From Listed to SOLD - How to Sell Those Listings You Work So Hard to Get!

In keeping with our tradition of posting the Favorit-est Tips after our How-To shows in the SWS Virtual Studio, below are the Favorit-est Tips from yesterday's show: The Proper Care & Feeding of Sellers from Contract to Closing.

The show was about a listing agent's duties and responsibilities during the critical Contract-to-Closing period to keep everything on track and heading toward the closing table. We used my Listing-Under-Contract checklist (which you can find in my VIP Lounge) to refer to, although interestingly, a few of the most favorite tips weren't even ON my checklist! (Thank you SWS Coach Deb Stephenson for adding your brilliance!)

So, without further adoooooooo.... Here are the Favorit-est Tips as voted on by the live studio audience, in reverse order of Favorite-ness!

Fifth Most Favorit-est Tip
Prepare the seller for the inspection by 1) asking them to vacate the home during the inspection so the buyers can begin emotionally moving into the home and 2) setting the expectation that the inspection may go badly so that if it does, they aren't shocked, and if it doesn't, they are pleasantly surprised.

Fourth Most Favorit-est Tip
Put up your SALE PENDING sign fairly quickly after contract. This is great marketing for YOU and for the local real estate market. SOLD signs always breed more SOLD signs and that's a very good thing.

Third Most Favorit-est Tip
Do a walk-thru with your seller before the buyer does his or her walk-thru. This gives you the opportunity to make sure the buyer won't find anything amiss and create a ruckus right before closing. Wish I could take credit for this one, but it was Coach Deb's.

Second Most Favorit-est Tip (seriously)
When you pick up your sign and lockbox, take some toilet paper rolls with you to make sure there's TP in the bathrooms. Many sellers inexplicably take their half-used TP rolls with them and it's a drag for the buyer when they arrive with their moving truck... and there's no TP to be found. The buyer may never know it was you, but it's just good karma ;-] - Thanks, Deb, for this visual.

And...

The MOST Favorit-est Tip...!
Prepare for and attend the appraisal. Have good comps with you that support the price, as well as any that don't and be able to explain the lower ones. Also bring an itemized list of any repairs, improvements or features the home offers, with approximate costs. Don't annoy the appraiser with random chatter or get in his way, but do be there, be charming, and offer to help measure.

So, there you have it! If you'd like to listen to the entire show, you can find it at Club SWS (www.clubsws.info) or at the SWS Bookstore (www.SWSStore.com).

Especially for Rookie Agents (but everyone is welcome), this teleseminar show is about what happens (or SHOULD happen) between the time you get your listing under contract (woo hoo!) through the day of closing (an even bigger WOO HOOOO!). 

The thing is... getting a listing under contract is nice, but it's sometimes the easiest part of the whole process. Today, buyers are nervous, lenders are fussy and your seller might not be tickled with his selling price, so holding the transaction together will require you to be on top of the dates and deadlines, and prepared to ward off problems before they become deal-breakers.

On Thursday, January 12th, we'll discuss all these things a listing agent should be doing during the contract-to-closing phase, based off of the SWS Listing-Under-Contract Checklist.

During the show we'll cover topics such as:

• What you need to do immediately following contract execution
• What you need to make sure your seller does immediately following contract execution
• How, why, when and with whom to follow up throughout the process
• Your role during the inspection period
• Proactive steps to take to head off problems before they arise
• What your responsibilities are prior to, during and after the closing
• And... whatever else we think of to tell you about!

Sound like fun? If so, please mark your calendar and join us on January 12th!

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THE DETAILS
Date: Thursday, January 12th, 2012
Time: 8:00am Pacific / 9:00am Mountain / 10:00am Central / 11:00am Eastern  
Duration: 60 - 75 minutes
Equipment Needed: A computer with a high-speed connection and speakers or a telephone.
Cost: Free, but you must register, below. 

REGISTER FOR THE SHOW HERE

I just got off the phone with one of my consulting clients. Poor guy. I nearly took his head off with my impassioned rant about the priorities of the real estate industry. He handled it well, I must say, although I could tell his patience with his trusted mentor (that would be me) was wearing thin. But I just couldn’t help myself…

Nothing like a good rant to re-energize your day!

We were talking about the pursuit of expired listings. My client has all sorts of ideas on how to approach expireds (I really hate that label, but shall use it here in the interest of clarity) with promises of doing a better job than the last guy, and getting the house SOLD.

