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OFFICIAL MAGAZINE OF THE NATIONAL ASSOCIATION OF REALTORS®




2008 List Issue: Sales & Marketing

 Regardless of what pundits say about the market today, you can achieve sales success. Make your sales goals, stay on top of market trends, be straightforward with prospective buyers and sellers, and keep your own negative emotions in check.




5 Questions To Ask Before You Go Out on Your Own

Slower markets are often the best time to start your own company because once your market heats up again, you’ll be too busy to plan and execute a successful launch. Here are questions to ask yourself to determine whether you have what it takes to fly solo.

1. Why do I want to leave? "My first response to coaching clients who say they want to open their own firm is ‘Tell me why you’d like to do it,’" says Tom Ferry, CEO and founder of Yourcoach.com in Newport Beach, Calif. One top producer told Ferry he wanted to create a business that he could sell so that he could live off the proceeds during retirement. Wrong answer, says Ferry. That client spent hundreds of thousands of dollars and years to get his brokerage profitable enough to sell — and he could have made just as much money and saved himself grief by staying on the sales end. If, however, your answer is that you’ll create new services and ways for a brokerage to thrive, you may be destined to be an entrepreneur, says Ferry.

2. How do I currently operate my business? If you run your sales career as a business now — with systems, technology, a marketing plan, a budget, and, yes, profitability — you may be suited to running a brokerage. “If you don’t, you’re going to die as a broker,” says Ferry. “If you don’t have those things, hold off on starting a company and build your business by establishing systems within your existing company. Then ask whether you should start your own company.”

3. Is my personality suited to company management? Are you a control freak who wants things done instantaneously? A natural leader? “You’re now going into a business that relies on many other people to create your income,” says Ferry. “It takes a special breed of person to be successful in that environment. You need to be a businessperson who’s going to take the time to build something. Brokerage isn’t a get-rich-quick formula.”

4. Do I have the money? “In this market, don’t start a company unless you have, conservatively, 12 months of total operating costs in cash or a line of credit,” says Ferry. A home equity line of credit shouldn’t be looked to for capital, he says, because if your company fails, you’ll lose your home.

5. Should I partner? If you’ve decided that you’re not the best person to run a company, but you still have a burning need for ownership, consider partnering. “If you’re a great sales associate with a great reputation, maybe you can create a partnership with someone who can handle the operations and recruiting sides and allow you to keep doing what you’re doing,” advises Ferry.

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10 Ways to Run an Effective Real Estate Seminar

1. Join forces. Marketing seminars are all about lists — mailing lists, that is. Teaming up with other professionals like attorneys, appraisers, or landscapers can help you get access to their consumer lists and broaden the appeal of your session.

2. Titles matter. Don’t overlook the title of your seminar. Think about the things that keep consumers awake at night, and incorporate those ideas in your seminar title. Instead of advertising a “Home Buying Seminar,” call it, “Five Ways to Save Money Buying Your First Home.”

3. Advertise early and often. Advertise at least three weeks in advance and then again as the seminar date approaches. When people register, get their phone numbers so that you can personally make a reminder call just before the seminar.

4. Make ‘em pay. Many experts say that if you don’t charge a registration fee, you’re conveying that your seminar has no value and that you’re just trying to sell something. In addition, when consumers pay for something, they’re more likely to show up. So consider charging a nominal registration fee of $15-$20.

5. Stray from your office. Another way to avoid the perception that you’re just trying to sell something is to hold your seminar at a local venue like a hotel or library—but never at your own office.

6. Don’t go too high-tech. The flashier your presentation, the less content people will remember. Your video or PowerPoint tools aren’t supposed to be the star of the presentation—you are. Make your presentation professional but not so cutting-edge that consumers walk away remembering the technology, not your expertise.

7. Tell tales. Your primary goal is to educate attendees, and your secondary goal is to establish your credibility. War stories can help you do both. Using phrases like, “When we did this that happened” or “Here’s why I talked those buyers out of that home” puts attendees in the shoes of the people you’re talking about.

8. End it well. Your close is your last chance to impress people. Don’t throw it away with a casual, “That’s it. Thanks for coming.” Make a specific offer such as, “I’ll be at the back of the room for 20 minutes, and I have room in my business now for four additional buyer clients. If we get more than that, I’ll have to put you on a waiting list.”

9. Let your clients speak. People may not have a real estate need now, but if you impress them, they’ll save your handouts for when they do need you. Include client testimonials prominently — on the first or last page or both — in those handouts.

