Category: Buyers

Old Scripts/New Scripts

I love ‘scripts.’  I hate ‘scripts‘.  It’s a love/hate relationship.  Scripts are so phoney.  Yet, scripts can be the key that unlocks a great real estate career.  I know:  they unlocked mine.

Way back when dinosaurs roamed the earth (oh no, here he goes again), I was failing as a new real estate salesperson.  I was 25 and most of my buyers and sellers were 40 or better, so let’s just say I had a lot to overcome.  Completely frustrated after six months, I went to my local Board of REALTORS and checked out a set of Tom Hopkins’ cassette tapes.  Do we still listed to Tom Hopkins?  I don’t know. . . Anyway, Tom was very big on LEARNING THE SCRIPT WORD FOR WORD AND NEVER DEVIATING FROM THE SCRIPT!  As if the words had some magical power to make people say, ‘Yes!’

I’d drive around in my car, previewing property, listening to Tom Hopkins, saying to myself, ‘There’s no way I’m ever going to say any of this stuff, it’s not me,’ or ‘it sounds so fake.’  Still, I kept listening; and then the damndest thing happened.  I called on a FSBO (I had such a great attitude walking up to that door:  I knew I wasn’t going to get anywhere with this person because I’d never gotten anywhere with a FSBO before!).  She opened the door and stood there, arms folded across her chest and . . . suddenly Tom Hopkins’ words started coming out of my mouth.  I got the appointment and I got the listing.  Then I sold the listing in a couple of weeks sold the seller a house and listed two family members’ property.  It was the beginning of my success.

I became a devotee of scripts, a script junky.  I studied them all and I started to notice something:  while the early scripts were pretty much sales technique and tricks of tongue to get the other person to do what you wanted (‘I could stop by at 5, or would 7 be better?’ there is no bad answer to that question), the more sophisticated ones were just simple truths. I started noticing that when I learned a new script I was actually clarifying some basic piece of knowledge I already had and learning how to package it powerfully.  Let me give you an example:  my favorite script from 1987:

‘You know, Mr. FSBO, there really are only four kinds of buyers out there.’  (Intrigued, the FSBO raises an eyebrow or otherwise indicates he wants to know more).

‘There’s the first time buyer.  I love  them;  they are so rewarding to work with.  But you know what?  They’re usually scared to death.  I often have to sell them three or four times on completing the purchase they’ve already made.  Plus, they rarely buy directly from an owner.  They need help and they know it.  It’s probably not a buyer you’re going to find as a FSBO.’  (Is that true?  Yes!)

‘Then there’s the move-up buyer.  This is the local person who’s wanting to go to a newer, better, or bigger house.  They’re great buyers too and you know what?  You CAN find them.  They do shop FSBOs because the number one thing on their list of wants is:  it has to be a bargain and they think that’s what FSBO means.  Plus, when they decide they want to buy your house, you know what they have to do before they close?  Right:  sell their house.  Hardly your best buyer.’  (True?  Pretty much).

Third is the Investor or Speculator.  It’s really two buyers but I lump them together.  The Investor wants to steal the property so he can have a positive cash flow when he rents it.  The Speculator wants to steal the property so he can do some cosmetics and then flip it for a profit.  The operative phrase, of course, is ‘Steal the property.’  You can find them all day long, but you probably don’t want to deal with them.’  (True?  I think so — all that ‘steal the property‘ stuff is just packaging the truth that they’re going to want a good deal.)

‘Finally there’s the quality buyer from out-of-town, the transferee.  Now, think about it.  Suppose you were moving to, say, St. Louis, and you’d never been there in your life and really didn’t know anyone there.  Your company is giving you a long weekend to come into town and find a place to live.  Are you going to trust yourself to find the right house at the right price in the right neighborhood?  I sure wouldn’t.  And transferees rarely do. They seek the professional help of a REALTOR who can keep them from making a big mistake.  The transferee is a buyer who rarely looks at FSBOs because they don’t have time and they don’t know enough on their own.  It’s a buyer that’s largely unavailable to you.  And it’s the buyer I can bring.’  (True?  Mostly.)

