Like the budget, writing a production plan for success is a lot about numbers. Black and white. Hours, dollars, and widgets. There is a sensible layout to follow. You map out the big picture by breaking down your transactions to quarterly and monthly goals. You examine the buyer sales, listing sales, and number of new listings it takes to produce the income needed to support the budget. Easy, right?
Well, straightforward, maybe. Easy, no.
Production planning is as much about problem solving and perspective as it is about the numbers. Why? Because you know you will not always hit your numbers. (If you do, you probably were not challenging yourself enough during the visioning process.) And not hitting the numbers obviously means you have a problem. You may be overspending the budget and/or underproducing the income. Not hitting the numbers for an entire quarter might not just mean a problem, but a genuine crisis.
So it is important when production planning to focus not just on target numbers, but on the potential problems related to production so that you can plan proactively to stay in business with a smile. Lets look at some Givens.
#1You are in control of more than you think. If you chart the numbers for first quarter and fall short, what do you do? (First of all, you always review the numbers.) If first quarter is lean, be prepared for you and others to blame outside influences. Oh, the market. Oh, those fickle buyers. Oh, those unrealistic, so-and-so sellers. Oh, those banks. Slap yourself and your teammates awake! The market is what the market is. Buyers and Sellers are simply responding to it. YOU are the expert. YOU need to take control. Take control of their expectations. Take control of your own emotions. Adjust your numbers if necessary for the rest of the year, but take control of your sales. If you were successful before this market, there is absolutely no reason you can’t be successful now. You have the experience and the skills. If you are new to this market, you have no excuse to be anything but successful because you don’t know the difference! If you were three sales short in the first quarter, plan now what it takes to make up those three in quarter two.
#2 There are some things you cannot control. Let go! A teammate’s sudden divorce is going to affect your business. No doubt about it. Can you influence that event? No. (Even if you offer the unhappy couple an all-paid expenses weekend at the Poconos in a heart-shaped tub, their relationship will not change because of your generosity and desperate attempt at keeping your top buyer agent happy and productive.) Curse fate all you like, but know that the teammate will have court dates, down days, and need extra time off to be with the kids. Let go off the idea that life is unfair and provide as best you can for the loss in production through your own efforts or added staff. Know that these things happen. Deal.
#3 Not to overuse and abuse the often quoted, Attitude is Everything, but it is. The mindset you get up with every day determines the success of your production plan. Is the market everything you read about in the papers or hear about on the TODAY SHOW? Is the sky really falling? If you believe it, your numbers certainly will reflect that view, (and you will need to hope that your spouse doesn’t mind supporting you for some time to come.) On the other hand, if you wake up each day seeing opportunity and, yes, fun in the current real estate market, your numbers will bloom and grow with every positive step. It’s not a Pollyanna world, but neither is it Oscar the Grouches. Your perspective determines outcome.
Plan for the numbers. Plan for the problems. Plan for success.
With the constant bad news about the economy, everyone is talking budget these days as if it were a new and exciting phenomenon—just discovered!
* How to save a buck
* How to budget for a successful future
* How to make your dollar stretch the farthest
The truth is that there is nothing new, trendy, or sexy about budgeting. A well-planned budget is simply the most practical aspect of your business plan—and one of the most important. It’s also not that much fun. But if you think about it, if you have completed the other parts of your business planning guide, you’ve done the hard part already. You’ve already analyzed where you spent your money last year and how well it returned your investment. You’ve articulated the vision for your business in the next year, five years, and ten. You’ve written down the action steps to achieve that goal. Now it’s just a matter of the numbers.
The easiest way to tackle this job is with a good software program like QuickBooks, but you can also manage the old-fashioned way, by hand on a chart, if that’s what it takes to get you started. The budget records your total income, gross and net. It includes the numbers for your current expenses, plus those you anticipate adding under your new vision. It breaks down the expenses and itemizes them so that nothing is overlooked, creating a potential drain on your cash flow down the line. And remember: cash flow is the goal.
When the numbers are complete, if you don’t like the result, you need to remember to reevaluate the plan. If your marketing exceeds your income, for example, then you must make a decision: slash the marketing budget or make more money. Either way, your budget needs to “show you the money.”
Approach #1: Gary Keller reminds us to “lead with revenue” when budgeting. He cautions only to spend the money that the business has generated and avoid the “Field of Dreams” mentality of expecting business to materialize if you spend enough money on marketing, desk staff, quality equipment, etc.
Approach #2: Write down the number of marketing dollars you will need for the next year to reach your goal then do the math. How many lists will you need to carry in order to create that cash flow? How many will you need to sell? How many buy sides? Those are your numbers to live by.
Truth be told, a combination of these approaches is probably the wisest course, but regardless, the budget is the budget and you stick to it. (That’s the unsexy part.) But don’t worry about that because this axiom can serve you well when some annoying vendor tries to convince you that you really must buy his refrigerator magnets by the gross with your logo embossed on them in order to be a success at the next home show. You now have your ready-made excuse: “oh, we set our marketing budget last October.”
