers gain a significant competitive edge and financial advantage when they choose to work with you.
Doing the math
To calculate the average number of days your listings are on the market, follow these steps:
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Make a list of all your listings that sold over a recent period of not less than three months. Alongside each listing, note the number of days that passed between when the home was listed and when a sale contract was signed.
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Add up the days on the market for all homes on your list. For example, if you had five sold listings, one that sold after 33 days on the market, and the others after 45, 62, 21, and 84 days, then your total would be 245 days.
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Divide the total number of days on the market by the number of listings sold. If you had five sold listings last quarter that were on the market a total of 245 days, then your average days on the market per property over that period would be 49.
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Ratio: Total number of days that all your sold listings were on the market ÷ Number of sold listings = Average days on the market ratio
Working the numbers
When comparing your days-on-the-market averages with market-wide real estate averages, take into account the following considerations:
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After calculating the average number of days your own listings were on the market, conduct the same calculation for your overall MLS area or real estate board. If you don’t yet have a significant number of listings, obtain the average number of days that your company’s listings were on the market and present that figure while you’re building your own business.
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Be aware that the price range you sell in can affect the average number of days on the market. In general, homes in a higher price range result in a higher average number of days on the market.
If you have a high number of listings, consider creating average calculations for various price ranges or geographic market areas. This will allow you to create apples-to-apples comparisons with other agents by analyzing performance in specific segments of the market.
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When comparing your performance with market-wide averages, strengthen your competitive position by including homes that failed to sell in your calculation. When doing so, be careful to disclose that expired listings are included in your calculations. By factoring in expired listings, you reflect the most comprehensive view of how many days homes sat on the market, whether they ultimately sold or not.
By including expired listings in your average calculations, the market average will go up sharply. The vast majority of expired listings will have been on the market 120 days or more. Therefore, if your overall market saw a number of expired listings and you personally had none, the gap between you and your competitors will stretch considerably and to your great advantage.
(See Part 3 of 3 in our next issue)
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Competitive Postioning Defined
Ask most agents how they’re different or better than their agent colleagues or competitors, and get ready to hear either a whole lot of hemming and hawing or a lineup of platitudes about how they care more, work harder, make clients happier, whatever.
What you’ll rarely hear is a summary of how the REALTOR® is statistically more effective than other agents or how that statistical advantage translates into a strong position in the overall market and a dominant position in a particular market niche.
If you don’t know how you stack up against your competitors or how your performance is different or better than average, take comfort in the fact that you’re certainly not alone. It amazes me how even very successful agents often can’t define their competitive positions.
In a sentence, your competitive position defines how your real estate practice is better than all others in some unique and meaningful way. It might be that you’re dominant when it comes to selling ranch-style spreads. It may be that you excel in high-end or low-end properties or properties in a certain neighborhood or design category.
In all cases, your competitive position must be real and defensible, which means it must be based on statistics.
The best agents – the most powerful, experienced, high-volume agents – share a single advantage: They know the statistics of their market, their own performance statistics, and their statistical position in the overall marketplace or in a particular niche market area.
I was on a coaching call with a powerful agent in the San Diego marketplace. Her business was going great, but she was looking to the future and planning how to grow to an even higher level.
She had compiled her sales statistics, and we took some time to analyze her performance, define her position, and create a marketing strategy to build upon her competitive advantage:
- Performance: In 2005, 56 homes were listed and sold in one of her market niches. Of those, 17 (or more than 30 percent) were her listings; her nearest competitor listed two. By listings alone, she was 8.5 times more successful than any other agent in her competitive sphere. She also sold more homes in her niche than anyone else. Her closest competitor was a company of 75 agents that listed and sold five homes.
- Position: It didn’t take long for the numbers to prove that she owns a dominant position in her market niche. She knew she was strong, but until she did the math, she didn’t realize just how strong a position she’d staked out. By the end of our call, she had the facts she needed to position herself as the Emerald Heights real estate expert.
- Marketing Strategy: Emerald Heights includes 700 homes. Annually it sees an ownership turnover of 8 percent, which means that somewhere between 50 and 70 homes are bought and sold each year almost as predictably as clockwork. To increase her income, my client knew she couldn’t just convince more people to sell. Her revenue growth would need to result from winning a greater portion of the existing business in the market, and that’s what she’s prepared to do. She plans to grow her slice of the pie (which is called “market share”) by taking listings and sales from other agents. By presenting herself as the regional expert – with the indisputable statistics to back the claim – she’s ready to attract an even greater number of qualified leads and convince an ever-growing number of clients to select her services based upon the proven advantage she offers.
If you’re a newer agent, it’s likely that you don’t yet have the stats to stake your competitive position. However, if you selected your real estate company well, your company likely does. Work with your broker to learn how your company excels in the marketplace and present your company’s advantage while you build your own success story.
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