What follows is a complete and un-edited e-mail from a consumer to me regarding the way that we approach the unrepresented seller (aka FSBO) - I thought this might be helpful in some way, and Glen allowed me to share it.  Try not to get defensive, instead, use this as a learning and growing opportunity!

 

Dear Joe,

I just read your article over at RIS [Staging a Successful FSBO Campaign.] I'll offer a few comments from a sellers viewpoint that hopefully might find their way into the hands of the people who might be best positioned to affect some change in this challenging marketplace of today.

Two years ago my wife and I were in a category you don't really have a slot for in your article. It's a place between Category II and Category III. The seller that's aware of FSBO and all it may offer and entail, but sellers maybe willing to go a traditional route because yes it's the way things have been done for eons and it works to a degree.

So we listed with an agent who came recommended to us by another we felt had been helpful in the past when we were buyers. In reflection we're now aware that this agent listed our home in MLS and just sat back and waited for the calls. Didn't even take pictures, had us supply them, and when we sent updated ones didn't even replace the original older ones. We let her contract with us expire. All she brought us were buyers that tried to low ball us. And her recommendation was always to take the offer. She became known as the soccer mom agent. You must know the type, has a real estate license in order to be able to bring the kids to school and be there when they get out. I imagine she manages to sell the odd home every once in awhile. And you are 100% correct in your article, as a seller, even while listed with this agent we were flooded with offers to list with someone else. All promising they were better than all the others but how am I to believe that when here I see them trying to prey on their own colleague?

That's when we became Category II sellers. With an entry only listing in MLS we did the showings ourselves. Because we both work and can be away from the home for 10 hours in a day we made it clear that 48 hours notice was required to set up an appointment. I lost count of how many calls we received from agents on the message machine after we had left for work wanting to bring someone by at 3:00pm that day. We learned to call back after showings to find out how things went. I began to see another pattern. Time and again we would hear, "oh I'm sorry my clients couldn't possibly meet your asking price".  And I would think to myself why in hell did you schedule an appointment with us then? You cost me an entire day getting ready for this showing and brought me a buyer with a prequal $30K below my asking price?

So we thought we had wised up. We began to require a prequal letter before we would even schedule an appointment. That language was added to the listing. And still we got calls on the message machine from agents wanting to show the house the same day. We would call back and tell them we can't schedule an appointment until we see the prequal letter. We heard "I'll get that for you asap" and never heard from most again. We had quite a few try to BS their way around with fantastic stories, but again never heard from most again. One hung up on me after stating haughtily "I can't do THAT!".  Several times after spending substantial effort on our part getting the house ready to show we had agents never even show up.

In that time period we got two offers from potential buyers who came to us without representation. Private sales. The first we refer to as the buyers from hell, who after taking over a month negotiating an offer to purchase wasted a total of 3 months of our time trying every possible way to knock the price down further. 10 days prior to closing when their approval letter from the bank was due they could not produce it.

The second buyer signed an offer and a purchase and sale, supplied a prequal letter early on and even an approval letter from the bank. The house passed a home inspection, now it's second in a year, and the second appraisal also went through no problem. This buyer then extended the closing 4 times over a month, by which time we were moved out of the home completely in order to be ready to close, and the buyer walked away leaving us hanging with a $500 deposit. Because the bank in the end would not give them the loan.

We moved back home and relisted with an agent we watched do a very good job selling a friends home. A small one man office that made us feel we would get his undivided attention. He only takes a few listings and works hard to move the ones he has. He brought us a buyer with the first open house. Although we weren't comfortable with them because it was another offer that didn't have much of a deposit, and we are understandably a bit nervous towards that, it was an offer for the same amount as the previous sale. The house passed a home inspection last week. At this point home inspectors and appraisers are making more money off the sale of our house than real estate agents.

Our agent contacted us this morning saying the deal has collapsed because the buyer won't be able to come up with the deposit money they will need at the P&S they were to sign this coming Thursday.

3 deals in the span of a year each one failing with financing issues. As a seller I look at all this and say something has got to change in the Real Estate Industry. The decision to go with an agent this time was in large part to draw upon expertise that we hoped would protect us from yet another buyer that couldn't perform. And it's now apparent that even our agent isn't safe from having this happen.

I hope it's clear that as a seller I have seen quite a few ways the industry as a whole could clean up its act and present itself more professionally. But the major point I want to bring up here is this. You write about the need for agents to find a way to deal with the FSBO phenomenon. I say go after the banking industry and the fast and loose way they are playing the mortgage game. It's time to tighten up on a lot of practices. My agent says he can have a prequal letter inside of an hour for any amount he needs to get a buyer in the door. That needs to stop. It's time to demand that the prequal letter really means something. Both Agent and Seller lose a lot of time and effort and possibly a significant amount of money when a buyer just up and walks near the end of a deal. In this day and age it's costing too much money to be playing games with this sort of thing. The industry as a whole should look into changes that will provide a means of protection and better filters for unqualified buyers.   

