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Current Q & A
(To view our archives, please click here.)
12/2/09
Q: Hi, Walter! You did a great job at the seminar on Wednesday. It was very entertaining, and it was good for me to hear everything again. It's so much information it really takes a while to digest and implement.
Point me to a good argument in your books for a seller who really wants to move up but can't get past the hit they're taking on the sale price of their home. I know the goal is to help them focus on getting to the new home, which they can get for cheap, but I need to learn how to get past the part where they get stuck on the sale price of their current home.
Thanks!
Laura
A: Answer One:
Nothing that I know about in the books, so, are they buying up or down in price?
Question Two:
They are going up in price. They want more rooms, square footage. They just had one baby, and they might have another.
Answer Two:
Here is the thought. They move from an $800,000 home that has had a 20% hit. Sorry, they had to lose $160,000, but you have good news for them! They’re still ahead of where they would have been when their first property was really worth $800,000.
The new $1,500,000 home they’d like to purchase has dropped at a larger percentage, because higher end properties have had even less activity. This new home has had a 25% discount. This provides them with a $375,000 discount on their dream home! All in all, they’re still $215,000 ahead over the same position in 2006.
However, there is one more concern that I have. We have a government that is spending more than ever before in history. They are spending money that they do not have. Printing money and borrowing money puts pressure on interest rates. They will now have a larger mortgage than they do currently. By moving now and getting that large discount on their new, larger home will provide yet another benefit. They will be tying down a new, low, fixed-rate interest loan that will provide safety in a rising interest rate market like that of the Carter administration – an administration that had the same economic stimulus approach!
11/5/09
Q: Walter, we recently relocated to Southern California from Calgary and purchased all your books and CDs. They are great. The following objection is something we keep running into. Should we discuss our track record in Calgary? We are at a loss and need some guidance. How would you handle the following objection: “We really liked your presentation. Your pricing was similar to the other REALTORS®, and your commissions were all the same. The only factor was track record. We went with the REALTOR® who had a stronger track record for the area.
Sincerely, Desiree
A: Here is my suggested response: “Track record on anything is an important indicator of future performance. We are at a loss because that record for us is in Canada, where we were considered to be the best in the following areas: (insert items that you can back up with proof).
“However, what is even more important are the ways we intend to achieve your goal of (insert their reason for selling) and achieve that goal with the highest net to you. I would like to show you five ways that we find a buyer, which will be new to this area, and also five ways we can increase your net proceeds.
Getting you to sell your home and (insert their goal) is what it is all about! I believe we have brought some new ideas to the table. I would like the privilege of selling your home.”
Notes for you: remember, you need to be the last agent in for the presentation! Know their criteria for hiring an agent before you go on an appointment and also know what their largest concerns are before going on the appointment.
10/15/09
Q: Hi, Walter. How do you overcome the objection to a lockbox?
Thanks,
Laura
A: “I understand your concern; however, I believe that we have balanced security with accessibility. Only licensed agents have lockbox keys and carry an insurance bond through the MLS. I have included a copy of this insurance bond. Should there ever be a problem, which there has not been in (your area) for (XX years; talk to your board for detailed stats), the offender would be traced by their unique code that accessed the lockbox. That individual would lose his or her license; furthermore, the insurance would pay for any loss."
"You will be notified when anyone uses the lockbox via phone call or text – whichever is easier for you. I could also be the notified source if you like. One of the key benefits is that impromptu showings could be made. Furthermore, many agents are lazy and will not pick up keys; in fact, they will not show homes that are hard to access, especially when so many homes are on the market. Having a lockbox, adds to my marketing in that I will get a print out of all showings with the showing agent's contact information. This allows me to follow up for their feedback, keep them in the loop on any changes in the listing, and start a marketing program toward them and other buyers."
"Based on history, the downside to not having a lockbox is minimal; however, the increased showings and the complete showing information allows me to do my job better. When you mentioned that you want to move to that home with the view of the Rockies, I promised that I would employ every tool to make that happen. Having a lockbox on your home is one of those needed tools for me.”
Laura, listings without lockboxes will kill you!
10/09/09
Q: Hi Walter,
See the e-mail above. This guy keeps up with his negativity on the market. How do you think I should respond?
Thanks!
A: Your buyer has every excuse in the world…as to be expected. I see some mistakes on your part. You do not remind him what the finish line looks like and you do not add any coals to build a fire under him. Here is my response to him:
Joe,
I go to sleep at night, because I use my experience to energize my crystal ball. Here are the facts so you can make a decision:
1. You can make an offer subject to your "orders" coming in. This puts us in line and gives us a chance to stay in the game if another offer comes in.
2. Remember when you told me you wanted ________________. This property meets all of those requirements and more such as: _____________________.
3. Replacement value on this property based on current construction costs is $_____________, which is pretty much a bottom on this property.
4. If you miss the November tax credit date, you pay $8,000 more as it stands today.
5. Your after-tax cost of owning is way less than the true cost. You are not getting the benefits of owning until you own.
6. The onslaught of additional foreclosures has been known about for a year. There are private investors and investment pools ready to buy them when they hit. Properties are less than replacement value and rents are higher than payments. When this has happened in the past, we were at the bottom.
7. Rates are going to go much higher in the future. Lenders will not allow low rates when inflation comes roaring back. Have you seen gold lately?
8. Moving in the snow is really annoying.
9. When markets turn, they turn quick. Look where your payment goes if we recover 10% of the 40% drop in price and rates go to 7%. Pigs get slaughtered.
