Coaches Corner Newsletter - Issue #901
 
October 4th, 2018
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Words of a Champion...

One of the technical mistakes many salespeople make in objection handling is using the word “but”. They make a statement to acknowledge the prospect’s views or feelings that closes the gap between them and the prospect. The problem is they often use the word “but”, which blows up the bridge between you and your prospect.

We say things like: “I see where that would cause you a concern” or “I understand your concern in this area.” Then we make the mistake of adding the “but” at the end of those phrases. The “but” negates everything you have said before. It says clearly to your prospect that “I see your point of view, but you are wrong” or “I see your concern, but I don’t care; I just want to make a sale”.

To get beyond the “but” use “and” as the linking word. We are trying to turn them, and the word “and” does a more effective job because it’s more conversational, less antagonistic, and it’s softer. You will still get your differing view across without the disingenuousness, contradictions, or problems that “but” brings up.

Other salespeople will try to be sophisticated by using “however” instead of “but”. I don’t advise that tactic. In the end, “however” is really a dressed up “but”. It’s “but” with a bowtie!

Dirk Zeller

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Acquiring Knowledge about Your Marketplace
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Think of your marketplace as your playing field, not unlike an athlete views a football field, basketball court, or hockey rink. The better you know every inch of that playing field, the more you can exploit it to your advantage. 

Before I became a real estate agent, in my early twenties, I was a racquetball professional. I played hundreds of tournaments over my sports career, and my best games were always at my home club. There, we had a court with floor-to-ceiling glass on the right side and back wall, making it particularly difficult to see in the back right–hand corner where the two walls of glass converged.

When players came for tournaments at my club, they struggled to pick up the ball in that corner – giving me what you might call a significant home field advantage. I rarely lost a match on that court.

Real estate is like any other competitive endeavor. If you learn all there is to know about your playing field, you’ll acquire a competitive advantage that will distance you from the competition and build the basis of your success.

The most challenging aspect of gaining market knowledge is determining what facts to collect and where to find the information you need. Fortunately, a number of readily accessible resources are available to real estate agents. All you have to do is contact the right people and ask the right questions. The following sections will help you on your data quest.

Your Local Board of REALTORS®

All professional agents belong to REALTOR® associations that compile and make available a wealth of statistical information. The facts you can obtain from your local board include:

  • The number of agents working in your marketplace. This information helps you understand your competitive arena. It also allows you to track whether your competition has expanded or receded over recent years.
  • The production of the average agent in terms of units and volume sold.  By obtaining this information and comparing it with your own production units and volume, you will be able to contrast your performance against the other agents on your local board. This information will be useful in your effort to calculate your share of the market. It also helps you understand how you stack up against the other agents your prospective customer might be considering. 
  • Experience levels of agents in your field. Most Boards of REALTORS® keep information regarding the percentage of agents recently licensed and those with three, five, and ten years in the business. This information provides you with another factor against which to measure your competitive position.

Meet with the executive director of your local Board of REALTORS® to learn the extent of information that is available to you, how frequently new research is released, and how you can obtain copies for your ongoing review. 

Your Local Multiple Listing Service

The Multiple Listing Service, commonly called the MLS, keeps statistics of all the listings and sales in your area that are processed through the MLS. 

The MLS does not cover every sale due to the fact that some sales bypass the system. Often, new construction builders, particularly in very robust markets, don’t submit their inventory into MLS. Agents also sometimes sell properties themselves or in-house, and those sales are not submitted to MLS.  However, the MLS, in most markets, covers more than 95% of all marketplace sales, and it represents the surest indicator of real estate activity in your region.

The MLS can give you key market statistics including:

  • Days on the market averages
  • Listing price to sale price ratios
  • Listings taken versus listings sold ratios
  • Geographically active markets inside your service area

Nearly all real estate agents recognize the MLS for its significant role in increasing communication and exposure of real estate properties. Fewer real estate agents recognize the MLS for its powerful but under-utilized role in reporting trends and performance of agents, companies, and subsets of the marketplace. Access and put this information to work to your advantage.

