In This Issue...
Words of a Champion
Dirk Zeller
CEO
Preparation is critical for success. Sometimes, when the market takes off, we are not prepared or ready to take advantage of it; same as when the market slows down. Part of being a successful Agent is knowing where the market is heading. The key is getting there before the others.
Wayne Gretzky once said that the reason he was a great hockey player was because he was always heading to where the puck was going to be, rather than going to where it was. He was ahead of the game. He could see where the puck was heading and the opening ahead where it was going to be, a pass or two ahead of time.
- Where is your market going in the next sixty days?
- Are you heading there?
- Do you need to go after more listings aggressively?
- Are your Buyers motivated enough?
- Who has the real control in your market: the Buyers, Sellers, or you?
We need to understand the market to take full advantage for our clients and prospects. Here are six things to look at:
- The average list price to sale price
- The average days on the market
- The hottest selling area
- Are most Buyers competing in multiple offers?
- The influence of interest rates on the market
- Possible outside forces that may affect the market
All of these variables affect your current market. They will shape what you do in response to the market and the results you get. You need to know these six things to enable you to gain the upper hand in all your ventures.
To Your Achievement of GREATER success,
Dirk Zeller, CEO
RealEstateChampions.com
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How to Prospect Expired Listings
Prospecting expired listings can be the core of anyone’s business in the real estate field. You can create a system that will give you repeatable results for your effort. Let’s look at these three very positive characteristics in prospecting expired listings.
They are easy to find: Expired listings come up everyday, so you will always have a handful that you can work with on a daily basis. They provide a steady stream of new leads to contact for listing appointments. There are also usually a few very heavy days each month. You will need to set your schedule to take advantage of these heavy days. The end of the month is one of the heaviest times for expired listings; up to 25% of the expired listings for the month may occur in just one or two days.
They want to sell: Expired listings were on the market at one time, unlike many other types of clients you will contact. The owners had a plan laid out to sell and move. Unfortunately, their plan did not work out, but, in most cases, they wish it had. There will be some expireds that were listed by clients who are now tired of the process, but the majority of them still want to sell.
The bulk of them are looking for an Agent: If the prospect still has the desire to sell, as most do, then they are searching for a new Agent. They are looking for someone who can solve their previous problem. Most do not know why their home did not sell, but they are frustrated with their previous Agent and sometimes all Agents. They will rarely return to their previous Agent.
The successful way to work expired listings is the CAP system:
Consistency
Attitude
Persistence
The first part is consistency: You must consistently work expired listings. For you to achieve a large return on your time invested, you must work diligently for a minimum of four weeks straight. Expired listings cannot be started and stopped without losing momentum. There is a rhythm and a flow to them. They must be a daily discipline that you work on. If you prospect them for two weeks, then take a week off, you are back to zero. I did not prospect weekends, but I did diligently call Monday through Friday.
Your leads must build, and your follow-up must grow. When you get down the road 30 plus days, you will begin to receive calls for listing appointments from your work earlier in the month as well as your appointments from new expireds. You must work to create a pipeline of expired listing clients.
The second part is attitude: Your attitude plays a crucial role in your success working with expired listings. You need to convey to the seller an attitude of compassion and problem solving. They are not just looking for someone to pound a sign in the ground; they are looking for someone to get their home sold; they are looking for someone to solve their problem. They can get even more resentful due to the high volume of Agents that may call them.
Many expireds feel that everyone else is the problem, when it is actually them and their price. When it comes to expired listings, price is the problem 90% of the time. You have to read the people you are meeting with regarding their home. Too many Agents who work with expired listings hit their prospective clients with a ball peen hammer between the eyes when it comes to the price. That will work with some and will fail miserably with others. You must be able to adjust your delivery.
You need to read the prospective clients, and, most importantly, you need to exude an attitude of caring and compassion for their situation, while conveying confidence in your ability to get the job done. Sometimes, the only way to get the price down is to convince them you care, and it pains you that they have to sell for less, but there is no other way. It is like the doctor who tells his patient she has cancer. He does not like it, but he has to do it, so he can cure her.
The last, and at times most critical, is persistence: Your persistence or ability to stick with it can have the most positive results of all. Many expired listings do not set appointments right away with Agents. Sellers will wait a week or two, maybe even a month. The number of calls they receive about their home drops dramatically as the weeks tick by. Do not be one of the Agents who drop off unless the sellers have low motivation or are unreasonable. Be one of the ones left standing at the end of a week or two.
Be persistent in your calling. Call them a few times a week. All you are doing is trying to set an appointment. You are not doing a listing appointment over the phone; just close for an appointment. That is what the call is for. You just want to be one of the three or four they interview. If you keep that as your goal, you will get plenty of salable listings.
Focus on the CAP system daily. Work both today’s expired listings, and the ones you gathered in the past. Effectively follow-up with your hot leads daily. Remember consistency, attitude, and persistence are the keys to prospecting expired listings.
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Increasing Sales Production Through Number of Contacts
When you break a Real Estate Agent’s business down, there are only four ways to increase production. There are four proven avenues toward increased gross revenue. The four ways to increase production are:
Number of contacts
Method of contacts
Quality of the prospect
Quality of the presentation
When you begin working on any one of these, you have taken the step to becoming a Champion Agent. Once you have raised your level of the performance in each of these areas, you can call yourself a Champion!
Number of contacts
Whether we like it or not, real estate sales is a full-contact sport. Too many Agents are trying to devise ways to avoid making personal contact with people. We use massive mailing programs to raise our image and “build our brand”. We develop elaborate websites and e-mail contact systems, so we can hide behind the computer every waking hour of the day. Some of us do this because we don’t interact with people well. Some of us do this because it is beneath us to “prospect” for business. Others do it because someone told us this is what we need to do.