10. For these reasons, I am buying investment property for myself and my family.
If this is the home, my direction would be to make an offer today.
10/08/09
Q: I have a new objection. “Our house is no longer for sale because we've leased it out for a year.” How do I come back for that?
A: My response to them would be: “I understand. Have you signed the lease yet?”
Their response: “No.”
My response: “Well, many owners have appreciated my rental analysis prior to to leasing. Because of negative cash flow, vacancy factor, maintenance factor, and other expenses, many owners find this to be a losing situation. This situation compounded with lost opportunity cost and the possible further erosion of equity can be a real eye opener. May I ask you some questions to get the information so I can work the analysis for you?”
Here is the analysis. Take the rent being paid and subtract 35% for all the expenses of the property except for P and I. Then subtract P and I from the total. $3,000 rent less $1,050.00 less a P and I payment of $4,000.00 is a gross negative of $2050. per month. That is a loss of $24,600 per year.
Let's say the “one-time seller” had $200,000 equity. If he could get a 4% return, that is a loss of another $8,000 in lost opportunity costs in a year. Plus if this $600,000 home lost another 10% in total value in the next 12 months which is the prediction....that is another $60,000 off the equity for a total loss of $92,600 or almost half your equity...and that is only in one year. This little dip may last 2=5 more years and not look like a V recovery. It may skip at the bottom for more than 7 years.
Right now we have buyers who are buying. Why? Because we loan them our commissions toward their down payment and can take a note against their new property. We market harder. We keep a great database of buyers. We have the best SEO strategy. We use a team approach, and we educate the agents known to have an interest in your area and price range. We research their names based on their production for the last 3 years and make sure your property is on the top of their showing list.
I would be happy to show you this in writing and also a plan to accomplish your goal (main core value goal).
You now have a script that works when the deadly "I'll just rent it" objection comes up.
08/28/09
Q: Hi, Walter. I'm an agent in Naperville, IL. Just thought you'd get a kick to know that last weekend I was at a thrift store and found some real estate materials. One of them was your 'The Modular Listing Presentation” video and manual. I think I paid $3 for it. I liked it and really like some of the letters you had in that packet. I'm going to change them around some to fit my own needs but thought you'd get a kick out of this story.
I also found a book of cassettes that were one hour interveiws from six of the top producers in California. They were from around 1980. That cost me $1 and they were really interesting to listen to.
One thing is a constant in this business and that is nothing really changes. Technology did but it is always going to be a people business!
Jackie Beardsley
A: Hi, Jackie! Those items are classics and sell on Ebay for over 150! Congratulations on your find! The concept of learning about a seller before you go over there is huge and very few agents get this concept. If you know what they want to accomplish and then give them a plan to accomplish it, you get your commission, the listing, and most of the times the price -- if they are motivated. If they were not motivated, you would not have gone in the first place.
08/28/09
Q: What are the perennial methods, strategies, and best practices for motivating buyers in this challenging market and one that will perhaps return to a new normal in 2010?
A: One of the largest challenges that average producing agents have is following up on leads that are not moving forward. Some agents spend all of their time following up on bad leads instead of producing new one.
Motivated buyers will appreciate your great services (see July ‘09 Illinois REALTOR® magazine). If the buyers do not appreciate the services, my thirty years of experience tells me that they are not low-hanging fruit. Low-hanging fruit buyers answer questions, have an idea of what they want, get excited when you look beyond the MLS for property, will get pre-approved by your lender team member, and sign a loyalty agreement.
The under-motivated buyer will not do most of the above. Generate more buyer leads and get rid of the ones that won't follow the plan. If a buyer that I am following up on would not complete the system after about 3 tries, I would say, “I don't know that I have the necessary tools to complete your goals, but (agent’s name) in the office has been very successful in the type of property and service you are looking for. Let me get you two together.”
I would then collect a referral fee and go out to develop some listing leads, make a better listing presentation, and increase my inventory. We all know the least expensive and most effective way to find more buyers is to have more listings!
08/28/09
Q: Hello, Walter. I missed you at the Marriott the other week, but I've already got all of your kits anyway! Quick question. I'm designing a website in my neighborhood that is going to have:
- Neighborhood Information
- Homes For Sale (including FSBOs)
- Garage Sales
- A section for networking (people with homebased businesses can advertise, like snow removal, lawn mowing, Mary Kay, REALTORS®, etc.)
- Current real estate market information and past solds in the area
- Neighbors names, addresses, phone number, email addresses
- Other pertinent information to the neighborhood
My question for you is -- have you ever had one of these "packets" of information that you pass out to farm specific neighborhoods? It seems like among your documents on your CDs there was something that was specific to what I'm trying to do. Maybe not…It might have been through another source, but just checking to see if you had anything like that!
Thanks, Walter! Hope you and your family are well! God bless!
Christopher Smith
TRADITIONS REAL ESTATE
A: The only vehicle that ever advertised my neighborhood website were the "just sold" cards from that particular neighborhood. When I ran out of “just solds,” I would retrieve the information from the recorder’s office (not the MLS) then notify the neighborhood of those closings. Sometimes, the receivers assumed that I sold these homes. Don't forget to add to your site these important ingredients:
1. Tell me what my neighbor’s home sold for.
2. The 48-hour free phone value analysis
3. The neighborhood dream home search
4. The “pull out some equity and invest” service.
5. Local business coupons
6. Baby sitting leads
7. Open house section...even let other REALTORS® use it.
8. Awards for best neighborhood pumpkin and best decorated home for Christmas.
Go get ‘em!
