One question always comes up when we talk about the Buyer Consultation:
How do we solidify the relationship after they’ve decided to work with us?
Do we pull out the official Buyer Representation Agreement, the 6 – 8 pages of legalese the State Association of Realtors has created and have them sign it? I hope not. While each State is different, those documents generally say nothing except that you can sue the buyer if they get away from you. And let’s be honest: if they DO get away from you, you’re not going to sue them, are you? You don’t have time for that! So why introduce that scary document at the end of your powerful discussion of the value you bring to the transaction?
Instead, create your own one page list of the things you’re going to do for them and what you expect them to do as they search for a home with you, and then sign it. Call it a Home Buying Pledge. Start by listing, 1-2-3-4, the things you’re going to do for them. Things like put them on a first to know program, give them access to your MLS portal or Listingbook, run a CMA on any property they find interesting and advise them about the value, coordinate and review the results of all inspecitons, and so on. It’s probably about a dozen things.
Then describe how you want them to behave:
*When going to an open house on your own, always inform the agent on duty that you are working with me.
*If you see a home online or in person that you want to know about, call or text me so that I can get that information for you.
*If you come across a For Sale By Owner or non-MLS listing that interests you, let me know. I can get the details and arrange a showing.
All you’re really doing here is emphasizing their decision to work with you and providing some guidance on how to make that relationship work. If you’ve done a good job with the Consultation, reviewing it and getting signatures should be easy, and they’ll be leaving the meeting so confident that they wouldn’t consider making a move without you.
Your job is not to sell houses.* It is to sell representation!**
History lesson: back in the Dark Ages, when I sold real estate, the agent’s value was access to information and available properties. Home buyers didn’t have this information and had to deal with us to gain access.
Today, they have all of the information . . . so if we stay stuck in that old paradigm, our value is our lockbox key – the ability to open the door.
Is the fact that you have a key worth, oh, thousands of dollars?
If you answered ‘no,’ you’d be correct!
So why would any buyer work with you rather than going directly to the listing agent (where they think they might save that buyer side commission)? What is your value?
You may be thinking of a lot of different things you do for you buyers; things like advising, solving problems, negotiating, handling inspections and so on. But what they all boil down to is this:
So, why are we so reluctant to talk with our buyers about it? Why is it so difficult to have a frank conversation about agency and how it affects them, so that they can make an informed decision?
I know. You think that’s all implied, understood and taken care of by that little box you check in the purchase agreement. And I guess, if you’re lucky enough to get them on paper, that little box protects you somehow. But that’s not the point! Talking with your buyer prospects early on about representation makes a strong statement about the value you bring to their transaction. It is why you are worth, oh, thousands of dollars!
My crystal ball tells me that in the not so distant future, buyers will contract with agents to represent them for a fee. The fee may be paid up front or maybe it will be rolled into the transaction . . . but it won’t be paid by the seller. This is a good thing! It’s logical and transparent.
It also means that in order to secure a buyer client, you’re going to have to make a presentation about the value you will bring to their transaction in exchange for the fee they will pay.
So why not act as if that’s what happens today? Why not plan to have a discussion about representation with every buyer before becoming deeply involved? It’s the best way I know to demonstrate your value and cement the buyer relationship.
And by the way – the discussion has a name. It’s called:
The Buyer Consultation.
If you’ve taken Jack Bailey’s Buyer Consultant Training program you learned it. If not, I have a resource for you. Log on to OMS. Go to Marketing & Content and then to the Download Library. Select the Training folder and then Buyer Consultation. In that folder you will find two different versions of ten videos on how to do the consultation. The .Mp4 versions can be viewed online, while the .WMV versions can be downloaded and kept on your computer. You’ll also see another folder entitled ‘Buyer Consultation Software.’ It includes the installation files and guides on how to install and how to use it. The software is an excellent addition to your consultation and makes you look even more valuable.
So: stop thinking that people will gladly pay you thousands of dollars for your sparkling personality and your ability to open doors. Your value is so much more than that! But, they’ll never understand your value if you don’t take the time to tell them. Have the agency discussion – the Buyer Consultation — up front before you invest time and energy.