10. Keep in touch. Make sure your registration process includes a request for permission to contact people after the seminar so that you don’t violate do-not-call or e-mail spam laws. Then create a follow-up campaign that includes an e-mail or postcard each month, and supplement that with a personal call every quarter.

Sources: John Doerr, Wellesley Hills Group, Framingham, Mass.; Kelle Sparta, Sparta Success Systems, Newton, Mass.

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4 Ways to Court International Investors

The dollar’s plunge against many foreign currencies, along with softening real estate prices, have made U.S. properties extremely attractive to overseas buyers. Here are four ways to tap into this expanding market:

1. Join the club. Immigrants and foreign nationals often join social groups to connect with people like themselves. For instance, there’s a Canadian Club of Chicago, a Canadian Club of Washington, D.C., and a Canadian Association of New York. Looking to work with buyers from France? Try the Alliance Française in Washington, D.C. Wherever you are, find clubs that bring together people from around the world, and begin networking to generate referrals from overseas friends and relatives of local members.

2. Partner up. You may be able to find eager international buyers by teaming up with other professionals who’ve already built relationships with them. Search your area for attorneys, CPAs, and other professionals who work with international buyers. Interview them to determine their level of expertise and professionalism, and if they’re smart and capable, ask if they’re willing to send and receive referrals to overseas buyers.

3. Work the Web. Allow international investors to search for properties in their native language right from your Web site. How? Contact your state association first, because some, like Florida, offer the service to members. If your local association doesn’t offer that service, hook up with a capable Webmaster who can upgrade your site to allow foreign-language searches.

Also, make sure your advertising directs foreign buyers to a Web page that’s geared specifically to them. If you advertise in, say, Paris, include the address for a Web site that you’ve created exclusively for French-speaking visitors. Or put a French flag prominently on your Web page with a link that says, “View this page in French.” That helps international buyers feel as though you understand them and allows you to track responses to your ads.

And be sure your Web content incorporates the local dialect. Find an expert translator who can translate precisely and use common phrases and idioms familiar to buyers in their language.

4. Ask for help. Treat international buyers no differently than you’d treat U.S. buyers—ask them for referrals. Also, get their opinions on the best places to advertise for buyers in their area, and ask if they’d be willing to make in-person introductions to brokers from their country with whom you can build a professional relationship.

Sources: Perry Corneau, broker-owner, Corneau & Associates, Sarasota, Fla.; Robert Keats, Keats Connelly & Associates Inc., Phoenix; Marc Weinberg, Active Website LLC, Denver.

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How to Price Correctly in Today's Market
  • Look at Pending Contracts.
    When analyzing your CMA, give the most weight to pending sales (rather than active properties or those that have already closed) and pay close attention to the square footage of the home you are pricing relative to those under contract, advises Fraida Varah, the principal broker of Fraida Varah Real Estate Group in Albany, N.Y. Pending sales better reflect the current market than active listings or those that may have closed three months earlier. In a falling market, you may have to be priced below the latest sold or pending comparable.
  • Don’t Take the Heat for the Market.
    Make sure sellers understand that the market will determine the final selling price. Don’t take responsibility for market conditions. Your job is to help the seller understand and adjust to the market, says Varah.
  • Creating Value is Key.
    Remind sellers that the objective in pricing their home is ultimately to get their home sold. The home has to be priced so that it’s considered by buyers to be within the top two or three values in that price range. If the market is very slow, they have to be the best home value in their price range. Tell the sellers you’ll revisit the market situation with them every 30 days, and they may need to adjust their price accordingly, Varah says.
  • Time for an Adjustment.
    Industry standards suggest that if you haven’t received an offer after eight to 10 showings, a price adjustment is probably necessary.
  • Have Your Seller Sign a Price Reduction Form in Advance.
    The form should be dated up to 60 days after the original listing date. You can always choose not to reduce at that time depending on circumstances (such as negotiations or expected offers).
  • Forget About “Price Reduced” Signs.
    All such riders do is alert the public that this home is failing to sell. You want to avoid having the buying public think there’s something wrong with the house.
  • It’s OK to Fire a Seller!
    If a seller is unwilling to recognize the market’s indication that the price is incorrect, there’s no reason for you to continue to invest your time and money in that client. There is no advantage to you to take or keep an overpriced listing with an unmotivated or stubborn seller. Serious real estate pros pay close attention to their success ratios (the percentage of listings taken that close), sale to list price ratios, and average days on market. Serious sellers will take note.

