More Free Cheese In The Mouse Trap!
OPINIONby Peter Mericka B.A., LL.B
Real Estate Consumer Advocate
Real Estate Lawyer
Qualified Practising Conveyancer Victoria
Director Lawyers Real Estate Pty Ltd
We have previously examined the way in which consumers are lured into the clutches of estate agents through FREE property valuations, but we haven’t seen such blatant promotion of valuations as a tool for the “conditioning” vendors before.
Promotional material from MyHouseValue.com.au tells estate agents how to increase their “list to sell ratio” and increase their income without increasing their hours worked. One of their tips is:
“Set the Stage for Price Reductions
A terrific technique to use when taking a listing is to explain to the seller that as a normal part of your sales process, your team mails out a price reduction letter every thirty days to homes that have not yet sold. This will provide the seller with an ongoing push to reduce their price, and provide you with a talking point during your regular phone follow up calls”
The promotional email provided plenty of clues on how to deal with a vendor client, but seemed a little light on with regard to strategies for selling a client’s property for the highest possible price.
What’s the difference between an estate agent’s valuation or price estimate and a “lead generation system”? Read the full promotional email and see if you can work it out.
Reproduced below is the full text of the promotional email:
MyHouseValue News and Views – Edition 2
Welcome to the second edition of ‘MyHouseValue News & Views’
This month we will conclude our article on ‘Databases – who goes in’ by detailing what you can send to your database. Read more…
Increase your list to sell ratio and you will increase your income without increasing your hours worked. We will help you identify a few key ways to increase the percentage of your listings that sell. Read more…
With Christmas fast approaching and the third quarter of the year concludes, it’s a good time to do a reality check with your business plan. Are you on target? Are you ahead? Are you behind? Read more…
The two key ingredients for a successful listing presentation are thorough research and confidence in your own abilities to give the sellers what they want. How do you fare? Read more…We hope you enjoy this edition of ‘MyHouseValue News & Views’
All the best
The MyHouseValue.com.au team
‘unsubscribe link at bottom of page’
Databases – Who goes in and what do you send?
Last month we look at who should make it into your database.
This month we look at what you should send them.
Sending something is simply about keeping you are your office ‘top of mind awareness’ for that client. The information needs to be both informative, eg. of interest locally and have a real estate flavour.
Newsletters have always been popular with agents as a means of getting their message out and I believe are still an effective way of communicating with a prospective client.
The secret to a good newsletter is it has to be regular. Many agents start out with the grand ideas of writing a newsletter themselves, only to eventually work out they are neither journalists nor copywriters.
Depending on the size of your database, it may not be feasible to send out a hard copy newsletter. In these situations electronic newsletters are useful and much more cost effective.
For a small investment you can have a professionally written newsletter provided on a regular basis. Companies such as Robert Bevans Best Practicewww.bestpractice.com.au and Quartile Researchwww.quartileresearch.com.au offer this service.
The newsletter is bandaged with your logo and for all intent and purposes looks as though it has been prepared by your office.
Don’t be put of by thinking the other agents will also do this. Most won’t go to the effort of compiling an accurate email database and then keeping it up to date.
I have listed some other contact ideas below.
1. CMA (comparable market analysis) – if you have access to one of the property information providers such as RPdata it is very easy to compile a report with recent sales. Send this out once a quarter and after a while your prospective clients will start looking for it.
2. Anniversary card – for clients who have bought from you, send an anniversary card or why not try am anniversary SMS.
3. Birthday card – similar to anniversary cards. When someone buys from you keep a record of when their birthday is and send them a card or SMS.
4. Local paper articles – not all your prospective clients will live in the local area or reads the local paper. Send copies of articles in the local newspaper that would affect the value of real estate in the area, which is always appreciated.
5. Free reports – there is a huge amount of free information available on the internet. Do some research and prepare a couple of reports you can send out with a note occasionally eg. mistakes of novice investors, steps to take before selling your home, secrets lenders don’t want you to know etc. I’ve effectively used these and other reports in the past, contact us and I will be happy to forward them on.
Even though “everybody” is the easy answer to “Who goes into your database?” – I believe a great system will answer the “who,” the frequency of contact, what that contact is, and the delivery method. A manual on how your database system functions will make it easier for you to delegate when it gets huge from all the business it generates – but that’s another article.And remember if they are not thinking about you, they are probably thinking about another agent.
Five Ways to Turn Your Listings into Sales.
1. Don’t buy the listing!
Saleable listings are almost always created at the listing appointment. Weak agents tend to have “I’ll take the listing” at any cost type of mentality. But think about the stupidity of that attitude. If you take a listing that is overpriced or the condition is horrible, or if the seller won’t allow you to market the property properly what will the end result be? A frustrated seller, an empty bank account, and a huge amount of wasted time!Instead decide now that you will choose to only take listings that you feel have a reasonable chance of selling. This may include setting your own internal standards. Example: Perhaps you will only accept listings that are within 5-10% of your recommended price range.
To set the stage for success you have to come prepared to listing appointments. Meaning you have to have done your homework.