The budget might not seem to be your best friend at times, but it should be your wisest adviser—the one you trust with your most important decisions. Accordingly, spend enough time with it to do it, and yourself, justice. Your business, and your profit/loss statement, will thank you.
It is almost time to begin creating your Business Plan for next year. One important part that is often overlooked is what I call the Development Plan. A Development Plan helps you to look at your overall business in different specific areas.
A great story is told by Jeffrey J. Fox in HOW TO BECOME A MARKETING SUPERSTAR. It is the story of Pablo Picasso, dining at an elite New York City restaurant and being approached by a socialite who presumes to ask him for a drawing.
Fox relates, "Picasso grabbed some paper, and with pen and pencil, promptly sketched the waiters passing parfaits. As the woman reached for the sketch, Pablo Picasso said, 'Madame. That will be $10,000.' Shocked, she replied, 'But that only took you five minutes.' 'No, Madame,' replied Senor Picasso, 'it took me fifty years.'"
Fox tells the story as a parable for understanding and charging--your worth. (And come to think of it, that part of the lesson applies here, too: a solid development plan will help you avoid the folly of cutting your commission fees.) But we recognize Picasso's remark about the fifty years as a clear symbol of the value of a development plan. It takes time to plan, but the plan should have long-lasting consequences that shape the course of your business down the road and, ultimately, your desired profit. A development plan, in effect, defines your practice.
A development plan can be as simple as a list. But it is an essential list. On this list you need to itemize the changes needed in the next year to improve your business. On it you should include:
Marketing and Lead Systems
What kind do you need to bring in the number of leads?
Sales and Servicing Systems
Technology
What about Facebook?
What about Twitter?
What about Texting?
People and Staffing
Do you need an office manager?
Support Systems
Training
Policies
What are they? And are they written down?
Procedures
Ditto
Team Development
Retreats
Celebrations
Training
New Ideas
What is next?
This is the place where you name your dreaming: what is it that you want to create? To revise and perfect? To research? To implement? What kinds of systems and practices do you want to employ? What people and roles?
At the development stage, you may be looking at assistants, additional agents, coaches, mentors, equipment, programs, and education. (Budget concerns are for another day.) In development, we identify what it will take to produce your desired outcomes. Put them in place, and the path toward your business future is paved.
I am often asked, What do you say when a For Sale By Owner seller says [asks] ...? I always have an answer for every FSBO objection, but only because I have the advantage of both knowledge and skill over the FSBO seller. Here is a list of common FSBO seller objections and a quick follow-up statement for the listing agent."
They say: "I'll save money. I won't have to pay realtor commissions."
You say: "Well, you may save a portion of the commissions; did you know that over 90% of the For Sale By Owner homes are sold by realtors? (FSBO response) So, we are really talking about saving the seller side of the commission. Is it worth saving a small percent of the sales price, knowing you will eliminate the vast majority of buyers from even looking at your home? When would you have time to discuss a plan for selling your home?"
They say: "I am going to see if I can sell it on my own."
You say: "Good! Have you considered what type of buyers look at For Sale By Owner homes? (FSBO response) Agents work with qualified buyers, people that have the means to secure loans or may be cash buyers. What arrangements have you made to assure your potential lookers are qualified buyers? (FSBO response) That is interesting. Do you have time this evening to get together to discuss a plan for pre-qualifying buyers?"
They say: "I have an ad in the paper and I'm going to put it on Craigslist."
You say: "Wonderful. What other methods are you using to expose your home to potential lookers? (FSBO response) Do you have time to meet this weekend so I can share a few other ideas with you?"
They say: "I have someone who is interested."
You say: "That's great news. Are you aware of the pre-negotiation strategies that will assist you, as the seller, to secure the best possible offer without waiting days upon days? (FSBO response) Would tomorrow morning work for us to review the strategies?"
They say: "My friend is an attorney, so she is going to do the paper work."
You say: "The four big steps in getting your home sold are: exposure, responding to buyers, negotiating and the paperwork. I am just curious, how is your friend going to assist you with the other three big steps? (FSBO response) Would you be able to meet tomorrow during the day or in the evening to discuss these three big steps?"
They say: "I can't afford to list with a realtor. I need every cent of the sales price."
You say: "I understand. How did you determine your sales price? (FSBO response) Great! Are you very familiar with the current market facts? (FSBO response) Would you have time to meet Monday or Tuesday evening to review the current housing market facts? I could do an estimate of proceeds for you to help you determine your bottom line."
They say: "I can pay $500.00 to have my home on the MLS."
You say: "Great! The MLS is one way to expose your home to agents who are working with buyers. What plans have you made to expose your home to buyers who are not yet working with realtors? (FSBO response) Would five or seven o'clock work for us to review how we capture interested buyers?"
They say: "I don't think realtors are worth their money."
