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Archive for Value of Realtors

The Art of the Deal: Marketing to FSBOs

Marketing to FSBOs: Art of the Deal

When I see a FSBO sign in someone’s yard, I always feel a bit sorry for them. Not in a condescending way, simply because I know they are leaving money on the table. And because I know they are getting themselves in over their heads.

Homeowners don’t seem to understand everything it takes to close a deal. I think that represents a huge marketing opportunity as you reach out to FSBOs this summer. Letting a seller know who has to be involved in a home transaction and what it takes to make things go smoothly can really open their eyes.

First Part of the Deal: Time

Homeowners don’t realize how much time it really takes to market a home correctly. Simply placing it on the MLS is not enough to get a great offer. You have to take professional pictures, create marketing materials, and spread the word.

The value you bring as a Realtor® isn’t just your time and money. It’s also your network. You know other real estate agents who represent buyers. You know who you can contact to get great Just Listed and Just Sold postcards. You have connections on social media and through your website that can help you sell a home.

A homeowner doesn’t have these specialized connections. They also don’t have the time, money, and expertise it takes to market their own home effectively.

Second Part of the Deal: Negotiating

Do you know how to drive a hard bargain? Do you know exactly how to price a home to maximize the value to the homeowner? If you’re a Realtor®, your answer should be a resounding YES! But most homeowners cannot say the same.

Negotiating starts with setting the right price, which takes market knowledge and business skill. Then, you weed out the looky-loos and negotiate with serious buyers. Sometimes you need nerves of steel to stand your ground against an aggressive buyer’s agent.

Let’s be honest. People are afraid of negotiating over a car. Dealerships market themselves as “no haggle” to attract customers. What makes homeowners think they can handle negotiations on a house, which is worth 10 times as much, by themselves?

Of course, you can’t say things that way in your marketing outreach to a FSBO, but you can point out that negotiating is hard on small things. It’s even more difficult when hundreds of thousands of dollars are at stake. A buyer’s agent won’t respect a FSBO and may take advantage of them. Having a Realtor® on the seller’s side offers protection.

Third Part of the Deal: People & Paperwork

Remember when I mentioned how much your network is worth? Your sales network is only half the story. The people you know that help you close the deal are equally valuable. As I mentioned in a previous post about the five people you should know, a great Realtor® is well-connected.

The connections you have with mortgage brokers, home inspectors, insurance agents, and escrow officers are extremely valuable to a seller. They almost certainly don’t know how to connect with high-quality professionals and may be in for a shock when an inexperienced inspector or escrow officer scuttles a deal.

Then, of course, there’s paperwork. The mountain of paperwork and disclosures required to sell a home would intimidate anyone, and it all has to be done right to protect the buyer and the seller. Without proper documents, a seller may be hit with extra fees or find themselves on the hook for post-sale repairs. Having a professional prepare and execute the closing documents is a huge relief for a seller.

You’re Worth More Than You Know

The next time you’re reaching out to a FSBO, look over all the value you bring to the table. Consider how much training, experience, and knowledge you bring to a transaction. You have mastered the art of the deal.

That poor FSBO doesn’t know what he or she is missing. But with the right marketing focused on the many services you provide, including time, negotiation, your network, and making the transaction go smoothly. How can a seller say no to that?

If you’re ready to reach out to FSBOs in your area, let us help. We have a variety of FSBO marketing postcards that can help you connect. Check them out today!

Prove the Value of Your Commission in Any Market

Prove the Value of Your Commission in Any Market

In some areas of the country, real estate is moving very quickly. Unfortunately, with a strong seller’s market, there’s a lot of competition among Realtors® for listings. As a result, many Realtors® feel a lot of pressure to cut commissions in order to win business.

Of course, your commission is your livelihood, and once you cut it for one customer other will find out and expect the same. So how do you keep from cutting your commission in a seller’s market – or any market?

The simple answer is to show clearly how your commission is used to benefit the homeowner. Also, don’t be afraid to remind them that commissions are your only income, and you deserve to be paid for your work like they do.

Here are some steps you can take to prove the value of your real estate commission in any market.

Have a Premium Marketing Plan

The first step is to show clearly what you will do for the seller as a full-service agent. Having a premium marketing plan ready to go and detailed for the client is vital.

When sellers see your real estate service as generic and able to be done by anyone, they tend to expect mediocre performance and focus heavily on price. Instead, set out a clear plan of action that makes it obvious that you are not “just another agent” and really have unique value to offer.

Here are some of the key components of a premium real estate marketing plan:

  • Print marketing – using a series of postcards to draw interest in their property. We recommend a series that includes “coming soon”, “just listed”, “open house”, and “just sold” to maximize exposure. Be sure to indicate the importance of professional photography here as well.
  • Online marketing – beyond just listing the home on the MLS, what will you do for the listing online? Ideas include Facebook ads, featuring the home on your website, and creating professional walkthrough videos. Focus on your unique use of technology especially online.
  • Reach with other Realtors®. Most buyers have buyer’s agents – how are you able to reach out to them? Are you part of a real estate network that you can advertise the listing to? Does your brokerage have a national or international presence that can be leveraged? Do you have access to overseas real estate agents? Professional publications or magazines?
  • Personal Touch. Will you do door-to-door in a specific neighborhood for their listing? A specific number of calls? The personal touch is one of the things that will really set you apart from discount automated brokerages.