08/25/09
Q: Hi, Mr. Sanford. I was hoping you could explain further your analysis method to me. I read this in an article and am interested in investing but am not sure I understand completely. You wrote:
The analysis is fairly simple. Imagine what you can get the income to in about 6 months. Use a 35% expense factor. This expense factor is high to most investors, but I have found it to be more realistic. Subtract this expense factor from the proposed income to find what is left over to pay principal and interest. Next, work backwards to see how much of the loan this payment will pay off with the current interest rate. Take the loan amount and divide it by the inverse percentage of the down payment you are going to use. This gives you the sales price. Using a digital offer form with a nice cover letter, E-mail the offer to the listing agent.
Is there an example you could give so I could better understand? The part I get lost on is working backward and then you say to take the loan amount and divide by the inverse % of DP to get the sales price. I am just unclear and would like to understand better. Thanks and God bless.
Stephen P. Reddell
A: Once you find the loan amount that 65% of your income will service, you figure the inverse of your down payment which would be 80% if you were putting down 20%. Then take your loan amount and divide by .8 will give you the sales price to offer. Good luck! All the rich people in the next ten years will have bought today.
07/22/09
Q: I had one question for you. I heard you speak in Oak Brook, IL for the Realty Executives Convention. You mentioned a voice mail script. I can’t for the life of me find it in any of the books. Is there any way you could help me find it or even a general idea of the voice mail script? Any help with this would be greatly appreciated. Thanks again.
Dominic Di Brizzi
A: Here it is, Dominic. “It’s a great day at Sanford Systems. We guarantee returned phone calls between 11am and 12pm or 5pm and 5pm. Please leave the exact need you have and a phone number where we can reach you during these times. We will endeavor to find your answer and call you back during these time blocks. Thank you for calling.”
07/22/09
Q: Walter,
Trust you are doing great! Long time, no chat. Let me bring you up to speed.
After our last conversation, I went into the asset finance business, only to fail. As you know bank financing, which was needed to underwrite the loan, dried up and so did I. We then sold everything we had and have spent the time in Santiago, Chile for the past 6 months.
Our time has been amazing. I surf twice a day, read a lot, and spend time with my family. I will be leaving with restored confidence. We are now coming home in mid-August and I will be starting over.
Good place to be and I will be very hungry out the gate. I am going back into real estate. I am good at it and I will focus all I have on it. This wasn't a quick decision, but rather well thought out.
Here is my question: Is it career suicide to move away from your network? As you know I was born and raised in Whittier; however, we love the beach and would love to move to the coast, San Clemente, Laguna Niguel, or Newport areas. Should I sacrifice the location for a career or can you effectively "re-plant"?
I will say I am hungry and I am prepared to do whatever it takes to change the path I have been on for the past 18-24 months.
Let me know your thoughts.
Charlie
A: Hey, buddy! These are experiences your family will remember forever. Balance in life says you have to have some assets at your age. Real estate is probably the way to get it. With no prospecting, you will only make money in a hot market and that is not until 2012 at the earliest.
So, what were the reasons you did not prospect? (Your network) kept you in play mode, which is your default position. I transplanted from my network when I started in Long Beach. I was brought up in Arcadia. Than meant that I had to write and visit the expireds, write letters to the short sales, go after REO accounts, get the divorce attorneys on my side, get all the out-of-state owners, be the best at all new technology, and make sure that I was going after every new demographic that would result in listings.
Checklists and buyers were next, then teams, and finally investments with the money I made.
I think a fresh start for you is fine. Hope I can help you.
06/09/09
Q: Good morning, Walter. What are the “Twelve Secrets of Selling Your Home at Above Market Prices?” Thanks!
Robert Hicken
A: Great question! I assume that you read that somewhere in one of my writings. Even though we all know the answers can be personal to the agent providing the marketing, I’ll do my best to give you some direction.
1. Price the property to be the most competitive to attract every buyer in that demographic.
2. Remove clutter, huge collections, and personal items that are necessary to the current owner’s life but not necessary to the potential owner’s life.
3. Repair obvious problems in the major systems. Get a post-listing inspection report and have the work done now rather than waiting for a nervous buyer to make their choices.
4. Provide easy access to the property. Anything less than a lock box with a warning call prior to showing will reduce showings.
5. Offer a 10% second to assist in the financing.
6. Follow-up assertively and determine why offers are not being written after showings. Express those concerns to the seller with solutions.
7. Make sure the features and benefits of the property are compelling and are expressed to the agents who have had a sale in area or price range in the last 2 years. Do this on a weekly basis.
8. Implement an effective SEO strategy that allows the world to find the home. Once the home is found, present a quality “showing” that will elicit REAL showings.
9. Offer "secret property" to your database to create buzz, prior to the listing hitting the MLS.
10. Add one value enhancement to the property for every week that it does not sell.
11. Put together 10 financing packages to show buyers that they can creatively obtain the keys to this new home.
12. Call your team member, the seller, religiously once a week and be straight with them. No showings in two weeks equals another price reduction or value enhancement. No offers in one month equals a price reduction or value enhancement.
If you can answer why price reductions in a tough market actually increase many seller's nets, then you have made it.
06/01/09
Q: Walter,
Not so long ago, I bought the entire package of Sanford Systems. I have been looking for a good phone script reference contacting the human resource departments of very large companies and didn't come across one in my phone scripts book. Would you happen to have a script such as this?