I innocently asked how he planned to do that. “Do what?” he asked. “Do a better job and get the house SOLD,” I answered.

He seemed a little stumped by the question. Perhaps even confused as to why I asked it. So, I attempted to clarify.

“What, specifically, are you going to do differently from the last guy to assure a different outcome? If you’re going to tell a seller you can do better, what ARE you going to do better? I mean, you don’t want to go in just saying ‘My sign is prettier than HIS sign,’ do you?”

My client thought a moment and came back with “Well, I don’t want to criticize the other agent and say that I’m a better listing agent than he was – that would be rude.”

And I agreed. It might be rude, even unprofessional.

BUT… I disagree with all my heart that he shouldn’t be able to say, with all sincerity, that “I am the best listing agent I know.” That’s not arrogance and it should be the truth. Anyone who pursues the business of homeowners who want to sell their properties should feel, no, KNOW in their hearts and souls that they are the best thing that could ever happen to that homeowner. If they don’t feel that way, they should not pursue his business.

So, if you’re pursuing expired listings – or any listings, really – what IS your differentiating factor? What makes you “better” than the agent who didn’t sell the house, or anyone else the seller might be talking to?

That’s not a trick question! It’s a question every agent should ask him or herself before venturing out the door to pursue business.

So... HOW are you special? WHY should a seller hire you over the other guy or gal?

(This is the subject of the final SWS Teleseminar show of the 2011 Season... "Are YOU the Best Real Estate Agent You Know?" Details and registration here: www.sellwithsoul.com/best-agent)

Especially for Rookie Agents (but everyone is welcome), this teleseminar show is about what happens (or SHOULD happen) between the time you get your new seller client's signature on the listing agreement and that glorious day you go under contract.

Contrary to what some seem to believe, there are a LOT of things that a listing agent can (and should) do once the sign goes in the yard, way above and beyond the 3P's (Put a sign in the yard, Put it in the MLS, Pray). Things like communicating with the seller every day during the first week and on a regular basis thereafter. Making sure the seller approves your MLS listing. Keeping up with market activity in the area and ensuring the seller knows you are. Checking in on your listing in person every week or so. Verifying with the HOA what the seller told you about it. Soliciting and communicating showing feedback. Updating your photos when the season changes. And so much more.

You do these things not only because they make your seller happy (which is certainly not an insignificant reason!) but also because the more in touch with your listings you are, the more likely they're going to sell, and when your listings sell, everyone wins. 

So, on November 10th, we'll discuss all these things a listing agent should be doing during the listing-to-contract phase, based off of Jennifer's New-Listing Checklist which you can review at the SWS VIP Lounge here: www.SellwithSoul.com/vip_lounge.html.  

During the show we'll cover topics such as:

• What you need to do right away once you have a signed listing agreement
• What you need to make sure your seller does prior to going on the market
• What you need to do one week, two weeks, three weeks (and beyond) after the list date
• What sorts of things (and when) to communicate to your seller throughout the process
• How to communicate feedback
• Proactive steps to take to head off problems before they arise
• And... whatever else we think of to tell you about!

Sound like fun? If so, please mark your calendar and join us on November 10th!

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THE DETAILS
Date: Thursday, November 10th, 2011
Time: 8:00am Pacific / 9:00am Mountain / 10:00am Central / 11:00am Eastern
Duration: 60 - 75 minutes
Equipment Needed: A computer with a high-speed connection and speakers or a telephone.
Cost: Free, but you must register, below. 

REGISTER FOR THE SHOW HERE!

Related to a recent blog entitled "READ THIS Before Your Next Price Reduction Recommendation, today's post is about HOW to recommend a price reduction if it comes to that without blowing your credibility, or, frankly, ticking off your seller.

In a perfect world (and why not strive for that?), a price reduction is rarely necessary. In this perfect world, real estate agents price, prepare, and present their properties properly (I love alliteration) and therefore homes sell in a reasonable amount of time without the need for a price adjustment. Agents don't capitulate to the demands of sellers to overprice a home, nor do they "buy" listings with inflated estimates of market value, planning to push for a price reduction six weeks later.

Okay, so it's not a perfect world and L'il Miss Smarty-Pantz JAH didn't always score a 10 on the beam either when it came to pricing her listings for sale. Pricing is an art, not a science; the "right price" is a constantly moving target, and can be affected by many factors outside our control. So, it happens. Sometimes a price adjustment is the right thing to do.