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4 Reasons Lenders Want to Work With you on Short Sales

In steeply declining markets — particularly in states like Nevada, Arizona, Ohio, and Michigan — short sales are booming. Selling a home for less than the underlying mortgage often provides troubled home owners with their best chance of avoiding foreclosure and ruining their credit. A cottage industry of bankruptcy specialists and other self-described loan mitigators are trawling for clients, but lenders would often prefer to work with real estate professionals in negotiating short sales for clients.

Short sales expert Will Weaver of Royal Oak, Mich., explains why:

1. You’re licensed by the state.

2. You adhere to a code of ethics.

3. You carry errors and omissions insurance.

4. You have too much at stake to cut corners. As a licensed professional, you aren’t likely to commit fraud that could put your entire career at risk.

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5 Signs of a Housing Market Pickup

There’s one sign that your market is improving that you can’t miss, and that’s when your phone rings with new customers ready to buy or sell. But there are other indicators — not including the familiar days-on-market, new listings per month, and new contract activity — you’ll want to monitor to see if a sales turnaround is imminent.

Fewer Builder Concessions

Look for new-home builders in your area, as a sign of new confidence, to curtail their offerings of free mortgage payments, new toasters, designer landscaping, and other concessions they rolled out at the start of the downturn.

New Jobs vs. New Housing

Historically, one new home owner is created for every two new jobs, so if job creation continues in your area and builders are scaling back on production, it’s just a matter of time before the supply and demand equation moves toward equilibrium.

Months’ Supply

The country had about a 10-month supply of housing at the end of last year, but the figure you’re interested in is the months’ supply for your market. The historical norm is closer to six months.

Visitors per Listing

Look at the visitor trends tracked by your local MLS using today’s computerized lockboxes. You can see not only how many visitors view a house but how long they stay; more visitors staying longer suggests buyers are getting serious.

Rising Apartment Rents

Healthy rental rate increases show strong demand for rentals, but if such increases go on for too long or rates rise too steeply, renters will start inquiring about buying.

Source: NAR Research

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5 Reasons Clients Won’t Move Forward — and How to Respond

What buyers and sellers tell you may not be the real story. It’s up to you to uncover the truth about a client’s ambivalence. A savvy practitioner can infer a lot from the stated objection and determine how to proceed effectively, explains Dennis Caracciolo of RE/MAX Accord in Danville, Calif. Here’s his outline for responding to common client objections:

1. NO MONEY.

Buyer: $555,000 for this? I won’t and can’t pay that much!

(Money may or may not be the real issue: You must flush out the truth. Try this approach when a buyer says money is the obstacle to moving forward.)

You: What do you think the house is worth, Ted?

Buyer: At least $35,000 less.

You: Fine. Why don’t we make that offer right now for $35,000 less? They can either say “no” or counteroffer. Whatever their response, we’ll know exactly where they really stand, won’t we?

Buyer: Yeah, but you’ve rushed me out to see all these homes and I’m feeling hurried.

(You’ve uncovered an issue of trust: The client may not feel he knows you well enough and could be thinking that all you want is a quick sale leaving him in the dust. Always use the soothing phrase “I understand” until you have more information.)

You: Ted, I completely understand. Why don’t we go back to my office, have some coffee, and take a break? I’m sure the house will be there tomorrow—I’ll keep tabs on it.

(Your next behavior should leave space for your client to talk: Listen hard and pin down what is at the root of his misgivings. Avoid yes-or-no questions such as “You do want this house, don’t you?” Ask open-ended questions such as “What did you think of that last property with the spa and all the RV access?”)

2. NO NEED.

Seller: Sell this house?! They’ll have to carry me out of here on a stretcher before I sell!

(Every house is for sale: It’s the first thing you learn in this industry. Again, your job is to weed out the truth behind the stated objection.)

You: I know you’ve said you’d like $2 million for this house, but what realistically would a buyer have to offer for you to think about selling?

Seller: Bring me an offer of $750,000, and we’ll discuss it.

You: Well, you’re saying $750,000 in this market?

Seller: Oh, I know that might still be a little high, but they’d have to offer me at least $700,000. That would get my attention.

(You’ve accomplished two outstanding things: You’ve found out that the seller will indeed sell under the right conditions, and you’ve nailed down an approximate sale price that may motivate him to list with you.)

3. NO DESIRE.

Buyer: Buy a home now? I can’t even consider buying real estate!

(A client’s personal life may be in turmoil: Even if it is, that does not mean he’s completely disinterested in real estate. Use the parrot technique.)

You: Can’t consider buying now, John?

Buyer: Absolutely not. Not now while I’m in the middle of a divorce!