Thank you,
Coretta McKinney
A: Hello, Coretta. You are smart. There are a ton of seller leads in that demographic. Be careful your people do not get hung up on those coming into town needing tours to see if they want to take the job. You have to be clear it is the potential employer’s job to sell them on the job and area. Your job is to sell them a home.
It is the listings that bring in the most net profit. My coaching clients and/or their assistants use a letter detailing all the services that their “Human Resource Service Departments” handle. These services can include the following:
1. Quick seminars for employees on the state of the real estate market, financing, problems and their cures, and neighborhood updates.
2. The free 48-hour phone value analysis.
3. Email-enabled free dream home search.
4. Access to lender team member for refinancing and new loans.
5. Approved team member for support in-home inspections, home warranties, termite, title, and other real estate services.
6. Guaranteed same-day return phone call or Email on any question or challenge from an employee.
7. The contract "look-over" service should any employee find themselves in a real estate transaction with another agent and have a question.
8. Access to the VIP Client Club.
Once you put your contact list together, send the offer above and follow-up with the following call:
“Hello, (name). My name is Coretta McKinney, and we are rolling out our new Human Resource Department Services. I sent you a letter last week regarding some of the services we offer. I was wondering if we could set up a small seminar for your employees regarding the current real estate market. Do you have any current employees that need selling services, buying services, or rental services? May I stay in contact with you regarding updates on additional services and to see if any of your employees need real estate services? By the way, on every closing, I would like to donate $500 to the charity that your company supports or possibly toward the employees’ appreciation party.”
I hope this gives you some ideas to capture the HR business!
06/01/09
Q: Hi! After receiving over 50 calls yesterday for status on my listings, I set up the 800 system to provide “showing information.” No need to do it this week-end, but could you please listen to some samples and give me your feedback and thoughts. Any suggestions are always appreciated.
Call: 1-800-XXX-XXXX. Ext. 24251, 711, 2211, and 401. These are samples of many.
Thanks and have a great week-end. By the way, I hired a new assistant!
Best,
Valerie
A: Add an extension to the "what we look for in a short sale offer" section. Refer to this section in the individual listing recordings.
1. We will only accept offers that use the following affiliates.
A. XXXXXXXXXXXXXXXXXXXXXXXXXX
B. XXXXXXXXXXXXXXXXXXXXXXXXXX
C. XXXXXXXXXXXXXXXXXXXXXXXXXX
2. The earnest money deposit must be for 4% of the sales price and held at (Name of Escrow Co.)
3. The buyer must clear inspection contingency and order. Buyer must pay for appraisal in the first week of acceptance. The buyer will be expected to pay for appraisal and inspection (if required). prior to short sale lender approval.
4. Updates on short sale progress will be emailed at 4PM every Thursday.
5. Buyer agrees to wait four months for short sale approval.
05/28/09
Q. Good morning, Walter. I just read your article in Realty Times. I am an agent on my fourth year in the business. I did Tom Ferry coaching in my second year and learned how to do a business plan and some time blocking, which is my weak area. I need to work on that.
I brought my listing inventory up by 3 times the amount and had over 3 additional contracts a month. In this market, I have not been able to continue the coaching. I have lost my stride somewhere and trying to get it back. Is it really a matter of just going after it?
I am in Northern Cal where we have 2nd homes and land that sold to Bay area people. Now with them backing away, we have very low income in the area and not many sales. I primarily dealt with our “high end” homes, new construction (which is rare), and land sales. Those are all of the things that came to a halt.
I am a (almost) divorced mom of two who wakes up everyday loving what I do, but need to make the money for the family. I was the expired listing agent that dominated but a lot of those are now the bank owed properties. Should I go after every expired? I was the newer agent that basically took over from one of the highest producers, and I liked that. I love challenge. So I should be thrilled right now..lol.
I have a listing presentation and if I go to a listing presentation, I averaged 99% of them even in multiple agent interviews. I know my personal issues have clouded my energy but ready to put that aside and move forward. How do I get back on the horse and win the race?!!!
Thank you for you time. Have a wonderful day!
Christi
A. Hi, Christi. All business problems can be cured with a larger listing inventory that is saleable.
There will be other challenges with a large listing inventory, but your focus right now is being on a listing presentation every day. Therefore, you need leads. About six from the following list should be up and running by years' end.
1. Database management
2. Expireds, old expireds, first and last day expireds, and first of year expireds (removed all periods after these items)
3. FSBOs and old FSBOs
4. Out-of-state owners added hyphens in here but they’re tiny so I thought I’d bring attention to them for you!
5. Obituaries run with a just sold card program
6. Mature people in large homes system
7. Short sale solicitation with a post system to gain access to the REO manager
8. Host/parasite systems with companies like moving companies
9. Event open houses
10. Divorce attorney program.
These are 10 of about 60 seller lead generation systems that are working in this economy, especially in a second home market. Only go with those who are motivated. Work the REOs and only do short sales that have a high probability of closing. You will find your activity level going through the roof again!
05/28/09
Q: Hello Mr. Sanford,
Love your tips on Realty Times! I have been a Realtor for 4 years so still fairly new...but struggling in this economy. I need all the training I can get!! Do you have a book???
Thank you!