So, what might be some ways to approach the price reduction conversation with your seller without jeopardizing your credibility (hey, YOU suggested or agreed to the price in the first place!) or otherwise creating unnecessary drama and angst between the two of you?

I have a few suggestions, but would like to hear yours!

1. Prepare the seller ahead of time that a price adjustment may be required if the market doesn't respond as favorably to the home as we hope it will. But do this carefully, not with a pre-printed price adjustment form or with a snotty attitude of "Well, we'll TRY it your way if you insist, but BE PREPARED to reduce the price," but rather as if you have just as much to lose as the seller does. In other words, "as if" you're on the seller's team... which you are, right!?

2. If you recommended (or agreed to) a price believing with all your heart that you were in the ballpark, but discover that, um, you weren't, take the blame. Admit that you were wrong and that you're very sorry you got the seller's hopes up. Perhaps something like:  "Bob and Sue, I blew it. I really thought your house was nice enough to overcome XXX, but I was wrong. I'm glad we gave it a try, but I do think we're going to have to reduce the price significantly. Let me tell you what I'm thinking..."

3. As pontificated about in the original blog, it's best NOT to lead with a price reduction as your primary solution, for several reasons. One of those reasons is that if you are able to suggest alternatives to a price adjustment and the seller rejects your suggestions (e.g. stage the home, replace the carpet, mow the lawn, etc.), then you can feel much better about recommending a price reduction because it's actually the seller making the choice to reduce instead of fix or improve.

4. Related to #1, when a seller wants to push the price beyond your comfort level and if he's not too far removed from reality, agree to try his price for a week to ten days, no more. Don't get snotty about it because the fact is, you don't have a crystal ball; maybe the market will respond more positively than you expect! Say something like this: "Okay, let's try it for a week or so. It's a bit higher than I'd like, but I don't want to give away your money if I'm wrong. If we aren't getting the activity we need or if the feedback indicates the price is high, we'll reduce it to $XXX,XXX, deal?"

So... there are some suggestions that worked for me... any you'd like to share with the class?

I have a friend who listed her house with one of the top agents in her area. They went on the market about two months ago, at the exact price the agent recommended and supported with his market analysis. Showings were brisk at first, then trickled off, as typically happens. Feedback has been generally positive, although the home is rather unique and simply not practical for many buyers, and the feedback has reflected that.

A few weeks ago, out of the blue, the agent recommended a $50,000 price reduction. This caught my seller friend by surprise since the feedback she'd received never mentioned that pricing was an issue; most of the negative feedback centered on the unique features of the home that made it "not work" for the buyer. But no one, to her knowledge, had mentioned price as an obstacle. My friend asked the agent for an explanation of his recommendation, but no explanation cometh, the agent simply reiterated his recommendation that she reduce her price.

My friend came to me for advice. I suggested she ask him the following questions as to the WHY of his recommendation:

1. Has there been consistent feedback that we are overpriced? (If so, it has not been shared with us.) 
2. How is the overall market right now? Is anything in our price range selling? Is the market typically slower this time of year?
3. If the market is not interested in our home at the current price, would your recommended price reduction change that? 
4. Will reducing the price by $50,000 overcome buyer's objections to the unique character of the home, or will buyers still expect a more traditional home?
5. Are homes in your recommended price range getting more activity than homes in our current range?

and the kicker...

6. Has the market changed significantly since you recommended the price we listed at? 

My friend is not categorically opposed to reducing her price if that's the right answer, or to withdraw the home from the market and wait for a better time to sell. But she wants (and deserves) information. A coherent explanation. Some evidence that her agent (who is supposed to be looking out for her best interests) put a little effort and thought into her situation -- and his recommendation.

Contrary to what we like to believe, our sellers are not stupid and they aren't unreasonably stubborn. But when we recommend a list price, back it up with data, and then, like clockwork, push for a reduction to that price six weeks later without explanation or exploration of other solutions, home-sellers have every right to be frustrated with us and to question our credibility. To doubt our commitment to their best interests. Or perhaps, to reach the conclusion that we're just lazy.

(My friend is thinking all these things about her agent and I can't blame her).

The moral of the story... before you recommend a price reduction, make sure you have answers to all the questions YOU would ask if it were YOUR home on the market and your agent advised you to give up a chunk of your equity. DO your homework, not just to pacify the seller, but also to determine if, indeed, a price reduction is the right solution. Maybe it is, maybe it's not. But be a PROFESSIONAL real estate agent and find out.