The National Association of REALTORS®

There are a number of national resources that you can access to obtain a wealth of knowledge and statistical trends. The best is the National Association of REALTORS® (NAR), which produces some wonderful studies, reports, and market statistics that most agents never use.  The truth is most agents don’t even know they are available.

Their monthly “Real Estate Outlook” publication provides a national view of real estate sales: What has happened in terms of sales, days on the market, what people are purchasing, what financing they are using, emerging trends, and predictions for the future.  This is a powerful tool in the hands of a successful agent. If you aren’t currently receiving and reading it, put it into your information arsenal immediately.

They also conduct annual surveys and studies of home sellers and homebuyers. They delve into why consumers selected particular agents, what services they sought from agents, and what geographic areas, home amenities, and features caused them to buy.  This type of knowledge will enable you to provide the highest level of counsel and value to your clients.

NAR also issues reports on second home markets, investment properties, financing options, and many other topics. It’s one of the best services that NAR provides, but it’s the service that agents use the least. Make yourself an exception and dive into this deep pool of information.

Visit the NAR website at www.REALTOR.org to obtain an overview of the association, to access quick links to useful sites including REALTOR® Magazine Online, and to subscribe to receive e-mail updates on real estate topics and statistics.

Other Sources of Marketplace Information

Consult your broker about company-compiled statistics on regional trends and also on your firm’s market share and market penetration. Especially if you work for a regional or national real estate company or franchise, your organization has likely commissioned studies that will be useful to your fact-gathering efforts.

Also, if you live in a state where sellers provide title insurance to buyers, the title companies often conduct market trend reports that allow agents to better understand the marketplace they are working in.

 
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Lead Conversion and Follow Up
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The first step to higher lead conversion is developing a better definition of what a lead is.  What’s the criterion of a lead for you?  Is it a specific timeframe or level of motivation?  Is this a subjective or a pre-determined scale you use?  For most Agents, a lead is defined as any human being who can fog a mirror when held up to their mouth.  It’s basically anybody and everybody.  That definition is much too broad for us to ever reach the Champion Agent level.

Too many of us are investing our time and money trying to convince any and every lead to turn into a good lead.  We, in effect, say, “Oh, please, Mister lead, if I work with you long enough, won’t you turn into a good lead; because I really don’t want to have to prospect, and I need to make my mortgage payment next month.”  Are you trying to turn bad leads into good leads, or are you looking for good leads?  It’s almost as if we are trying to water dead plants in hopes of resurrecting them from the dead.  They are dead . . . move on!  What is the quality of your leads right now?  What would someone pay you to buy your leads?  If the answer is not much . . . Houston, we have a problem.

Champion Rule:  The leads you have in your database are in other Agents’ databases as well.  Whoever calls them and meets with them first wins the game.

This, my friends, is the truth of our business.  For some reason, many Agents haven’t come to grips with this concept.  We think somehow, we are the only Agent who knows about this prospect’s desire to buy or sell.  This is particularly true of Agents who work exclusively by referral.  You are making a huge mistake in today’s competitive market if you feel that you have the inside track or non-competition track.  Couldn’t another friend have referred them to someone else?  Isn’t it possible that they searched the Internet a little and got information from other Agents?  Could they have been out to an open house?  When a lead appears, we need to take action toward a face-to-face appointment immediately.

Effective lead follow-up is like threshing wheat at harvest in ancient times.  Threshing is, essentially, separating the wheat from the chaff.  The good kernels of wheat would be removed and used for food, while the chaff would be blown away in the wind.  If we aren’t actively threshing our leads, we will become complacent.  Too many leads can cause lead complacency.  Too many leads can be a bad thing.  You did read that right.  Too many leads can be bad! 

An overabundance of leads can lead to complacency in your prospecting.  You can stop or slow the flow of new leads by reducing your prospecting because you feel comfortable because you have a certain number of leads (50, 100, 1000, or whatever the number may be).  You may feel that you don’t need to prospect today because you have enough.  What if what you have left has a high percentage of chaff in it that you haven’t found out yet?  It’s going to take a lot of effort to find that out. 

