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.

Mastering the Buyer Inquiry

Yesterday, on the regular Wednesday Help-U-Sell training webinar, we worked on the  Buyer Inquiry.  I think this is one of the more critical moments in the client life-cycle, if not the most critical.  It’s the place were all of the power and energy of the marketing program falls right into the hands of the person answering the phone.  This is the Arena for your real estate career, where it all happens.  It’s the Moment of Truth you will either leave with the beginnings of a client relationship or leave with nothing.  It is clearly where the rubber of all your preparation and hard work meets the road.  I am absolutely convinced that this is the single most important skill to polish if you want to increase your production and your own bottom line . . . and I’m not kidding or puffing the goods.

Think about it:  if 1 in 10 buyer inquiries make it to the closing table, how much better would your income be if 1 in 5 buyer inquiries made it to closing?  Right:  Twice as good.  So, without even listing more or improving your closing ratios, you could double your income right now by mastering this little five to ten minute phone conversation!

You are in business to help people sell and purchase real estate.  Your measure of success is closed transactions.  You spend thousands of dollars each month to attract the buyers and sellers who will fuel that process.  The Buyer Inquiry phone call is the bridge that connects all of  your marketing dollars with the big payoff of a closing.

Think about your car for a moment.  You have an engine under the hood.  It’s powerful, but all by itself it’s not going to take you anywhere.  To GO, you have to have something else:  spinning wheels. Of course, without the engine, the wheels don’t spin and you still don’t go anywhere.  In your car, there is a contraption that sits between the engine and the wheels that translates the power of the engine into the spinning of the wheels and it’s the Transmission.

In your office, Marketing is the engine.  It powers everything.  The end result, the spinning wheels, are closings – that’s what we want.  But without a strong transmission – the well executed Buyer Inquiry call — we don’t go anywhere.  Let’s put some numbers to that.

Let’s assume it costs $85 to make the phone ring one time in your office with a potential buyer on the line.  Now, I didn’t just pluck that $85 from thin air.  I’ve been working with brokers on operational issues like this for 30 years and I can tell you those who did the math were usually surprised to discover that every buyer inquiry cost between $80 and $100 dollars to generate.  If you were to add up everything you spend to market your company and then divide that by the total number of buyer inquiries you receive over a period of time, you’d know your own cost . . .

So, everytime you pick up the phone and it’s a potential buyer on the other end, just picture that you’re holding about $85 in your hand.  You can either toss it in the trash can . . . or you can INVEST it in your business by capturing that buyer lead.  The payoff for capturing the lead can be very large:  like about $6,000 – that’s what the average buyer side commission is in Help-U-Sell today.

Of course, you know and I know you’re not going to get every single buyer inquiry to the closing table.  In fact, you probably won’t get most of them.  But let’s just assume it takes 50 buyer inquiries to create one closing – then your cost to create the closing (not counting your time showing, negotiating and handling details) is $4,250 (50 inquiries X $85 per inquiry), and that leaves a pretty small return at the end of the day . . . one for which it’s probably not worth staying in business!

So, let’s see what happens when we start doing a better job on the phones.  Let’s assume for every 10 buyer inquiries we receive, we are able to get one to closing.  Then our investment (at $85 per inquiry) is $850 and that’s starting to look like a pretty good return:  invest $850 to receive $6,000?  Pretty good.

But, I think you can do better than that. I believe if you work on the Buyer Inquiry diligently and continuously, you can get that down to 1 in 5.  And now your investment is $425 (5 x $85) and your $6,000 return is more than $10 for every $1 invested in marketing.  Now that’s a business worth having.

At Help-U-Sell, we have a tool for capturing that buyer inquiry and turning it into a prospect.  It’s the Buyer Data sheet and it is utterly simple and brilliant at the same time. You owe it to your income, your career, your office, your family . . . but mostly to yourself, to practice handling incoming calls every week (if not every day). If you are a broker/owner, make role play of the Buyer Inquiry part of your company culture.  Do it every week, several times a week.  Do it so often that the natural discomfort that comes from exposing your skill level before your peers goes away.  Do it until it just becomes what you do in your company.  If you are an agent, make a pact with a partner.  Commit to regular focused practice on this one key skill.  Role play, critique, try different scenarios.  If you do, I promise:  you’ll see a corresponding increase not only in your numbers of buyers, transactions and closings . . . but also in your income.

Pugnacious Practice

Yesterday evening, I took Homer out for a long walk to Balboa Park.  We made our way to one of his favorite spots, the Redwood Circle.  He loves this little open lawn surrounded by big trees because it is home to dozens of grey squirrels:  his favorite stalking target.  He’d just spotted a plump adult and the two of them were in a frozen stare-down when I saw a couple of guys coming down the hill carrying a gym bag.  They made their way to the center of the Circle and set about wrapping their hands in Ace bandages and then strapping on boxing gloves.  I could tell from the conversation they were speaking Italian.