Oh, and it wouldn't hurt to price it right in the first place.

RELATED BLOGS
When Your Listing Isn't Selling, What's the First Thing to Fix - All together now...
STOP! Before You Reduce the Price!
If Price is All That Matters, What Do They Need Us For?

During a recent SWS Teleseminar show (Negotiate with Soul) a discussion arose as to whether or not a listing agent should "remind" the buyer agent of the buyer's contingency deadlines. We didn't exactly call it "reminding," but rather "checking in" or "following up," but to my ear, it's the same thing as "reminding."

For example, in Colorado, there is a loan approval deadline which somewhat functions as the Drop Dead date in a transaction. If the buyer does not have loan approval by that deadline (typically a few days to a week prior to closing), he can do one of three things. He can:

1. Terminate the contract and receive a refund of his earnest money, no questions asked, or

2. Ask for an extension of the loan approval deadline (which the seller has the option to grant or not), or

3. Do nothing.

Please note - the onus is on the BUYER to notify the other party if there is a problem with the loan. If the buyer does nothing, it is assumed that the loan is fine, and the earnest money goes "hard" - that is - if the transaction does not close on time, the seller has the option to keep the buyer's earnest money. But NOT HAVING LOAN APPROVAL DOES NOT TERMINATE THE CONTRACT and if it still somehow can close on time, great!

So, back to the question, (assuming an agency relationship exists) should a listing agent remind the buyer agent about the loan approval deadline?

You can probably tell by my tone what my opinion is... but first, what's yours?

Yesterday, we did a teleseminar show in the SWS Virtual Studio about negotiating - specifically, negotiating on behalf of our buyers and sellers (as opposed to any sort of fee or commission negotiation). I was joined in the studio by Blake Farley, from Silver City, New Mexico and from the positive feedback I received on her presentation and brilliance, I'm guessing you'll be seeing her on future shows - GREAT JOB, Blake!

The format of the show was that Blake and I took turns sharing our top ten favorite tips and strategies for keeping negotiations on track and civil... and, oh yeah, maximizing the likelihood that our client gets what he wants without any unnecessary drama, chaos or angst. At the end of the show, I asked the audience to tell me what their favorite tip(s) of the day was/were, and here were the results:

Favorit-est Tip #1: When negotiations get hot and heavy, withdraw. Dead silence from your side. Don't tell the other agent you're "thinking about it" or going to "sleep on it," just stop all communication until the next day. Very unsettling to the other side, and keeps your client from getting carried away by the emotion of the negotiation.

Favorite-est Tip #2: Never believe anyone when they say "This is our best offer" or "This is our bottom line," and related, never let the deal die on your side. No one knows what their best offer or bottom line is until they've either signed an agreement, or rejected one. When the other agent presents a counter-offer to you and tells you "this is the best we can do," pay no attention. If your client still wants the house (or still wants to sell), counter back. More often than not, the negotiation will continue beyond the previously stated "best" or "bottom."

Favorit-est Tip #3: Related to 2, never ask your buyer or seller for their bottom line or highest-and-best. If you do, you force them to commit to a figure and they might be uncomfortable down the road if they're willing to go higher or lower. A side benefit to this strategy is that you won't be accused of spilling the beans to the other side if, by chance, the offer or counter comes in at the exact figure they shared with you. If a buyer or seller tells you what their highest-and-best or bottom line is, act as if you didn't hear them ;-]

Favorit-est Tip #4: Get everything in writing - no oral negotiating. When agreements are reached over the phone, something always comes up when it's time to put the agreement on paper, creating unnecessary drama. It's easy enough today to just "write it up," and keeps everyone on the same page, so to speak.

(Tied for) Favorit-est Tips #5, 6 & 7: (Almost) always counter an offer, even on technicalities to keep the buyer from feeling he could have/should have offered less; as the listing agent, don't remind the buyer's agent of contingency deadlines (to protect your seller's right to retain earnest money); and always remember whom you represent, which helps you be a stronger negotiator and not make an idiot out of yourself with your own client!

