Coaches Corner Newsletter - Issue #898
September 13th, 2018
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Words of a Champion...

You’re already on the road to real estate success, demonstrated by the fact that you are reading this newsletter to expand your growth and to learn what it takes to become a great agent.

Each agent defines success slightly differently. Some agents set their goals in dollars, some are attracted by the opportunity to be their own bosses and build their own businesses, and some want the personal control and freedom that a real estate career allows. Regardless of what motivates you to be in the real estate industry, however, to achieve success the same fundamentals apply.

Success results from completed sales transactions, and completed sales transactions result from consistent prospecting, persistent lead follow-up, quality client presentations, effective sales and transaction management skills, and the ability to develop client loyalty and ongoing referrals.

I’m privileged that you have allowed me to help you on your real estate path through the avenue of this newsletter that is full of information, advice and tips to follow as you prospect for and win buyers and sellers, prepare for and make sales, close deals, and develop a successful practice that will grow, meet, and exceed your hopes and goals for years to come.

Dirk Zeller

Attitude and Objections

It is amazing how an objection raised in the sales process can make most Agents look like a deer in the headlights: they get that blank look of disbelief that you see just before the front grill of your car connects with deerskin at full speed.  If the deer manages to move at all, he does it at the last split second before fatal impact, leaving you to experience heart-pounding adrenaline for the next 30 minutes. Many Agents treat objections the same way that a deer treats oncoming traffic.  They are frozen in terror and move only at the last second before the buyer or seller runs them over.

Often, Agents will view an objection as a big wall between them and the sale . . . a wall so tall that they can see no way around, over, under, or through.  But objections are really like a two-to-three-foot-high picket fence.  There are, in fact, many ways over it; or you can walk down its length and find the gate.  An unskilled salesperson fears hearing an objection, but a great salesperson views objections as opportunities.

Your mental approach to an objection will determine your success or failure.  Most Agents dread hearing an objection, but most objections result from one of two situations.  One is the seller or buyer has legitimate concerns regarding the property and/or your skills to sell his home.  The other occurrence of objections is because your presentation was not good enough.  You did not convey the confidence that you are the person for the seller to hire for the sale of his home.  You did not make a convincing enough presentation for the buyer to purchase the home you showed him.  The clients’ desire to work with you is a natural ending to a good presentation.  If the presentation is weak, the objections will flow like a river.  There are really only about forty possible objections in the selling process of real estate.  The question is why haven’t you learned them all?  If you wrote them all down and practiced them for half an hour a day for the next six months, you would know them automatically.  You would be prepared for any situation in selling.  You would then have the confidence to say, “Bring them on; I am ready for them.”  There are about ten to fifteen most common objections that will stop unprepared Agents in their tracks 90% of the time.  How difficult would it be to learn just those ten in the next 30 to 60 days?

The problem is we do not regularly practice countering objections in real estate.  The Denver Broncos spend four to six hours a day practicing football.  The players and coaches spend a couple more hours a day reviewing film and studying their playbooks during a two-month span in spring training, then they play four practice games in pre-season to prepare for the real NFL season.  Next, the players and coaches spend a few hours a day practicing and watching films, five or six days a week, to prepare for one 60-minute game.  They will spend 40 to 50 more times practicing and preparing for the game than actually playing the game.  How skilled in sales would you be if you adopted that regiment?  How about if you practiced even one hour a day on your skills at overcoming objections?  You would become an unstoppable real estate sales person.

Your attitude and mental approach to objections will determine your success level.  Do not relinquish control of your mind to your client.  Step up with mental authority and clarity to handle any objection a client raises.  Practice being successful daily, and you will be amazed at your progress in as little as 30 days.

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Commission Cutting Myths

When I finished my active sales career at the end of the 90s, the trend from a 7% fee to the 6% fee was well entrenched.  Most areas were moving rapidly to a lower fee structure, while I was still taking plenty of listings and sales at a higher fee structure, plus a processing fee of $495.00.  I already had belief in my value and could defend it to the open marketplace.