Joyce Sipple
A: Hi, Joyce. If you like my stuff, you will do fine. “Doing fine” means you understand that owning the inventory is the key and your focus needs to be on seller lead generation. You understand that making listing presentations will increase you chances for income in less time. You understand that you will have to concentrate on buyer control and produce listings from that control. You know that you will have to gather your assets in family and affiliates to form an unpaid team. When you find that money is flowing, begin saving just a little to begin investing in real estate.
If you’re interested in my systems, most agents start with Letters 401: The Advanced Course, Grow Your Leads: Just Ask Walter,Beating the Competition Every Time, and Buyer Net Profit. I will forward this to Cyndi. If you call her at 800 792 5837, she will give you the seminar price on the package.
Follow the systems and I will cut 10 years out of your learning curve.
Thanks for your kind words!
04/01/09
Q: Here is an Email exchange between myself and a client. I’m not sure where to go next. Could you help me, coach?
From my client:
We haven't finalized our decision. Since we will be buying in your market and we would like to use the same selling/buying agent, we want to get a lower REALTOR® price on the package. Can you propose any options?
My response to my client:
It's good to hear from you! Here is what I can do for you: on the listing of your home, I will charge a commission of 6%, and on the purchase side, I will give you a 1% of the sale price credit at closing of your new home. I hope that this will work for you. I would love to represent you and help you make your move.
Let me know if I can answer any other questions. The time to list is now; the spring market has started. I have sold 18 properties so far this year, most of them within the last 6 weeks.
Talk to you soon!
From my client:
We also want a discount on the sold home. How about 0.75% on the sold home and 1% on the bought home? Checking the competition, there basically is 1 maybe 2 homes similar in style/price, so I think priced right, it should sell easily. Also a discount on the sale helps minimize the impact of taking a loss on the house. Additionally, we are both familiar with the internet and are very focused on what we want, so it should be easy for us to find a home (and less work for you).
A: Next time, it is 6% on the sale with 1% on the sale being credited toward their down payment on the purchase, if they buy through you. You will actually give them a check at close of their new purchase for 1% of their sale. If you get both ends of the sale or the purchase, you will give them 1.5% and if you get both ends of both ends you will give 2% of the sales price of their listing.
Here’s my suggested response to your client:
I know you will be able to find someone that will give you more of their earnings than I will give you, but here are a few of things that you’ll also be bargaining for:
1. Carrying costs. I beat the days on market for the average real estate agent on the sale by ________ days.
2. List-to-sell ratio. In our area, the list-to-sell ratio for the Board of REALTORS® is 96%. Mine is 98% because of the marketing that I do. You will give up the 2%.
3. Average litigation rate for a seller or buyer. The current going rate is one for every 87 transactions. This is a National Association of REALTORS® statistic. Mine is one in every 433 transactions. Litigation is where clients really feel the pain of having a poor agent.
4. You will not be introduced to my secret, wholesale property list. This has saved my clients over 20% on a purchase.
5. You will not get the guaranteed customer service and return call guarantees. You have not experienced pain until you have unanswered anxiety.
There are many other differences as to why I do not cut my fees more; however, if you look at my overhead as compared to other commission cutters, you will find that I have a staff, which is necessary to provide the kind of service that you deserve.
03/31/09
Q: Hi, Walter. I’m curious what you think of my welcome/thanks message to those who visit my website. I’ve included it below. Please let me know your thoughts.
Hi (insert name),
Thank you for visiting my website at www.alexmi.com. I hope you were able to find information regarding my listings and services. Are you looking to buy or sell a home in the Ann Arbor area? I will be more than happy to assist you with all of your real estate needs. I have been a full-time Realtor in the Ann Arbor area for over 8 years and I have helped hundreds of people buy and sell homes.If you are looking to buy, I can e-mail you all the listings that are available on the market that match your criteria and keep you updated of new listings as they come on the market. Let me know what you are looking for and how much you would like to spend and I will e-mail you everything that is available.
However, you are searching for real estate the hard way. I would like to introduce you to my Home Buyer Club. The benefits of belonging to my Home Buyer Club is that you will receive the latest new listings via e-mail. I will be checking new for sale by owner listings every day to see if new homes that match your criteria have come on the market. I will be searching 3 years back of unsold listings to see if anything matches your criteria and contacting those sellers, and I will be posting your criteria in ads online and in newspapers to get the sellers to call me. I will also be going into my past client database to see if I have any relationships with clients that own what my buyers want. The membership in this club is free of charge, call or e-mail me to learn more.
Thanks!
Alex
A: I would suggest that you condense the first paragraph into one or two good sentences. Who cares about the rest of the stuff?
Add to the second paragraph: "Buyers who are winners in this market should see all the inventory, not just the MLS that everyone shows you.” I would also mention short sales and REOs.
In the third paragraph, I would add the following:
“If you are a seller looking for comps, let me introduce you to my Pre-Listing Consultation. This is a free service that is full of the tools you will need to maximize your net proceeds.
1. You get a customized marketing plan centered on your goals
2. You get suggestions on how to maximize the property to appeal to the type of buyers who are paying fair prices.
3. You get suggestions on how to stay out of trouble and litigation in this market.
4. You get the exact comparables that the appraiser is going to use to value your property.
5. You get the five most used financing methods and how they apply to your property.
6. You get a complete team including insurance, title, inspection, termite, and others that all work together to accomplish your goals.