You say: "Selecting a top realtor is a serious and important process. How many realtors have you interviewed for the job of selling your home? (FSBO response) Why don't we meet this evening and I can assist you in writing the key questions to ask every realtor you interview."
They say: "I know my home better than any realtor."
You say: "I am sure that is true. I am going to be in your neighborhood previewing homes that compare to your home. Knowing your competition can give you a huge advantage. Would you like to join me? (seller response) Do you have any other selling concerns I can assist you with?"
They say: "I have a friend in the business who is giving me advice."
You say: "Great! We can make your friend a partner in the process of selling your home and not miss any valuable market time. That way you know you're getting the best advice. Can you meet tonight?"
They say: "Will you cut your fee in half if you sell the home?"
You say: "No. Are you very familiar with how the brokerage commission splits work through the MLS system? (FSBO response) Would you have time to meet tomorrow afternoon or evening?"
They say: "What can you do that I can't do to sell my home?"
You say: "There are several factors that go into selling a home. A seller is responsible for and in control of two of the major factors (condition and price); the location is a given, and the forth factor is the realtor's responsibility (marketing). Would you have time tomorrow to discuss the four factors?"
They say: "I heard that agents will still show my home if I just have it on the MLS."
You say: "It is true, that some may show it. What arrangements have you made for compensating agents that show your home? (seller response) I may have some suggestions for you on how to attract more agents. Are you available tonight to discuss a few options?"
They say: "I do not want unsupervised people in my home."
You say: "You're right. Security is an important issue. However, as realtors we take several steps to maintain the security and integrity of the home buying process. Are you available this evening to discuss the steps we take to keep homes secure?"
They say: "I sold my last home myself."
You say: "Good for you! What has to happen before you will consider interviewing a top agent who can get your home sold? (FSBO response) Can you meet this evening?"
They say: "I just want to try selling it myself for thirty days."
You say: "Ok. I'm curious, if I brought you an offer that was 95% of that amount, how would you proceed? (seller response) If I could get you top dollar for your home in the next 30 days, would you list today? (seller response) Can you meet this evening to review our plan?"
Two Plus One
On the surface, FSBO objections have a dual focus: brokerage commissions and price of the home. After extensive interviewing or conversation, the peel back process will reveal the underlying concern or the true objection. The one big objection all FSBO sellers have in common is simply: realtor worth (or a lack of understanding of our value.) The challenge is getting the FSBO seller to understand and accept your value. One strategy is a comparison of your efforts (marketing, exposure, response time, access, availability, follow-up, feedback, legal forms, representation, fiduciary duties and negotiations) to their efforts (an ad, Craigslist, maybe MLS, limited web exposure, a sign, a friend in the business, or whatever). Once the comparison is made it should be a simple close."
Your Value
As realtors, you all compete against each other for listings. In the FSBO arena, your competition is extended beyond realtors to the actual seller. Your competition is the seller. Remember: Do not insult or belittle the seller’s efforts. They believe they can do your job and do it better. Focus your presentation on your worth, your point of difference, the true value you bring to the table. This is the only way to be a true champion in the FSBO arena.
-------------------------------------------------------------------------------- Coach Cheri Alguire has coached over a thousand Realtors on scripts and other skills needed to take their business to a new level of success. For more information on her real estate coaching program, check out www.ProRealEstateCoach.com or www.FSBORealEstateLeads.com
I am often asked, "What do you say when a potential seller asks…?" I always have an answer for every objection, but only because I keep the objective of the conversation IN MIND at all times. Here is a list of common seller objections and a quick follow-up statement for the listing agent.
They say:"I am going to try to sell it myself."
You say:"I am just curious, how do you plan on marketing your home?" "…representing the buyer?" "…responding to buyer leads?" "…being available for buyer showings?" (seller response) "If you had a proven plan for selling your home at top market value, would you be interested in using it?"
They say:"I am not going to give my house away."
You say:"Good! I prefer to work with sellers who believe in the market facts and are willing to negotiate from a position of equity and strength. When would you have time to get together?"
They say:"It is not a good time to sell."
You say:"I know that it is almost counter-intuitive; the supply and demand ratio indicates that this is a good time to be on the market. We are at a _____ month low in ‘homes for sale' inventory. The demand remains high due to the low interest rates, the tax credit and the declining number of foreclosures available. Do you have time to meet this weekend?"
They say:"I am going to talk with other realtors."
You say:"That's fine. Help me understand. What is it that other realtors will provide you that we have not discussed?" (seller response) "Would tomorrow morning work for us to review the differences between my plan to sell your home and my competitor's ideas?"
They say:"We have to do several things prior to listing our home."
You say:"The two big steps in getting your home on the market are meeting with a realtor and preparing the house for the market. Would you be able to meet tomorrow during the day or in the evening to discuss them?"
They say:"We are waiting for the neighbor's home to sell before we go on the market."