(If you’re listening, you heard his reference to a time frame loud and clear: Once you decide the stated objection is the real reason, you put this client on your warm leads list and stay in touch with him until his personal circumstances improve. Send him nothing but positive market information and make regular phone contact.)

You: When do you think buying might be feasible?

Buyer: Not for at least six months.

4. NO TIME.

Buyer: I’m starting a new job and I feel like I work 24 hours a day. Seeing homes is impossible.

You: You work 24 hours a day, Jim?

Buyer: Yes. Plus I get about 10 postcards a week from real estate agents.

You: About 10 cards a week?

(The parrot technique is an outstanding way to respond to many objections: But it must be accompanied by your most attentive listening. The clues to the truth are usually contained in the client’s words and nuances.)

Buyer: At least. And you agents are all the same—just want that commission!

You: I understand completely, Mike. And there are agents who are like that. I’ve met them. But what would you say if I told you that I don’t accept clients until I take them to dinner at a nice restaurant, decide if I mesh with them, then give them my referral list of satisfied clients? You’d be free to call them, and I’ll be very comfortable with what they say about me.

(You’ve uncovered an issue of trust: Now cross over and begin establishing your integrity.)

5. NO TRUST.

Buyer: I sort of like the house, but I think I’ll hold off until prices come down further.

You: You’re going to wait for prices come down more, Kathy?

Buyer: Yeah. Besides, look at that miserable roof.

(It takes time to develop a relationship with a client: Whenever she expresses negativity about several different things, use the parrot technique to get to the truth. Then listen hard.)

You: The roof is another issue for you?

Buyer: I won’t pay this price for a house with a roof like that.

You: Kathy, here’s what I’ll do: I’ll write a contract subject to your 100 percent satisfaction for either a new roof or a roof credit. If the sellers don’t agree, you have a bona fide way to back out.

(KEEP DIGGING: You’ve uncovered the buyer’s negative feelings about just one of the property’s amenities. But there could be more.)

Buyer: Yeah; then there’s that eyesore storage shed in the back yard.

You: We’ll also include a request that it be removed by close of escrow. Again, subject to your approval.

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LINKS

Prospecting Scripts for Customer Objections


How to Cope With Anxiety

The market downturn has created a confidence crisis for some sales associates. If you’re having a tough time keeping your equilibrium, it’s even tougher to help keep your clients from stressing out. Training guru Dirk Zeller, president of Real Estate Champions in Bend, Ore., offers some hints for alleviating client jitters:

Calming your clients:
  • Don’t assume you know what your clients are feeling. Get them to share what’s on their minds. You need to understand your client’s fear — further weakening in their market, they won’t qualify for a mortgage, their house won’t sell, they’ll miss a ripe selling or buying opportunity — to help them cope.
  • Ask clients what they expect from you and follow through. Consistency of communication is essential, and yet many sales associates fall down on the job. Find out how often clients want to hear from you and which medium they prefer: phone, e-mail, or text messages. If clients expect you to hold an open house once a month, then you’d better do it. The same is true if they want a monthly written report on changes in local market conditions or an update on where you’ve placed ads. Regular, reliable communication will go a long way to keeping their anxiety in check.
  • Get their worst-case scenario on the table. It’s imperative to encourage clients to speak about their fears and to listen attentively when they do. Don’t dismiss or belittle those concerns. If you expect them to trust you, they must feel comfortable sharing their anxieties about the market and the buying or selling process.

    Calming yourself:
  • Lose the self-pity. Telling yourself that you can’t thrive in this tough market is a waste of time. Remind yourself of earlier successes to help boost your morale, and avoid blaming the market for your problems.
  • Take positive actions consistently. Salespeople sometimes become frustrated or panicked when they don’t have enough leads. In a tough market, you need a steady stream of good quality leads, so get focused on prospecting like you never have before (see “Prospect for Profit,” March 2008, page 36).
  • Get knowledgeable. Quit reading newspaper and magazine articles with a hopeless spin on real estate news. Remember, 2007 was the fifth best year on record for home sales. NAR research reports may provide more useful context for understanding the changing market. Stay up to date on sales and pricing statistics in your local market and on shifts in submarkets like entry-level or higher-end homes. Establish goals for the number of leads you need to generate for the number of buyers you want. No one needs to lower their earning expectations in a slow market. Instead, now is the time to retool your sales strategies to meet the demand that exists.

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    LINKS

    Your Handbook for Success: Read More Lists
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    View the 2007 List Issue: Prospecting, Technology, Selling, and More