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COVER FEATURE: The List Issue 2006 Prospecting & Service
15 ways to succeed in different types of markets Real estate trainer Mark Leader explains how to build business and impress customers no matter what “mood” your market is in. When your market is slow: • Work high-turnover areas. Find niches in which there are more transactions than average for your market. For example, you may want to focus on a neighborhood of starter homes where there’s a steady stream of first-time buyers moving in and growing families moving out. •Be realistic about pricing. With a larger inventory of properties on the market, buyers can be choosier. Homes that are priced right will sell first. It’s not easy telling sellers that their home is priced too high, but it’s critical information. (For more on pricing homes, visit the Current Links .) • Educate your customers. Use market statistics and newspaper clippings to show clients that housing activity is slow. Tell them about ways to make their property stand out from the rest, such as by improving curb appeal. (For more on curb appeal, visit the Current Links .) • Stay committed to customer service. In a slow market, competition among real estate practitioners is fierce. Differentiate yourself from the crowd with top-notch customer service. Go the extra mile to make sure your customer is happy and to say thanks for the business. In a disaster-prone market In a disaster-prone market: • Know the risks. Do your own research and talk with industry veterans in your area so that you fully understand the risks of working and living in a market that has a history of hurricanes, mudslides, floods, forest fires, or other natural disasters. • Prepare a detailed disaster plan. Be ready for the worst so that you can react logically, not emotionally, if a disaster strikes. Plan for your personal and business needs. Stock up on water and other essential supplies, and determine a stand-by office location in case yours isn’t accessible. By being prepared, you can help customers stay calm. • Turn your Web site into a community information portal. Tell customers that your Web site will be updated with emergency information, important links, and community news if a disaster occurs. Make sure you account for this in your personal disaster plan so that the site will be ready for customers in need. • Be honest about past situations. Prospective buyers in your market undoubtedly will ask whether a disaster has ever occurred in the area or affected the home. The buyers are entitled to an honest answer so they can make a sound decision. Explain what happened and how the community recovered. In a declining market: • Be armed with market data. Have up-to-the-minute information on market conditions so that you’ll be knowledgeable at listing presentations and when talking to buyers. Give customers a clear view of what could happen if the market continues to decline. Don’t paint a rosy picture; paint an honest one. • Sell your company’s services and success. Wary customers need reassurance that they’ve chosen the best practitioner and brokerage to navigate them through uncertain waters. Highlight your experience in similar situations and explain all of the resources your brokerage provides. • Price ahead of the curve. If you’ve accepted a new listing, your sellers would be smart to price the home a hair less than what comparable homes on the block recently have sold for. By the time showings begin, it’ll be priced competitively and have wider buyer appeal. • Become an agent of change. Work with local government leaders and non-profit development organizations to help jump-start a lagging market. Involvement in revitalization programs can drive investment and spur property appreciation in downtrodden areas. Positive media coverage is a side benefit. (For more on revitalization, visit the Current Links .) When your market is crazed: • Pay attention to details. In a frenzied market, deals happen quickly and details can be overlooked. Deliver on your promises if you want to win repeat business. • Help buyers make their best offer first. When multiple bids are the norm, it’s important that buyers are ready to make a competitive offer quickly. Ensure they’re ready with an earnest money deposit and that their financing is lined up. A down payment of 20 percent or more also can improve the odds that an offer is accepted. • Save 10 percent of your gross revenue for a rainy day. If the market slows down, you’ll have enough money saved to continue full force with your personal marketing, prospecting, and other business needs. Sources: Mark Leader, Mark Leader Courses and Leaders Choice sales training program ; “Agents of change,” REALTOR® Magazine, June 2005 5 credit mistakes buyers can avoid Giving top-notch service to buyers starts with making sure they’re on solid footing to obtain a home loan. Help them bypass these common credit mistakes. 1. Not leaving enough time to fix errors. Consumers should review their credit report at least once a year. Inaccuracies aren’t uncommon, and it takes time to set the record straight. Each of the three major credit reporting agencies—Equifax, Experian, and TransUnion—provides one free credit report per year (www.annualcreditreport.com). There’s a charge, typically about $15, to see the actual credit score, but the cost is worth it. 2. Changing spending behavior. A surprisingly good credit score can tempt prospective home buyers to open credit card accounts or take out a loan for a new car. Such actions can damage their credit score during a critical time, making it harder to obtain the loan they want. 3. Seeking a subprime loan. Even those with a marginal credit score can qualify for conventional loans. Tell customers to apply for the best mortgage loan they can find and to remember that other factors besides their credit score, such as the size of their down payment, come into play when applying for a loan. 4. Confusing “prequalifed” for “preapproved.” Prequalification doesn’t require the lender to verify income and means very little in terms of a consumer’s ability to obtain a mortgage. Encourage customers to get preapproved, a process in which the lender checks employment history, income, and bank funds, and reviews the credit report. 