One of the key ingredients to taking a saleable listing is setting the right asking price.
Start from your gut instincts and work backward. You and I both know that as soon as we walk into almost any home, we instantly have a gut reaction as to what the home will sell for, I would call this your “gut” price. It may be wrong, but my guess is usually it’s pretty accurate. Most agents have this reaction and then immediately begin fighting it, in other words they look for ways to build up the price. Why? So they can buy the sellers love! Don’t do it! Trust your gut!
2. Set the Stage for Price Reductions
A terrific technique to use when taking a listing is to explain to the seller that as a normal part of your sales process, your team mails out a price reduction letter every thirty days to homes that have not yet sold. This will provide the seller with an ongoing push to reduce their price, and provide you with a talking point during your regular phone follow up calls:An example of how this works follows;
Sally: Listen, I want to really thank you for this listing I’m very excited to begin marketing the property. I want to take just a couple of minutes and talk about the follow up process. Would that be OK.
Seller: Sure.
Sally: One of the things that my team does is to mail out an auto-price reduction letter every thirty days. I don’t want you to be offended by this, we do it with every seller. You can do one of a few things with it – Of course you can throw it away, or you can save it just in case you might want to use it in the future, or you can just fill in the price adjustment and mail it back… If you do adjust your price let me tell you what will happen then….
By using this simple technique you will keep your seller focused on an area that they control, price! This can open up the discussion to a price adjustment, and create an opportunity to sell the listing.
3. Talk about Inspections
One key to building a saleable listing is to talk about showings. Sellers often associate showings directly with your performance or lack there of. They tend to think – If my house is not being shown it must mean that my agent isn’t advertising enough, so bingo they call you and complain. Most agents will then run off to spend even more money on a listing that will never sell.Instead why not explain the truth to the seller. What is the truth? Here it is:
If the home is not being shown it’s almost always because the market is rejecting the price. If on the other hand the home is being shown but you are not receiving any offers it’s almost always because there is something wrong with the condition of the house. If you explain these facts at the listing presentation you will set yourself up to talk intelligently about getting the home sold, instead of just placating the seller with more advertising that will never work.
Example:
Sally: A couple of things we need to be really conscious of, first, if we don’t get any inspections or very few inspections – what this means is that the market is rejecting the price, and no amount of marketing will fix it. At that point I may need to ask you to adjust the price. The reverse would be if we get a lot of inspections but no offers, that would indicate that the buyers are rejecting something specifically about the house. My job would be to find out what it is and see if there is something we can do to fix it.
4. Be Brutally Honest During the Listing Presentation
Most agents think that telling sellers what they want to hear is a smart way to get listings. In reality it is almost always a straight line to the bottom of the profitability barrel. When you lie to sellers, you are lying to yourself. You end up congratulating yourself for taking a listing, which has absolutely no chance of selling. What a huge waste of time and energy! Instead we should tell sellers what we honestly think. This fresh approach may seem radical, but I guarantee you sellers will love you for it.The classic example of this is in regards to the condition of a home. Most sellers will ask an agent what they think should be done to prepare the home for marketing, unfortunately most agents will respond with some kind of lame answer like “Oh, nothing, it looks terrific!”. Really, what about the holes in the rug? The water spots on the ceiling? Or the dogs “accident” on the front steps? Terrific?
Instead try this technique:
Sally: Listen, we can go two ways here. I can tell you what you want to hear, or I can tell you the truth – Which would you prefer?Client: The Truth
Sally: Are you sure?
If you were the seller what would your answer be? Probably the same as mine! “Tell me the truth.”5. Give Them Something to Do
Think about your seller for a minute. They’ve been thinking about selling for the last six months. Finally they work up the nerve to invite an agent over to the house. They listen carefully to the presentation, all the while getting more and more excited about the prospect of moving. At the end of the presentation they agree to list the house. Now they are on cloud nine, and they just can’t wait for that first inspection.The downside, of course, is that all they can do is wait, and wait, and wait, and watch. They watch your every move, your flyers, your advertising, your website, and your follow up letters. Inevitably they find mistakes, which in their mind is exactly why the home is not selling. They become frustrated, irritated, and hard to deal with – eventually they fire the agent and hire another.
Is this typical? I would say this exact scenario happens tens of thousands of times a year through out the country. Instead of just letting your sellers sit and do nothing why not give them a list of things to do. For instance – How about a Pre-Inspection Checklist, a Pre-Marketing Checklist, or an After Inspection Checklist. This simple list of things to do can provide a seller with an outlet for all of that nervous energy.
Is Your 2006 Strategy On Target?
As the third quarter of the year concludes, it’s a good time to do a reality check with your business plan. Are you on target? Are you ahead? Are you behind?
One of the reasons the great hockey player, Wayne Gretzky, had an edge over his competition, was because he looked to the future: “Some people skate to the puck. I skate to where the puck is going to be.” Where is your market going? What changes are needed for you to be positioned to hit your target this year?
Block two to three hours on your calendar to work on your business in the coming days. If you do this every quarter of the year, you will find you can make course corrections and be more powerful in achieving your goals.