*’You job is not to sell houses.’ They sell themselves. It has been scientifically proven in several double blind studies that you can’t sell someone a house they don’t want. So stop thinking you sell houses for a living. Your Value lies elsewhere!
**’It is to sell representation.’ I used the word ‘sell’ for shock value. No, you don’t ‘sell’ representation; you present it. And the customer chooses it. And they can’t choose you if you don’t explain what they get when they do!
I don’t anticipate a downturn, market adjustment or recession anytime soon . . . but I do expect one to come eventually. It always does! It’s the nature of our business; it’s cyclical.
The question is: what can you do today to be in position for the next tight market? Of course, I have a few ideas:
Start making contact with Asset Managers at companies that manage REOs. A dozen years ago, that meant attending seminars and conventions and crawling over dozens of other agents to schmooze elusive decision makers. It’s very different today. Making contact usually means going online and completing an application; and then responding when a request for a BPO is issued. It’s a lot easier! And, trust me: your peers are not even thinking about this right now. Beverly Sonnier is in our Friday Coaching Group and it is remarkable that she usually has one or more REO listings in inventory most of the time. So start doing those applications now – and if you need to know which companies to go after, let me know. I have a list.
Decide now how you’ll handle Short Sales going forward. There are probably very few or none in your market at the moment, which makes this the perfect time to consider that process. You may have been an absolute ACE at processing Short Sales during the last downturn. I knew a few Brokers who insisted they loved Short Sales! But do you really want to go through the frustration and aggravation of negotiating with a lender again? I sure wouldn’t! I believe the best course is to form a relationship with a company that specializes in processing Short Sales. You take the listing, you make the sale and then they take over, dealing with the lender and getting to closing. There are a number of companies that do this and it usually costs you nothing. Their fees are generally paid by the lender. I’ll remind you that David Bartels of Help-U-Sell Full Service Realty in Westlake Village, CA has had another company for years that processes Short Sales for other brokers. During the 2007-2012 time frame it wasn’t unusual for him to have more than 90 Short Sales working at once. His team is professional, knowledgeable and this is all they do. Why not reach out and find out about his program – or one of the other ones out there – today.
Start focusing on how buyers are served in your company. They will become the sought after parties in our business when the market shifts. So, how are you marketing to them today? And more important: what are you doing with them once you are in contact with them? Incubation is essential today. Most are taking three months or more after an initial contact before they are ready, willing and able to purchase. So what system do you have for staying in touch in a meaningful way? By the way, typical Realtor blather is usually not meaningful and probably won’t help you cement a relationship. So skip the newsletters, recipes and promotional pieces about how wonderful you are! Instead, put your incubating people on a hot list to be notified any time you take or come across a listing they might like. Touch base once a month with a market update emphasizing things like days on market, months of inventory and appreciation rates. Start paying attention to what’s happening to the buyer leads coming into your office now. What are your conversion rates and how could you improve them?
And, reach out to some of your competitors to find out if they have a referral process. I know that sounds a little odd. But Redfin takes on referral agents in areas where they don’t have a physical presence (and sometimes where they do). Maria Powell at Help-U-Sell Galleria Realty in Tucson is completely buried in buyer leads to the point that she really can’t get to them all! And the lion’s share are from Redfin. There is a detailed process you must go through to become a Redfin partner, but Maria will gladly share her experience with you. Mike Bowling in Yuma just got an invitation from PurpleBricks (of all people!) to become a referral agent for them. Like Redfin, they are looking for people in areas they don’t serve. So who are you hearing about on a National level that doesn’t have a presence in your local market? This would be a great time to reach out and see if you can solve a problem for them!
Your preparation will make a big difference when the market eventually turns and now is a great time to start. Smart sailors mend their canvas when the sun is out . . . so they will be ready when the storm hits.
It’s been nice visiting with you and learning about your move. I understand: we have about 90 days to get this done; and, Dan, you’ll start working in the new location in 2 months. That’s a tight time frame, but I believe we can get the job done.