When I started working with a particular client a few years ago, I asked him how many leads he had who wanted to buy and sell in the next six months.  He said he had 247 that fit into that category.  He was proud of himself, yet I found out he had not talked with them in a while, and he hadn’t been prospecting because of this volume of leads.  His attitude was “I don’t need to; I have 247 leads”.  I asked him to call all 247 in the next two weeks and ask for an appointment.  If they were not ready to list or buy, he was to set an appointment with them anyway to move the relationship along, so he could secure them as future clients.  Two weeks later, the first thing out of his mouth before hello was, “I have fifty-nine leads.”  He dumped over 182 leads that were junk.  He realized he needed to prospect to create new leads every day.

 
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The Case for Expired and FSBO Listings
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If you’ve been in the real estate business for any time at all, you’ve probably already sensed that many agents have a preconceived negative impression of expired listings and for-sale-by-owner or FSBO listings. They act as if these listings represent second-hand goods not worthy of an agent’s interest and ability. They can also look down on agents who do work them as being beneath them. As a result, they turn their backs on tremendous revenue potential and literally thousands of annual listings. That’s great news for agents like you who can reap great success by converting expireds and FSBOs to new listings for your business.

I’d go so far as to make this bold statement: I honestly believe that agents who work or have worked expireds and FSBOs with successful outcomes are the best salespeople in the real estate industry. They are skillful in sales, time management, prospecting, lead follow-up, presentations, objection handling, and closing. They know how to put their sales skills to work to book appointments, make presentations, and persuade potential customers to become clients. As a result, they make more money and have more listings than agents who don’t work these two areas.

If any of that sounds like a pretty good path to follow, read on.

Any new agent with aspirations to climb all the way to the top tier of success in residential real estate should consider working expired and FSBO listings for three good reasons:

  1. They’re easy to find. You don’t even have to ask the owners if they’ve considering selling. All you have to do is notice the For Sale By Owner ads or signs or scan the MLS files for property listings that expire without buyer offers. As the saying goes, it’s hardly rocket science.

  2. They exist in any kind of market condition. You read that correctly. If you’re accomplished at converting expired and FSBO listings, market conditions will have little bearing on your income and success. Here’s why. In a market that is experiencing sluggish sales, buyers are in control and listings move slowly, if at all. As a result, a large number of listings expire each day, week, month, and year, providing you with a near-endless supply of conversion opportunities. On the flip side, when the marketplace is robust and listings are moving briskly, sellers enjoy quick sales, high list to sales price ratios, and multiple offers. In this environment, an abundance of FSBOs sprout up. Consumers, due to what they see and read in the media, think selling a home is easy. So they devalue the services of real estate agents and try to sell on their own, as proven in the go-go years from 2002 to 2005.

    Agents who work expireds and FSBOs can make their businesses bulletproof by simply shifting their listing emphasis to fit market trends – focusing on expireds in sluggish markets and on FSBOs in brisk markets.

  3. Working expireds and FSBOs provides the best training an agent can get. No question about it, if you’re going to convert four, five, or even six expired or FSBO listings a month, you’re going to become a great salesperson. You’ll work hard getting there; I’m not going to whitewash the truth. But the rewards – in terms of self discipline, time management, sales skills, personal confidence, and (last but certainly not least) a whole lot of money – will make the effort well worth the investment.

Securing an expired listing is a pretty simple process that many agents make more complicated than necessary.

Basically, to win an expired listing you make a phone call or series of phone calls. Yet agents create complex and elaborate systems involving extensive postcard mailings followed by sales letters and direct mail packages. They jam the owner’s mailbox with cute, clever, and even corny packages, postcards, and letters. They create envelopes that look like they contain express deliveries. I’ve even seen agent-created mailers shaped to resemble firecrackers which, when opened, reveal the message “Bang! Your listing is dead.” And we wonder why people call it “junk mail”.

Agents who rely exclusively on direct mail win a distant second place behind those who call directly or use a call and mail combination. An owner with a ready-to-expire listing is flooded with direct mailers, all competing to be the one that grabs attention and interest. What grabs attention, though, is personal contact.

 
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