5. Forgetting about credit after the purchase. Your customers moved into their new home, happy they’ll never have to worry about credit scores again. Not so fast. If they decide to refinance or move, their credit will once again take center stage. Remind customers to keep their credit score in mind as they deal with the expenses of being a home owner. Source: David Reed, CD Reed Mortgage Bankers, Austin, Texas, author of Mortgages 101: Quick Answers to Over 250 Critical Questions About Your Home Loan (AMACOM, 2004) 5 ways to make people happy Your business success depends on how well you build positive relationships with customers. If you can make them happy, you’ll keep them coming back. 1. Be honest. Many people have been conditioned to expect an evasive or equivocal response from companies. If customers ask how your service differs from that of competitors, give an honest and straightforward answer. 2. Let them talk. People enjoy talking about themselves; your customers are no exception. Ask questions not just about their real estate goals, but about their family, profession, and hobbies. Pay attention to how much of the time you talk compared with the time your customer talks. If you find that you’re talking too much, make an effort to ask more questions and listen. 3. Show you care. Thoughtful acts say a great deal about who you are. Record the names of customers’ children, pets, or birthdays and use the information when asking how their family is doing or to send a card. E-mail them a news article about their favorite band or send a recipe you think they’d like. 4. Be persistent (but not aggressive). Do you know whether your customers think your actions are aggressive? If they perceive you as being too pushy, they may back away from doing business with you. Rather than guess, simply ask them how often they want you to contact them and what time of the day they’d like to be reached. 5. Don’t break your word. If you tell customers that you’ll e-mail them the next morning with a new batch of home listings, follow through. If you say that you’ll always return their call within an hour, do it. People never forget a broken promise. Source: Jerry Acuff, The Relationship Edge in Business: Connecting with Customers and Colleagues When It Counts (John Wiley & Sons Inc., 2004). Adapted with permission of John Wiley & Sons Inc. Great ways to personalize closing gifts for less than $40 Closing gifts that are tailored to your clients — rather than the same old tchotchkes customized with your name and logo — demonstrate that you’re focused on serving their needs, not your own. These thoughtful gift ideas are sure to make your clients smile without making a big dent in your pocketbook. Cater to the kids. Moving is stressful, especially when young children are involved. Look Who’s Moving to a New Home (Budding Family, 2006), a keepsake book authored by Renee Raab Whitcombe and designed by Angelique Thermes-Martin, eases children through the process. Ideal for 4- to 8-year-olds, the book has fill-in-the-blank pages with lots of photo inserts so that kids can keep memories of their old neighborhood and welcome the new one. $24.95 plus shipping. Budding Family, Manhattan Beach, Calif.; 310/702-4466; www.buddingfamily.com. Incorporate a home photo. Even after all of its delicious contents are digested, this cookie tin decorated with a photo of the buyers’ home will be a lasting reminder of your service. Design the tin online; upload a photograph from your computer and add the customer’s name, new address, or a message. The tin is filled with home-style cookies that are baked and shipped on the same day. A personal greeting card is included. Prices start at $34.95 plus shipping. Chip-N-Dough Cookie Co., Santa Ana, Calif.; 800/523-6844; www.chipndough.com. Support their cause. If your clients are big on being “green,” show them you support their cause with a memorable gift that benefits the earth. The Toilet Tree is a standard-size plunger that comes with an attractive faux plant that fits atop the handle, keeping the plunger out of sight. How does that help the planet? Because when you buy one, the National Arbor Day Foundation plants a tree in your name or someone else’s name that you specify. $24.95 plus shipping. Toilet Trees, Anchorage, Alaska; 866/918-7337; www.toilettrees.com. Provide convenience. Great service is all about making life easy for your customers. Show your moving-weary customers that you understand their situation by giving them all the supplies they need for a home-cooked dinner in their new digs. The Pasta Pot Dinner for Four comes with gourmet pasta and sauce, bruschetta, specialty crackers, and Italian cookies—all packaged in a six-quart pasta pot with a built-in strainer. Feeds four to six. $39.95 plus shipping, corporate discounts available. Flying Noodle, Stamford, Conn.; 800/566-0599; www.flyingnoodle.com. Generating referrals Past customers aren’t the only ones who can send business your way. Here are ideas for increasing referrals. “I buy a table at a charity event, school fund-raiser, or chamber of commerce mixer. I invite