Real Estate Investing :The New Ultimate Listing Presentation (Part 18)Posted on November 13th, 2010 No comments
Introducing My Secret Weapon!
If you recall from the last chapter, we were in the middle of making our presentation to a seller. We’ve discussed the two approaches — the traditional or price approach and the traffic approach. We’ve helped him understand why the traffic approach works and why it sells houses in half the time while netting more money.
Next I tell the seller that if he’s like most of my clients, he’ll want to know how I intend to market his property and what the current market conditions look like. I’ve had sellers tell me that they wanted to wait until spring (or some other time) to put their homes on the market because they had been told that the market was slow and few buyers were out shopping. I love it when this happens.
I ask my seller if he has a computer handy. We go to his computer, and we log onto the Internet. I then take him to my LCM Gateway, and we go through the process of registering to see properties online. We receive our user name and password and log into the website to view the MLS.
Just about the time we get to the search (IDX) page, I get a text message on my phone. I show the seller that my registration has just come in within seconds. I explain that if this were an ordinary inquiry, I would immediately call the shopper back and introduce myself, see if I could help him find what he was looking for, and offer to send him new listings by email.
Next I would tell my seller that today’s customers want instant information, and because of the technology I use I can actually provide that help when the home-shopper needs it — right now! Then I pull out my secret weapon: my home-buyer notebook.
In it I have the names of all the Internet customers who have come through my LCM Gateway in the past three months. Each customer is neatly printed on a page by himself, complete with his name, phone numbers, his email address, and any notes I’ve written. Each page is literally a resume for that buyer, and it’s very impressive.
Imagine the reaction of your listing client when you show him — when you actually put into his hands — the names and phone numbers of hundreds, maybe thousands of home-buyers with whom your team is currently working.
Imagine what goes through his mind when he is holding your notebook that is four inches thick, and it’s page after page of real people who are actually looking for homes in your market!! It’s easy to convince the seller that, while the process may be slow for some agents, it’s anything but slow for your team!
How do you think your customer will react? I’ll tell you how: he’ll stand there looking at your home-buyer notebook in disbelief, except for the fact that he just saw your system work! In his heart he knows it works, and he knows instantly that nobody can do a better job selling his home. All he says is, “Where do I sign?”
Finally, I’d tell the seller about some cases where I’ve used the traffic approach and had great results. Remember: Jesus taught in parables. Why? Because people love stories. A story can take the vaguest idea and make it imaginable by making it real. Here are a few of my favorite stories that I’ve used countless times in the past.
Through my website, a client who was a licensed broker in Boone, North Carolina, approached me one day last year. His parents had passed away, and because of his real estate experience, his siblings had chosen him to help sell the family home. So he called the largest company in our market, which happened to be Coldwell Banker, and listed the home for ,900.
Over the course of two years, Coldwell systematically reduced the price to ,900. But even though it was a very nice little house, the seller hadn’t received a single offer on it during the course of the listing contracts.
When I explained my idea to the broker, I could see the light come on in his mind! As an agent, he intuitively knew that this approach would work, so at my suggestion we raised the price to ,000 and the commission from 6% to 8%. (The co-op was half.) Well, within a month we had received three offers! The first two we turned down, but the third was a full offer, and we accepted it.
Still, we had one more hurdle to get past: the appraisal had to support the sale price. As it turned out, the appraisal came in short, and my client had to sell the home for ,500 and do some minor repairs that amounted to less than 0 (and probably would’ve had to be done with any sale at any price).
So after raising the price ,100 and then paying an extra ,390 (the 2% extra commission), my client netted ,210 more money and got the absolute top dollar for his childhood home. Even more importantly, we accomplished in under ninety days what he’d failed to do in two full years: we got offers and were able to command the maximum price because of the traffic generated by the higher commission. Was he happy? He was ecstatic! And so was I.