You say:"What could possibly be more convenient to potential buyers than having two homes in the same neighborhood available at the same time? I am going to preview your neighbor's home, would you like to join me?" (seller response) "Would you have time to meet at your home after our preview?"
They say:"Yeah, but my home has (seller's exceptional home feature)."
You say:"If both properties are equal except (seller's exceptional home feature), and both homes are priced the same, then your home will be the first to sell. Can you meet tonight?"
They say:"I know most people don't like busy streets, but we think it is a real advantage to be so conveniently located."
You say:"Location is always a factor for potential buyers, and we will secure feedback from every buyer who views your home. When is better for you to meet, Monday or Tuesday evening?"
They say:"I want to sleep on it."
You say:"That sounds good. I will call you in the morning to see if you are ready to put your home on the market. Do you have any other questions on the selling process? (seller response) "Do you have any other selling concerns I can assist you with?"
They say:"I have a friend who may be interested in purchasing the home."
You say:"Great! We can make your friend a ‘timed-exclusion' to the listing contract and not miss any valuable market time. That way you know you are getting top dollar in today's market either way. Can you meet tonight?"
They say:"I want to fix a few things first."
You say:"If you do not mind, I would like to review your list with you. Just to make sure the items you are doing will ‘help' the sale of your home and be worth your investment. Would you have time to meet tomorrow afternoon or evening?"
They say:"I am too busy with the holidays coming up."
You say:"I understand the extra effort the holidays take. However, what we have found with the holidays is that homes look and show their best when they have received that extra holiday touch. When do you expect to be ready for the holidays?" (seller response) "How would the next day work for us to meet?"
They say:"I heard that there are companies that will put my home on the MLS for a small fee."
You say:"This is true. What marketing and services do they provide?" (seller response) "I took a few notes, are you available tonight to compare those notes to our marketing and service plan?"
They say:"We want to think it over."
You say:"You're right. This is a huge decision. However, if you are ready to list your home, we can do the paperwork and I will hold it until you are ready to go on the market. This gives me the opportunity to prepare the ads, flyers, recordings, and home show." (seller response) "Is there something specific holding you back? How can I assist you with your decision?"
They say:"I don't want to sign a long contract."
You say:"Ok. I will simply work with you as a temporary listing client rather than a full client. It will not impact the representation you receive or the marketing efforts. It only restricts us for the ads your home will be eligible for. It's your decision. When are you available to meet?"
They say:"If I can not get $xxx,xxx, I cannot sell."
You say:"Ok. I'm curious, if I brought you an offer that was 95% of that amount, how would you proceed?" (seller response) "If I could get you top dollar for your home in the next 30 days, would you list today?" (seller response) "Can you meet this evening to review our plan?"
The Key to Successful Responses
When responding to potential seller objections, it is not a matter of being through, accurate or adding value. Rather it is important to acknowledge the seller's concern(s) AND close for the appointment. Only the best closers (successful realtors) completely understand that over 90% of the public does business with the first vendor of service they meet eye-to-eye. Once you have the appointment set, you will have the opportunity to clarify and reveal seller motivation. The bottom line result is more appointments equal more listings equal more satisfied clients.
The Next Step
Of course, if you set an appointment YOU must have a PLAN. If 90% of being successful is being there, then the remaining 10% is what you do once you are there. Think it through, do you homework, and make sure you are prepared. Nothing adds to a confident presentation than being prepared and rehearsed.
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Coach Cheri Alguire has coached over a thousand Realtors on scripts and other skills needed to take their business to a new level of success. For more information on her real estate coaching program, check out www.ProRealEstateCoach.com or www.RealEstateBusinessResources.com
No doubt about it: when you set out to complete your goals, you will need a functional team to support you. Think back to your goals. Are you going to be able to handle that kind of volume and all the paperwork and follow up that goes with it? Probably not. Chances are, you will need a team of assistants and buyer agents to help support you as your business begins to grow. Team members may wear many hats, and you will need to structure your organization to facilitate your desired outcomes.
A visual representation is a great place to start. Physically draw out the team. Who is/are the lead agent(s)? Who leads the listing team? The buyer agents? Who is in charge of managing the office? Marketing? Technology? (If the answer to all of these is ME: rethink your business plan and reread THE E-MYTH REVISITED by Michael E. Gerber.) A key question when planning is: do I need to hire more people? In addition, seeing which person wears which hat, and who reports to whom, is extremely useful in tracking the successor lack thereof--of the business.
One of the best books to use as a resource when you are planning your team is THE MILLIONAIRE REAL ESTATE AGENT, by Gary Keller. Although he has newer book SHIFT, most of my clients are seeing another shift in the market and are once again working on building and strengthen their teams.
