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What the Top Agents Are Asking October 14th, 2008 | Posted in General Real Estate

When I receive questions via Email or even in person, it’s difficult to answer the questions fully without knowing the person’s productive level, experience, etc. 

Recently, I spoke for a large RE/MAX group, and I asked them to share some questions/concerns with me to answer for them.  You’ll find these questions are quite relevant to most agents and they are from people who are seriously thinking about their career every day.

1. The merging of smart phones/GPS/MLS info is on the horizon.  Buyers will be able to literally point to a house and instantly download the listing.  Do you agree this will happen and what is the impact on buyer’s agents?

It is already happening, and it will continue to happen.  Not only will interested buyers be able to download the listing, but I believe they will also be able to download a video file on the home.  Plus they could hit a button to be connected directly to the lender for the appropriate financing. 

For thirty years, I have said that the need for a buyer’s agent is most likely to be minimized with the use of appropriate technology.  The listing agent needs to counsel the seller on the best moves to make and then needs to customize an appropriate marketing plan to achieve the seller’s goals.  The listing agent has to review the financing options and prepare all of the materials to market the property.  The listing agent needs to be familiar with comparables to help with the eventual appraisal and has to have team members ready perform all of the services necessary to achieve a closing.  Furthermore, the listing agent by virtue of a low-tech sign and the high-tech ability to be transferred to over twenty different websites will be the one who more than likely will be the first real estate agent represented to an unrepresented buyer. 

If buyer’s agents are working without contracts, I guarantee you that that listing agents who have studied our systems on how to provide a better level of service will be taking away your unrepresented clients.  The only defense for a buyer’s agent against the inventory availability of a listing agent is the fact that the buyer’s agent can show their potential buyers properties other than what is showing up on all of the current websites represented by a single listing agent. 

A buyer’s agent needs to understand the following in order to be the most effective:
• Do a better job of counseling their buyers
• Get the buyers pre-approved in writing
• Put the buyers under a buyer-broker contract (now called a loyalty agreement)
• Service the buyers with unbelievable service by showing them FSBOs, old expireds, direct mail postcards to the target area soliciting yet listed sellers, delving into the past client database finding people who own real estate that meets their buyer’s needs, giving the buyers the first opportunity on new listings that come into the office, and other unique inventory levels.

Only after these items are wholly-fulfilled can a buyer’s agent have the greatest opportunity in competing against a listing agent.   In looking at the way most buyer’s agents just offer MLS inventory, technology will allow the listing agent to usurp more influence, therefore minimizing the buyer’s agent.  It is time for the buyer’s agents to wake up!

2. Is there any point in blogging if you are looking for short-term business?

There is one item in real estate that I want to make clear — anything that increases your visibility works!  However, an agent must decide what is the most profitable use of their time. 

I find it funny that most people who sell blogging software or help in setting up your blogs don’t have blogs on their own websites!  Blogging is a minor lead generation tool.  Blogging needs to be set up once you have the ability to quickly insert daily content and that information is viable enough to be picked up by others or read by your current blogosphere. 

There are many other steps prior to an agent sitting down and blogging.  One is going directly to the demographically proper buyers and sellers with value propositions by using various delivery methods.  Then you can offer all of the value propositions to buyers and sellers by way of your website.  Then, and only then, should you consider more ways to bring people to your website outside of direct mail, phone calls, and advertising.  These other ways like search engine strategies and blogging will only be effective once you deliver a client to your website, and they determine there is value enough to complete a form to inquire for more information.  The quick answer — yes, it is valuable, but no, it is not on the top priority list for most real estate agents to implement.

3. What is the best way to reconnect with a past client you haven’t spoken with for a while?

The answer to this is ‘just tell the truth!’  Many of my top coaching clients are finding this occurrence has happened to them.  Sure, it’s not the favorite job of any top agent to call their past client list, but it is necessary.  Here’s is what I would say:

“Hello, Mrs. Johnson.  This is Walter Sanford.  Back in October of ‘01, I was your real estate on the purchase of your home!  I wanted to say that I am sorry for not being in touch with you more often.  I was spending all of my resources in helping my current clientele and achieving their goals.  By doing this, I unfortunately neglected some of my past clients like you.  I would like to remedy this for the future. 

“We are going to be sending our ‘first chance’ listings to our past client database.  This means that you will be one of the first people to see new listings that we bring into our office.  I will also be Emailing you a newsletter on what is going on in the market so you’ll always be aware of opportunities and free valuable services. 

