The Holiday Season is traditionally a slow time of the year in real estate. Combine this with the trends in the market place that are prevalent today, and you have a formula for a starvation diet.
So, what can you do that's different then what the majority of agents are doing to get business?
I suggest that you go "Old School" and use the phone. Yep, it's just that simple.
Most of today's business models have you doing your mailings, or maybe even blogging. We're good at email and all the non-personal contacts that allow people to have their space. But the reality is that allowing people to stay in their space doesn't necessarily pay the bills.
Real estate has always been a contact sport. The more contacts you make, the better your chances of success.
I recently challenged my agents to make at least 20 phone calls over a 3 day period. I even told them that we would pay them $1.00 for every call that they made and logged in on a call sheet.
Virtually every agent that put out the effort to make the calls, ended up with a new deal - usually from an old client. One of my agents was shocked, since he got new business from a phone call to a person on his mailing list. Surprised?! You shouldn't be.
The fact is that by committing your personal time to someone else leaves more of an impact on them then a piece of mail. I believe that people are more prone to feel the need and desire in you when you take the time to interact.
Don't give up your mailing list. But add phone calls every 90 days to your list of things to do.
Sunday, November 30, 2008
Thursday, November 20, 2008
Knowing your financing options can give you the upper hand.
In this era of specialization and litigation most agents shy away from giving financing advice to their clients.
The general consensus seems to be that since the mortgage lender is an expert in the field, you should set your client up with a lender to arrange for all that complicated financing stuff.
Although your buyer will more then likely have to get financing, I don't think it's in your best interest to defer all financing questions to the lender - and here's why.
Assuming that you've developed a good rapport with your buyer, why risk the chance that the lender doesn't strike the same cord with your client? Not only that, but doesn't it seem that your buyer would have more confidence in the lending process if their agent not only knew the options, but could explain them in some detail?
I'm sure your company attorney and your E & O carrier would want you to defer all questions that you don't have some knowledge about to an expert in the field - and that's good advice. But why can't you educate yourself to a point where you can tell buyers about various loan programs that currently exist and the basic criteria for qualifying for each program?
I know you want your buyers to be "pre-approved" before you even show them houses, but that doesn't mean you can't have a financing discussion with them prior to meeting with the lender. You ask some basic questions, make sure you understand the buyer's needs, and help the buyer get a mental picture of what type(s) of program will work for them.
Now I know that many loans have some "iffy" situations, and that underwriters can be temper mental. But you can caveat some details while giving your buyer a good basic understanding of what they can expect for a down payment, what rates are being quoted that day and how much closing costs usually run.
The way you accomplish all of this is to work with lenders that you trust and who know how you want them to handle your buyers.
Instead of giving your buyers to the last lender that came to your sales meeting promising 20 day closings, interview lenders until you meet a couple that seem to be a good fit for you. Ask them to explain - in detail - what types of programs they offer. Don't let them go until you have a good understanding of the programs. (If you can't understand it, how do you expect your buyer to?) Have them do a cost break-down for you on each loan that fits the client base you work with. Make sure you run several scenarios by the lender regarding potential buyer problems so that you cover a wide spectrum of variables - and don't forget to ask about their "lock-in policy."
Then when your totally satisfied that you understand what's being offered, let the lender know what to expect from you and how you want your clients to be handled.
Since this approach is so much different then what most lenders are used to seeing, it's time for you to lay down the rules of doing business with you.
I tell the lender that any buyers that I send their way will have been pre-qualifed (by me) for a particular type of loan program. My buyers will have a good idea of what's expected of them and what to expect from the lender.
I let the lender know that I will not tolerate them switching programs on my buyers without my knowledge. The fact that their boss told them to sell a certain product that day isn't my concern. And, if I ever suspect that the lender is skimming the loan, I'll have them drawn and quartered at high noon in the public square!
Besides the common sense concerns about keeping me posted on the loan progress, I also tell the lender that they have to let me have the pleasure of telling the buyer that their loan is approved!