7. You get a list of “ready-to-buy” buyers.
8. You get a guaranteed sales price.
9. You get the exact net proceeds in writing.
10. You get a master plan integrated and personalized to obtain your exact goals.
03/31/09
Q: Hi Walter,
We’re including several lists in our magazine, and we’d love to have you contribute your expert advice. Would you be able to provide a handful of tips on how to effectively price a property?
Please let me know what you think.
Thanks!
Marty
A: Marty, I would be happy to help!
Seven Short Tips to Effective Pricing
1. Before going on a listing appointment, ask the potential client why they are selling. If their response is unclear, ask again. You need to let them know that the more you know about their needs, the better job you can do in customizing a program to meet their needs.
2. Bring up their motivation to sell every time you speak with them. How are they going to conform to this market unless you keep the vision of the goal line clear?
3. Let them know that surety of close can be as important as price. Let them know the steps you take to add surety to the close. Larger deposits, heavy pre-approval of the buyer, shorter closing times, and shorter contingency times are all methods of adding surety to close and taking the emphasis off of price.
4. Sometimes you have a seller with motivation and the wrong price in mind. Calling them every 10 working days, reminding them of what the goal line looks like and being armed with more comps, comparisons, or feedback will result in a price reduction if the motivation is there.
5. Understand that negatives are greatly magnified in tougher markets. If it is a busy street, there is always a discount in a good market, but it will sell because buyers have less to look at and will overlook it. In a tougher market, they want it all, and it might not be shown enough until you obtain a substantial price reduction.
6. It is not always about a price reduction. Sometimes the seller will turn to cement, resisting any further price reductions even if they have motivation. In this case, we use a list of over 100 value enhancements like including the appliances, buying down the loan, or offering a .5% more to the selling office. I would never get off the phone unless I got something to make the listing better.
7. You, as an agent, need to understand the most important law in real estate. With the MLS and all of the cooperation we get from other agents, there is a simple fact – if there are no showings, you are overpriced. If there are no offers, you are overpriced. Don't let the seller sell you on the fact that it is lack of marketing. Price is 95% of marketing.
03/20/09
Q: Hi Walter,
Enjoyed your RBC presentation! I was there last year too (and bought 4 books). You touched on a subject that interested me.
Is it better for a website to be a “buyers agent" or leaning towards buyers? Because the listing people will think, “This is the guy with all the buyers!” Or, in your opinion, will listers keep clear because this guy only deals with buyers? No one here seems to be a "buyer’s agent," but I was thinking of heading my website up in that regard. As you suggested, sending out “just sold cards” to my rural farm area with my picture, etc. on them, so they would think it was sold by me or through my site.
I know you’re busy but I thought I would ask. I picked up some great points this year.
Cheers,
Stewart J. Lowe
A: Hello, Stewart. Listings are your best source of buyers. Sellers want you to be the world's greatest buyer’s rep, not the best listing agent. Your listings will be sucked into many consolidator websites so you will get the buyer calls. Your personal website needs to provide perceived service to sellers and tout your buyer program as a method to pull more buyers.
On your personal website, sell your buyer services as a method for sellers to see that you handle many buyers. Offer value for every seller demographic available in your area.
As a separate matter, informing your database or area of geographical expertise with a post card that touts someone else's sale will provide the impression that you are selling those properties. This information can be obtained from tax records. Just sold cards are ten times more valuable than a just listed card in this environment so supplement your just sold cards with "other broker sold cards."
Thanks for coming to my seminar! Don't depend on a website to build your listing inventory! It is just a tool among many.
03/18/09
Q: In an article in Real Estate Pro, you mentioned having more aggressive “Just Sold” cards available. Where might I see these cards?
Fran
A: Your question is actually answered in detail in a chapter of our new seller lead generation product. Even though you should buy it to implement at least two new proactive seller lead generation systems per year, let me help you with the concept.
In a tougher market, solds are “honey” to sellers. We want more sellers to produce more buyers, more showings, more contracts, more double-ended contracts, and more sellers calling for comparables. Each of my clients has increased their listing inventories from 3x to 12x their levels in 2006.
The just sold cards deliver value and give them a reason to call you. Use something like this:
- Call me for the list of seven steps I followed to obtain my seller’s goals on this sale.
- Call me to find out how my seller netted more money than his neighbors.
- Visit www.yourneighborhoodname.com for our long list of other happy seller stories and find out why this may be the best market ever for selling a home.
- Don’t believe that it is a tough market! Call me now for some great news and find out why my sellers are getting more cash for their homes.
- This buyer came from my VIP Buyer’s Club. I might have one for you….
I am sure you get the message. We need to increase our calls on the cards, make more appointments and make more presentations. You’ll be more successful if your presentation is better by taking higher commissions, more transaction fees, etc.
We are making a lot of money for top agents in this market!
03/17/09
Q: Walter, can you comment on the merit of working the networking sites like Facebook, MySpace, Twitter, etc. and also advertising in Craig's List, Kijiji, etc. I'm not convinced they're worth the time.
Thanks,
ALICE TAYLOR
Royal Lepage
A: It is much more profitable to pro-actively generate seller leads than to spend rather than spending a lot of time doing social networking to organically grow your search engine rankings for a website that is probably sourced to buyers rather than sellers.
03/16/09
Q: Hi, Walter. I need your advice. Last week, I had to read my buyer’s agent the riot act about getting work done. We discussed the FSBOs, expireds, and the calls I expected him to be making. It was a tough week, but we got through it. We seem to be fine now.