In the end, the number of contacts matters. My definition of a contact is probably different from most people. I define a contact as talking to someone over the age of twenty-one about real estate. This person must have the capacity to buy or sell or be able to refer you to someone who can. A contact can be face-to-face or over the phone. A contact, for the purpose of my definition, is not an Internet e-mail address or a mailing piece you send. It can only be face-to-face or phone-to-phone. You can make a contact at an open house, during floor time, at the grocery store, or at your child’s soccer game, provided you really make it a contact by discussing real estate and discussing referrals.
Life is a series of numbers or, in essence, a numbers game. It’s the number of t-ball games you make or miss or how many and how frequently you have a date night with your spouse or significant other. You can have numbers in your life you don’t like. A few years ago, I had a cholesterol count of about 200. For those of you who don’t know, that’s not a good number. I could ignore that number or work to change it. I decided I needed to take action to change it. I needed to change my diet and increase my exercise patterns. Fortunately, I didn’t have to go on medication, but that is an option if it gets out of hand again.
Numbers matter in life and in business. One of the ways to know the health of your business is to know your sales ratios. By knowing your sales and conversion ratios, you can determine your income before the year, quarter, or even month begins. One of the most powerful things we posses is our sales ratios, but only the Champion Agent knows what they really are.
Within the first year of my real estate practice, I understood my sales ratios of contacts to leads, leads to appointments, appointments to representation contracts, and contracts to closings. Because I clearly knew my ratios, it allowed me to create a plan that I could follow to earn what I wanted to earn.
The reason that such a high percentage of our clients at Real Estate Champions earn what they want to earn is because we teach them that contacts matter and your sales ratios are king. A word of caution – because you tracked them once doesn’t mean you stop tracking them. You must embrace tracking your sales ratios for the rest of your career. Your sales ratios will usually improve because your skills will improve: your ability and skill to ask for referrals, to ask for appointments, to conduct Champion level Buyer and Seller interviews. A Champion Agent should see regular improvement in their sales ratios if they are working on their sales and business skills.
There is one exception we are seeing now to that rule. The sales ratios can change negatively or adversely if the market changes adversely. You might see, as some of our clients have, the number of contacts to create a lead go up and the number of leads to generate an appointment go up, as well. In some markets, the number of appointments rises because the Sellers are unwilling to do what is necessary in terms of price to be competitive.
You might have to walk away, as some of our clients have, from a few more listings. When that happens, you have to have an attitude of acceptance and a commitment level to do what it takes. Jack Welch, the famous retired CEO of General Electric, has six rules to business success. One of the rules is “face reality as it is, not as you wish it to be.” A Champion Agent has that attitude and commitment. When the marketplace dictates sales ratios will change and things will get tougher, they deal with the reality of the marketplace influence on their business. They realize and accept the influence and increase their number of contacts to reflect the new sales ratios that will enable them to reach their goals.
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Taking the Insult Out of an Insulting Offer
The first step toward taking the sting out of a low offer is to assure your client that the offer is financial, not personal. Most likely the prospective buyers don’t know your sellers or your sellers’ family. They might not even know the rationale behind the number they presented. They may have relied on poor counsel, too much counsel, or an unskilled agent, in which case a well-presented counter offer is in order.
On the flip side, the sellers’ house may be overpriced, either because the sellers insisted on a high price or because the market environment changed between when the home was listed and when the offer arrived. If a home is radically overpriced then a fair offer can look insulting when it really isn’t.
If your sellers’ home is overpriced, you must get them to focus on the gap between the low offer and fair market value, not the difference between fair market value and their inflated listing price. Likely you’ll remove tens of thousands of dollars of “insult” through this calculation alone. If that doesn’t work, ask the cooperating agent to share the burden by helping to explain the rationale behind the offer.
A good agent won’t write an insulting offer. I was asked many times to write ridiculously low offers. I consistently refused to represent those on the equivalent of a fishing expedition. One client chastised me, saying I was required by law to write whatever she wanted to offer. I corrected her misinterpretation of my responsibility. Agents are required by law in most states to present all offers they write, but nothing forces agents to write garbage that is embarrassing to present and wasteful of their time, and costly to their reputations.
Getting beyond emotion
People get emotional during the closing for a number of reasons. For one thing, money is at stake. For another, both parties are anxious to get the deal done and time is ticking away. For a third, home inspections and low-price offers reveal opinions about a home’s value that can feel jarring to sellers who have viewed the home with pride and joy for a number of years.
The only antidote to an emotional uprising is a pragmatic focus on the goals the parties are trying to achieve and a renewed commitment to find common ground and get the deal done.
A few years ago, my father sold the family home I grew up in. My mother had died six months earlier and he wanted to start a new life.
Fortunately, I didn’t represent him in the sale, but he did call to discuss an offer he’d received. I took his call one night and we talked for 45 minutes while I was driving through mountain passes on my way to a speaking engagement in Vail, Colorado. (FYI, I would never talk with anyone but my dad for 45 minutes about a contract.)
He was such a typical seller! His big issue was the sales price. I asked him the question I often pose to get to the core of what’s affecting a sale negotiation: “Dad, is the reason you want this price for the house based on your ego or do you really need the money?” There was silence on the other end of the phone. Of course, I knew he didn’t need the $20,000 he was so emotional about.
From that point, he was able to find common ground with the buyer and get the home sold.
When you hit a buyer-seller impasse, find a way to ask: Is this about ego or income? Do they want the bragging rights that come with a high price, or do they need the money? Usually, you’ll bring your client back down to earth in a hurry. You’re asking, in essence, what are you really fighting for?
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