I don't want to lose any positive connects with my clients. I also want the lender to tell me if their loan is denied - and the reasons why - so I can do what's necessary to fix them.
Vertually any lender worth their salt appreciates doing business with an agent that you knows what's going on. It actually makes their job some what easier. Plus, the lender knows that they've got a pit-bull on the other end of the deal.
Remember, it's a jungle out there. So be the Tiger!
The general consensus seems to be that since the mortgage lender is an expert in the field, you should set your client up with a lender to arrange for all that complicated financing stuff.
Although your buyer will more then likely have to get financing, I don't think it's in your best interest to defer all financing questions to the lender - and here's why.
Assuming that you've developed a good rapport with your buyer, why risk the chance that the lender doesn't strike the same cord with your client? Not only that, but doesn't it seem that your buyer would have more confidence in the lending process if their agent not only knew the options, but could explain them in some detail?
I'm sure your company attorney and your E & O carrier would want you to defer all questions that you don't have some knowledge about to an expert in the field - and that's good advice. But why can't you educate yourself to a point where you can tell buyers about various loan programs that currently exist and the basic criteria for qualifying for each program?
I know you want your buyers to be "pre-approved" before you even show them houses, but that doesn't mean you can't have a financing discussion with them prior to meeting with the lender. You ask some basic questions, make sure you understand the buyer's needs, and help the buyer get a mental picture of what type(s) of program will work for them.
Now I know that many loans have some "iffy" situations, and that underwriters can be temper mental. But you can caveat some details while giving your buyer a good basic understanding of what they can expect for a down payment, what rates are being quoted that day and how much closing costs usually run.
The way you accomplish all of this is to work with lenders that you trust and who know how you want them to handle your buyers.
Instead of giving your buyers to the last lender that came to your sales meeting promising 20 day closings, interview lenders until you meet a couple that seem to be a good fit for you. Ask them to explain - in detail - what types of programs they offer. Don't let them go until you have a good understanding of the programs. (If you can't understand it, how do you expect your buyer to?) Have them do a cost break-down for you on each loan that fits the client base you work with. Make sure you run several scenarios by the lender regarding potential buyer problems so that you cover a wide spectrum of variables - and don't forget to ask about their "lock-in policy."
Then when your totally satisfied that you understand what's being offered, let the lender know what to expect from you and how you want your clients to be handled.
Since this approach is so much different then what most lenders are used to seeing, it's time for you to lay down the rules of doing business with you.
I tell the lender that any buyers that I send their way will have been pre-qualifed (by me) for a particular type of loan program. My buyers will have a good idea of what's expected of them and what to expect from the lender.
I let the lender know that I will not tolerate them switching programs on my buyers without my knowledge. The fact that their boss told them to sell a certain product that day isn't my concern. And, if I ever suspect that the lender is skimming the loan, I'll have them drawn and quartered at high noon in the public square!
Besides the common sense concerns about keeping me posted on the loan progress, I also tell the lender that they have to let me have the pleasure of telling the buyer that their loan is approved!
I don't want to lose any positive connects with my clients. I also want the lender to tell me if their loan is denied - and the reasons why - so I can do what's necessary to fix them.
Vertually any lender worth their salt appreciates doing business with an agent that you knows what's going on. It actually makes their job some what easier. Plus, the lender knows that they've got a pit-bull on the other end of the deal.
Remember, it's a jungle out there. So be the Tiger!
Tuesday, November 18, 2008
Working With Difficult Agents
If you've been in the business for any length of time, you've probably heard (and told) your share of stories about how difficult so-and-so is to work with.
I'd be lying if I didn't say that some of my cross-sales have been a little tougher then others. But as I've grown in the business, I've come to realize that if I want any sale to close I just might have to do more work then I bargained for.
Although the law holds you to a fairly high standard of practice from your very first day in real estate, as a practitioner you know that there's a large learning curve with regards to the nuances of the business.
