Shut Up and Buy The House Formatting

JUST SHUT UP AND BUY THE HOUSE
JUST SHUT UP AND BUY THE HOUSE

By John Horne
Copyright 2010 All Rights Reserved
Just Shut Up and Buy the House Copyright 2010 All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any meanselectronic, mechanical, digital, photocopy, recording, or any otherexcept for brief quotations in printed reviews, without the prior explicit written consent and permission of the author. EDW-831 Edited by: Elizabeth Marshall Charlotte, NC
CONTENTS
Foreword Preface Introduction Chapter 1 Chapter 2 Chapter 3 Chapter 4 Chapter 5 The Mind Massive Results The Bond That Binds Dont Fall in a Customers Hole Love and Hate Two Emotions to Deal With
ix xiii 1 7 11 25 45 65
Just Shut Up And Buy The House
Chapter 6 Chapter 7 Chapter 8 Chapter 9
Smart Marketing Uncooperative Clients Super Agent Listing Secrets
75 95 103 117 147 169
Chapter 10 Peel the Onion Chapter 11 Everyone Is a Potential Sale
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Dedication
For Carolyn Rose. What every person in the world should aspire to be, and to whom I am so greatly indebted. I can never repay you for all that you did for me, and we will soon be together again. I am proud to have called you Mama. For Tonda, Savannah, and John Eric, ll my heart with joy and wonders every day.
who
To my brother Scott, whos always been there thanks doesnt say enough.
FOREWORD
BY: BILL GALLAGHER

For thousands of years, people in every culture have taught students to master their professions, via a master-toapprentice relationship. Even today, young men and women shadow their masters as they perform their daily tasks. The apprentices learn tricks of the trade and bene t from the skills of the master. Today, more than ever before, realestate agents can no longer do business they way they have in the past. The evolution of technology has brought us to a point in society that requires that the real-estate agent be more educated than ever before. This evolution of technology is one that we cannot deny. Newer innovative ways of advertising, promoting, and exchanging property
are going to be essential to be a successful real-estate agent. Blogs, Facebook, Twitter, LinkedIn, and other social networking mediums employ methodology that the realestate world has never experienced before. Prior to the invention of the Internet, the only way to socially network was to throw a cocktail party and invite other agents to your open house. Today, when people hear about a hot new listing, it is usually by means of an announcement on Facebook. Finding the balance between the master-apprentice traditional method of learning and the implementation of new technology is dif cult, to say the least. The younger, more tech-savvy agents are going to be able to market and sell properties in revolutionary and innovative ways. One fundamental truth that is not going to change is the importance of language and communication with our clients. This skill is what John Horne introduces to real-estate agents in a way that truly de nes the masterapprentice relationship. Fancy Web sites, great blogs, and the Internet are wonderful tools, but if you cant educate and communicate with a client in a way that gets him to the closing table, this technology doesnt improve your bottom line. Agents that are on the cutting edge of self-improvement and higher education will be the ones who dominate the realestate industry. Those who dont keep up with the technology advancements will nd themselves on the sidelines, wondering why they cant make a living in real estate.
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The role of the real-estate consultant is no less important because of technology. In fact, clients are desperately in need of our help. Clients are going to continue to depend on real-estate agents to guide them through the maze and confusion of the real-estate market. Home ownership is and always will be one of the most important purchases that people make in their lifetime. Shelter is one of our basic necessities, but the real-estate market of today is so much more than mere shelter. It is a nancial investment than one cannot enter into lightly. Customers need the help of someone who not only has a real-estate license but also has depth, character, wisdom, and advanced training. The work of the real-estate agent is important. Sure, real-estate agents arent out practicing medicine, performing heart surgery, or rescuing people from burning buildings. Their heroic efforts are often not seen until a client goes to sell. The agents efforts during the purchase process are often overlooked. My challenge for the thousands of real-estate professionals and mortgage lenders around the world that will read this book is to not just think of your clients as a single transaction. Make sure that when your clients leave the closing table, they leave with a smile on their face. That is how you should de ne your successnot by the number of transactions or the number of homes sold each year, but by how many of your clients smile when they leave the closing table. John Horne knows what it is like to experience a smiling client over and over and over and over and over and over
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and over again. When it comes to real-estate training and insight, the master is John Horne, and when you nd yourself frustrated and wanting to scream at your clients: Just Shut Up and Buy the House, remember what you have learned in this powerful book.
