Step 1: Pre-appointment preparation
The work you do before you go to the property will set the tone for how the seller perceives you. Let me explain. You want to be able to show the seller (not tell him) that he is professional and organized. This will allow you to exhibit leadership and authority. People like to be led down the path of a decision, if they value what he says and how he acts. This will lay the foundation for the trust relationship to begin. People will do business with people they like and respect, but they must first trust you. So how do we do this? When you first make the appointment, ask lots of smart questions. Questions help build rapport and show the customer that you care enough to ask about their needs and unique situation. Here are some examples:
-What do you look for in an Agent?
-Tell me about your previous experiences buying and
selling (if they have sold before)?
What are the three most important aspects of selling?
for you?
The questions you ask will show your experience and knowledge (this is not related to time in business). Next, send a letter and an email to confirm your appointment time (yes, both if you can). Include a pre-sale packet with your appointment confirmation. This packet should include information about you and your business that will “pre-sell” the customer. The package should help the client to feel that he knows him before he really knows him. Finally, call the day before and confirm. You are on the way.
Step 2 – Educate the client on why you are their best option:
It is important that you educate the seller on why you are the most qualified agent to list your home today (yes, I use that terminology). The goal here is to show value through differentiation. Depending on your level of experience, you will relate your personal statistics, or by association, your company statistics. The seller cares about one thing here, and that is that you have confidence in what he says. In addition to talking about yourself and your company’s successes, also spend some time talking about:
-the number of buyers you generate and how you generate them
-the number of buyers you have successfully represented
-the number of buyers you personally find who buy your listings
-how you encourage other agents to show your listings
Ultimately, the seller wants to know that you know how to attract buyers to your home.
Step 3 – Educate the seller on current market conditions and future market predictions.
Your job is to give the perception that you know everything about Real Estate. Too often, as real estate agents, we skip this step assuming the seller knows what’s going on. This could be an expensive assumption, which will manifest itself later in the presentation. Be sure to analyze market trends and back up your claims with documentation. This can be in the form of MLS statistics, articles from your local newspaper, and articles from real estate experts (online source). Be sure to discuss:
-time on the market
-list price to sale price ratio
-percentage of properties that are not sold (overdue, withdrawn and cancelled)
-number of active listings (seller’s competition)
-buyer expectations (closing costs paid, price negotiation, etc.)
-typical financing structures that a buyer will use to purchase the item
property.
Step 4: Define how you price a property.
Avoid using the term “Market Value”, sellers don’t like that phrase. Do not produce the CMA yet. You MUST get the seller to understand that, as an agent, you do not control prices, a seller does not control prices, and a buyer does not control prices. The price is established by mutual agreement between the buyer and the seller, period. The evidence we use for that is recent closed comparable sales. A closed sale is a demonstration of a buyer and a seller agreeing on the value of a given property. The use of closed compositions is a very important tool in determining the price and a good starting point. However, depending on whether your market is going up or down fast, comparisons can be misleading. The seller must understand that the price he ultimately chooses will have to be carefully monitored to determine if that price is the correct price. This is done this by deduction. The price is incorrect if there has been a lack of activity, calls, visits, offers and acceptable offers. This can take two weeks or two months to determine, depending on your market. There are four levels of activity:
a) no show
B) Projections
C) Unacceptable visits and offers
D) Exhibits and offers acceptable.
At this point, you are simply educating the seller on the different scenarios. Don’t discuss specific prices on your property yet.
Step 5: Tell the seller how you get paid. It’s okay to discuss this, since the seller is the one who pays.
Make sure the seller understands that you are being paid as a percentage of the actual sales price. The reason you make this clear is to remove any further objections about the correct price (which is usually lower than what the seller wants). Indeed, the lower the price, the less you are paid. As an agent, he always told the seller (jokingly) that he wanted all the properties to be worth much more.
Step 6: Educate the seller on the “shady” tactics some realtors use to get a listing.
Tread lightly here. You do not want to tarnish our industry and your reputation by directly accusing individual agents or companies. That being said, don’t hold back with generalities. Let me list a few:
-Agents will quote at the seller’s price, making the seller the expert, this is back
in front.
-Agents will be listed high only to get a yard sign to attract more listings, not
buyers
-Agents will be trading high and their only focus will be getting a price reduction
before the seller decides to cancel.
-Agents will say they have a buyer waiting for a house like this, just to get
the list
-The agents will reduce the commission because it is the only tool they have to attract
the seller to list, this is the worthless approach. because the seller doesn’t
pay a commission unless the property is sold. The agent can reduce to 1%
but if it doesn’t sell, it’s an empty promise (trick).
-Agents will tell sellers that they can get more money. I ask again how? Tea
the buyer will ultimately decide the price of the offer (with the advice of his
agent) and then the seller has to agree.
-The agents declare that they are experts in the area because they have more
listings They actually have the most unsold properties at any time.
-Agents declare that they can sell the property faster. Again, I ask how?
Can they produce a buyer out of nothing? I do not think.
Agents using the aforementioned tactics take advantage of the seller’s lack of knowledge. Remember, if the closer agrees to any of these offensive sales tactics, it is only because he has not clearly communicated to you the repercussions of his actions. Listing with the wrong agent at the wrong price will only prolong the inevitable price adjustment. In addition, the seller will have made one, two, three or more mortgage payments and still will not be able to sell the seller’s property.
Step 7: NOW present the facts of the CMA and the Net Sheet.
If you’ve done some thorough work on steps 1 through 6, you’ll find the seller much more cooperative and you’ll have a better understanding of how to price the property. Just a piece of advice here: don’t associate yourself with the price by saying “I think the price should be…”, instead say “The market shows us that the price should be… Remember, we don’t control the price, the market it does.
Step 8: DO NOT proceed with the presentation unless you have established and agreed on a price quote.
This step is critical. If you continue, the hurdle you will have to overcome will be the price. If you can’t get the seller to agree with you and you’ve used logic and truth to try to overcome his objections, pack up your gear and walk away. Hard to do, but you’ll feel so much better about yourself knowing you did the right thing. Now you’ll have fewer headaches and less stress knowing you don’t have to try to convince an unrealistic salesperson every week to give you that elusive price reduction. The advantage: now you have more time to relax or more time to search for more motivated sellers
Once you’ve established and agreed on a price, discuss the marketing and exposure of the property, and then ask the seller to sign the listing. As agents, we must understand that sellers are normal in their search for the highest price. Our job is to educate them using truth and logic. Remember, the most important part of listing submission is how you price, if the seller trusts and understands you, the listing will be yours at the right price.