This being said, there's a fairly good chance that you will have a cross-sale with an agent that doesn't have your business experience, your people skills or your life skills when it comes to handling difficult situations.
The sooner you become aware of your opposite number's shortcomings, the better chance you have of making the sale appear seamless.
Even though the other agent may have several years in the business, it doesn't necessarily mean that they got to this point by being a good negotiator. It doesn't even mean that they're (what you consider) a good agent - it just means that they're part of your sale and you have to deal with them.
Some of my best long-term relationships have been with other agents from other companies that had a whole different point of view on how our cross-sale was supposed to go. And rather then give them a piece of my mind, or degrade them in some fashion, I found it much more rewarding and a lot less stressful when I was able to find a way for everyone to work through the problem.
Sometimes it meant sleepless nights trying to connect the dots, but once they're connected you're that much closer to a closing.
I've never seen a written job description of what the listing agent, or the selling agent's job is in a transaction. I've heard a lot of conversations about it though!
I've never promised my client or customer that I'll do a good job for them "As long as the other agent does their job."
The reality is that it's all on you! No ifs, no ands and no buts!
The sooner you learn to bring out the strengths of the other agent in your sale, and eliminate the negative spin in your deals, the more successful you will be.
I'd be lying if I didn't say that some of my cross-sales have been a little tougher then others. But as I've grown in the business, I've come to realize that if I want any sale to close I just might have to do more work then I bargained for.
Although the law holds you to a fairly high standard of practice from your very first day in real estate, as a practitioner you know that there's a large learning curve with regards to the nuances of the business.
This being said, there's a fairly good chance that you will have a cross-sale with an agent that doesn't have your business experience, your people skills or your life skills when it comes to handling difficult situations.
The sooner you become aware of your opposite number's shortcomings, the better chance you have of making the sale appear seamless.
Even though the other agent may have several years in the business, it doesn't necessarily mean that they got to this point by being a good negotiator. It doesn't even mean that they're (what you consider) a good agent - it just means that they're part of your sale and you have to deal with them.
Some of my best long-term relationships have been with other agents from other companies that had a whole different point of view on how our cross-sale was supposed to go. And rather then give them a piece of my mind, or degrade them in some fashion, I found it much more rewarding and a lot less stressful when I was able to find a way for everyone to work through the problem.
Sometimes it meant sleepless nights trying to connect the dots, but once they're connected you're that much closer to a closing.
I've never seen a written job description of what the listing agent, or the selling agent's job is in a transaction. I've heard a lot of conversations about it though!
I've never promised my client or customer that I'll do a good job for them "As long as the other agent does their job."
The reality is that it's all on you! No ifs, no ands and no buts!
The sooner you learn to bring out the strengths of the other agent in your sale, and eliminate the negative spin in your deals, the more successful you will be.
Sunday, November 16, 2008
How Long Should a Listing Presentation Take?
I once overheard one of my agents telling our Secretary that they were going to a listing presentation and that they would be back in an hour. I couldn't help but think to myself that the agent must of had a great "canned" presentation since the drive to the appointment and back would consume about half an hour.
Once the agent returned to the office, I said "How did you know that it would only take an hour to do your listing presentation?"
I got that look like you gotta be kidding me!
The agent went on to let me know that they had spent at least an hour working up the comps, another fifteen minutes or so putting the "package" together and about another half hour telling the seller what the price should be and what they would be charged for commissions.
So, how dare I assume that they only had an hour invested in this listing!?
Unfortunately, this scenario is all too common with most agents. We get caught up in worrying about the price so much that we forget about all the other elements that make for a good listing.
Albeit, price and cost to sell are important issues. However having your seller properly prepared for the listing/sales process is very crucial.
I've found that spending a couple of hours at the seller's home is just about ideal - more if necessary.
I want the seller to understand how the process works from start to finish. Issues like when the sign and key box go on (demonstrate the key box) to how to handle buyers that knock on the door without an agent - I cover the entire process right down to getting a temporary home for the dog.