Here’s another story you’ll love. Again, I had a client approach me through my website. (Are you noticing a trend here?) This fellow was very frustrated because he’d bought a brand new home, closed on it, and was having to make two house payments every month. He’d tried to sell the home FSBO; and although he’d shown it a lot, no offers had materialized. Then he listed it with a local brokerage, but still no offers and only a few showings.
After the listing expired, I went to see him and I showed him my approach. He decided to try it. We raised the price from ,900 to ,000, and immediately had a surge of showing traffic. Exactly seven days later he sold the home for the full asking price of ,000.
Just like in the previous story, we anxiously waited for the appraisal, but this time it went through without a hitch. To this day, my client thinks that I’m a genius and he sends me business every chance he gets.
Now let’s do the math on this one: the additional commission cost the seller ,720, but the additional price he was able to command was ,100, so his net benefit was ,380. That’s over 5% more money than using the traditional approach. Best of all, the house sold almost immediately!
I could go on and on with these stories, but I’ll share just one more. This client was one of those know-it-all people. As usual, I shared both approaches with him. His initial reaction was that he’d never heard of the traffic approach and was skeptical because he had a problem with the high commission.
No problem. He decided to split the difference and list the home at 7%. (Let me remind you that we’re in a 6%-or-less market.) We waited. Because we had listed at 7% we had a slightly-better-than-average number of showings, but nothing outstanding and no offers for about four months.
Eventually, the client began to get frustrated (not a new thing to many of you listing agents, I’m sure) and he called me to ask what I thought he should do. He was in a hurry to sell the home and he had a lot of equity, so we’d listed it for 6,000. I asked him if he remembered what I’d suggested when we first listed the house, and he said, “Not really.”
I suggested that we raise the price to 6,000 and the commission to 8%. He’d been considering reducing the price and was naturally stunned when I told him to raise it.
Well, to make a long story short, we closed not long afterward! He was very thankful for my getting him top dollar, and I can promise you that he’ll never sell another home the traditional way. He realizes that bribery works!
Quickly looking at the math, you can see that we raised the commission 1%, or ,560, and we commanded ,000 more for the home and sold it almost immediately. Hmmm. Coincidence? I don’t think so!
Now, did I do anything differently in any of those cases? Absolutely not! I advertise all of my listings exactly the same. I don’t show any preferential treatment, regardless of price, commission rate, or pressure from the client. What sold those homes and many more just like them was the commission.
But it gets even better! What’s the first thing we’re all taught to do when a home doesn’t sell? That’s right: lower the price. But what I generally do is convince my client to raise the commission. We’ve raised the commission as high as 12% (!) to sell a home that otherwise would’ve sat vacant forever. It’s amazing what a lot of showing traffic will do for even the worst dog of a house.
So there you have the listing presentation that’s made me one of the top listing agents in the country and earned my clients and me lots of money. And now that you have the “ammo,”. Next, I’m going to give you the “gun.” In the next and final chapter, we’ll help you put it all together so that you can become the dominant listing agent in your market!
We’ll take the technology component, the advertising and marketing component, the preparation component, and the listing presentation and give you the strategy to assemble it all in a way that will make you virtually impossible to beat. Until then, work on getting your technology in place if you haven’t already done so. The first key to being the top listing agent is having lots of opportunities.
Matt Jones is the founder and CEO of FavoriteAgent.com and nationally syndicated author of LCM: The Secret to Success in the New Age of Real Estate, The Ultimate Listing Presentation, Traffic: How to Sell Fast and Net More, Becoming a Mega-Producer, and 20 Questions: Everything You Always Wanted to Know about Real Estate but Were Afraid to Ask. Jones’ North Carolina-based company has been profiled by major media outlets as an innovator and a pioneer in the industry, and CNN’s Pulse on America claimed FavoriteAgent.com is “changing the way real estate is being done in America.” This content is cross-posted in the following locations: BlogMattBlog.com, RealBlogging.com, NewsGeni.us, TheCommissionCheck.com, and now Amazon Kindle.
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