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PREFACE
Paul Potts was a recent contestant on the TV show Britains Got Talent. If you watch his audition closely, you will see that when he takes his position on stage and is asked, What are you here for? his answer was simply: I want to sing opera. In those ve words, he summed up his mission and his lifes desire to sing opera. I love Pauls story because by day he sells mobile phones, but in his heart he sings opera. This question is one that I asked myself prior to writing this book: What are you here for? Immediately I knew the answer. Sometimes we fail to see the answer to this question because we are wrapped up in the rat race of life. Too busy taking kids to their violin lessons or going to the gym to try to lose a few pounds. Often, if we take a moment to re ect, we realize our purpose. My moment of internal re ection
didnt come out of a personal tragedy or a weekend seminar with a guru. It simply happened at a moment of awareness. This moment came from a great friend that put things in great perspective for me. What makes a good friend is love, what makes a great friend is tough love, and this great friend told me to stop receiving a small piece of the pie that is given to me, and start baking my own pie. It was only when I found myself open to hearing that I was able to nd the answer to this question. My heart screamed out at me. My mission is to pass on my knowledge, my skills, my success, and my failures to other real-estate agents across the country. I believe that what we do for our client makes a difference. We can make the difference between a great buying decision and a terrible one. Our work can save a client from foreclosure, it can make an investor lots of money, or a mistake or bad advice given to a client can ruin the nancial dreams of either party. I believe in the role of the real-estate consultant as the advisor, the advocate, the negotiator, the counselor, the guide, the watchman of the details, and most importantly, the role we play during a transaction as the captain of the ship. I believe that what I have learned, the experiences that Ive gained, and the failures that Ive had, can improve your sales ability and help you accomplish your goals. My training is different from that of most sales coaches whom you will nd out there offering you what they call easy solutions. They entice you with false hopes such as: Only work when you want to work and earn six gures.
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My training is not a scam or hoax; it is reality. The truth is, the answer to succeeding in real-estate sales can be captured in two words: hard work. Thats right! There are no easy answers, there are no magical Web sites, there are no wonderful marketing ads that bring people to your door saying, Take me out and sell me a house today! It just doesnt happen that way. It takes hard work, discipline, and systems that work in order to make it in the real-estate business. My mission is to do everything I can to get you producing quicker, better, and easier deals than before. Hopefully, through reading this book, you will gain insight into the psychology of selling and an understanding of more effective marketing strategies and tools that you can use to improve your business. My high school track coach was one of the best track coaches in the country. Every year the track team came back from the state competition as champions. I have always been a terrible runner, so when I was in high school I wrote for the school newspaper. I had the pleasure of interviewing Coach White once, and I will never forget the answer to one question. I asked him, Coach, when students try out for the track team, what do you look for? How do you decide who makes the team and who doesnt? His answer was as simple and profound as ever. I look for the ones who fall down during the race but get up and nish no matter how bad it hurts. He went on to say, Those are the ones who will end up being winners. I never forgot those wordsand yes, I have fallen down many times in my attempt to sell
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houses. You will too. But the agents that get up every day, that train the hardest, that have the discipline, that do the miserable cold calls, that push themselves to their limits every day no matter how bad it hurts will be successful. So I ask you: What are you here for? Why are you in the real-estate business, and if you fall down a couple of times, are you going to get up and keep running the race? I hope this book inspires you to not only start the race, but to get up and nish it, even when you fall down.