Understanding the difference between a group and a team is critical. (And you may want to be mindful of how you name your business accordingly: The Jones Group, for example.) In brief, a team centers around a common goal to which all members commit. Job descriptions are unambiguous and stated in writing. There is buy-in to the success of the team, not just an individual. Team members are accountable to one another. A team celebrates successes and problem solves together. A group, on the other hand, is loosely (if at all) structured and adheres to no clearly defined goals. A group is about daily work and outcomes, (vs. vision and goals) and one person is usually in charge to reap the success or to feel responsible for failure. Whereas a group can serve a single purpose, a team creates a business dynamic that enables success and growth.
Teams require management. Be prepared to facilitate team needs. Be prepared to mentor and nurture as the team develops. Plan for meetings carefully. Build in accountability to goals and review them weekly. Be consistent in leadership. Your team members, and your sanity, will appreciate the effort.
Remember that teams grow and change. When writing a business plan and when hiring on team members, you need to keep in mind that the job description of today might be entirely different a year from now. (Sound familiar? How many of us were foreclosure experts until recently?) A team member who demonstrates the capacity and willingness to learn beyond the immediate landscape is a great asset to your business. Real Estate is dynamic. A good team not only plans for change, but embraces it.
As a real estate agent, it is important to know your value. Your value is determined by what you have to offer the consumer. It is important to remember that consumer perception is consumer reality. Every agent on the path of success must be able to answer the following question from a consumers point of view. (We all need to answer a version of this very basic question and answer it very, very well.) The question is: Why should a consumer work with you instead of another agent? Or, why should a client work exclusively with you, instead of having several agents search and show them homes? Or, why should a buyer express complete loyalty to you, instead of calling every listing agent in town? Your answer should compel the consumer to select you, and keep the consumer from moving on to one of the next agents.
Your value proposition is your personal thirty second elevator speech answering the WHY question: Why should a home buyer pick you? This thirty second answer will prove to be helpful at an open house, a social gathering, answering a floor call, responding to an email, responding to a sign-call, meeting a come-show-me request at one of your listings or the first time you meet any none-contracted buyer. Like all thirty second answers, your answer needs to be well thought out and planned.
Your value proposition planning begins with listing all of the services you provide to buyers. Your list may include: MLS access, automatic notification of new properties, market knowledge, negotiation strategies, process knowledge, one-stop-shopping and the list goes on and on. All of the services agents provide can be viewed as the features agents provide to buyers. However, simply giving a potential buyer a list of features is over-whelming and full of jargon. This list has meaning to real estate agents, not to Joe Consumer. For an example: If an agent boasts that they have auto-notification, MLS access and top service, what appeal does that have to a potential buyer? What if agents, instead, convert their list of features to a list of how the consumer will benefit by choosing them. The same example would sound like this: I offer access to all homes currently for sale; I give immediate notification of all new homes to the market, and I will show you properties at your convenience. The second example gives the potential buyer the benefits of working with an agent and is consumer focused. From your initial list of services or features you provide, comes your list of benefits or your value proposition. Your value proposition will compel a potential buyer to pick you.
Here is the step-by-step process to building your value proposition: Step #1 List all the services that you provide for buyers. Step #2 Determine which three services do you do best. Step #4 State how you provide the three services. Step #5 Clearly identify what benefit your client gets from each of the three services. Step #6 Write down the three benefits and practice verbalizing them until you are comfortable saying them.
Now that you have a value proposition, you may want to evaluate it. Will your value proposition be compelling enough for buyers to want to work with you? Is your value proposition giving the message you intended? Evaluate all three parts of your proposition by selecting the correct quadrant on the Johari Window. First, is the statement client directed or agent directed? Second, is the statement a consumer benefit or an agent service/feature? It looks like this the attached table. -----------------------------
Coach Cheri Alguire has helped thousands of Real Estate Agents develop their Unique Selling Proposition. Sign up for your FREE 20-minute Coaching Session today at www.ProRealEstateCoach.com In one session you will develop your Unique Selling Proposition. Find out firsthand the value of knowing your worth to consumers. http://www.RealEstateBusinessResources.com
I am often asked, "What do you say when a buyer asks?" I always have an answer for every objection, but only because I use a method for analyzing every objection. Here is a list of common buyer objections and a quick follow-up statement for the buyer agent.
They say:"I am too busy to make an offer or even look right now."
You say: "I am just curious, is there a way you can schedule your week so you can home search for two hours? I don't want to see you lose the opportunity of the $8,000 tax credit and low interest rates."
They say:"This home faces the wrong direction. I want more southern exposure."
You say:"If this house faced south, would it be your new home?" (buyer response) "Good!" "Tomorrow we will only view southern exposure homes. Does 6:00 work for you?"
They say:"I don't think the market has hit bottom."
You say:"How will you know when we are at the bottom?" (buyer response) "The supply and demand ratio indicates that there are only _____ homes per buyer. This is a clear indicator of turn in the market."
They say:"My hours may be cut, or worse yet, I may loose my job."
You say:"Help me understand. What is the difference between your monthly rent payment and your qualifying payment for your new home?" (buyer response) "If I may ask, where do you plan on living if you lose your job?"
They say:"I do not know if I can get a loan."