Now, we have just three things to talk about: the Price, the Product (that’s the house) and Promotion (what I’m going to do to get it sold). What would you like to talk about first?
(Well let’s talk about what you’re going to do and why we
should go with you)
Great. We are a different kind of real estate company. We’re different because we make sense. At the core of our program is the Low Set Fee we charge for our service. It saves sellers thousands of dollars over what they might otherwise pay. My office charges a Set Fee of $5,950 and that’s what we charge everyone, regardless of what the home is listed or sold for. After all, it takes no more time, money or effort to sell a properly priced $400,000 house than it does a $300,000 house – so why should the people in the $400,000 house pay more?
Here’s an example based on the 6% commission many ordinary
brokers charge: the guy in the $400,000 house pays $6,000 more! And what does he get for that additional $6,000?
(Pause) I’ll tell you – he gets absolutely nothing!
We don’t do it that way. With us, both of these home sellers
would pay the same thing: $5,950.
See? I told you we make sense! But it’s more than that. We also charge you based on how the home actually sells. If there is no outside broker or agent involved in the sale – you don’t pay for one.
Here’s the truth about ordinary real estate commissions. When you sign up to pay that big commission you’re
actually signing up to compensate four different individuals: the Listing
Agent, Listing Broker, Selling Agent and Selling Broker. But in ordinary real
estate, you pay that full percentage based commission even if there is no
outside agent or broker involved in the sale; even if you find your own buyer;
even if your listing agent finds the buyer. It makes no sense.
With us it’s very different.
You’re listing with ME. I am the broker. This is my company. I’m not having to pay a listing agent because
I’m your agent. So I’m going to save
you one of those four commissions automatically. Also, If no outside broker is involved, you
don’t pay for one, and there go two more commissions. Now, if one of the Buyers Agents in my office
comes in with a buyer, we do have to compensate them. But it’s not the 2 ½% or 3% the other guys might
charge. In my office we charge the same thing when we bring in a buyer as we do
when we list a property: a Set Fee of
Bottom line: you’re going to save thousands of dollars with us no matter how your home sells.
Here’s a chart that illustrates that. Here, at the top line is our Set Fee of $5,950 – and it doesn’t change no matter how your home sells. Over here on the right is what you’d pay if an outside agent and broker brought the buyer. We have to pay them too, and they charge a lot! I’m recommending 2 ½%. But even if we have to pay them, you’ll still save thousands.
Here’s what happens if one of the buyers agents in my office
comes in with the buyer. You pay your Set Fee, $5,950, and also pay the buyer agent
fee, which is also $5,950 – and you save even more.
Finally, this is what happens when you find your own buyer – and it happens more often than you’d think. You save the most. That savings looks pretty good, doesn’t it?
The key to saving the most is seller participation. We’re the only company that’s going to encourage you to talk to your friends, neighbors and co-workers about your house, to show it to them or anyone they know who might be interested. And if they ultimately buy, all you pay is the Low Set Fee. We’re going teach you how to use your social media accounts to further promote your house and perhaps find a buyer. But best of all – if you’re up for it – we’ll teach you how to hold your own open houses so that you can be open whenever you want – not just when I’m available. We find that sellers who participate like this have a good shot at saving the most amount of money – and that’s what we all want, isn’t it? (Nodding)
I want you to save the most, because the more I can save you the happier you’ll be and the more you’ll talk me up to your friends and neighbors! Seller Savings is my Marketing Plan!
(That sounds great. But how are you going to sell my house?)
I’ll let you in on a little secret: with the maturation of
the Internet, the real estate marketing playing field has become somewhat
level. We all have the same tools – and they
are good tools – and we all pretty much do the same things: MLS – Zillow – Realtor.com – Website – Facebook
– advertising and so on.
But I go several steps farther.
I use short code marketing so that consumers can get information on your home instantly – and also, so I have a way to get back to them immediately to further develop their interest. Let me show you how that works. This is a photo of a sign in front of my listing in the next neighborhood. See that small sign at the bottom? Text 7980 to 209-395-1945? Go ahead and do that on your phone.