Here’s my problem. Another of my hires was “put out” by how harsh I was with Dave. She didn’t think I was “fair” and took it rather hard. For the past week, she’s been getting increasingly aggressive with me. I’ve tried to shut it down, tried to make light of it, and tried almost everything I can think of.
I asked her to meet with me in the morning, to see if we can sort this out. I can’t have her glaring at me and taking verbal pot shots at me anymore. I have a feeling that I’m going to have to let her go. Any words of wisdom on how to handle this?
I think I know what I have to do, but I just hate to do it. She’s shown me a lot of loyalty over the year that she’s been with me.
Suggestions?
A: Let her know about your responsibilities. Let her know how much money goes out. Let her know that you are the only one taking chances with their financial future. Tell her how much pressure a divorce and starting over again can be. Let her know if you make no money, you still have to sign paychecks. Then ask her, “So, if you were in my position, how would you run this operation?"
If she is not going to give you some slack and if she can not get over your "tough love" -- you should probably let her go. If she continually doesn’t help your buyer’s assistant in making his goal or help in “paying for herself” by keeping the business alive – you will definitely have to let her go.
Re-training is easier than hating her and not wanting to come into the office. Either she gets over it by Monday, or tell her not to come back.
02/20/09
Q: Walter, first let me say that I think you are an awesome coach and I love attending your sessions at the NAR conferences. I subscribe to your newsletter and refer to your articles often and refer others to your free stuff.
So, now I would like to "Ask Wally" what should I do with a client (that was referred from a past client) who has been out 3 times and won't pull the trigger? He is qualified and wants to buy a second home in our resort town, but "thinks" the prices will still come down (and they probably will). How can I get him to commit? Should I stop showing him properties?
He is supposed to come down today to go looking again and I would like to "nail down" his motivation, if any. Thanks for taking the time to respond. I need all the help I can get in this tough market.
Sharon A. Curtiss
Hileman Real Estate, Inc.
A: Hello, Sharon! Thanks for the nice words. I want you to think about what I am about to tell you…it might apply, and it might not. I want you to see the big picture so you feel better about kicking this guy in the butt.
1. Most of your time should be spent soliciting sellers, making listing presentations, getting price reductions, and following up with them. More sellers mean more activity in co-op showings, offers, double-ended transactions, and buyer calls. When you spend most of your time doing this, tough buyers tend to go away as a referral or to our new buyer's assistant.
2. I would have asked him a LOT of questions, gotten him pre-approved, met with him, and asked him to sign a loyalty agreement. You might not have this buyer if you had those requirements and he failed to meet them. Remember, a lot of listings means you can raise your standards with buyers.
3. Assuming you do items number one and two above, you took this guy because he had motivation and he followed through on your systems. Therefore, he should have you writing offers on all property he likes at the price that he feels we might fall to. At this point, that can not be more than 20% off already low prices. Every two or three properties shown should result in an offer at the price he feels we will be at in a year.
4. If he has not done 1-3, you should feel okay about working on business that is a little more profitable.
Hope this helps!
02/12/09
Q: Just read what you wrote about the bottom of the market: "It is when you can put 10% down on a piece of property, with a 40% expense factor, that you can then break even with a fully amortized loan."
Would you please explain what the “expense factor” includes? And it's 40% of what? Could you also define what you mean by “break even” with fully amortized loan, i.e., what are the specific items that are included? Is the end result that the rent then pays PITI, any utilities or other things included in the rent and a monthly amount that is reserved for maintenance and repairs? Thank you, I really appreciate it.
E.V.E. Joy, Tierra Verde Realty
Palmetto, FL
A: Forty percent of your rent is a high figure to express how much of your rent would be eaten up in expenses on a free and clear property. It would include taxes, insurance, repair and replacement factor, vacancy factor, maintenance factor, attorney fees, utilities, management, and other fees.
The goal on the property is to disregard appreciation as a bonus and make sure that the rent will cover your 40% expense factor, the principal, and interest payment. In this matter, you would then have the tenant paying off your mortgage.
As you increase the rent, you can accelerate the principal payments. This is the method that many close to me have used in becoming wealthy.
Thanks for asking.
02/10/09
Q: Walter,
I’ve met you a couple of times over my 20 years in real estate. In Orlando at NAR, I loved the way you came back to the lender/short sale administrator and told them to talk to their legal department about tortuous and wrongful interference in regards to not messing with your listing contract.
How can I say, do, or write an e-mail to stop them from cutting my commission on a short sale? They sent a demand/request today for that very thing! Could you please tell me how to do it?
I will promise you this -- if you help me today, I will buy one or two of your programs for my office. Can you share a script or a paragraph to fax and/or e-mail the SS administrator to get them to forget about cutting the commission?
One of your fans,
Dan
A: Here is the letter that I would send:
Date
Name
Company
Address
City, ST ZIP
Name:
Today, I received your request to lower the commission I require my sellers to pay for my help in determining whether a short sale will solve or mitigate damage toward achieving their goals. I also have presented a marketing plan and determined value. I have made suggestions to enhance value in addition to marketing and showing the property to buyers who I develop from my marketing. My sellers are happy with this arrangement. I will not adjust my commission.
The contract that I have with the sellers is in writing. It has been dated and signed. Substantial monies have been expended by my company to execute my promises.
As you must know, you have no right to interfere in my listing contract, because you are not a party to it. You are the lender, and we have offered you a reduced amount on your payoff in return for a full reconveyance. This has been necessitated due to the market and poor lending practices.
