I have the privilege of coaching some great agents. They have enough business so that they can effortlessly say “no” to business that they believe has a small chance of closing.
You are in a contingency business. Your income is contingent on the property closing. Lawyers who work on contingency are very careful in choosing what cases they work, and they get a 33% commission in most cases. Similarly, you need to abide by the rules below…or you will be working too much business that does not close.
Quickly, let’s go over what happens to you when you exert energy on non-closing transactions:
1. You lose your enthusiasm for the business.
2. You are less likely to have time & money for the important things in life.
3. It is time you’ll never get back.
4. You don’t do a very good job on low-closing percentage transactions.
When deciding to take business (a client)….
For buyers:
1. Have questions for them to answer before you meet. Let them know that you can deliver additional properties to see — some “off market” — if they will answer some questions about their needs and goals.
2. Have them pre-approved. Let them know with their pre-approval on lender stationery provides surety of close to a seller, and therefore, gives the buyer negotiating leverage.
3. Have all decision-makers meet when possible.
4. Go over the plan of showing “off market” property. Explain that this is a high-overhead activity and that you would like their loyalty. When the answer is “yes,” have them sign a buyer- brokerage agreement.
5. If they only want to see one property and do not concede to the items above, they are a low-closing percentage client. Refer them by saying, “Okay, (name), if you only want to see the one property at (address), then let me give you to the office specialist in that property. His/her name is (name of a new agent, preferably). Let me connect you with him/her.” Be sure that you’ve previously arranged a referral agreement with this individual.
For sellers:
1. Have questions for them to answer before you meet. Let them know that the more you know about their needs and goals, the better job you can do in customizing the marketing plan to achieve (their core motivation/goal in selling).
2. Make sure they have a motivation that is real enough for them to “jump through the hoops” of a sale. You might have to ask numerous questions about what a sale will do for them.
3. Take the listing, if they have motivation, even if the property is slightly overpriced and ugly.
4. If there is a lack of motivation, BE CAREFUL about taking overpriced properties or properties that don’t show well, since the price doesn’t compensate the buyer for the property deficiencies and there is little chance they will drop without motivation.
5. If the listing is overpriced, their motivation is low, and your warning bells are going off — refer it by saying, “(Name), I understand what you are trying to achieve, but there might be an agent at our office who has had more success in similar situations. Let me connect you with (name).”
The only way you have the ability to refer bad business is to make sure you have the systems to generate consistent, new business. Be proactive about new business so you don’t gum up the works with inventory or buyers that weigh you down.
If you would like our multi-page question lists for buyers and sellers, please reply to this email with the name and contact information of someone who is hiring speakers for real estate events in your area.
Walter Sanford has been designing and implementing real estate systems for 30 years. One of the most successful REALTORS® and now wealthy from his systems, Sanford teaches his systems and strategies through his products, seminars, and personal coaching producing the best results in the industry. Do what works, do what is proven. Hire Walter Sanford. Call our office at 800.792.5837, email walter@waltersanford.com, or chat with us online at www.waltersanford.com.