You say:"The two big steps in getting you into a home are meeting with a realtor and meeting with a lender. Would you be able to meet with our lender tomorrow during the day or in the evening?"
They say:"Something better might come on the market."
You say:"What would make another home better?" (buyer response) "Are you willing to risk losing this home, the neighborhood, and the great price for a hope of greener grass?"
They say:"My credit score is low."
You say:"I would think twenty minutes with our loan officer will clarify your concerns. Is Tuesday or Wednesday better for you to meet with our loan officer?"
They say:"I have a lease on my apartment."
You say:"Have you explored the options for an early vacancy?"
They say:"I want to sleep on it."
You say:"That sounds good. I will call the listing agent first thing in the morning to see if the home is still available and then I'll call you. Do you have any questions on the property I can get answered for you?" (buyer response) "Do you have any other purchasing concerns I can assist you with?"
They say:"I have a home to sell."
You say:"Have you established the value of your home?" (buyer response) "Would Monday or Tuesday work best for me to preview your home?"
They say:"I want to be closer to my workplace."
You say:"Are there other factors that impact your location choice?"
They say:"I am too busy with wedding plans."
You say:"Are you familiar with the home search process?" (buyer response) "What is your target date for being in your new home?"
They say:"Interest rates may go down more."
You say:"What rate are you hoping to capture?" (buyer response) "Let's look at the current rate and your dream rate and calculate the monthly payment difference. Are you willing to lose this beautiful home, location, and great price for _____ per month?"
They say: "We want to think it over."
You say:"You're right. This is a huge decision. However, I have to give you fair warning with as little pressure as possible. If you are ready to write an offer on this home, other buyers may also be ready to write. Being first to write will make a difference in negotiating the best possible price for you." (buyer response) "Is there something specific holding you back? How can I assist you with your decision?"
They say:"I don't want to sign a buyer contract."
You say: "Ok. I will simply work with you as a customer rather than a client. I will assist you with gathering information so you can make informed decisions. However, you need to understand that with any home listed by my brokerage, I will be working in the seller's best interest, as they have signed a contract with our brokerage for full representation. If you sign a buyer's representation agreement, you are legally represented as well."
Cute, Quick or Quip
When responding to objections, it is not a matter of being cute, quick or quip. Rather it is important to discover the circumstances or reasoning that caused the objection. In doing so, you clarify and reveal buyer motivation. The bottom line result is better service and satisfied clients.
Clarifying Buyer Motivation
Use a two-step process for clarifying buyer motivation: The first step is to determine if the objection is house related or not house related. Step two is to determine if the objection is within the buyer's control or not within the buyer's control.
If an objection is house related and within a buyer's control, this is person is buying. All you need to do is satisfy the objection and write the contract.
If an objection is neither house related nor within the buyer's control, you have a long road of educating the buyer ahead of you. This buyer will need market facts, successful buyer stories and a lot of patience on your part.
The objection that is not house related but within the buyer's control needs to be peeled back and indicates a buyer is ready to purchase. Peeling back the objection through concern and questions should reveal a missed step in the process or misunderstanding that the buyer has. For example, the buyer may not be sure about the purchasing range or how they proceed to buy the home.
On occasion an objection will surface that is house related but outside of the buyer's control. This is also a buyer that is ready to purchase. To satisfy the objection you need to firm up the buyer's criteria through questions that focus on price, condition, location and amenities.
The following Johari window will assist you in understanding the two step process I use for clarifying buyer motivation.
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Cheri Alguire has partnered with thousands of Realtors® to help
them take their business and their life to the next level of success.
To submit an objection or for more information go to
http://www.ProRealEstateCoach.com
or http://www.CheriAlguire.com
I have had an enormous response from you all about the first set of Real Estate Scripts. I had a couple of you send in more examples of objections and some that felt like they were being trapped by the expired real estate leads they were talking to.
It is true; some consumers like to set traps for unsuspecting agents. Armed with an attitude of sincerity and motivated by the opportunity to secure a new listing, every agent needs to avoid the traps set by expired home owners.
They say:If I cant get $XXX,000 for my house, I cant afford to sell.
This statement sounds innocent, but sets a major condition for taking the listing. A pre-set price without clarification or reasons is a trap to avoid. I suggest you simply reply: I am just curious, how did you determine that price? The objective for your curiosity is to peel-back-the-onion or to reveal the expired sellers motivation for having a pre-set price, not to mention the expectations that may exist with that price. Because the property has expired from the market, the price was probably rejected by the market. (But always keep in mind the possibility of location and condition as reasons for a property expiring.) Peeling back the sellers motivation is key in determining your next step. An expired sellers motivation for pre-selecting a price can range from: simple greed to having a second mortgage to another agent priced the home to the seller looked on-line at Zillow to the price reflects current tax assessed value to the cost of their new home or future lifestyle costs. Once you determine the motivation or reason behind the price tag, you can select your next step in successfully listing or walking away from the seller. Without peeling-back-the-onion, you may foolishly spend your time and money AND emotional energy. Avoid the trap of motivational ignorance.