Your interference in my contract in tortuous interference in the relationship that I have with my seller, and I request you cease and desist in any further attempts to modify the existing contract between my seller and me.
After taking into consideration the market indicators that I have sent to you and if you find that you need more money, please request more money. Please do not try to modify a contract with which you have interest.
Sincerely,
Name
Company Name
***As always, this is my opinion. If you want a green light on implementation, go see your attorney.
01/20/09
Q: Hi Walter:
I'm working on an article…. The piece will include tips/advice that REALTORS® can use to selling in the current marketplace. We'd like to look beyond pricing, to more creative ways that REALTORS® can make their listings more attractive, sell homes, and seal deals in this challenging market.
Regards,
Bridget McCrea
A: Hello, Bridget. Thanks for including me.
Just so my clients do not think I have lost my mind, you must interview a seller until you find their core motivation and then build a picture of how achieving that goal (core motivation) will look and feel. Then let them know that the granddaddy of all motivators, price, will make that happen.
However, if you must know of other non-price motivating factors, here they are:
1. On whatever the sellers are buying, especially a new builder’s inventory, help them obtain concessions on their purchase and then match those concessions to the sale of the seller's home.
2. Buying up in a down market makes the seller more money. Sell a $300,000 home at a 20% discount, loosing $60,000. Buy a $500,000 home at a 20% discount, gaining $100,000 for a $40,000 net gain.
3. Offer to pay a lender points to lower the start rate for a buyer on a new loan.
One of the items that I want all to be careful of is that it is all about price. If you want other non-price items, such as staging by a REALTOR®, you tend to raise a REALTOR’s® overhead rather than reduce prices. Who should take the hit in profitability -- the seller or the agent?
01/19/09
Q: My clients are upside-down with negatively amortized loans. They only have a first, but the bank would have to waive $100,000 to do a short sale. Their credit is horrible. What should I do?
A: In California, where there is no deficiency judgment, the only reason to do a short sale is to mitigate damages to a client's credit or the agent's need for a commission. If the client's credit is already bad, then the best thing for the client is to stay in the home as long as possible and bank the payments until they are evicted by an unlawful detainer. However, there are enough exceptions to require that you get a written legal opinion from an attorney.
01/19/09
Q: Walter, I enjoy reading your blog. I am curious if you recommend any particular website(s) for an agent to use, or if you have a particular method you use to evaluate a website building company.
Thanks,
Chris Thompson
A: Great question, Chris! Most website gurus have never been in real estate sales. The few who were in real estate are not great webmasters/web designers. So, before you plan a site, you have to have a PLAN.
Great agents love this business because of the leverage it provides. When you have listings, you will find that they are the least expensive and most effective method of lead generation for buyers. You need to plan your personal site around generating listing leads. The buyer leads will come from your new site, but let the listing consolidation sites generate the buyer leads as a focus. When you take a listing, it is sucked into at least 5 major consolidation sites, probably many more.
Plan your personal site around generating seller leads. The best way to do that is to add value for sellers. The best way to do that is to have your site as an end destination to deliver seller services.
Here is how I plan or upgrade my coaching client's websites:
1. Find a demographic of clients who have a higher incidence of wanting to sell. As an example, let’s use mature people in large homes.
2. Develop a list of all these types of owners in your market area by using list brokers and tax records. Come up with about ten items of value that you can deliver to that group. Let's say one is delivering lists of guard-gated, low maintenance, smaller townhouses.
3. Develop a letter mentioning all the services that you supply this demographic group and how easy it is to obtain these free services.
4. Decide how many letters will be mailed to them, when the follow-up calls will happen, and add ancillary mailings to the list like "just listed" cards. When the system is up and running, try delegating the task to a less expensive practitioner like a part-time assistant, but only if you have enough of these systems working.
5. Then and only then, add a MATURE HOMEOWNER’S button to your website, where you will provide all of your services for them to sign up for, ask advice from you, provide or view testimonials, and, of course, an easy way for them to get anything that you have mentioned in your letter to them.
As you can see, instead of using your website as a front-end lead generator, I used it as a back-end service provider. Maybe that is why all of my coaching clients are doing better in the worst year of real estate than they did three years ago, in the best year.
Good luck on smart customization of your site. It should be custom, not cookie cutter. Remember add the services as you add the systems.
01/05/09
Q: We are having a heck of a time wasting times with our rentals. Can you help?
Anonymous
Texas
A: Great question! We had a similar problem until we implemented the following “checklist” of mandatory questions.
Please ask the following questions to prospective tenants who call to inquire about a property.
1. How many people are you looking for a home for?
2. Does (rental amount) fit into your budget?
3. We only take two year leases. Are you comfortable with such a commitment?
4. Because of the condition of our rentals, we do not accept any pets, and we also do not accept any smoking or candles. Is that a challenge for you?
5. We require a $2,000 security deposit plus first month’s rent. Are you fine with that, assuming you love the property?
6. We cannot accept Section 8 or people with poor credit ratings. Can you tell me about your credit rating?
7. Once we agree that this home is perfect for you, we will require a non-refundable $52 background and credit check for everyone over 18 years old. Would that be agreeable to you?
Then you can say, “Great, I would love to show you the home. Because we have had some no-shows on showings, we would like you to call 30 minutes before our appointment. Once I get your call, I will leave the office. Thank you for considering our gold-plated homes.”
Please type and put this script/checklist in front of everyone who will handle incoming calls for your rentals. This list should cut down the number of poor quality rental showings.
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