Due to the robust sales in that time, the consumers’ perception of the ease of selling property, and the rise in sales prices; the lowering of our fee structure had accelerated.  Given the reduced level of risk we, as agents, assumed in a marketplace where everything sold quickly and easily (even garnering multiple offers), one could understand the downward pressure on fees.  The challenge was that once a fee structure or commission structure trends a certain direction, it won’t go back to a higher level.  When the risk increased for the listing agent and a smaller percentage of homes on average sell due to market competition increase, inventory, and selection options for the buyers, it would be nearly impossible to increase the fees or commission charged to better reflect the risk of marketing exposure of the newer, more challenging marketplace.

The natural trend is for agents to lower their fees in competitive marketplaces where listings are tough to acquire.  When the competition is fierce, rather than raising knowledge, skill, attitude, or activities to compensate for the increased competition, we lower fees to attract and secure more prospects.  A Champion Agent applies the opposite approach; they work to increase their activities to increase their leads and lead sources.  They focus on raising their skills and knowledge to create more recognizable differences between themselves and the competition.  This allows the Champion Agent to convert prospects to clients in higher volume despite their higher commission rate.  Finally, they control and improve their attitude, so they increase the number of prospects and increase conversion. 

In robust markets, too many agents figure that their work will be less strenuous; that they will exert less effort to achieve a sale of the property.  They feel that the property will sell in a week or a few days, so they equate the timeframe and money spent on marketing to be quicker and cheap, so they feel a reduction is in order.  I have never heard of a doctor lowering their surgery cost because the operation took less time than they expected.  The charge is based on the procedure.  In some cases, they take less time, and sometimes they take more time to complete the surgery.  They don’t rebate the easier ones because they know they will have a really tough one in the next few weeks.

If we get in the habit of discounting or rebating fees because one sale is easier or quicker than another, we will lose in the long run.  There is no way of telling how hard or easy a transaction was to complete until you have the transaction fully closed and are looking back, even if the sale happened early and appeared to be easy.  There are always transactions during the course of the year that you end up not making a profit on because of the difficulty and stress associated with them.

I know what it’s like to try to defend my value and fee structure.  I know what it feels like to be face-to-face with a tough seller and to be asked to cut my commission rate.  I have had it asked of me hundreds of times; they say that another agent will do it for less money.  I have also had both the buyer and the seller, during negotiation, expect me to cut my fee or participate in them buying and selling the home through a fee reduction.  A Champion Agent experiences often those same situations.  They are just better prepared to handle them and maintain their fees, value, and integrity.

Myth #1 – Champion Agents who never cut their commission don’t get asked to as much as people who do.

It isn’t that they get asked to reduce their fee less frequently; it’s that a Champion Agent just doesn’t do it.  They choose not to play that game.  They have the personal integrity, sales skills, and mental strength to be able to defend their value and not give away their hard-earned and well-deserved fees and profit.

The real truth is that a high volume Champion Agent will get asked to reduce their fee more frequently than other agents.  That’s due to them putting themselves in more selling situations, which raises the likelihood of the subject coming up more frequently in the course of business.

Myth #2 – A little adjustment in my fee won’t hurt.

The minute you consider the option of a fee adjustment, you have opened Pandora’s Box.  You have started down the slippery slope.  Most agents are willing to adjust a little, but they shouldn’t.  They will be unable to stop once they start.

I also believe your fees affect your self-esteem and self-confidence.  There is a direct link between your fee structure and your self-esteem and self-confidence.  To be successful in sales both of those need to be protected and at a high level.  By cutting your fees, you are sabotaging yourself.  When you accept less, you start to feel that you aren’t worth as much; that your value is diminished.  I know few people who feel like Champions walking away when they adjusted their fee downward.  In fact, most of them feel poorly.  Some will even beat themselves up over being weak.  This whole negative mindset will affect your future performance.  It will create a negative image and negative expectation when faced with the tough situation again.  The belief you have in yourself will be changed and lowered.

Some people also can feel guilty because they are giving preferential treatment to one person over another.  You can feel like you are taking advantage of the client who is willing to pay you a full fee.  When you start wheeling and dealing with commission we can turn ourselves into the equivalent of a car salesperson.

