Let us take a break from the consistent, pro-active, time-blocked, seller-lead generation activities. It is my hope that you increase your buyers by increasing your listing inventory. The only way to increase your listing inventory is to increase your leads, make more effective listing presentations, and determine whether or not a listing is saleable. In coaching my clients, it seems as though there is a lot disagreement regarding what listings to take and what listings not to take.
Many times, you feel that your listing inventory is low and you start taking any listing that is available to you. You will soon find that this will become a mess of high costs and unfulfilled client desires. As your listing inventory increases, you tend to become more rigid in your requirements of a potential listing. I have heard some superstars and speakers say that they like to turn down three out of five listings. Why so many? Often because the client is under-motivated, the price is inconsistent with comparables, and/or the property lacks curb and interior appeal.
My opinion — the only determining factor of a saleable listing is seller motivation. Sometimes seller motivation may be difficult to determine because the seller will not want to give any indication about their motivation. They think this prevents the listing agent and any buyers who receive information from the listing agent to learn their great need, which they might think will result in a lower price offer.
My determination of whether or not a client is motivated starts with my first conversation. The lead has probably come to you from any of the amazing systems in this book, and now it is time for you to interview the seller, prior to a listing presentation. The questions to ask this potential seller can be found in your book called Beating the Competition Every Time (our listing presentation system). You will find the seller is asked numerous times why he or she wants to sell.
At some point, you will need a full answer. Answers like, “It is time now,” “Because of my wife…,” or “Because I want to move to North Carolina” are insufficient. When you receive answers like these, you need to follow up with “What does moving to North Carolina (or rephrase to insert their goal) accomplish for you and your family?” If it is STILL unclear as to why they want to move, you can ask a third question.
If the seller seems to become bothered by this line of questioning, your response immediately should be “I am sorry to ask so many questions; however, the more I learn about your goals, the better job I can do in planning a customized marketing plan to achieve those goals.”
Sometimes you will receive an answer that just is not very compelling. “We have been discussing it for a long time, and we think now may be the time for a move.” That is certainly a reason, but not a very compelling reason. To find if their reason is competitive enough to go against foreclosures, REOs, and bad markets, you will need to ask, “If you are not able to make the move because a proper offer is not obtained, what will your plans be then?” It is as this point that you will know if they have to sell.
The reason I spend so much time on this is that you need to make the decision whether or not you will be spending the time and money to bring about an outstanding marketing plan. This is the decision that many real estate agents are facing today.
Many of you are turning down listings because the seller-quoted price is too high. In fact, the price may be over comparable sales, based upon some nebulous aspect that the seller deems important but a buyer may not feel is as important. In that case, if the seller has motivation to sell and not selling is unthinkable, you may want to go ahead and take the listing. It is important that you understand that you cannot take an over-priced listing, unless you tell the seller up front what you believe the true listing price should be. I did take over-priced listings in my career when the seller understood what the selling price should be based upon comparables, the net sheet based upon what the sales price should be, and also had motivation that prevented them from doing anything but selling after I had obtained a price reduction from making them face reality.
In taking an overpriced listing where the seller has been told the truth, it is important to time-block weekly discussions with the seller regarding comparables, showings, and feedback. You should consistently be requesting a price reduction or value enhancement. To increase your number of listings, you will turn down fewer. You will find that with strong, weekly seller counseling that you will eventually receive the price reductions necessary to receive a sales contract.
Develop more leads, make a better listing presentation, but turn down fewer based upon price if the motivation is there.