“I have taken the liberty of adding you into our VIP Client Club, which means that each quarter you will be receiving many free services that we have assembled from our other team members, associates, and affiliates. I hope that you won’t mind me calling to check in with you just twice a year, too.  Would you mind sharing your Email address with me to help in facilitating some of these services?

“Now or in the next twenty-four months, is there anything that I can do to help you by way of buying, selling, or trading?  Do you have any family, friends, or co-workers who might be interested in buying, selling, or trading in the next twenty-four months?  One of the most prevalent requests is from past clients who want to take equity out of the highly appreciated real estate that I have sold them.  This can be done at record low interest rates then produces liquidity to allow my clients to once again by involved in the real estate market today.  Have you ever been interested in that?”

As you can see, you can be stopped any time along this script to answer specific questions or sometimes, they just let you rattle on (like you allowed me just now)!  The bottom line is that it usually gets you back in the door with someone you have neglected.  It is time to go back, call these people, and re-establish your business relationship before they start putting “teeth” in the “do not call” legislation.

4. How do you get the phone to ring with more buyers?
Have more listings!

5. How do you best explain to a seller that the first offer will likely be the best?

The short answer to this is to start early!  This means that you make that presentation to your sellers at the listing presentation, rather than waiting until the offer is sitting in front of them.  In the listing presentation, tell your sellers that within the first week virtually 98% of all active buyers who are searching in their neighborhood and all others who don’t realize they are buyers until they see their home available will make contact in the one to two weeks of the listing period. 

Explain that they shouldn’t be amazed if an excited buyer is generated early in the listing period.  This simply means that a majority of the buyers who are currently looking in this neighborhood or who are interested in your property will find out about it when the sign comes up or when it hits the various different websites.  It is natural for them to call and inquire about the property. 

The dangerous aspect of having activity in the first two weeks is the fact that it might cause a seller to be less likely to negotiate with a buyer early in the process.  I have seen this happen many times, even with me explaining this concept as I am doing now for you.  I have seen offers come in first one or two weeks during the marketing period and never receive an offer better than the first one we had.  It is important that you talk about this before an offer comes in, because after that, anything you say seems self-serving.

6. What do you see as the next “big thing”?  I.e. two years ago it would have been short sales.

The funny thing is that many agents are still taking short sales that are not profitable.  If you fall into that category, please read some of the articles on my website about how to eliminate or run from approximately 70% of all short sale opportunities. 

Assuming agents do understand how to work short sales and know which ones to take, the next big opportunity in real estate is in getting their clients to take equity out of their assets and invest in the real estate market.  There have been very few opportunities in the last twenty years to buy real estate at wholesale prices where properties will actually break even with a 35% expense factor and 10-20% down.  When a client has a rental property that breaks even or has positive cash flow while allowing the tenant to pay off the underlying mortgage, you are creating wealth for this client.  You are also creating a consistent source for new properties once this buyer sees the success with the properties you will be showing him in the next few years. 

It is time for you to understand 1031-Tax Deferred Exchanges, the net present value of money, management techniques, and negotiation techniques on investment property.  If you are weak on these items, please get the only product in the country developed for real estate agents to buy real estate agents for themselves and their best investors — Insider Trading for Real Estate Agents.

7. My business is almost exclusively referrals.  For the last year, everyone is pushing the internet.  How on earth does an agent have time for face-to-face meetings, lunches, breakfasts, networking, listing appointments, showing homes, checking Email, updating website, etc.?

Please be careful what ‘everyone else’ is pushing.  Please question how much real estate they personally have sold and where their allegiance lies in selling you the next best piece of software or system. 

I have never believed in any business being referrals only because it is hard to control the eventual outcome.  I think you are missing the boat by adding more activities toward referrals and not increasing pro-active seller lead generation systems directed toward the demographics most likely to produce a seller. 

To answer your question directly, you won’t have time for everything!  Cut out some of the activities that are least profitable.  When you attend our seminars, you’ll find that my business plan in a tough market is extremely short and outlines the items that you should be working on first in making sure that every moment you spend is the most.

Make your top priority generating seller leads, which you do by ways of referrals.  I would encourage you to cut the least productive ways you generate referrals and replace them with more pro-active seller lead generation systems that are demographically directed such as mature people in large homes, out-of-state owners, builders, and people with large amounts of equity.  Great value propositions can be devised for these people.  Send them the information by way of direct mail then direct them to your website.  On your website, they can complete a form to request additional information so you can call them. 

