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Walter Sanford is an international speaker and author of 15 books for top-producing real estate salespeople. He has sold real estate for 28 years in Southern California, but has followed his heart to Kankakee, Il., where he runs a real estate speaking business and is one of the most-requested real estate trainers in the country. You can reach
him at waltersanford.com or at Sanford Systems & Strategies, 800/792-5837.
Want selling and marketing advice? Send your questions for Walter Sanford to salesclinic@realtors.org
| | New profit centers
Income Ideas--Thinking Outside the Box
Add unconventional variations to your standard listing and sales contracts to reap more money.
BY WALTER SANFORD
There’s a certain comfort level to doing what’s customary—what everybody else does. But if you’re interested in increasing your revenues from sales and listings, don’t be afraid to think outside the box. During my long career I’ve found it was the little things that made me successful. Adding some unconventional—but legal and ethical--variations to your standard listing and sales contracts may help you sell properties more quickly and more profitably.
If you’re uncomfortable with the idea of charging more than your competitors, don’t be. Remember, it never hurts to ask. Even when customers don’t fully agree to your conditions, asking can help you negotiate important concessions. Here are some ways I’ve deviated from the norm, adding profitability for my clients and myself:
1. Earnest money deposits. I made the deposit amounts huge, asking buyers to deposit 5 percent to 10 percent of the sale price. Some of my buyers choke and I have to back down. However, others climb on board once I explain that it could result in the seller looking at our offer much more favorably. With this benefit in mind, foregoing a few percentage points in interest for a few weeks seems to be a good idea. I have won many a bidding battle with a huge deposit. It shows what a seller wants most--the desire and ability to close. And, boy does the buyer pay attention during the closing procession. With that much money on the line, a buyer is much less likely to get cold feet and try to withdraw from the transaction.
2. One-year listings and a higher commission. I hear you saying, “Oh yeah, sure.” But even in hot markets I prefill out all my listing agreements with 1-percentage-point higher commission rate than my toughest competition. I also ask for a one-year listing. I then set out to make the best listing presentation possible (another article). You’ll often encounter resistance, but dealing with resistance is what makes a good salesperson. Stress the excellence of your marketing plan, and let your clients know that you need enough gas (compensations) to get across the desert.
If you think that this idea will never work, look at my own scrupulous figures. I made more than 3,100 listing presentations in the 1990s at a higher commission rate and here’s what happened: 8 percent signed the higher commission rate and longer listing without a quibble; 7 percent OKed one or the other; and another 9 percent signed one or both after a wonderful discussion about my "perceived" superiority in technology, systems, marketing, customer service, team concepts, follow-up, and consistency. Another 11 percent didn’t list with me.
The remaining 65 percent asked me to reconsider my fees, contract period, or both. If I was satisfied I’d done everything I could to get what I wanted and responded well to all of their objections, then I had the option of "falling back" to my standard rate. The seller came away with a win and I "settled" for a still-profitable business relationship.
3. Transaction coordination fees. As brokers stretch to remain profitable, some ask their salespeople to add administrative fees on top of the commission. My suggestion is that you start before you get the mandate from above and reap the benefits yourself. If you’re wondering who in their right mind would pay a fee of $75 to $750 on top of a full commission, the answer is many--if you are providing the right service. My question to you is how good is your service and how good is your salesmanship?
When my client says . . . "Walter, I would rather sail to Singapore and get caned than pay for you an extra fee," I have a service-oriented response ready. Mr. Johnson, my service and marketing entail a high degree of overhead. My team, multiple Internet sites, my guarantee to return all phone calls in three hours, my advertising, direct mail, telemarketing, and follow-up, and my intensive investment in items such as education, hardware, software, and tools necessitate that we add this fee." The key is to demonstrate where this money is going and convince prospective clients that this cost will lead to better service. You win because the fee helps alleviate your overhead; the clients win because they get the feeling they got a Nordstrom salesperson at a Wal-Mart price.
4. The $500 cancellation fee. My listings were always fully cancelable at any time, for any reason. I sell this as part of my listing presentation. If a listing is cancelled, I do charge a $500 cancellation fee to reimburse me for my time, overhead, and marketing. However, this fee is fully refundable if the clients ever relist their property with me and I sell the property. This rebate gives clients an out if they chose to cancel a listing, while protecting me from wasting time and money on a listing that doesn’t go anywhere. And because the money is refundable based on future business, the clients are more likely to come back to me if they decide to sell down the road.
Real estate is an entrepreneurial enterprise. Sure there are common practices that many associates follow, but you’re the captain of your destiny. Make a decision today to increase your service and the quality of your listing presentation so that you can ask for what you deserve, get it, and be profitable.
Ask Walter:
Q. How can I entice FSBOs in such a way to make these prospects trust us and want to list with us?
Marie Bishop
Carlson GMAC Real Estate
Danvers, MA
A. Dear Marie:
There are many ways to approach for-sale-by-owner business. Some conventional ways include:
· Tell them why you will net them more money with less trouble on their parts. This approach is old and worn out, unless you are good.
· Give them more information than they can possibly assimilate, thereby luring them to seek a real estate professional’s guidance.
· Have your lender assist them, always making sure that you are suggested as the listing broker should the time come.
· Add them to your open house tour, and show them how a pro gets bodies through a home.
However, my favorite and most successful FSBO technique involves providing them with free services that will help them sell their home. Adding a FSBO to some of your client-service systems costs little and nets a client for life. Here is what I did for my FSBO clients:
· Free time-on-market analysis
· Introduction to my team of affiliate service providers.
· Free marketing flyer for their home using my word processing equipment.
· An e-mail home visual tour, prepared for a fee.
· A free marketing plan.
· Inclusion on my Web site under a FSBO section.
The offers go on, but you get the message. Give to get. Remember, you aren’t just going after the listing, even though the above sounds like a great listing presentation (and it is!). You want FSBOs to become lifelong customers and pass their loyalty along to their family and friends.
Want selling and marketing advice? Send your questions for Walter Sanford to salesclinic@realtors.org | |
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