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

Got a question yesterday from an agent who was referred to a potential seller by an acquaintance.  However, the acquaintance warned the agent (let's call him Sam) that the seller has a "friend who will list the house really cheap," so Sam may not have a chance at procuring the listing.

Sam asked me how I would approach the situation - how would I respond if the topic of commission comes up in their initial phone conversation? And how would I go about persuading the seller that I'm worth my "full" fee and that the "friend" may not even be worth her discounted one?

Wanna know what I told him? Okay, twist my arm.

First, I always recommend that we be upfront about what we charge if asked. I don't believe in deflecting the issue because it puts us in the position of being a salesperson instead of the professional advisor I feel we are. So, if Mr. Seller were to say "Sam, what do you charge to sell a home?" I'd advise Sam to answer the question without hesitation. No hemming, no hawing, no creative avoidance. Just get it out there on the table.

"My fee is X% to sell a home, which includes the buyer agent's fee of Y%"

If the seller responds with "Well, I have a friend who will do it for X-minus-2%..." Sam can say: "That's great - and that might be the best deal for you. But I'd still be happy to get together and talk about your situation, so you can be sure you're making the right decision. No pressure, I promise. And I'll respect whatever decision you make."

Reverse psychology ("that may be the best deal for you") works great here!

If the seller agrees to meet with you, that means he's probably open to paying your fee, if you can prove you're worth it.

And as you probably know if you read much of my stuff, that's a BIG DEAL to me - actually being WORTH the fee you charge... and knowing you're worth that fee. Getting the point of being and knowing you're worth it might take some time and soul-searching, but it's well-worth every minute.

(And by the way, BEING worth your fee has nothing to do with how much you NEED that fee).

Anyway, I digress.  Next question - once you're face to face with the seller - should you address the issue of your competition's lower fee head-on?

Whatcha' think? (I'll share my thoughts tomorrow.)

I read a featured blog the other day written by an agent who was regretting not insisting on a buyer agency agreement and was subsequently ditched by the buyers she was working with. She was disappointed, and in her blog, reconfirmed her commitment to always get that agreement in place before investing much time in a new buyer client.

Fair enough. I disagree with the agent's conclusion that the solution to being ditched by a buyer is a written contract, but that's okay. To each his own.

But one of the many comments on the blog caught my eye. It was something about how now that we're in a new decade; it's a perfect time to set new priorities. In this case, the commenter meant that he or she intended to be even more committed to getting those agreements signed before working "for free."

Again, fair enough.

But it occurs to me (yep, here comes a soapbox) that it would do us and our industry far more good if we set our priorities a little higher. If we set them based on what the customer wants and needs, rather than on what we want and need. Don't get me wrong, I'm all about looking out for #1, but when you put your customers first, my experience has been that Your Favorite Real Estate Agent benefits right alongside!

So... how about instead of making it a higher priority to be more diligent about contractually obligating your buyers to you... you commit to making yourself indispensable to your buyers so that no contract is necessary?

How about instead of making it a higher priority to more efficiently beat the streets looking for more and more and more and more listings... you commit to figuring out how to sell the listings you already have?

If we shift our industry's priorities away from the face in the mirror and focus them on the consumer we're licensed, hired and well-paid to serve, I promise you we'll all benefit. Our buyers will buy and our listings will sell, so we'll attend more closings and see more repeats & referrals.

It really might be that simple!

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Your listing agreement is signed and you're heading out to install the lockbox and yard sign for your fabulous new listing! By this afternoon, the property will be entered into the MLS, and hopefully your fancy-schmantzy home brochures will be delivered by the end of the week.

Whew! You're done, right? Time to move onto the next listing prospect!

Well, that's up to you, but I don't recommend it.

Those first two weeks of a new listing provide a beautiful window of opportunity to knock the sox off your seller and cement your position as his or her all-time favorite real estate agent. Oh, and by knocking the sox off your new seller out of the gate, you'll buy yourself a little grace if, down the road, you unintentionally drop the ball (it happens)!

When you put a new listing on the market, strive to have contact with my seller every single day for the first week; and into the second week if possible. Remember, while listing another home may be just another day at the office for us, it's a monumental event for most home-sellers. They are watching your every move (or lack of movement) very closely - AND - commenting on those moves (or lack thereof) to their peers.

So, what can you do to knock some sox those precious first two weeks of a new listing?