Other tips from the show:

• Make the offer price/counter price "attractive" to the other side by rounding up or down (e.g. $279,900 versus $280,000)
• When countering, use positive statements when possible - e.g. instead of "No termite inspection," say "Buyer to pay for termite inspection."
• Realize that you can say NO - and that the other side sometimes fully expects you to.
• Set expectations with your clients BEFORE you get to the offer stage (e.g. market conditions, communication, etc.)
• Negotiate delayed possession for staged and owner-occupied properties, in case the loan falls apart at the last minute
• Try to give the other side an opportunity to save face when negotiating - don't reject a counterproposal outright - give a little bit, even a token amount or concession.

If you missed the show, you can purchase a recording of it in the SWS Bookstore for $3.99, or join Club SWS for $10/month and get access to recordings of all past, present and future SWS shows!

A few months ago, I was contacted by one of my customers who had just purchased my Listing Analyzer for Expired Listings which is a dandy little tool to help agents figure out why an expired listing didn't sell with the previous agent... and what they can (and should) do better this go-around.

She was a little miffled by something she saw in there - specifically - my implication that the previous listing agent "failed" to sell the house and that somehow, that was HIS/HER fault!

She asked me: "So, Jennifer, you're saying that if I can't sell a listing, it's MY fault?"

Yes. That's exactly what I'm saying.

Are you a bit miffled with me now, too? ;-]

Here's the thing.

When a seller wannabe honors us with his business, we agree to take on a serious responsibility. Our job as a listing agent, when done right anyway, entails far more than just getting some signatures on an agreement, putting a sign in the yard, entering some words into the MLS and installing a lockbox. More than just holding open houses, creating pretty brochures, taking good pictures and pursuing buyer feedback. More, even, than just pricing properly!

It's our job to know:

1) if the property is sellable at all (not all are), and,

2) what it will take to sell it and,

3) how to effectively communicate with the seller wannabe so that he understands and accepts how his actions and decisions affect the final outcome, and how to inspire him to do his part.

So, Ms. Smarty Pantz, are you saying YOU sold all YOUR listings because you're so freakin' perfect?

Nope. I didn't sell all my listings and I'm far from perfect. But when my listings didn't sell, I'll be the first to say it was MY FAULT.

Agree? Disagree? Unsure? Tell me!

A few weeks ago I posted a blog about whether it's a good idea or not to "disclose" an obvious material defect in your public advertising of a home, or let buyers discover it on their own when they visit the house. My opinion is that it's usually best to be upfront about such things so that you are marketing to the "right" buyer, not just using a shotgun approach hoping that "right" buyer stumbles along.

Well, there's more to the story; thought I'd share.

After the blog got featured, a member wrote to me privately telling me that she was currently in that situation with a new listing. The home is cute, in a great location, great square footage and tremendous potential. BUT (sigh - always a "but"), it has a material defect that will likely scare the pants off the majority of retail buyers. The defect is fixable, but at significant cost.

My reader had debated whether or not to disclose the defect in the public comments of her MLS listing. She (and her seller) had already priced the home properly (significantly below the non-defective comps), and she knew the price would be attractive to the market.

But... to mention the defect? Or not...?

After talking with her managing broker, my reader decided to be silent on the defect in the public marketing (with a brief mention of it in the broker comments), with the goal of generating as much activity as possible from a wide spectrum of buyers. Her seller agreed with this approach and away they went.

Well, the strategy worked, sort of. They had a bunch of showings the first week - woo hoo!

But...no offers and universally negative feedback. "My buyers loved the house until they got to the basement...then... yikes!"

At the end of seven days, her sellers asked her to change the marketing to more accurately reflect the reality of the situation. They admitted they were tired of all the showings, knowing that most of the buyers wouldn't consider the home at any price, and the negative feedback was wearing them out emotionally. (The agent admitted to similar feelings - that she was starting to dread notices of showings and subsequent agent feedback).

So, the agent changed the marketing as requested and immediately was rewarded with two showings, presumably by buyers who were willing to consider dealing with the defect. The agent told me that her enthusiasm level improved dramatically once she felt she was advertising the home more accurately, and felt she'd learned a valuable lesson in marketing - "UNDERpromise and OVERdeliver!"

Which raises the question - while OVERpromising in marketing might get more buyers/customers in the door, if they don't buy because they felt misled, was the marketing effective? (I vote NO).

But was the agent wrong in trying it "her" way at first? Did she dis-serve her sellers with her initial "more-inclusive" marketing?

I don't think so, but I'd love your thoughts on the matter! I'll share mine if you'll share yours.  

EPILOGUE: Two weeks and six more showings later, the house went under contract and is scheduled to close this week.