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INTRODUCTION
I have interviewed, trained, and supervised many realestate agents over the past years, and one clear truth that stands out to me is that very few real-estate agents actually understand the importance of their role when representing a client. Most do not have any systems in place. Most will simply go put a sign in the yard and cross their ngers in hopes that their listing sells. What I nd most interesting is the mere lack of awareness that they could be doing so much more. When detectives begin an investigation into how burglars break into businesses and homes, they start by looking for a point of entry. One fact that has held true with regard to criminals is that they are lazy. They generally take the path of least resistance. For example, when looking through a parking lot for a car to break into, a thief simply
starts by checking the handles on the cars to see if any are unlocked. In other words, why take the time to manipulate a locked vehicle when there are so many that are simply left unlocked. I think the same principal can be applied to real-estate agents. They take the path of least resistance and want the clients and deals to come easily. The most successful agents take the time to gure out how to unlock the car doors. The truth is, if criminals were smart, they would know that the best loot is in the cars that are locked. The same goes for real estate; the deals that come easily are often not the people you would really want to work with. They often found you merely by the fact that you were the one who answered the phone or agreed to meet them at the house or stumbled into an open house. Awareness can only come to those who seek to be aware. I often get agents who will ask me, John, why is it that I work so hard and provide great customer service and do everything the client wants me to do, and then nd out later that they didnt refer me to their neighbor or their son or daughter? Why does this happen? You think you are doing a great job because you go the extra mile, and then you dont get the thank-you or the referral. The reason this happens is because when you dont follow a system of selling, you contribute to your own failure. You have to use a system! If you dont, you will fall into the clients systemand guess what? The client doesnt have a real-estate license. The client isnt the expert. The client doesnt know our business.
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Imagine going into the operating room and saying to the surgeon who is to remove your spleen: Doctor, please make the incision from the back, because I dont want a nasty scar on my stomach. Just imagine the surgeon agreeing, knowing that the surgery would take hours longer and put you in greater risk. You could end up with terrible complicationssimply because the surgeon wanted to please you and make you happy. In an effort to provide great service, he cut you from the back instead of doing exactly what he had been taught to do, which is cut from the front. After the surgery, who do you think is going to have dirt thrown on them? And who is going to throw it? Right! You, who asked for the no-scar-in-the-front surgery, are probably going to end up suing the doctor for the complications resulting from having done the surgery from the back instead of the front. You are the surgeon! Dont let a client convince you to cut from the back. When you meet a client one of two things are going to happen: either you are going to fall into his system, or he is going to fall into yours. What is it going to be? Remember what I said about becoming aware? My challenge to you is: Right Here, Right Now, Decide! Decide that he is going to fall into your system, and if he doesnt, you are not going to waste your valuable time working with him. My very rst managing broker asked me a profound question one day when trying to teach me this point. We had a questionable buyer who wanted me to spend time with him showing houses. My manager simply asked me: What
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is the time spent with your family worth? I responded, What do you mean? He said, Right now, put a monetary gure on what your time is worth with your family. He informed me that he calculated that the time with his family was worth at least $400 per hour, so if he didnt think it would be worth at least that much to go meet with a client, he chose his family instead. Putting a dollar amount on the hourly rate of family time made it real to me. I was able to make wiser, more informed decisions when going through the client-selection process. This introduction is not intended to ridicule or criticize real-estate agents. I can tell you that most real-estate agents do care for their clients. They do want successful businesses. They do want to work with great clients, and overall, most are great people. I hear stories nearly every week of real-estate agents who give to their communities, work with habitat for humanity, or give to charities. The purpose of an introduction section of a book is meant to do just that: introduce you to what the book is all about. My overall goal for writing this book can be summed up in one word: awareness. If you read this book and walk away just a little more aware of some areas in which you could improve, or if you discover a system that might work better for you, or if you nd a technique that will get you one step closer to achieving your goalsthen my mission will be accomplished. When consulting with business leaders, one question I often ask is: What is your mission? Well, I learned over the years that instead of asking what their mission is, I should