All of that was stuff I already knew back in 1987 on some level.  The ‘script’ was just a way of clarifying it and packaging it.

Today I think scripting is mostly about first knowing your business, then about finding ways to present what you know powerfully.  I think it’s fine to learn a Mike Ferry or Brian Buffini or David Knox script, but while you learn it, tie it to your base of knowledge.  Make it your own.

Today’s scripts are different.  In the old world it was all about ‘how can I get this person to buy or sell.’  Today it’s all about solving problems.  Seems everybody’s got some kind of real estate problem and our scripting needs to be focused on this.  For example, I got a glimpse of one that went something like, ‘You’re like so many other homeowners today who find themselves upside down and possibly  unable to keep up mortgage payments.   What you need to know is that you have options.  In fact, I have nine strategies that can help.  When can we get together to review them?’  I don’t know what the nine strategies are but I’ll bet one of you does.  How about sharing it here in a comment (or via email to me if you’re worried about your competitors stealing your silver bullets).  What are your favorite scripts today?  What seems to carry the most weight when you speak to a buyer or seller?  I’d really like to know.

Financing Home Mortgage and Repairs At Once

The  FHA 203(k) mortgage program is the bomb (that’s for the gen Y’rs out there . . . for us Flower Children, it’s way cool).  With this program, a home buyer can choose a property in need of repair and finance the cost of fixing it up right in with the mortgage.  The repair and renovation money is held in escrow after closing and is doled out as repairs are made.  This is beneficial to the home buyer as repairs are financed under the same terms as the home mortgage (usually that means lower interest, longer term and, therefore, lower payment).  It also makes the home in need of serious repair — often the best buy in the market — an option for the average home buyer.

But here’s the catch:  in order for this great program to work, everyone has to know their stuff!  Most mortgage people have never done a 203(k).  Most agents haven’t a clue about how to go about putting together a deal involving this kind of financing.  Home buyers and agents are stymied when they contemplate how they are going to coordinate all of the bids and contractors involved in a project like this.  Suddenly it looks  like a 203(k) purchase is out of the question for most.

If you’re interested, however, there are some great resources out there.  My San Diego area B of A Mortgage Loan Originator, Rob Webber,told me he has access to a specialized team of Mortgage Reps who do nothing but 203(k) loans.  That’s a good start.  And today I read about REbuildUSA, a network of agents and lenders who have trained and become certified in working this kind of transaction.  REbuildUSA has just designated Lowes as their remodelling partner.  Now, working with a REbuildUSA certified agent, a purchaser can go into Lowes and get their entire project bid, from materials to contractors and schedules.  It’s one stop and all the gritty work is done.

I think this is an outstanding development.  We’ d all like to work these kinds of transactions (and they will become more prevalent as time goes on) but few of us have the time or resources to figure it out on our own.  REbuildUSA has created a path on which to run and has simplified the process of getting home buyers into rehab property.  To learn more about their program, click HERE.

Is Proper Pricing Less Important Today?

Pricing is the topic for today’s training session at 11 Pacific Time. It’s always been a favorite of mine. You see, I learned early on in my career as a Salesperson that the best marketing I could do for my sellers was to convince them to price their home as close to market value as possible. All the marketing you might do, all the fantastic, cutting edge promotion you might undertake, is meaningless if the property is overpriced. Excessive marketing does not make a home worth more. I know: it’s a simple concept, one that is pretty obvious. But it’s striking how many sellers don’t realize it.