But one of the more important things that I discuss with the seller at great length is the purchase and sale process. Yes... even before they sign the listing agreement!
After all my goal is to sell their home, and going over the entire process with the seller gives them a better picture of what to expect and how to deal with it.
I probably spend more time going over the language of a (blank) purchase and sales agreement then I do the listing contract.
I explain how all the paperwork ties together and the time-frames that each element of the sale will consume. I make sure to leave copies of all the documents that are normally part of a purchase and sale and comment that (sic) "I'm leaving you these copies so that you can review all the fine print prior to actually seeing an offer. When we get a chance to discuss an offer, you'll already be familiar with the forms and only have to be concerned about how all the blank spaces are filled in."
If you invest more time with the seller at the beginning, you'll find that you won't have to spend so much time later on explaining the "how's" and "why's".
It also makes it easier for the seller to see your true value by bringing the whole process together.
Once the agent returned to the office, I said "How did you know that it would only take an hour to do your listing presentation?"
I got that look like you gotta be kidding me!
The agent went on to let me know that they had spent at least an hour working up the comps, another fifteen minutes or so putting the "package" together and about another half hour telling the seller what the price should be and what they would be charged for commissions.
So, how dare I assume that they only had an hour invested in this listing!?
Unfortunately, this scenario is all too common with most agents. We get caught up in worrying about the price so much that we forget about all the other elements that make for a good listing.
Albeit, price and cost to sell are important issues. However having your seller properly prepared for the listing/sales process is very crucial.
I've found that spending a couple of hours at the seller's home is just about ideal - more if necessary.
I want the seller to understand how the process works from start to finish. Issues like when the sign and key box go on (demonstrate the key box) to how to handle buyers that knock on the door without an agent - I cover the entire process right down to getting a temporary home for the dog.
But one of the more important things that I discuss with the seller at great length is the purchase and sale process. Yes... even before they sign the listing agreement!
After all my goal is to sell their home, and going over the entire process with the seller gives them a better picture of what to expect and how to deal with it.
I probably spend more time going over the language of a (blank) purchase and sales agreement then I do the listing contract.
I explain how all the paperwork ties together and the time-frames that each element of the sale will consume. I make sure to leave copies of all the documents that are normally part of a purchase and sale and comment that (sic) "I'm leaving you these copies so that you can review all the fine print prior to actually seeing an offer. When we get a chance to discuss an offer, you'll already be familiar with the forms and only have to be concerned about how all the blank spaces are filled in."
If you invest more time with the seller at the beginning, you'll find that you won't have to spend so much time later on explaining the "how's" and "why's".
It also makes it easier for the seller to see your true value by bringing the whole process together.
Wednesday, November 12, 2008
Pricing It Right
When doing a CMA we often become our own worst enemy when we allow ourselves to get caught up in the "numbers". The seller has already told you what they want, your comps say something different, and your gut tells you something else!
You're convinced that the seller is knowledgeable, because they act confident about their price. The information you've gathered is accurate, but is less then the seller wants. You really want this listing, but at the right price. What do you do?
The important "number" to be concerned about is not the list price, but the seller's net proceeds.
After all, if the house sells for $10K over asking price but the buyer wants $20K in costs, how important is the sales price........ really?!
When you present the seller with their cost break-down, don't use the sales price they suggest; use the sales price you think is real. I usually preface my cost analysis by saying something like " The market will dictate what your property is really worth - and buyers are usually pretty educated to value after they've seen several properties. Let me show you what an offer would look like "to you in your pocket" from a buyer that is pretty much in tune with the market."
Most agents do a cost break-down based on the seller's price or the "listed price" at the listing presentation. Stop doing that! This is where you shoot yourself in the foot.
If you do my imaginary buyer break-down, and bring the price in at what you expect - and even throw in some closing costs - you might be surprised when the seller kind of nods in agreement at the "net" on your cost sheet. I usually pad the loan amount by about 1K, since the seller usually doesn't really know their loan balance, or even if they do, they don't take into account their last month's interest.