Next thing you know, they are squaring off, putting the dukes up and flailing away at one another.  I knew this was practice because I’d observed their friendly conversation prior to the fight, but they were really pounding away at one another.  It was as intense and focused as anything I’ve ever seen in the ring.  This heavy sparring went on for about forty minutes with just a couple of breaks:  the first when one fighter split his upper lip and needed a moment to get the bleeding under control;  the second when the other fighter developed a bloody nose.  Each time, when the fists came down, the friendly Italian banter returned.  And each time, after a few minutes to regroup, they returned to more serious fighting.

When they finally finished, I walked over with Homer and learned that they are indeed from Italy, Livorno to be exact, and that they belong to a gym and boxing club there.  They are in America for an extended trip this summer and wanted to keep their boxing skills sharp.  They’d left their hotel a few blocks away and came to what seemed to be the best place to practice:  the park.

I walked home thinking about what I’d seen.  These guys were very serious about their boxing.  I can’t imagine hitting anyone like that unless I was insane with anger; but they weren’t.  They were good friends practicing a violent sport intensely.

Yesterday we were supposed to have a national training session on the Help-U-Sell Buyer Data Sheet and using it to secure working relationships with potential buyers who call the office.  The session was designed to include several role plays and attendees were supposed to leave with the instruction to pick a partner and role play on their own.  I say ‘supposed to’ because about five minutes prior to the start of the session, GoToMeeting crashed;  not just our session, the whole system.  It was thirty minutes before it came back online and by then we’d already put the training off for a week.

Here’s the point:  the way those boxers were going after each other — seriously, intently, nothing held back — that’s the way our guys need to be practicing their phone skills.  Really:  if I could only tell a real estate broker one single thing that would absolutely increase production and improve the bottom line, it would be to work on the Buyer Inquiry and how that call is handled in the office.  Period.  It’s a skill that has to be practiced constantly:  role play after role play after role play.  The best offices I’ve ever seen were ones that orchestrated this kind of practice every week.  It takes constant practice to get over the natural discomfort that comes with exposing your sill level before your peers, but once that hurdle is overcome, the real value of practice comes out.  Practice is serious business with a serious payoff.  You owe it to yourself and your career to commit to it on a weekly if not daily basis.

For a little inspiration, here is a video I shot of these two friends duking it out in the park:

The Mission and the Message

We Help-U-Sell folk are pretty passionate about what we do.  We see ourselves as anything but ordinary.  We have a better idea, one that works better and costs less, and we are very proud of that fact.  We’re not just selling real estate, we’re changing the way real estate is sold.  This sense of mission, of participating in something bigger than the job, becomes a driving force in a Help-U-Sell career.

Talk to Help-U-Sell people and it doesn’t take long before the passion oozes out.  You see the fire in the eyes and notice the quickening of speech.  It’s the kind of thing that’s almost impossible to keep tucked in — as if you’d ever want to.  I think this passion for the mission is one of the reasons our crew is so successful when they get face-to-face with a potential client.  The client sees the excitement, feels the passion and it’s hard to resist.  The fact that our people believe so strongly in what they are doing is one of our great secret weapons.

Here’s the important thing about this:  you can’t manufacture it.  You could go to sales seminars for a month and still not be able to muster this kind of excitement about what you’re doing if what you’re doing is . . . no big deal.  Believable passion for the work comes from knowing that you have something really special to offer, believing you bring something of great value to your customers and seeing your biggest challenge as simply spreading the word about what you do.

In every successful selling situation, there are two sales being made.  Of course, the customer is buying; but so is the salesperson.  Every time a Help-U-Sell person presents his or her program to a consumer, they are drawing on a deep well of belief in what they do, and each time the consumer says, ‘Yes!’ that belief is further reinforced . . . and we get stronger.

There’s a rather cynical phrase commonly applied to passion and a sense of mission in business.  It’s ‘Drink the Kool-Aid,’ and it’s a reference to the tragic events that occurred in Guyana in 1978.  The followers of Jim Jones believed in him to the point that they were willing to drink his poisoned Kool-Aid.  When we tell someone to ‘Drink the Kool-Aid,’ we’re saying they need to suspend their logical skepticism and just do it.

I actually went to a business meeting several years back with thousands of others, where we watched a business leader on the stage mix a gallon of Kool-Aid.  As he talked about his product (which was nothing special at all), he added stuff:  Mustard and Ketchup, vegetable oil and vinegar.   At the end of his presentation as the throng rose to its feet in roaring approval he drank a cup of the stuff . . . and then invited others to join him on stage to do the same.

Listen: There is no Kool-Aid to drink at Help-U-Sell.  There is no suspension of logic here, no misplaced belief in smoke and mirrors.  We have no special effects department, no stunt men.  What we have is real, it is tangible, it makes sense and it can be grasped by most people in a few minutes.  That’s why the passion is believable, why the sense of mission is strong enough to drive us even when the market is challenging.  Our message is the mission.

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