some clients and encourage them each to invite a friend. Now I’m not a broker but the guy who invited them to dinner. At some point during the conversation I’m usually introduced as somebody’s broker and it’s almost by osmosis that I become their friend’s broker, too.” —Daniel Webster Johnson, ABR®, CRS®, RE/MAX Properties of the Summit, Breckenridge, Colo. “I’ve made it a point to get to know the people who answer the phones and handle administrative work for rental apartments, property management companies, and condo offices. They know when leases are coming up, and tenants and owners alike always seem to let them know well ahead of time what their buying or selling intentions are. —Brad Kintz, Long & Foster, REALTORS®, Alexandria, Va. “I’m a full-time working mother and find many of my referrals are generated through local activities that involve my child—music classes, my babysitter, playgroups. People with young children can see that I understand the needs of young families who want to stay in the same area but need more space.” —Nancy Tassone, JDL Brokerage Co., Chicago “One way to generate more referrals is to join a business referral group such as Business Network International . This will provide you with a “board of directors” for your business and a steady stream of referrals.” —Mary Zentz, CRS®, e-PRO®, RE/MAX Suburban, Arlington Heights, Ill. “I set up an e-mail list of my high school and college classmates, as well as other alumni. I let them know that I’m in real estate and explain how I can help them, their family and friends, and their co-workers. If they’re outside of my service area, I offer to help them identify qualified real estate professionals in their area.” —Jamal Smith, Keller Williams Real Estate, Blue Bell, Pa. A word to the Y’s The members of Generation Y, also known as Millennials and Echo Boomers, are beginning to enter their homebuying years. Do you have a plan for reaching them? Marketers consider this group, whose members were born roughly between the late 1970s and late ’s, to be the first true digital generation, meaning you can expect tactics such as online video, podcasts, and cell phone text messages to play a much bigger role in marketing campaigns aimed at them. In the grand scheme demographers have created, here’s how the Y’s compare to their elder homebuying counterparts.
Influencing Gen Y Amount of influence each of the following items has on getting members of Gen Y to try a new product, service, or brand. The percentages represent the combined number of people rating each item a 6 or 7 on a scale of 1 to 7, where 7 means “extremely influential” and 1 means “not at all influential.”
Generational word association
Teach the children well
A great way to help students get off on a sound financial footing — and create name recognition among future home owners—is to offer free seminars to high school and college students. Working with students can be personally rewarding, too. For 15 years, the Colorado Association of REALTORS® has offered a high-school curriculum called “It’s Your Move.” Among the topics:
Finding an apartment
Furnished or unfurnished? Inspecting the apartment Lease application Tenant and landlord rights and responsibilities Discrimination in housing Renter’s insurance
Role of the real estate practitioner
What’s a REALTOR®? The real estate broker The real estate sales associate Duties and services of a real estate agent The broker’s role in the community and the housing industry
Buying a house
Exploring the market Checking the property The real estate sales contract Types of loans Closing the deal Keeping house records
Selling a house
Changes in value Sell or remodel? Adding space Modernizing
Credit
The importance of good credit Credit scores What impacts credit Tips for maintaining good credit
Source: Colorado Association of REALTORS®, Englewood, Colo.
5 niches to consider
Focusing on a particular segment of the market lets you create targeted marketing materials and, in some cases, develop expertise in a particular property type — both excellent ways to differentiate yourself from your competitors. The niche you choose will depend on your interests and your market, but here are some ideas to get you started.
1. Pet owners. A survey by the American Pet Products Manufacturers Association in Greenwich, Conn., found 63 percent of all U.S. households — 69 million — own pets, up from 64 million in 2002. If you share a passion for pets, let prospects know you’ll treat their furry friends right.
2. Golfers. There were 27.3 million adult golfers in the United States in 2004, up from 22.6 million 10 years earlier, according to the National Golf Foundation in Jupiter, Fla. Can you say golf course community?
3. College students’ parents. The U.S. Department of Education estimated more than 14.8 million undergraduates enrolled at a two- or four-year institution in 2005. The number of enrollees is expected to climb to more than 16.5 million by 2014. Help parents hedge high rental housing costs with a condo for Junior.
4. Retirees. The number of people age 65 or older will increase to 71.5 million by 2030 from 35.6 million in 2002, according to the U.S. Census Bureau. Cash in on the condo craze by selling empty-nesters on the benefits of scaling back.
5. Boaters. About 69 million Americans participated in recreational boating in 2004, according to the National Marine Manufacturers Association in Chicago. Whether you’re working the waterfront or targeting inland enthusiasts, you’ll make a splash by understanding boaters’ unique needs.
6 creative prospecting events
If you host it, they will come. Here are some great ways to draw prospects out of the woodwork and into your database.