Ok, so you got all the information on the house, right? But
look what I get! (shows his own phone) I get the phone number so I can call you
back immediately, answer questions and hopefully set up a showing. Pretty cool,
huh? Technology is only as good as your ability to use it!
In addition, when I start marketing, I get the neighborhood involved.
I’ll be sending postcards about your listing to the 100 homes closest to you.
I’m also going to walk and hand deliver flyers on the property
to your immediate neighbors. You’d be
surprised how often one of them knows someone who might be interested.
I mentioned Facebook.
I use it in a fairly sophisticated way. I’ll create a post about your listing and
boost it so that thousands of people in the local market who have expressed an
interest in real estate see it. When
they click on the ad, they’re going to go to a special website I’ll set up with
all of the details on the listing – that also captures their contact
information so I can get back to them.
I’m also going to create a post for you to use in your own Facebook
and other social media. I’m going to ask
you to put it out to all of your friends and ask them to share it with theirs.
I think you’re getting the picture that marketing is a very
active process for me. And it works,
too. Look at this: this year, according to the MLS, average days
on market is 63. My average is 37. That’s
almost a whole month faster.
Now, let’s talk a little bit about strategy. I use the MLS is a very specific way. First, understand that the MLS is just a
tool. It’s a great tool, but it is
expensive. I use it to expose your home
to thousands of local agents and to tell them they’ll get a nice commission if
they can sell it to one of their buyers.
But we’re all
about saving you money on commissions, remember! What I’m going to recommend is
that we first price your home properly – which I don’t think will be a problem –
then let’s NOT go into the MLS for 3
During that 3 week period, I’ll be marketing your home
exclusively to buyers without agents – and of course, if we can sell to one of
them, you don’t have to pay that outside agent and broker! And to take full advantage of that 3 week
period, you could hold an open house or two yourself. I’ll coach you and it will be fun – I promise.
If, after 3 weeks, we don’t have a contract, we’ll go into
the MLS, but we’ll do it with pizazz!
That first weekend we’ll hold a Grand Open House. I’ll be using Zillow,
Realtor.com, the MLS and dozens of signs to announce the event. We’ll invite
the neighbors and I’ll have flyers delivered to that big apartment complex down
When I’ve used this strategy in the past, I’ve often had a
sale before the house goes public – again, saving the sellers a lot of money.
And if not, we usually have offers at the end of the Grand Open weekend.
You know I could go on and on about this because it’s what I love; but let’s stop for a minute. You seem to get it. I mean, Dan, you’re over there nodding like a bobble head on a dashboard! Why don’t we move on and talk about Price? Sound good? Great.
Use lots of directional signs; say 10 or 12 or more. And get them out a day before, showing the date and time of the coming open house. Remember: you’re not just directing people to your open house, you’re establishing a powerful visual presence in the neighborhood that will help you get another listing and another listing and another listing.
Get your open house information into the MLS in advance. If the event is this weekend, get it in by Tuesday so that the outgoing feed can get it on the various real estate portals in time. Impromptu or seller held open houses can be entered manually into Zillow as late as the day before.
Have your seller claim their home on Zillow. It is an easy process that starts with finding their listing on the site and clicking on the Owner’s View. Have them add a paragraph to your listing about ‘What I Love About This House.’ Also, once claimed, they can add their own open houses to the listing.
Have your seller post the open house on their Facebook page and ask their friends to share it. They can link to their Zillow or Realtor.com listing in the post.
Make a personal invitation to the neighbors. You WANT to meet them, either at the event or on their doorstep prior to it. Plan to walk your flyer/invitation to the 20 closest households. Those homeowners will have real estate questions for you and you may uncover your next neighborhood listing in the process.
Use an open house log to gather contact information. Realbird.com has a great one that enables you or your seller to gather information and save it online where you can access it from anywhere. Visitors are more likely to type their information into a tablet or laptop than they are to scribble it out long-hand. There are a lot of other great tools at Realbird and you should check it out!
How do you build traffic for your open houses? Leave us a tip in the comment section below.