Consumers have always rated car salespeople at the lowest levels on the respect chain.  The reason is two-fold.  First is the high pressure, hot box techniques that are often used in selling cars.  The second is because they know others are buying the same car for less than they are purchasing it for.  This is especially true for women.  Women, on average, buy the same cars for more than men.  The same car will sell for multiple different prices for multiple different people even in the same day.  Is that what you want your reputation to be as an Agent?

A Champion Agent also doesn’t adopt the two deal discount philosophy.  Each transaction takes its own individual effort, work, knowledge, and expertise.  Your surgeon doesn’t offer you a discount on the second operation.  I had surgery in college for a cyst removal on my tail bone.  The doctor didn’t get it all the first time, so a year later, I had to do it all over again.  My parents paid for it all over again even though the surgery wasn’t completely successful the first time.  This volume discount philosophy only occurs when we don’t clearly express our value in each individual transaction.

A few years ago, my father sold the family home that I grew up in and bought a condo in downtown Portland.  He knew which building he wanted to live in.  I flew up to look at all the condo choices he had in that building.  In a few hours, we settled on the right one for him.  My father, his real estate agent, and I discussed how the offer needed to be constructed and presented.  Once that was agreed to, I watched in horror.  This agent, who was a good agent, slipped into listing presentation mode right there in the condo.  He proceeded to talk about listing my father’s home.  He concluded his ten-minute discussion by stating that he would charge 1% less if Dad would buy and sell through him.  He gave away 1% of his fee or 33% of his gross fee and probably over 70% in profit within ten minutes, and he wasn’t even doing a real listing presentation!  He didn’t have the paperwork, didn’t have the value of the home figured out, hadn’t evaluated the marketplace, didn’t know the services that my father wanted.  He just gave away his hard-earned dollars without my father even asking.

The truth is my father would have never asked for a reduction in fee.  I had done a few transactions in my sales career with my father on investment property and development land.  I never offered a reduced fee, and he never asked.  I never offered because I was worth every penny of the fees I charged.  This agent, who is prominent in the Portland market, just gave away about $4,000 in commission at the drop of a hat.  I would estimate he gives away more than $75,000 to $100,000 a year in net profit because of his rebate philosophy.  He has probably given away in excess of $1,000,000 in commission in his fifteen year career . . . Ridiculous!

The only good news is; I get lots of mileage out of telling how even seemingly successful agents are not Champion Agents.  A Champion Agent would never operate that way!  The list of available prospects and customers is unlimited if you are willing to work for free or at a substantial discount.  It doesn’t take any particular skill to attract people as prospects if you discount.

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The Two C's of Objection Handling
  1. Communication

    When we look at our ability to communicate at the Champion Agent level, we need to evaluate our verbal, vocal, and visual communication skills.  The vocal and visual are the most powerful when dealing with objections.

    Verbal:  These are the actual words and phrases you use to communicate to people.  The words really don’t convey the complete story, since they account for only 7% of communication.  However, it is hard to think about how best to use the vocal and visual to improve your communication and conversion if you are stuck focusing on the words.  It is priceless to have mastered the words for the approximately forty major objections.

    Vocal:  This is the tone and pace of your delivery.  This carries more weight than the words.  We experience 38% of our communication using the vocal medium.

    Visual:  This is what people see when you speak.  It’s the powerful, subtle yes head nods, confident posture, and eye-to-eye contact.  This form of communication accounts for 55%.  Your body language conveys how you perceive yourself and the value of your service.  If you visually demonstrate that you are the best, the prospect and clients will have more faith in your claim.  They can see right through practiced responses that are inconsistent with the body language.  The salesperson who exudes confidence and excitement will generate the same feeling in their prospects and clients.

  2. Confidence

    When your confidence goes up, your competence goes up, as well.  When you communicate your confidence, and the prospect feels that you are prepared to handle the objections that you might encounter, this will reduce the amount of objections they express to you, and they will sign more quickly.  This confidence must come out from the initial contact with the prospect.  My question is what do you need to improve on to dramatically raise your confidence?  What skills do you need to practice?  What mental attitude do you need to change?  Is there knowledge that needs to be acquired?

    Preparation is essential for Champion Objection Handlers.  Learn who they are, so you can anticipate their needs and questions.  Prepare the proper questions; prepare to listen, as well, and you can better direct the presentation to answer their objections before they come up.

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