If you plant the seed of "X" in the seller's pocket, and it turns out to be "Y"with the offer, you're going to have difficulty getting them to sign. Don't do a cost break-down at the seller's price which may show a net of (say) 85K, when in actuality they will probably walk away with something like 78-80K. And guess what? If they're going to take "less" who else do they expect to participate?
This technique works really well, since you're using an example of "another agent's" offer on the property, so it doesn't give the appearance that it's your doing.
Being the agent for the seller doesn't mean you have to do what ever they say. Being the professional, and realizing what's really important is why they're going to hire you.
Remember, the sales price is for bragging rights to the neighbor. What you actually put in your pocket is what's important.
You're convinced that the seller is knowledgeable, because they act confident about their price. The information you've gathered is accurate, but is less then the seller wants. You really want this listing, but at the right price. What do you do?
The important "number" to be concerned about is not the list price, but the seller's net proceeds.
After all, if the house sells for $10K over asking price but the buyer wants $20K in costs, how important is the sales price........ really?!
When you present the seller with their cost break-down, don't use the sales price they suggest; use the sales price you think is real. I usually preface my cost analysis by saying something like " The market will dictate what your property is really worth - and buyers are usually pretty educated to value after they've seen several properties. Let me show you what an offer would look like "to you in your pocket" from a buyer that is pretty much in tune with the market."
Most agents do a cost break-down based on the seller's price or the "listed price" at the listing presentation. Stop doing that! This is where you shoot yourself in the foot.
If you do my imaginary buyer break-down, and bring the price in at what you expect - and even throw in some closing costs - you might be surprised when the seller kind of nods in agreement at the "net" on your cost sheet. I usually pad the loan amount by about 1K, since the seller usually doesn't really know their loan balance, or even if they do, they don't take into account their last month's interest.
If you plant the seed of "X" in the seller's pocket, and it turns out to be "Y"with the offer, you're going to have difficulty getting them to sign. Don't do a cost break-down at the seller's price which may show a net of (say) 85K, when in actuality they will probably walk away with something like 78-80K. And guess what? If they're going to take "less" who else do they expect to participate?
This technique works really well, since you're using an example of "another agent's" offer on the property, so it doesn't give the appearance that it's your doing.
Being the agent for the seller doesn't mean you have to do what ever they say. Being the professional, and realizing what's really important is why they're going to hire you.
Remember, the sales price is for bragging rights to the neighbor. What you actually put in your pocket is what's important.
Tuesday, November 11, 2008
Overcoming For Sale By Owners
Back in "the day" working For Sale By Owners (FSBO) was definitely a rush. I had a total sense of accomplishment when I got a listing signed by an owner that knew just about as much as most agents did with regards to marketing, and didn't want to pay a commission.
Can you imagine the satisfaction of getting someone to work with you that was hell-bent on doing it themselves?
I could blog all week about the different ways to overcome the FSBO's objections, but the gem of a line that was virtually impossible for the owner to overcome was so simple, it was almost bazaar.
When an owner asked me what I could do to sell their home that they couldn't, I simply told them "I can brag about your house." Then with a demonstrative wave of the hand, I would say things like (sic) "Don't you agree that the condition of this home is second to none..."
Of course you would want to pick out something about the property that the owners were obviously very proud of in your statement of fact, then simply conclude by telling them that they can only show the house..... you can brag about it.
Can you imagine the satisfaction of getting someone to work with you that was hell-bent on doing it themselves?
I could blog all week about the different ways to overcome the FSBO's objections, but the gem of a line that was virtually impossible for the owner to overcome was so simple, it was almost bazaar.
When an owner asked me what I could do to sell their home that they couldn't, I simply told them "I can brag about your house." Then with a demonstrative wave of the hand, I would say things like (sic) "Don't you agree that the condition of this home is second to none..."
Of course you would want to pick out something about the property that the owners were obviously very proud of in your statement of fact, then simply conclude by telling them that they can only show the house..... you can brag about it.
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