Here are three steps to take:
1. Review the quarter numbers
If you’ll take the time to do an in depth view of this, you’ll discover information to make and keep you profitable.Numbers to track:
• Your Gross Production
• Your Net Proceeds
• The Number of Listings Taken
• The Number of Buyers Sold
• Average List Price/Average Sales Price
• Where each transaction came from
• Where your advertising dollars were spent2. Compare To Your Plan
If you are right on target, congratulations! Keep up the momentum and take a look to see if there is any fine-tuning that can leverage where this year’s business is being generated from to enable you to maximize what is already working.If you are behind: What is the gap? What will it take to get on target by the end of the year? What actions need to be increased? Take a look at where you have gotten business this year. Is your marketing plan aligned with the results you are getting? In other words, is where you are spending your money where you are getting business from? If the Internet is generating 20% of your income and print ads are generating 5%, is your marketing reflective of this? Where can you tweak your actions and dollars to be more effective?
If you are ahead, great job! I like to see my coaching clients have their financial objectives met by the end of October so they can relax towards the end of the year, if they want to (or just get real picky about working with the perfect clients, instead of the high maintenance whiners). What IS working? Can you go deeper with your impact in these areas to take advantage of the trend?
3. Strategizing For the Future
• Regardless of which category your numbers fell into, perhaps the most important action you can take from this business planning session is to look for the trends.
• Are the niches you are focusing on the ones where the activity is occurring?
• What new areas are emerging? A young new home subdivision (3-5 years old) is a great place to establish a foothold as a guru before anyone else does.
• What changes in consumer buying trends should you be taking into consideration? A need for homes with offices could be an opportunity, if you target that market. With consumers hungry for information and learning they educate themselves before they call you.Wayne Gretsky also said, “You’ll always miss 100 percent of the shots you do not take.” And “The fundamentals of the game are never going to change, but the things you’re going to do, that changes.” Every marketplace offers individual and unique opportunities. The agents that are aware and awake to shifting BEFORE others see the trends will have an edge! Will you be there?
Author Joeann Fossland, GRI, LTG, Master Certified Coach
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Listing presentation – sell yourself and be a winner.
Arranging a listing presentation is the first step that most people take when they want find the most suitable real estate agent to sell their property. Gone are the days when an agents’ credibility was determined by a simple competitive market analysis and the fee they charged. Today’s sellers want to hire an agent that they can rely on to put their needs before their own and get the best possible price for their home.
For an agent, the listing presentation is a fantastic opportunity to demonstrate your sales and negotiation abilities to the seller. This may be the only opportunity that you have to win the client. So how do you make this happen?
The two key ingredients for a successful listing presentation are thorough research and confidence in your own abilities to give the sellers what they want.Having a pipeline full of prospects will do wonders for your self esteem and enable your true personality to emerge. During bleaker times, don’t be tempted to go all out for the hard sell – people object to being pressured, especially in their own home. A well-prepared listing should include a comparative study of all similar properties in the local area and a detailed marketing plan which will incorporate a sale schedule and summary of the budget.
Asking the seller questions is absolutely vital in building a good rapport. You have to remember that a listing presentation is not about YOU. Remember that the person asking the questions is the person in control of the situation. You need to control the ebb and flow of the conversation.
The questions you ask need to help the seller to vocalise the following:
Their expectations and concerns: What do they want from you? What sort of price range do they expect their property to sell for? Are there any foreseeable problems with the property that need addressing before it can go on the market?What’s important to them: Do they want a quick sale or would they be prepared to hold out longer for the right price?
What information they need to make a decision: What further advice can you provide them that will make them decide to choose you as their agent?
When gathering information from the seller, bear in mind that the listing presentation needs to be principally directed at the price of the property, with marketing and advertising being secondary issues.
It is important not to undervalue yourself when the subject turns to commission. Sellers usually select 2-3 agents to make a presentation before making a decision. In many cases a rival agent will have quoted a cheaper price for their services and it is up to you to show them why you are worth your asking price. Explaining to the seller that the price of commission is directly proportional to the skills of the agent is the best way to acquire a better rate for yourself.
One of the main reasons why commission becomes an issue on a listing appointment is because the homeowner is focused on the wrong thing. If a homeowner is trying to save the commission, they obviously have not seen the value of working with a real estate agent, any real estate agent. So you first have to establish that working with a real estate agent is essential and then you have to make them understand why you’re worth your commission.
The subject of commission should not be addressed until the value of your offer has been established. Building trust with your client will pay dividends as you may be able to raise your level of commission depending on the level of rapport you established.A thoroughly prepared listing presentation gives you confidence and provides hard facts for the seller. If you have adequately prepared for every eventuality, there should be no question that you are not prepared to answer any question to get the listing on the terms that you want.
The information contained in this news letter is of a general nature only and is not intended to be specific advice – it is provided for general guidance only. No warranty is provided in relation to the accuracy or reliability of any of the information contained in this news letter. No party should act, or fail to act, based on the information contained in this news letter.
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