They say:How come you did not sell it while it was on the market before?
There is nothing innocent about this statement, and it likely makes every agent cringe. This is the blame trap and caution needs to be exercised. There are two clear directions an agent can take to avoid the pitfalls of the blame trap: One is to address the emotional feelings of failure of the expired seller. I suggest using the feel-felt-found strategy. I understand how you feel. I have spoken with many other sellers who have felt the same way. What they found is once we go through the factors that impact a home successfully selling, they understand why all buyers and agents may not see or show every home on the market. Would you be able to meet this evening or tomorrow to discuss these factors? The second strategy is to directly address the factors or reasons all agents and buyers do not see every home. I suggest an introduction like& There are several reasons that every buyer or agent may not see or show a home for sale. All of the reasons are related to five factors: Price, Location, Condition, Amenities, and the Exposure your home was receiving while it was on the market. I like to follow-up this statement with a series of questions related to the results of the previous agents marketing. How many showings did you have? How many open houses did you have? And, how many lookers were at the open houses? Did you have any second showings? Did you have any offers? My intent should be clear. I am taking control of the conversation and collecting valuable information as I show real interest in the expired sellers home. Avoid the blame trap.
They say:Can you send me some information on your experience first?
This request comes in many forms and I call it the pre-condition trap. It may be worded as: Can you send me the price you think you can sell my house for before we meet? Another way the pre-condition trap is used is when a consumer suggests you drop off your market ahead of time. And the most common pre-condition trap is, how much do you charge? In an attempt to be respectful of the sellers wish, I immediately close for a time when they will be home, giving me the opportunity to meet them and quickly review the information they have requested. It sounds like this: I have a brief resume of discussion points on my brokerage and my personal experience. When would you be available for twenty minutes? Avoid the pre-condition trap.
They say:Have you ever sold a house in my neighborhood?
This is a challenge for the majority of agents. After all, we can only have a definitive number of sales in a years time. More important than the direct question is the motivation behind the question. The sellers motivation for asking will determine your response and course of action. You may want to ask: I am just curious, did your last agent have a lack of knowledge about your neighborhood? Or, Are there some benefits of living in your neighborhood we can use to market your home? Or, Are you asking if I can service a listing in this location? Do not dodge the question, but do ask for clarification. Usually, only one agent will dominate a neighborhood and it is probably the expired agent. I call this the statistically improbable trap and it can be tricky if you are not prepared. Avoid the statistically improbable trap.
They say:How about if we just list it with you for a month and try it out?
The test-drive trap is very common among expired sellers and we cannot blame them for being a little cautious. After all, they may have endured a six month contract with zero showings and very little contact with their previous agent. Embrace the test-drive with empathy and a guarantee. Here is a possible response: I understand that you want to be cautious about entering another long contract. How would you feel about a seller service guarantee? If we do not provide the service you are expecting, we will cancel the contract --- no fees? This response is not for every agent. If you do not intend on servicing the listing and providing a list of service points with a guarantee, then you will need to respond differently. Avoid the test-drive trap.
They say:I am frustrated that our house has not sold yet.
This is not an objection. This is a statement of feeling. Use empathy and paraphrase their feeling. But, do avoid the possible trap of becoming their counselor. Remember, you run a real estate business not a counseling center. You want to establish yourself as their real estate market expert, not the human emotions expert. Try this: I understand how you feel. I have spoken with several other people that have felt the same way. They have found some comfort in understanding the current market conditions. When would you have twenty minutes for me? This should sound familiar; it is the feel-felt-found strategy. Avoid the counselor trap.
They say:I dont think our agent did their job.
Remember OUR Code of Ethics and stay true to its spirit and avoid the mud-slinging trap at all costs. Try a response like this: What did your last agent do that you liked? And follow with, How could have the last agent improved their performance? This is a great opportunity for you to hand-craft a marketing program for your new listing. The expired seller is giving you their personal list of dos and donts. What could be more valuable when listing a home? Take advantage of this opportunity. Avoid the mud-slinging trap.
They say:My last agent was not able to sell our house in six months, what makes you think you can?
Repeat after me: We are not interchangeable parts! And believe it! As many different and unique brokerages as there are, there are equally as many levels of training and agent proficiency. I like to answer this question with a simple statement: When can we sit down and compare what you experienced over the last six months with what I am offering? Or, There are three basic reasons I think I can secure a buyer for your home. When can we sit down and discuss them? Remember: Not all agents are created equal, and we all need to develop our personal Value Proposition. Avoid the interchangeable-parts trap.
They say:My last agent did not do much to sell my house. I think I am going to try it myself.