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ask the question in a different way. When NASA engineers begin to plan a space mission, they start by de ning the goals of the mission. More importantly, they ask themselves why each of the goals is important and if those goals are important enough to risk human life. Often their answer is that they dont know if the goals are worth a human life, because they are dealing with the unknown. Who knows what lies beyond the atmosphere? Who knows if their experiments on cancer cells in no-gravity environments will one day lead to a cure? But they go into space anyway! Why? Out of hope: hope that their discoveries will one day lead to the improvement of mankind. So I am not going to ask you, What is your mission? I am going to ask youat the end of every day, at the end of every transaction, at the end of every phone call or meeting with a clientwhat it would take for you to be able to say, Mission accomplished! The truth is that when we deal with human beings, very rarely do we know what the outcome will be. Your journey in real estate can be traveled alone. You can continue to work as you have been working and get on the spaceship with no captain. Or you can choose to travel with an experienced captainone who has been into outer space many times, one who promises that you will not just be a passenger on board. You will be my co-pilot, and you will learn how to land the ship safely yourself. So put on your space suit, strap yourself into the chair, check all your systems to ensure that they are functioning at optimal level, and lets travel together with the hope of what may come.
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CHAPTER 1
THE MIND
I want to take some time to tell you how the human mind works. I have to give a disclaimer; this is my personal theory. I havent read this in a book, and I am not quoting anyone. This is purely how I see it. I believe that God created our minds for two main purposes: survival and love. What I have observed in my life about how the mind works is that everything you do, every decision you make, and every thought you have is based on a series of highly reasoned, quickly determined assumptions that your brain makes. For example, just in the time that you have been reading this book, you have made assumptions about me. You may think that I was born rich and had great opportunities for higher learning. Maybe you assume that my family life is great or that I have been lucky. The
truth is that I was born into a family with a rather abusive father, blue collar at best, and a terrible alcoholic. My mother worked mainly as a secretary most of her life. I didnt get the opportunity to go to Harvard. I was not a particularly smart or gifted student. It wasnt until after I began attending college at the University of North Carolina at Wilmington that I began to understand how to learn. I was a late bloomer when it came to academics. The point I am trying to make is that we all make assumptions about people and situations every day. I believe the reason we make assumptions is due to our natural, primary instinct to survive. Imagine living in a time in which you had to farm and hunt for food. Imagine if you had to constantly worry about encounters with other dangerous tribes and live with no air conditioning, heat, or technology of any kind. God designed us to survive, and he knew that you and I would need brains capable of assessing a situation quickly. We are naturally inclined to make assumptions and decisions that are usually based on inference versus fact. When you meet a client for the rst time and he says to you, We want to buy a house, what are your rst thoughts? Most agents are survivalists and think of commissions. The rst thing they say to the client is: I need to get you in front of my lender, to make sure that you qualify for the house. Most agents go directly into survival mode and assume that clients cant qualify because in the past they have wasted time working with people who cant qualify. Then, if they do qualify, the
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next thought the agents have is: When can I get him in the car? I need to get him under contract. I dont have a closing lined up for next month, and this will help me meet my sales goals. Can you start to see why people dont like sales professionals? I would encourage you to have a paradigm shift. A paradigm is the lens through which you see the world. Instead of going into your own survival mode, start thinking with the connecting, caring, loving part of your brain and do what I call: Become Curious. Start asking questions at the most basic level, and make no assumptions about the clients. This is going to be dif cult because your brain is naturally wired to think in survival mode, not the love mode!
CHAPTER 2
MASSIVE RESULTS
The advanced approach to real-estate consulting involves creating and developing deep relationships with your clients. You should think of this approach or system as developing a psychological contract with your client. The contract that you create allows and requires your potential client to consciously choose you to represent him. I like to think of this as mutual agreement for how to proceed. It requires that you and the client share relevant information that leads to consensus on the goals. This mental contract is critical because it is the stage that allows your skills and expertise to shine. This foundation is so critical because without this essential connection, you will nd that regardless of your skill level or expertise, the likelihood of referral to someone else diminishes greatly.