Have a Commission Defense Script

Because sellers are often used to being offered a discount, it’s very likely to come up during a listing presentation. In fact, many online home-selling resources “help” homeowners “avoid being taken advantage of” with premium commissions.

As a result, you need a clear non-threatening script ready for when sellers ask you for a discount. The script should match your style and personality. Here are some ideas:

  • Ask, “Mr./Mrs. Jones, don’t you think it’s best to have a strong negotiator on your side when you sell your home?” When they say yes, say, “So if an agent can’t even stand firm on their own livelihood, why would you trust them to maximize the sale your home? Besides, the commission helps pay for…” and then highlight the marketing plan.
  • Say, “Mr/Mrs. Jones, this is my specific marketing plan that will help ensure you receive the best price for you home in the least amount of time. If you’d like a lower commission, perhaps I could find a junior associate or less experienced agent for you who is willing to work for less money.”
  • Talk about the results you get for them and compare your service to other specialties. “If your doctor is operating on you or prescribing you medication, are you going to go with the one who works for very little, or the one with the best results? Why not do the same with the biggest investment you own?”

Break Down Where the Commission Goes

Unfortunately, many sellers don’t realize how the commission process in real estate works. They think that the Realtor® nets the full 6% of the home’s selling price, leading many to believe that real estate agents are overpaid. Here’s a way to help educate them.

First, tell the seller that you charge 3%. Then, ask, “How much do you want to pay the agent who brings an offer? It can be 2%, 3%, 4%, or more. The more it is, the more likely other agents are to bring their buyers here.” Perhaps they say, “3%.”

Then, talk about your three percent. One agent came up with this creative explanation:

“Just so that you understand what happens to the 3 percent that you will be paying me,” he takes three business cards and continues as he removes the first card, saying, “Every agent has to pay their broker part of the commission.” He takes the first card and puts it aside.

He then picks up the second card. “This amount goes to the marketing of your property,” which includes such services as professional photos; video; Web marketing; social media marketing; newspaper ads the agent pays for; brochures; gasoline; and all the other expenses entailed in marketing a home.

He then puts that card aside, picks up the last card and says, “This is how much I get paid.”

He then tears the card in half and says, “But I have to pay taxes, so this is how much I keep.”

He then asks a very important question: “So if another agent offers to lower their commission, where do you think the money comes from? Three percent goes to the other agent, 1 percent goes to their brokerage, and the government keeps 50 percent of what they earn. They’re not going to take food out of their children’s mouths, so the only place where this money can come from is by cutting into the 1 percent that I use to market your home.”

With these three approaches in your arsenal, you’ll be well prepared to explain your value, defend your commission, and educate the seller on how that commission is used. This will prepare you to defend and protect your commission – and your livelihood – in any market.

How do you answer questions about your commission? Share in the comments!

How to Get Consistent Referrals Month After Month

Consistent Referrals Month After Month

Now that the busy summer buying season is slowing down, focusing on getting new leads is more important than ever. It’s no secret that referrals are one of the most important sources of new leads for Realtors®. What may be more unclear is how to get referrals consistently, month after month.

The vast majority of consumers are willing to give a referral right after a transaction. How you ask, and how you follow up on your request, will make all the difference in actually getting those referrals.

Have Value Discussions

Value discussions are times when you sit down with your client and check in to ensure that they are getting the value they are looking for from working with you.

Many times as Realtors® we assume that if we do our real estate job, the customer will automatically be happy. But unfortunately, we’re missing the fact that each customer has different expectations.

Instead, sit down periodically with your clients and ask them if they have any concerns, and then ask them what they love about working with you. When you get them thinking about you in this way, they are much more likely to share that with others.

As an example, a manager asked Louisiana financial advisors to schedule 12 value discussions with clients in a six-week timeframe. The 14 advisors who did so generated 132 referrals from those discussions alone. It’s powerful!

Make Asking for Referrals Part of the System

You almost certainly have certain processes you follow in your business. For instance, you might gather certain information about someone before showing them a property or prequalify a new buyer before showing them a dozen homes.

You can set up referral requests to be part of your system as well. Make it part of the checklist – after closing, contact the customer to ask for a referral.

When you make it part of a system, you’ll be much more likely to do it 100% of the time. And that means you won’t leave money on the table by forgetting to ask.

Ask Multiple Ways

People are busy. They don’t always see a specific request, and even if they see it they don’t always respond the first time.

When you ask in multiple ways, you make it easier for the customer to say “yes” and actually refer someone to you. So, send an email, and then follow up with a postcard. Finally, when you deliver your closing gift, ask in person.