The give-up trap is a signal of readiness for a hungry agent who wants to work side-by-side with a motivated seller. And treat this opportunity just that way: It sounds like you are motivated to sell your home and have some ideas on how to get the job done. Am I right? Would it be all right if I stop over tonight to discuss your ideas and possibly make a plan for your home? The key is to dignify the sellers ideas and see if they fit your marketing plan. It may be as simple as having the seller preview the flyers, MLS input, photos and 800 recording prior to the list start date. Some sellers just want to be empowered. Do it! Avoid the give-up trap.
Tip from the Coach: When a consumer offers an objection in the form of a statement or question, the consumer has an underlying motivation, reason or concern. The key to successfully handling all objections is to reveal that consumers motivation.
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Coach Cheri Alguire has helped hundreds of Real Estate Professionals take their business to the next level of success. If you would like to submit some objections for an upcoming article, or would like to know more about Coach Cheris coaching programs, go to http://CoachCheri.com
In previous articles, we focused on targeting a niche, the WHO that benefit most from your services. Now we turn our attention to generating leads from that given niche and creating a marketing plan for success (the HOW.)
Once you have identified the WHO, you must set about a plan to communicate with them in order to capture that business. Don’t neglect a single person within the target. If you have singled out a particular neighborhood, for example, every waiter from every restaurant and every manager/owner of every business in that area should know your name and game. A branded, consistent image is essential, and you should carry—and leave it—wherever you go. The persona you present should be just as consistent: friendly, competent, and willing to help.
Master marketing blogger and author Seth Godin reminds us that marketing is simply a matter of spreading ideas—but that the very action of dispersing those ideas is a powerful force. He suggests that your marketing be a form of storytelling: let the consumer know you and your business through a memorable narrative. The story can be told in print, such as a glossy brochure or easily remembered business motto or slogan, but it also should be told through every visual image you present to the public as well: your website banners, stationery, postcards, etc.
Let’s use for example your target neighborhood again. You have identified the WHO in the niche and now want to reach them. They are a mix of upper-middle class singles and families, mostly professional, who support their neighborhood through school and community events. The neighborhood houses a city park, a few small, locally owned restaurants, and a scattering of businesses. What is your marketing plan to attract them? What story will you tell?
First, be visible. Be present in the neighborhood, supporting it. Live in it! If you are handing out flyers (or sponsoring?) the local half-marathon, everything that represents you and your business should be immediately recognizable: your logo, your colors, every image that tells your story. If you want to connect in this neighborhood, shouldn’t your photo on your website and promotional materials include an image of that park? If you are a runner, the consumer should see you in those shorts. A volunteer? Publish the image of your cause with you in it. To paraphrase the humorist, Nora Ephron, “everything is copy,” so get out there and get your story told with the real—and relevant--details of your life.
Second, be different. Seth Godin also warns us that “people only notice the new.” (ALL MARKETERS ARE LIARS, 2005.) The truth is, there are an awful lot of people who do what you do. So what do you do that is so different? Or how can you change what you do to be different? “Hot pizza, 30 minutes or less” is a differentiating distinction in a business of countless competition. You can’t “provide the best service” and be considered different from all the rest. But define the best service, and perform it, and you will succeed. We know of one real estate team that grew to become the top producers in their market by answering phone calls in five minutes or less, emails and text messages within ten minutes. They advertised this difference and delivered on it, convincing the public that they were interested in providing them immediate attention and service. Listing appointments included “the test:” potential sellers calling anonymously from a coded listing, only to have an agent return the call within five minutes and ask if they needed assistance on a particular home. Slam dunk.
Third, be active. Do not confuse having a “marketing strategy” with having an “action plan.” You must invest your time, effort, and dollars in securing the specific marketing resources which target your clientele and give you the best return on your investment. Big doesn’t always mean better, but then again, sometimes it does. Do your homework. Select media which fit both your budget and your goals. Then put your plan into effect.
Finally, analyze results. Track every lead to its source of origination. In that way, you can determine which marketing resources are working best, and which are most cost effective. You will know when and how (much) to change only if you track and account for your leads.
In the end, it is pretty simple: Tell your story well to as many people as possible.
Disclaimer: ActiveRain Corp. does not necessarily endorse the real estate agents, loan officers and brokers listed on this site. These real estate profiles, blogs and blog entries are provided here as a courtesy to our visitors to help them make an informed decision when buying or selling a house. ActiveRain Corp. takes no responsibility for the content in these profiles, that are written by the members of this community.
By Cheri Alguire
A great story is told by Jeffrey J. Fox in HOW TO BECOME A MARKETING SUPERSTAR. It is the story of Pablo Picasso, dining at an elite New York City restaurant and being approached by a socialite who presumes to ask him for a drawing.
I have had an enormous response from you all about the first set of Real Estate Scripts. I had a couple of you send in more examples of objections and some that felt like they were being trapped by the expired real estate leads they were talking to.
In previous articles, we focused on targeting a niche, the WHO that benefit most from your services. Now we turn our attention to generating leads from that given niche and creating a marketing plan for success (the HOW.)
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