(I recently watched Maria Powell doing a listing presentation. At one point she said to the seller, ‘I’m sorry. I really wish I could make your home be worth $400,000. But I can’t. The best I can do is about $370,000 — that’s what the Market Analysis shows.’ )

I have always been a strong advocate of NOT taking overpriced listings. I look back 5 years ago and see that overpriced listings took longer to sell and therefore gobbled up more of an office’s precious marketing dollars. Truth is: every day you have an active listing on the market, it costs you money. And that’s just the tip of the iceberg. Think about the aggravation of dealing with an unrealistic seller wanting to know why you haven’t sold her (overpriced) house yet. And what about your reputation? So what if you have the best deal in town if your listings sit and sit and sit, unsold.

I always urged brokers and salespeople to fight the good fight, do everything they can to get the seller to acknowledge reality and then, if a realistic price cannot be agreed upon, to get up and walk. Don’t take the listing.

Today, I have to modify that stance just a bit.

It is still clearly in the seller’s best interest to price the property properly and we’re all about taking good care of our sellers (and buyers), urging them to do what’s best for them. But ultimately, what’s in the best interest of the Broker?

Every week we ask top producers where their buyer closings come from. Over and over they say the same thing: sign calls, ad calls, Internet leads, Open Houses . . . in almost every case, the buyer comes to us because of our listing inventory. So it’s clearly in the Broker’s best interest (as well as the best interest of ALL the sellers whose homes we have listed) for the office to have as many listings as possible. Listings are the net we cast into the marketplace to capture buyers.

So, what’s really wrong with taking an occasional overpriced listing? Even an overpriced listing will generate calls, right?

Here’s my new point of view:

If you’ve fought the good fight, if you’ve made as compelling a case as you possibly can and the seller still wants to overprice (that’s overprice, not grossly overprice), I think you might take that listing if:

  • You make it very clear you think it’s too high. By being clear when you take the listing, you eliminate the call two months down the road wondering why you haven’t sold the property.
  • You set a date four to six weeks in the future to revisit the pricing issue.
  • You ask every agent who tours or shows the property what they think of the price and you share that with the seller.
  • You give the Seller a Listingbook account or sign them up for some other ‘First to Know’ program so they can see what other homes are selling in the neighborhood, how the competition is priced, etc.

As an agent years ago, I found it helpful to put my unrealistic sellers in the car and take them out to see the competition.  They usually came back with a new appreciation for reality, especially if some of the competition were shiny new homes with flashy models.

Today, success in real estate is all about the buyer.  Can you attract buyer inquiries and convert them into prospects and then into sales?  Anything you can do to attract buyers is beneficial and nothing attracts them better than listings.

Question

So, ARE you more than a lockbox key and a fill-in-the-blanks purchase agreement? It’s all about the value you bring to the transaction from a buyer’s perspective. I think your value is huge, but I’m curious to know what you think. Why should a buyer choose to work with you rather than anyone else? Or rather than go it alone?

What is Value?

I am a home buyer.  I am looking for my dream home.  My list of wants is large and a little vague.  My list of needs is much smaller and well defined.  My past experience with REALTORS hasn’t been bad . . . but I’ve never been through a transaction without gasping a little when I saw the commission expense on the HUD-1.  I’ve been cruising the Internet looking at listings for a couple of months and have sent  inquiries on a number of properties.  I have been surprised at how often my inquiries have gone unanswered (!).  I have yet to stumble across an agent who seemed to have much to offer in my home search process.  I mean:  everyone was nice, but I didn’t get the sense they brought much to the table . . . except maybe a lockbox key and a fill-in-the-blanks purchase agreement.

This buyer – or one very much like him –  is probably going to contact you today.   How will you secure a working relationship with him?

It’s pretty clear that if you ‘wing’ it, relying on your sparkling personality and natural gift of gab, you’re probably not going to get anywhere.  You’re going to have to do something different than all of the other agents he’s already contacted.  Here are some ideas:

  • Use the Help-U-Sell Buyer Data Sheet.  It is designed to help you lead a caller through discovery of the tremendous value you bring to the transaction.
  • Practice, practice, practice . . . but do so before the phone rings.   Don’t think you’ll polish up your phone skills when this buyer calls.  They need to be polished before you even say ‘Hello.’
  • Answer the caller’s questions, but never answer without immediately asking a follow-up question of your own.  “That home has 3 bedrooms, how many were you looking for?’  ‘It is priced at $289,500,  in what price range were you looking?’
  • Your goal is to gather as much information as possible, demonstrate your value, and build rapport.  Conversational open-ended questions will help you do that.  Open-ended questions are ones that cannot be answered with ‘yes’ or ‘no’.