The second item in a business plan is your time with uncommitted or unmotivated buyers.  Make sure your buyers jump through “hoops” to have them prove to you that they are ready, willing, and able to negotiate a transaction.  This hoop system means that you need to spend more time on the phone counseling them.  Have them pre-approved in writing.  Have them actually commit to showing up at your office.  The last hoop is to have them sign a loyalty agreement.  Obviously, getting buyers to sign a loyalty agreement is hard, unless you can give buyers a lot of value as we have discussed earlier.

A third item in the “perfect” business plan is making sure that each listing presentation is the absolute best that you can do!  This will eliminate the possibility of being beaten by the competition every time. 

Develop systems and checklists that are reviewed each year, eliminating the least profitable activities and adding more profitable activities.  This allows you to always increase your business substantially by paying more attention to profitable activities than routinely doing unprofitable activities.

The missing link to many top agent business plans is to get your affiliates more involved with affiliate lead generation systems.

Get back on the phone with your clients, which is probably even more important than your face-to-face meetings.

Last point of my tough market business plan is to start earning enough money to pay off your bills and open up something called a “savings account.”  I know this term might be new to some of you, but it’s really a simple concept!  Start saving money to earn a down payment so you can then buy the world’s greatest investment product at close to the bottom of the market.

8. What can we do when we are presenting the buyers on a short sale deal and the listing broker tells us that they are lowering the commission, even though it was stated in the MLS at a different rate and we have not given permission to do so?

Just say, “NO!”  Even though, it was stated in the MLS at a different rate — just say, “NO!”  If it is the bank pushing a lower commission, it is quite different.  The bank interfering with a contract between the listing agent and the seller is tortuous interference of a contract.  Since you have made the offer based upon the representation of that contract, they, too, would be committing a tort. 

This is one of the reasons why I don’t like buyers and why I like short sale buyers even less!  I would certainly hope that not too many of you are actually making offers on short sale properties.  If you are working on a short deal, I do hope that you are working with a real estate who knows how to work with short sales and does not pull the last minute commission reduction trick because they are too weak to negotiate harder with the lender.

Make sure your buyers agree to wait at least four months for short sale resolution.  Many short sale buyers are looking for the next big deal.  They might easily become disenchanted and get out of the transaction, if the transaction goes more than a month without resolution from the bank.

9. How do you get buyers when there are none?  Even reduced the price of the home by $40, 000 less than what they paid a year ago and still no traffic.  Another $20,000 reduction and still no interest.

Having more listings will bring the buyers!  There has never been a time in the history of real estate when there have been no buyers. 

Most likely, you are probably still too high in pricing.  I had many times where I reduced prices $100K and received no traffic.  I have seen entire complexes reduced by 50%, because the builder did such a clever job on pre-marketing which caused the buyers to purchase for more than the property was worth.  

This is really a simple concept, especially when viewed through the eyes of a guy who has been in the business for thirty-two years!  If there is no traffic in two weeks and the property is in the MLS, you have it over-priced.  Sometimes getting a price reduction may be hard, and you have to get a value-enhancement rather than a price reduction.  You can refer to articles on our website at www.waltersanford.com for our lists of value enhancements. 

If there is no traffic, you are too high.  If the seller does not want to reduce the price but they leave you alone, let them sit there.  If they want to drive you crazy and not reduce their price, maybe it is time to generate some more seller leads so you feel okay about letting them go.
I know the current marketing is challenging.  Please be aware that some of the properties or current listings may be as much as 20 to 40% over-priced so small price reductions will just not cut it.  We need to determine what the seller’s core motivation is so we can remind them of that every time we ask for a price reduction or value enhancement. 

Good luck in your marketing!  Basically, it comes down to one thing — increase your listing inventory until you receive the same activity you received in pre-2006 years.  What will happen with more listings is you will get more showings, more buyers, and more opportunities for double-end transactions. 

I know that everyone thinks buyers are the game.  Buyers are never the game.  They weren’t the game when the market was hot, and they are not the game when the market is slower.  The person who owns the inventory wins.  It has always been that way, and it will always be that way.  It doesn’t depend on market conditions.

The only thing that my coaching clients are doing to achieve the same activity as the great market is to increase their listing activity substantially.  Please implement the most dollar-productive activities to start thriving in this market.

One Response to “What the Top Agents Are Asking”

  1. Alice Taylor says:

    Walter,
    Although some of your content is not relevant here in Toronto, Canada, but as usual I so love your honest straight forward talk. Because we are just beginning to feel the market slow down here, we need to soak in all your words of wisdom. Pls. continue coaching us on how to get more seller leads. thanks again. alice t.

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