• Send the sellers a copy of the MLS listing and ask for their blessing
• Send the sellers a draft of the home brochure and ask for their blessing
• Schedule the first open house
• Create and deliver your first State of the Market report
• Deliver feedback from showings, if any
• Send links to your online advertising (Your Virtual Tour, Craigslist, Postlets, Realtor.com, your blog, etc.).
• Ask seller to distribute the virtual tour to his social network.
• Drop off brochures
• Do your Open House
• Deliver feedback from Open House
• Ask sellers how they feel the process is going so far
• Preview any new competition and share your feedback
• Call to check on brochures - do we need more yet?
• Prepare a market report with the number of showings and virtual tour hits, along with an update on the status of the competition.

After the first two weeks, you can slow down your attention a bit, although of course, do continue to provide showing feedback and check on brochures and such. Every 2-3 weeks, send an updated market activity report, and at six weeks, prepare a full CMA and schedule a meeting with the sellers to discuss it.

If your seller feels you're being TOO attentive, he'll probably let you know, but I really doubt that will be a problem!

Any other ideas of reasons to contact a seller? Please share!

It's here, it's here! My new book - it's here! I mean that literally - it's EVERYWHERE in my house. Boxes and boxes of books, everywhere I look. Yeah, it's kinda cool. Strike that. It's so darn freakin' unbelievably cool. I do a little happy dance every time I trip over my boxes and boxes and boxes! (But check back in with me in two weeks as I'm moving all these boxes and boxes to my new place!)

Here's an excerpt from the first chapter of the book... enjoy!

"If You're Not Having Fun Selling Real Estate, You're Not Doing it Right!
by Jennifer Allan

Chapter One 
"What's Fun Got to Do with it?"

Selling real estate can be a blast. All day, every day? Uh, no. There will be days you long for the stability and security of a steady paycheck and regular hours. There will be nights you lie awake tossing and turning, unable to forget that scathing criticism you received from your unhappy seller. You'll have weeks - maybe even months - when you have no idea where your next mortgage payment is coming from. That's definitely not fun... and, unfortunately, something a lot of us can relate to in recent times.

But you'll also enjoy the euphoria of successfully negotiating a tough inspection. Of beating out five other agents for that primo listing without budging on your commission. Of picking up the phone to find a $1.5M buyer on the other end who found you as a result of your blog. Of hearing from your new referred client that your mutual friend said you were "the best." Of being too busy to breathe and then, when you finally come up for air, realizing that you just had a $50,000 month.

Making gobs and gobs of money is fun. Getting steady streams of referrals is fun. Being a master negotiator is fun. Solving problems is fun.

Being an exceptional real estate agent is fun.

This book is going to show you how to have more fun selling real estate by being exceptional at what you do and making lots of money doing it. Yes, you can mix business and pleasure... and have a heck of a time doing it.

First, we'll revisit and expand upon the Sphere of Influence (SOI) business philosophy introduced in Sell with Soul, because having lots of friends is fun, even for introverts like me. Getting business and referrals from your friends is even more fun-more fun than cold-calling, door-knocking, mass-mailing and advertising combined! We'll discuss how the traditional Numbers Game is not much fun at all and how you can change the rules and beat ‘em at their own game.

Moving on, we'll jump into the car with your buyers and debunk most of the nonsense that real estate trainers have been pushing at us since time began. The way we've been trained to "manage" and "handle" and "protect ourselves from" our buyers is a bunch of hooey! Relax, enjoy your buyers, trust your buyers, respect your buyers and they'll be a joy to work with.

Next, we'll spend some time discussing some advanced strategies for marketing, selling and closing your listings, with a particular emphasis on pricing. Trust me, being an outrageously effective listing agent - that is, one who knows how to actually sell houses - is buckets of fun. Being good at turning your listings into paychecks gives you an intoxicating sense of power over your business.

We'll also discuss some of the finer points of being an exceptional real estate agent-covering topics such as win/win negotiating, the right use of systems and effective communication skills.

Finally, we'll wrap things up with some fresh ideas on time management, taking your career to the next level (or conversely, down a notch), firing your clients and much more.

.....................

Want one of your very own? You can buy it from me (numbered & autographed - www.swsstore.com) or at Amazon... I think the Kindle version is already available, or will be shortly.

You can also get one for free, sorta, if you participate in the book release party at my website - just go here for details.

Did I mention how darn cool it is to release a book?

After a week away (thank you Robin!), I'm back in the saddle, talking about turning Prospecting Cheese into Soul... Today's topic is the non-cheesy Open House.

First, allow me to pontificate for a moment that I believe the first priority of any open-house-giver is to attempt to sell that house. After all, someone owns that house and has hired you, or an associate of yours to care enough about his listing to try to sell it. And no matter what you tell a seller ahead of time, he really does expect the offers to start pouring in at 4:05. 