You want to combat the FSBO phenomenon? Work together as an industry and demand changes from the banking community. You want to be able to portray the image that a licensed Real Estate Agent is the person who can bring a bullet proof buyer/seller to the table.     

Although it takes some specialized knowledge to work with clients who are investing in real estate, adding a few of these repeat buyers to your client base can increase and stabilize your income, especially during times of low interest rates and depressed property values.  Here, in summary, are some of the arguments I hear, both for and against, working with investors.

Some arguments in favor:

• Investors tend to be repeat buyers
• Investors tend to buy bigger and bigger properties
• With proper care, investors can be loyal customers (especially if they are not local)

 Some arguments against:

• Investors are not emotionally attached to the property, so they may be more likely to back out of a transaction
• Investors may not feel any loyalty toward a particular real estate agent
• Investors generally expect a higher level of specialized knowledge, expertise and experience from their agent
• Sophisticated investors may want to avoid using a real estate agent in some transactions
• Investors may not be local

Certainly there are more pros and cons than this, and notice that some of the pros and cons overlap.  Here are the fundamentals of working with investors: first, you have to educate yourself in the basics of investment real estate - know the terminology and techniques of investing; also, start with someone friendly and who is at about the same level of knowledge as you - a successful new investor will grow along with you; know your market, know what the best investments are - perhaps four-plexes are hot right now in your town, or commercial property; finally, develop working relationships with loan officers and financial planners who are also knowledgeable in the field of real estate investing.

Some agents hold classes on real estate investment fundamentals, drawing in new clients by showing and sharing knowledge, experience and expertise.  This is a great way to get started, since these novice investors will see you as a resource and will grow along with you.

If you are struggling right now with a lot of listings and a few buyers who are running you ragged, try spending a bit of time each day educating yourself on investing and nurturing some investment clients.  If you find that you fit in this niche market, you'll find excellent returns on the time you invested.

Excerpt from RISMedia article

Whether you are new to real estate, entering a new area or even a seasoned professional, you can still fall into the dreaded P-C-P (Prospecting-Closing-Prospecting) cycle. That cycle starts when business drops off for some reason. Naturally, you start prospecting. Maybe you hold open houses for the other agents and brokers, you make phone calls to past clients and unrepresented sellers. You mail out postcards, send e-mails and network like crazy. Out of all this prospecting, you finally get a listing, and then you write up an offer or two, get another listing and suddenly you are so inundated with the details of multiple closings that prospecting falls by the wayside. Pretty soon all the sales are done, the paychecks collected and you can breathe easy for about three days before you realize that you now have to get back to massive prospecting. If you are in this kind of P-C-P cycle, be it mild or severe, know that you are not alone. Also know, however, that you don't have to live like this.Breaking the P-C-P CycleReal estate professionals who have overcome the P-C-P cycle generally cite three factors that contribute to a steady stream of income: technique, touch and time.

Read the entire article here:  http://rismedia.com/wp/2008-05-28/creating-a-steady-stream-of-income-from-your-real-estate-business/

 

Current conventional western-culture wisdom (is western wisdom an oxymoron?) is that we should set goals and then dog away at them, keep a positive mental attitude and use affirmations and visioning until we get what we want.  Conversely, ancient wisdom (i.e. Buddhism and even the sayings of Jesus) promote a softer, more accepting way of life.  Are we too caught up in money and achievement to actually enjoy life?

In your real estate business, it is likely that you have set income goals and prospecting goals and even broader life goals, like a big house and a new car and travel.  But, are you having trouble sleeping at night?  Do you sit outside in the evenings and enjoy, really enjoy the sunset?  Do you move through the day lightly, with a sense of peace and joy, or is every day toil and heartache?

Deepak Chopra suggests setting goals and then letting go of the outcome, letting the universe guide you toward the far shore, pushed by the winds of fate.  We may be even happier if we can learn to live with the uncertainty of life, fully experiencing both the pain and the joy.

So many times I see real estate agents and loan officers hitting the bars after a hard day, taking the edge off with a glass of wine or two (or three) so that they can hopefully get some semblance of sleep that night, only to get up and toil again tomorrow.

There is a better way, but it is not based on income and possession goals.  The easier, softer way is based on an attitude of loving-kindness toward yourself.  You may have to re-think some of the conventional wisdom you have accepted.  For instance, is it kind to yourself to make affirmations like, "I make a hundred thousand dollars a year," when in fact, you don't?  Is it kind to lie to yourself?  Would you lie like that to your best friend?  (I hope not.)

Be honest with yourself.  Learn to love and appreciate yourself.  Find your own unique path and follow it, being kind to everyone as you go.  And don't avoid the tough issues either.  We all suffer and feel pain.  We are all struggling.  The trick is to stay in the present, go ahead and feel what you are feeling, work through it and above all else, be kind and gentle.

I'll write more on this soon.