By using three different methods to ask, you’ll be not only reminding them of your request, you’ll be giving them three different opportunities to answer in different ways. No matter how they are comfortable communicating, you’ll hit it!

Give a Specific Context

Too many Realtors® ask very generically, “Do you know anyone who needs a Realtor®?” Many times, even if they do, your customers will say no.

Why?

Because it’s out of context! You’re asking them to think of the whole universe of people they know and figure out who might need a Realtor®. Instead, make it very easy:

“Do you know anyone that you work with who has talked about moving lately?”

Now, they have context. They can think about folks they talk to at work and think about who has discussed moving. You’re much, much more likely to get a yes.

Obviously, you can choose the context that makes the most sense to your client. If they don’t work, ask about their parenting group, or church, or whatever type of community they are most active in.

Getting consistent referrals month after month isn’t rocket science. It’s a matter of talking about the value you provide, asking for referrals 100% of the time, and using different methods of communication. Finally, ensure you give your clients a specific context.

Get started today – order postcards to ask for referrals. Add that to email and in-person requests, and your referrals will be consistent and profitable!

5 Ways to Explain Your Value to Clients

Realtors Value to Clients

So… what do you do, anyway?

As a Realtor®, if a prospect asks you this questions you have a variety of feelings – some less helpful than others. Mostly, though, you just gape at them and try to figure out how to say, “Um, everything?”

Unfortunately, we live in a time where the true work Realtors® do is not understood or respected. This results in clients being over-needy while also asking us to reduce our commissions. Fortunately, you can head off a lot of this if you can clearly communicate your value. So here are three things to say when a prospect or client asks that ridiculous question – “What do you do?”

Be an Expert on Market Conditions and Prices

One of the key elements of being a Realtor®, from your client’s perspective, is your knowledge of the current home market and prices. This includes available properties and price ranges for your buyers, as well as knowing comps for your sellers. Staying up to date on these things at all times – without a computer handy – is not easy. However, the knowledge is vital to your customers’ ability to get the best value out of the real estate deal.

So, explain to your customers and prospects that you are an expert on market conditions, available homes, and appropriate pricing, and that this knowledge helps your clients get amazing value in their home purchases and sales.

Communicate With Everyone Involved In a Sale or Purchase

One thing that potential FSBOs don’t realize is exactly how many people are involved in a home transaction. The other party’s agent, the home inspector, the lender, and the appraiser are just the beginning of the list. You juggle everyone’s concerns and needs with the utmost skill, keeping that burden off of your client’s shoulders.

You can let your prospect or customer know that you get calls and texts at every time of day or night, from clients, lenders, prospects, appraiser, inspectors, and more. By working with you, they avoid this burden entirely. You also capably handle all the paperwork, ensuring that the transaction meets every requirement. This is an exceptional value for your customers.

Schedule Showings and Drive Buyers to Properties

Many new homeowners – and sellers – don’t know the best points of a home. They simply aren’t aware of what to look for. As a professional Realtor®, you help your clients look beyond the shiny finishes into the real structure and layout. You match your buyers with the perfect property that meets their needs, and personally walk them through the options. For your sellers, you contact buyer’s agents, set up open houses, and market their home in dozens of other ways.

When you explain to your prospects the amount of time and energy you put into matching the perfect home with the perfect buyers, they will have a better understanding of your value as a professional.

Guide Your Clients Through Transactions, End-to-End

One of the most difficult situations anyone has to face is uncertainty. For many people, uncertainty is worse than actual bad news. Not knowing what to expect, or what is going to happen next, puts even the most patient people on edge. As a real estate professional, you remove that uncertainty to a large degree for your clients. You help them know what’s expected in each stage of the sales or buying journey, how long it may take, and what will happen afterward. By helping your customers understand what’s expected of them, you remove their fear and help them be comfortable in the transaction.

When you explain – even briefly – all the steps to the real estate transaction and how you will be there for your client during every one of them, most people feel a sense of relief. Many simply don’t understand how complex the transaction is. Once you explain it to them, your value will be clearer.

Provide an Outside Opinion

Too many homeowners and home buyers have unrealistic expectations of the market. By acting as a neutral third party, you help them avoid making some common mistakes, including mispricing their home, offering too low of a bid, or being unable to negotiate a counter-offer. When you are there to give a true look at how others see a home, you can help your client remove their rose-colored glasses and take an objective look as well.

Your unbiased opinion and honest assessment of the market conditions can be the difference between a home selling quickly and never moving at all. Your negotiation skills are the difference between getting a home in-budget or getting an offer rejected outright. When you explain the importance of a third-person viewpoint, prospects will be able to grasp your value more easily.

It’s not easy to put into words exactly why we’re so important to a real estate transaction. We know we are, we just have a hard time expressing it. The five ways above will help you put words to your value, so that you can explain your importance to prospects. Hopefully, this will help you negotiate an appropriate commission from a client who has proper expectations.

How do you explain your value to a client? Share in the comments!