So, just remember that your primary obligation is to the seller, not yourself. Lecture over.

(For a discussion on whether or not to even hold open houses, click here for my series on the topic).

All that said, most of us do look at an open house as an opportunity to pick up buyers. Maybe even sellers. So, how can you do that without resorting to Old School Cheese? (That sound kinda gross, doesn't it?)

My best advice for figuring out what NOT to do is to spend a sunny Sunday visiting other agents' open houses. Egads, some of us are cheesy. Or, if not cheesy, just plain dumb, aka, unprepared. I visited an open house last winter and eavesdropped in as a visitor asked the agent how old the furnace was. The agent smiled brightly and said those magic words: "I don't know, but I'd be happy to find out for you!" This piqued my curiosity, so I actually went into the basement and, get this - LOOKED at the furnace. It was obviously brand new. I'd think that anyone who had ever seen a furnace could tell that. Of course, that would have meant that the agent would have had to have made that long journey down the stairs to see for herself - but clearly that was too much to ask.

I've also heard rumors of agents requiring ID before allowing visitors into the property. Okay, maybe in a multi-gazillion dollar home, but your run-of-the-mill listing? Puh-leeeeeaze.

Do I require sign-in? No, I don't. I just don't feel comfy doing it, but it's not something I advise against. When I hold an open house, I'm looking for quality over quantity. I'm hoping to connect with one or two visitors; someone I have a natural rapport with. When I find that rapport with a visitor, it's easy for me to draw them into a conversation about real estate and most of the time; they ask ME for my card. I like that. If I had people sign-in, I know I wouldn't follow-up unless I felt that rapport, so I just don't bother.

When you hold an open house, pretend that there's a hidden camera watching your every move (who knows?). Don't do anything the seller wouldn't approve of. Don't criticize the house (that guest you're talking to might know the seller and report back, or he might be a seller prospect himself and be less than impressed with your professionalism!), or aggressively direct visitors toward your fancy list of "other properties they might consider instead."  It's far less cheesy (and effective) to be able to simply discuss the market conversationally, rather than push a pre-prepared package on guests.

(If you're enrolled in the SWS Winter of Soul, we'll be doing a thorough discussion of Open House Strategies on January 23!)

Next up... non-cheesy greeting cards...

Couldn't sleep last night. Got up, turned on the TV, flipped thru channels until I landed on HGTV. When I can't sleep, HGTV tends to be my go-to channel since they usually have SOMETHING on besides "paid programming."

Anyway, I got my first taste of The Property Shop with real estate goddess Tatiana. I'd heard that she wasn't exactly the warmest, fuzziest real estate broker on the planet... and, indeed, I doubt she's often accused of being a little ray of sunshine.

This particular show's overall theme was the difficulty of working with friends and family. Okay, fine. You have my attention since that's sorta what I preach about all day long.

The first storyline has Tatiana reluctantly listing an overimproved loft in the 'hood. For a friend. Said friend had been trying to sell the loft for a year, priced at $900,000. No luck. Location sucks.

Tatiana comes in and says two things that made me LOL.

#1 - "Since you're my friend, I'll be honest with you. You're overpriced!"

#2 - "Since you're my friend, I'll list it for you at $895,000, but if it doesn't sell, we'll have to... blah blah blah."

Call me fussy, but since when is "friendship" a requirement for honesty in a real estate transaction? And since when do friends let friends overprice because they're friends?

Maybe I'm just punchy from lack of sleep...

Thanks to those who are sticking thru this series with me! While I think that the process of properly pricing homes is fascinating stuff, I know it's not nearly as sexy as other topics! (Although SELLING your properly priced listing is very sexy, indeed.)

In the previous installments...

Introduction
Step One - Before you price, prepare!
Step Two - Preview, preview, preview
Step Three - Play detective

...we talked about how to effectively preview the competition to figure out where your potential listing falls into the scheme of things.  So, what about the SOLDs?

The problem with using SOLDs in your market analysis is, unless you've been a previewing mad(wo)man over the last eight months, you probably haven't seen the inside of the properties, and now it's too late. So you have to go off the MLS description - a very risky proposition!

But we'll do our best.

Print off all the SOLDs that seem to be comparable, even if they're much higher or lower than your assumption of the market value of "your" listing. Drive by all of them! Pay special attention to the outliers - the ones that seem to have sold way out of whack to the rest of the market, or whose Days on Market statistic is unusually low or high.

There's a good chance your drive-by will reveal the reason for the out-of-line price or DOM. Perhaps there's a commercial building next door, behind or across the street. Or, common in Denver, a corner lot that doesn't have a private back yard, or any back yard at all. Maybe it's a pop-top done wrong and doesn't fit in with the neighborhood. Busy street with a bus stop in the front yard?  