Look for opportunities to bring value to the process.  Value is a perception.  It’s something the caller either perceives or doesn’t perceive.  It’s true that you can sometimes make the ordinary seem valuable by presenting it in a special way.  For example, Al Savastano used to refer to his Conference Room as his ‘Media Room’ when asking prospective buyers to come into the office.  ‘I’ll reserve our Media Room for you and we’ll go live on the MLS and search for properties.’ That sounds much more special than, ‘Let’s meet in the Conference Room and go through the MLS.’   Presenting things in the best possible light is fine.  However, value is more than packaging and language.  Value is real.  It’s real stuff the potential buyer can use to make the search process easier or more enjoyable.  Here are some examples:

  • Your knowledge of inventory.  If, after getting a clear picture of what the caller is looking for, you can rattle off 2 or 3 or 4 properties you’ve seen that match, the caller will see you as the area expert — someone who will bring great value to the home search process.  I don’t believe you can ever be that quick or clear on the phone unless previewing inventory in your marketplace is part of your weekly routine.  You have to physically go out and see the property.
  • Your knowledge of finance.  You don’t have to be a loan officer but you should know the basics of what it takes to qualify for a mortgage today, what typical downpayments are, how to calculate a payment on the fly and so on.  Meet with your favorite lender and ask them for ‘rules-of-thumb’ you can use when talking with potential buyers.  Things like, ‘If you have decent credit, most lenders will consider a mortgage that’s about 3 times your annual income.’  ‘At today’s rates, you’ll pay about $5.20 per $1,000 borrowed on a 30 year fixed rate mortgage, so if you borrow $200,000 your payment will be about $1,o40.’  NOTE:  do not use the two examples I just tossed out.  You need to talk to a local lending expert to get good factors for your own area.
  • Your knowledge of special programs and incentives.  Many States, Counties and Cities have special programs to encourage home ownership.  They can include downpayment assistance, interest rate subsidies, even preferential pricing.  You learn about them by digging:  constantly ask your lenders if they know of any such programs in your area.
  • A Buyer Consultation where you review the home search and purchase process, get an understanding of the buyer’s wants, needs and capabilities, and create a Real Estate Plan that clarifies what you’ll be trying to accomplish working together.
  • Listingbook.  If your MLS has it, I know of no better tool to give a potential buyer.  Through you, they’ll get real time access to the MLS.  You’ll be able to monitor what they’re looking at and you’ll also have the ability to communicate and share with them through the program.  I’ve never met an agent who took the time to learn Listingbook that didn’t say it greatly improved their ability to convert buyers.  It’s also very helpful on the listing side of the business.
  • Sikku.  Like Listingbook, Sikku provides a search platform for buyers based on the local MLS.  In additional to a traditional website, however, Sikku allows them to get the information on their smart phones, so if they pass a home for sale and are curious, they can easily pull the information right there in the car.
  • Free List.  Whether it’s weekly, daily or at the moment, a list of properties for sale with addresses and prices can be very valuable, especially when some of the properties are not in MLS.  There are many areas were a Free List of Foreclosed Properties is seen as valuable.
  • A mortgage consultation where various loan products are explored and where a pre-qualification letter can be generated.  You want your best lenders doing this for you BUT you want to be present, even if it’s happening over  the phone.  Remember:  it’s about building YOUR value.  The lender needs to be seen as an extension of your business, your service.

There are many other valuable services you can offer potential buyers — these are just some that are on the front of my mind.  I’d love to hear what you’re offering buyers who call your office.  Why not add a comment and tell me what you’re doing.

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