According to Daniel Pink, in his book A Whole New Mind, any job that can be automated, will be.  What about the real estate industry?  With sites like Zillow.com now attempting to webinize the industry, what will happen to traditional real estate agents and brokers?

Along those lines, what are the significant value added activities that agents and brokers bring to the table in today's information age?  Is it the CMA?  Marketing expertise?  The network of represented buyers?

I'd love to hear opinions from across the board!

Year after year the National Association of Realtors annual survey lists reputation, honesty and trustworthiness as the top three selection criteria that sellers use to choose a real estate agent.  Here's a question for you - in your experience, how do sellers (and buyers for that matter) actually determine these qualities?  What kind of process are clients using to select their agent?  Are they interviewing several, and if so, do they tell you that?  Do they go strictly by word of mouth?  And how do you, as an agent, show reputation, honesty and trustworthiness, especially if this is a prospect you don't know very well?

It's the only policy.  We have to be honest; we know that, but how easy is it, really?

Sure, you have disclosure checklists and if there's a crack in foundation wall you don't hide it with a storage unit.  We all know that level of honesty (I hope.)

But what about being honest as a person?  That's not always as easy.  Some people are born authentic and stay that way.  More of us have learned to put on a facade during our lives, learned behaviors that are "acceptable."  But, how many of us are completely comfortable just being exactly who we are?  Do we even feel safe being that way?

Here's an example.  Next time someone says, 'Hi, how are you?"  what are you going to say back? 

Most of us say, 'Fine,' even if we're not.  Or, if a client says, 'How's business?' we might be tempted to say, 'Great!'  even if it isn't.  These are subtle examples, but the point is, how deeply honest are we, with others, but more importantly, with ourselves?

Here's the important point - if you are struggling right now, it's tempting to blame outside circumstances; the economy, the housing market, storms and building supplies.  None of that is within our control as individuals.  But, you can work on your own thoughts and inner motivations, such as honesty, with yourself, first and foremost.

Sure, this is a "soft" topic.  Not really a "how-to" that you can take out and implement today.  But don't underestimate the importance of honesty.  And, as Paul Allaire, former CEO of Xerox Corp. says, "The hardest stuff is the soft stuff - values, personal style, ways of interacting...if individuals don't change, nothing changes."

What is your take on honesty, authenticity and personal integrity?

The market is definitely harder for the FSBO now, and that's good news, but the bad news is that the "Do-It-Yourself" mentality is still alive and well in the U.S.  We all suffer from it.  Sometimes it's a need to save money, hoping that the bottom-line will be higher if we eliminate the middle-person.  Sometimes it's a prior bad experience.  You can make some headway though; here's an article I wrote a while back (in the seller's market, but it still applies) that can help you approach the Unrepresented Seller (sks FSBO)

 

Also, I recently ran a teleseminar on this same topic - you can listen to it here, for free:  Staging a Successful FSBO Campaign.

 

There's an old show-biz saying that goes, 'There's no such thing as bad publicity.'

That statement may be debatable, but certainly there is nothing bad about garnering a whole lot of good publicity, and a good publicity campaign sets you apart from your competitors. Right now, for real estate teams, there are three burning reasons to become a publicity-hound:

1. The real estate market industry is more competitive than ever, with over 2.7 million agents in the U.S. against a population of just over $300, million.

 
2. The industry is changing. According to Daniel Pink, author of A Whole New Mind, the era of the "knowledge worker" (i.e. manipulating information and deploying expertise) is over. Already, Web sites like myfuturenet.com and zillow.com are automating purchases and sales of real property.

3. Traditional advertising is becoming less effective. We don?t live in the Information Age; we live in the Information Overload Age. According to the latest statistics, we are hit with up to 5,000 advertisements every day. Radios now come with scan and seek buttons, and TiVo allows consumers to fast-forward through annoying chatter and ads.

In short, as the market slows down and as society and the economy change, your competitive edge becomes more and more important.

Here are the four main differences between publicity and advertising:

1. Publicity is free.

2. Adding publicity to your advertising campaign turbo-charges your promotional budget. According to publicity guru Arielle Ford, publicity is at least six times more believable than advertising.

3. Publicity tends to generate more publicity; it multiplies itself.

4. Publicity is sticky. People remember stories about you, and they then remember you!

 

For more information, check out Turbo Charge Your Business with Publicity published by RIS Media and available free on their web site.  Also check out Joan Stewart (aka The Publicity Hound) and subscribe to her free newsletter to stay up on the latest publicity tips and techniques for building your business platform.

I'm currently working on an article about managing your client list, including both short-term and long-term prospects - specifically, what is the best database for real estate agents?

I'm amazed at the number of choices out there!  I'd love to hear from you - what are you using, how is it going, how many names are you managing, what kind of information are you sending out?

Here's a link to an article that you might find helpful: Ten Ways to Follow up Seven Times, located at RIS Media's web site via this link - http://rismedia.com/wp/2007-04-06/ten-ways-to-follow-up-seven-times/