Or conversely, you might see that it has a stellar location with an extra-large lot, a mountain view, or around the corner (at a suitable distance) from a popular coffee shop.

If the reason for the outlying price and/or DOM isn't obvious from your drive-by, go line-by line through the MLS listing. Is it missing a garage in a market that expects garages? No basement? One bathroom? Obviously, if the interior photos show that it needs work, that's relevant. Check the showing instructions to see if there are any obvious limitations on access.

If all else fails, and you really feel a particular house is a good comparable, call the listing agent. Hopefully they'll be helpful in helping you understand why the house sold at the price it did. Or, maybe not. But give it a try.

It really is the outliers that give you the most grief when looking at the SOLDs. There probably are some sold listings that fall right in line with what you're thinking the price of your listing ought to be, but the ones that don't give you fits. The more research you do on these outliers will not only make your CMA stronger, but will give you an air of confidence when going through your CMA with a seller.

Next Time - Putting it All Together

Here's the third, well, kinda the fourth (if you count the introductory teaser) installment in my series "Pricing Historic Homes in Urban Neighborhoods." You can read the rest of the series here:

Introduction
Step One - Before you price, prepare!
Step Two - Preview, preview, preview

I've had a few comments come in to the tune of "Wow - that's a lot of work - is it really necessary to spend so much time pricing a home?" Well, I say - YES! It is necessary! After all, our product is property, and our sellers pay us darn good money to know our product and move THEIR product off the shelf... so I believe with all my heart that we owe it to our future adoring fans to do our homework and make the most knowledgeable recommendations we're capable of.

Although... we'll never be perfect. Sigh.

Back to Pricing.

In the last installment, I talked about how important it is to preview preview preview. The more competing listings you preview, the better sense you'll have of where your listing falls into the mix.

Remember, the houses you're previewing are 1) the competition for your listing and 2) houses that haven't sold.

Why is it important to check out the active listings? Some agents don't preview because they don't think the active listings are relevant. "All that matters is SOLD." Eh, I disagree. First, what's SOLD is not competing with your upcoming listing, and when you're dealing with older homes, buyers don't always have a lot of options that meet their criteria. In many cases, the buyer will only find one or two homes that even come close, so knowing what they're comparing your listing to is critical.

Second, it's important to know WHY that active competition hasn't sold. Especially if it appears to be "priced well." You'll never know for sure why a house hasn't sold by looking at the MLS, although you may have your suspicions. It's not as if the listing agent is going to tell you that the house reeks of cat urine or point out that there's no bathroom on the main floor.

So, when you're previewing, ask yourself...

• WHY hasn't this house sold?
• WHAT makes it superior (or inferior) to "my" listing?
• HOW could the listing agent do a better job marketing this home?
• WHO is the ideal buyer for this property and is it the same ideal buyer as "mine" will attract?
  (I can't think of a "when" or a "where," so I'll move on).

Training yourself to ask these questions at every house you preview makes you a better previewer, and therefore, a better pricer. It also helps you to remember each house so you can speak intelligently about the competition with your seller when discussing pricing, as well as down the road when that homes' status changes (sells, withdraws or reduces the price), you'll be able to nod and say to yourself, "Hmmmm, I thought so!"

Speaking of down the road... this is another important reason to preview. When or if the competition sells, you'll be familiar with it in case appraisal problems come up on YOUR property and the appraiser wants to use comparables that aren't appropriate. If you've been IN all the comparables, it's much easier to make a compelling case!

Okay, ‘nuff about previewing. Next time, we'll talk about how to evaluate the SOLDs in your CMA to help you price your historic home in your urban neighborhood!

Just another installment in the series: Pricing Historic Homes in Urban Markets...

Introduction
Step One

In the last installment, I recommended that you always, always, always drive by your subject property before doing anything else. If you can get inside, so much the better...

So after you have a good visual of your subject property, it's time to go check out the competition - otherwise known as "previewing." (If your market frowns on previewing, and many do, please share with the audience how on earth you properly price homes!).

When I interview to list a property, I often find myself bonding with the home, to the point where it's almost as hard for me to be objective about it as it is for the sellers. I really have to fight the temptation to be overly critical of "my" listing's competition, while excusing "my" listing's challenges and flaws. Sometimes I'll take another agent with me on my previewing tour to help keep me objective.

