Coaches Corner Newsletter - Issue #896
August 30th, 2018
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Words of a Champion...

Preparation is critical for success.  Sometimes, when the market takes off, we are not prepared or ready to take advantage of it.  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:

  1. The average list price to sale price
  2. The average days on the market
  3. The hottest selling area
  4. Are most buyers competing in multiple offers?
  5. The influence of interest rates on the market
  6. 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.

Dirk Zeller

Benefits of Your Service

A Champion's approach to a Buyer is to convince them on the initial call that an appointment with you raises the possibility of:

  1. Them understanding the marketplace better. 

    Because your client understands the marketplace better, they are able to select a better home, make better decisions for their family, and engage in a smoother, less stressful transaction.

  2. Them receiving a higher level of service by meeting with you. 

    They will receive more professional service because they are working with you.  According to the National Association of Realtors®, over 52% of licensed Agents have been in the business less than 36 months.  Most Agents in real estate in the past couple of years have only seen one type of marketplace.  When we experience changes in the market, the odds are that, based on the number of Agents and experience, expertise, and knowledge of those other Agents, they will most likely select someone who is not properly prepared to represent their interest.  Most Agents will not know what to do.  "Is that a risk you want to take, Mr. Prospect?"

    Explain how you work on an exclusive basis only.  Because your service standard is so high for yourself and your clients, it would be impossible to work with everyone who contacts you to represent their interests in purchasing property.

  3. Gaining them an advantage in negotiating. 

    Through your understanding of the marketplace, the inventory, and current emerging market trends and by linking your knowledge with a clear understanding of their goals, objectives, and expectations, you will position yourself to be a more effective advocate and negotiator on their behalf.

  4. Them securing a better Lender for a smoother transaction.

    Too often, Agents allow the Buyer too much latitude in Lender selection.  While we don't want to be accused of steering a client, we do want to ensure a high level of service with minimum risk to the client.  A Champion Agent guides their client to the preferred Lender relationship.  This creates better service, a more timely closing, fewer surprises, and a lower stress level for the client and Agent.  Remember, you aren't compensated at a higher level if you have to pull out the miracle, "hail Mary" closing at the last minute.  It usually takes a lot more of your resources of time, energy, and emotion to do it.  The client is often exhausted by that roller-coaster ride at closing, as well.

    You put the long-term referral relationship you are trying to establish at risk because of the wrong Lender's involvement.  There is nothing you can do or say to extract yourself from the negative feelings and emotions a client has from the transaction when the Lender blows it.  This is also true if you have nothing to do with the transaction.

  5. Them saving money in the short and long run.

    By meeting with you face-to-face, you can help them secure a better home in a stronger appreciating area for their money and amenity requirements.  A home that performed as an investment will be better than others they might have selected without the meeting.  By having a clearer picture of the financial picture, you can possibly save them money on their initial down payment by having the Seller contribute to the closing costs.

  6. Them receiving the representation that they deserve.

    In the end, it's about understanding the type of representation they want.  It's understanding their expectations as clients, so you can achieve a high level of customer satisfaction, so they are willing to talk about you to others they know who are buying and selling.

Any of these six are valid reasons to make an appointment with you on the initial call, rather than securing their contact information and sending them stuff for weeks or even months.

Using strong dialogue to convert the prospect to a face-to-face appointment is clearly the objective.  It's about being able to deliver scripts with excellence that explains to the prospect their benefit of meeting with you.  The prospect clearly knows the benefits of meeting with you.  Getting them to come to your office for a Buyer consultation requires delivering the benefits that they want.

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Three Secrets for Effective Listening

1. Always take notes

You don't need to be a stenographer to be effective at note taking. Just jotting down the key concepts, problems, issues, and prospect information directly from them will do. The act of taking notes forces you to focus on the prospect and what they are saying. You can only focus on what they are saying when you are taking notes. Your mind will less likely be wandering to what you are going to say next. An effective technique is to tell the prospect that you are taking notes. This will raise your status with them instantly.

"Mr. Smith, I'm taking notes because I don't want to miss anything and need this critical information you are sharing with me to better serve you."

By telling them in advance, they will understand when you ask them to repeat themselves or slow down or give you a moment.

"Mr. Smith, I am sorry, but my shorthand needs a little help. I want to clarify the information on __________. Could you please go over that again, so I can get it on paper?"

By doing this, your prospect will experience the warm feeling that you really care about meeting their needs. They will think, "This guy is different than the other salespeople I have worked with in the past."

If you have a customer relationship manager (CRM) that you use, I would suggest learning the skill of typing and listening at the same time. This will allow you to avoid doing the work twice – taking the notes on paper and then transferring them to your CRM. It's really double entry and doubles the work. Your prospect will hear the plunking of the keys, so you will want to let them know that you are taking notes in your CRM while they talk.

2. Ask more questions

Whoever is asking the questions is the one in control of the conversation. The asker turns into the receiver of information. If you want to learn, you need to ask. You don't learn anything by talking. You already know all that you know. There is an old proverb that says even a fool appears wise until they open their mouth. Project brilliance through asking questions.

If I want to communicate with my son, Wesley, all I have to do is ask questions, and the floodgates open. He will tell me about his day, how he felt, what was awesome, what other kids did, what he wants to do tomorrow, how much he loves me. I get all of this information simply by asking a few questions. He is no different than any other human being. He wants to share but won't share as much until asked.

Let me share with you a few general questions that are effective:

  • Can you elaborate on that?
  • Can you give me a little more perspective on that issue?
  • Can you explain to me how this works?
  • Can you review that again for me?
  • "Bob, I'm not quite sure what you mean."

These will all move you off of a stalled position in your listening and discovery process and will allow you to gather greater information.

3. Instant replay

If you have done the first two steps correctly, you will be granted the third step. If you have done them poorly, you might not get to step three, or when you have reached this point, the prospect may have already tuned you out. As salespeople, we need to make sure that we got it right on paper and in our brain. The only way to do that is to instantly replay or summarize what we heard and understood the prospect convey.

You don't want to repeat word-for-word what they said. Our job is to summarize accurately and interpret what we heard back to them, not become a Myna bird by repeating them.

When you engage in "instant replay", your prospect will often do one of these three things:

  1. Confirm that the instant replay was correct
  2. Correct your "instant replay" in the areas that you didn't have it right.
  3. Give you new and additional information

All of these are terrific outcomes because you know you have it right when you hang up the phone. You also might get a bonus of more information. Usually, when they add information after the "instant replay", it's really something important. You got into their inner circle and have insider information that most of your competitors will not have gotten. Because the information is so valuable, you want to increase your focus on listening.

When they share more information, you will want to repeat the process of the instant replay again and use a phrase at the end like:

"Do I have it right?"
"Bob, am I on the right track?"
"How does that sound?"

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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:

  1. 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 an 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.

  2. 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.

  3. 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 stopped, home values declined, mortgage balances exceeded resale prices, and a large group of home buyers were forced to walk away from their homes as banks foreclosed on a significant number of loans. This further lowers values and stagnates 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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