1. Ask if you can take instant photos of Halloween trick-or-treaters when they come to your door.Slip the photos into jackets printed with your name and telephone number and give them to the parents.
2. Create a competition to award a $500 or $1,000 college scholarship to a high school senior in your community. Present the check at a ceremony for the winner’s family and friends.
3. Buy a block of tickets to a concert or play and hold a drawing in your office. Call past customers and ask whether they’d like their names to be in the hopper.
4. Sponsor a home repair demonstration or lecture at a local hardware or home improvement store.
5. During the summer, rent an ice cream truck and give away free frozen goodies in targeted neighborhoods. Use a postcard mailing to notify residents ahead of time.
6. Organize a group to go caroling in your market area. You can leave behind a holiday card from your company.
Source: REALTOR® Magazine Online’s Personal Marketing Tool Kit
Meet the buyers
Helping people buy their first home is a great start to a long-term relationship. Here are some tips on how to meet first-time buyers.
At weddings “I’ve found friends of the bride and groom start thinking about their own long-term goals as soon as the couple rides off into the sunset. Young people want direction from someone who is knowledgeable and who cares.” —Ann Marie McManus, CRS®, GRI, Meybohm Realty Inc., Augusta, Ga.
Through tax preparers “Every renter who files a tax return and doesn’t have property ownership benefits is a candidate.” —Bob Taylor, ABR®, CRS®, Weir, Manuel, Snyder & Ranke LLC, REALTORS®, Birmingham, Mich.
At bridal shows “We set up information booths to promote the benefits of home ownership and to show attendees how easy it is to buy.” —James Raysbrook, Coldwell Banker Bain Associates, Bellevue, Wash.
At apartment complexes “These are often the best places to prospect for new buyers. Door hangers, flyers, postcards, and info sessions are excellent ways to reach out to the residents.” —Kristin Carvalho, ABR®, ROI Group, Keller Williams Integrity First Realty, Mesa, Ariz.
During a workout “We meet more first-time buyers at the gym than at any other place. By working with the health club’s general manager or salespeople to design a new-member packet with information on me and other area businesses, my team and I are able to provide an added benefit to gym members and acquire leads.” —Adam Mullen, Realty Executives Greater Atlanta, Alpharetta, Ga.
At PTA and school functions “Teachers are excellent candidates for new homes. In my market area, there’s a grant program designed specifically for teachers, and I always mention this while working within the PTA.” —Shontell Rucker, Rekcur Properties, Houston
7 tips for working with foreign real estate buyers
With immigrants and foreign business entities looking beyond the coasts, the opportunity to work with foreign buyers isn’t limited to certain markets or to practitioners who travel overseas. Here’s how to succeed.
1. Remember that foreign clients may know real estate but not U.S. real estate. You need to explain local market conditions and U.S. legal issues. But be careful not to talk down to them, cautions Gustavo Lumer, CIPS, CRS®, with Lumer Real Estate in North Miami Beach, Fla.
2. Focus on clients from one or two countries, especially when you’re just getting started, suggests Carmela Ma, CCIM, CIPS, president of CJM Associates Inc. in Beverly Hills, Calif. In that way, you can become more familiar with the culture and establish a wider network of contacts, more rapidly.
3. Recognize that factors such as currency fluctuations and a need for market stability may influence buying decisions, says Pius Leung, CCIM, CIPS, president of Charter Equity in Houston. Leung recalls a client who bought a building, left it vacant for three years, then sold it for about what he paid originally. Yet, the client was happy because the currency in his home country had devalued by 50 percent over that period. So just by parking the money in the United States, the owner had made a profit, says Leung.
4. Take it slowly. Recognize that some cultures require more consultation and time to make a decision.
5. Develop a group of tax, legal, and other experts in foreign ownership of U.S. real estate you can offer foreign buyers as a resource, suggests Ma. Once you’re seen as a trusted adviser, offshore clients will often look to you for assistance in other parts of the transaction, such as finding legal advice.
6. Help bridge differences, suggests Alan Berger, CIPS, of Breslin Realty in Garden City, N.Y. Simple things such as converting a price from dollars to euros or square feet to meters can make a foreign buyer more comfortable, says Berger.
7. Get your Certified International Property Specialist designation from NAR’s International Division. It’s a great way to acquire skills needed to work with foreign clients and to network. “The CIPS network represents the best-kept secret around for making contact,” says Lumer.
More: Market to international buyers using the Distinctive Properties Advertising Service from REALTOR Benefits(sm) Program partner WorldProperties.com.
New immigrant gateways
Cities such as Chicago, Houston, New York, and San Francisco are still major gateways for immigrants, but U.S. Census Bureau data shows other metropolitan areas are becoming major points of entry for foreign-born individuals.
Emerging
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