SELECTING THE HOMES TO PREVIEW
Which homes should you preview? In a word (okay, a phrase) - as many as you can. Even if they aren't exactly comparable. With every house you tour, you gain a little better grasp on the up-to-the-minute marketplace, which makes it much easier to pinpoint the proper price range to recommend. It just happens naturally. As you look at the competition, you'll start to get a feeling for where your listing falls in the scheme of things, and the more you look at, the more confident you'll be in that feeling.

I try to preview at least 10 houses when I'm pricing a home. Sometimes I'll get lazy and only hit five - and I always regret it. It seems that it's right around the sixth or seventh house that I start to trust my gut about pricing. And that gut feeling is further confirmed on the eighth, ninth and tenth.

Depending on my price range, I'll preview all comparable houses within $50,000 (on each side) of where I think my listing will fall. By "comparable," I mean homes that offer similar square footage for the money. I probably won't preview a 1,000 sqft Bungalow if I'm listing a 2,000 sqft Victorian; they just won't attract the same buyer, even though they may very well be priced similarly. I always preview any homes within one block of my seller's property, even if they aren't comparable at all. It's just good practice in case the seller asks you about it.

Always preview the low outliers. A "low outlier" is a house that looks good on paper, but seems to be a screaming deal. You need to know why it's priced so well... but hasn't sold. There probably is a good reason. If there isn't, then this is the listing to beat. But we'll talk about that later.

How about the high outliers? The houses that are priced way above the rest, which are probably getting your seller all excited? Look at those, too. Chances are that they're just grossly overpriced (and the more houses you look at, the more sure you'll be of this). If they aren't overpriced, there's something really fabulous about them, and you need to know what it is.

As you're setting your previews, note if any homes are difficult to show. That will definitely affect market value. And frankly, if they are, I'll skip them. Lazy? Maybe, but on the other hand, a difficult-to-show home is not going to be comparable to MY listing because I don't take difficult-to-show listings!

Effective previewing in an urban market entails a lot more than just looking at a bunch of homes. Sure, that's what you're going to do (look at a bunch of homes), but in order to really evaluate the information you're gathering, you need to go in with the heart & mind of a detective.

We'll talk about that next time.

Earlier this week (or maybe last week?) I promised to do a little series with tips on how to properly price historic homes in urban markets. Here's where I promised that - you might want to read it first.

Got distracted by conversations ‘bout Real Estate Reality Shows, but here I am again, back to the more mundane issues of our daily grind... pricing homes to sell. Yawn. (I say that a little sarcastically; I totally love this stuff).

Pricing historic homes in urban markets is a bit (a lot?) more time-consuming than pricing newer homes in planned developments. But, at least to my way of thinking, it's a whole lot more fun! Hope you think so, too...

Step One is to Drive by the Home. Never, ever, ever begin the pricing process until you've at least driven by the subject property. You need to have an accurate mental picture of the home and its general location on the planet in order to take the next step. When you drive by, be sure to look for any locational challenges such as nearby railroad tracks, overhead high-tension power lines, undesirable neighbors (either commercial or residential) or obvious parking issues. If the home has an alley, drive through it to see what the back of the house overlooks.

Very few older urban homes are in a perfect location; almost all have some locational "amenity" that buyers will object to. You need to be aware of any such objections upfront. On the other hand, if the subject property IS in a perfect location, that's something you need to know as well, because most of the comparables you'll be using won't be.

While we're on the topic, it's far better if you can get inside the house before you prepare your CMA. I usually handle this by doing a 2-step listing presentation - the first being an information-gathering/rapport-building meeting and the second focusing on the current market - i.e. pricing. (Actually, I do a three-step listing presentation, but I'll talk about that later).

That said, whether you do a one-step, two-step or even three-step listing presentation, never meet face2face with a seller without first, driving by the house, and second, perusing the relevant market data online. You need to be at least conversational about the local market, even if you haven't done your detailed research yet. Remember, the general public thinks all we do all day is drive around and look at houses, so if you stutter, stammer and hedge when the seller asks you about his neighborhood's market activity during your first meeting, he'll certainly doubt your professionalism and expertise.  Being able to casually toss out a few neighborhood statistics or hyper-local market factoids will do wonders for your confidence and credibility.

If there are any homes for sale or any that have recently sold within one block of the seller's home, know the details of the listings or sales, even if they aren't comparable. Your seller knows all about them and he'll expect you to as well.  

Homeowners in urban markets tend to be pretty enamored with their neighborhood and will expect their real estate agent to be, too. So, be as prepared as you can, as early as you can.

Next Time - Step Two - Gentlemen (and ladies), Start Your Research!

The 2009-2010 Winter of Soul Kicks off November 18th! Click here to read more