To create this contract, you need a clear de nition of roles as well as an agreement by all parties about how you will work together. This stage of the system is called establishing the rules of the game. Imagine sitting down to play chess and not knowing or understanding the rules. It wouldnt work. There would be no point in playing. De ning and explaining how you work and determining if that is a t for your client is what determines a great outcome. If you dont take the time to explain the rules of the game to the clients, they work from assumptions as to what they think you should do. For example, most sellers see listing agents (on TV) promoting open houses. You and I know that open houses rarely yield a buyer for that particular house, but it could lead to being able to get new buyer clients for you. The sellers perception is that you as a listing agent should do open houses, but they dont realize that doing open houses rarely leads to a sale of their particular home. They are operating under a false assumption. If you dont establish with them up front that you dont hold open houses and why, they will assume that you are not doing your job and are not a very good listing agent, based on their assumption of what a good listing agent should be doing to sell their home. When you have a client making assumptions, this is a bad position to be in. In my experience of supervising upwards of eight hundred real -estate agents, I have found that a good majority of complaints could have been prevented by the agent simply setting expectations as to his role and getting agreement from his client.
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My approach is what I like to call the advanced approach, and it includes a system for developing this agreement that enables the agent and client to make an educated, well-thought-out choice about working together. There are some fundamental rules to keep in mind when taking this systematic approach. You can learn my entire system by visiting www.agentedgetraining.com.
RULE 1: ALWAYS WORK WITH BOTH OF THE DECISION MAKERS IN AN OPEN SETTING
For example, you are working with a couple, but the husband is not coming into town to look at houses; the wife says that he trusts her to make the decision. This would de nitely be a situation that violates this rule. Now, I am not saying that you shouldnt show houses to the wife without the husband present, but you had better get on the phone to verify that he is okay with whatever decisions the wife makes and to talk with him about what is important to him with regard to purchasing the house. I take this particular rule very seriously. When calling to give information on a repair request, for example, lets say Mr. Johnson answers the phone. I always attempt to get both Mr. and Mrs. Johnson on the phone to review this repair agreement together. Mr. Johnson clearly is not insulted by my asking him to also put Mrs. Johnson on the phone, as I have explained this as a fundamental way that I work during my
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initial meeting with the client. Not only have I explained this, but I have gotten agreement from them that we will follow this rule together during the process of the transaction. You may be thinking that this is a little extreme. However, if you pull one of the clients aside and speak with him or her without the other being able to hear or participate, what message did you just send that person? For example: if you only speak to the husband about the repairs and not to the wife, you clearly conveyed to the wife that her opinion really didnt matter. This will create negative consequences and will damage the relationship between you and the wife. You do not want to create situations that disregard a decision makers opinion. One way to do this would be to call the wife and say, Mrs. Johnson, I have the repair request from the buyer; would you like me to discuss this with you, with Mr. Johnson, or with both of you at the same time? It is always okay to design the conversation together with your clients, but it is not okay to disregard one over the other on any topic.
RULE 2: DESIGN
THE
PROCESS
WITH
YOUR CLIENT
If you take the time to talk with your client about the process for buying or selling a home, you accomplish several things. First, you open the door for the client to participate, and this is important. Client participation is one key to getting referrals. Here is an example: lets say you meet
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with a client and tell him that you are going to take him to look at eight houses and that these are the best in his price point and area of interest. The mistake is that these are the best eight houses for sale in that area in your opinion. The better approach would be to sit down with your client or e-mail the list to him, and verify with him that he thinks these are the best eight houses to see. This way your client has bought into the process and feels more like a member of the crew that helps guide the ship, as opposed to being dragged along in a dinghy behind the ship.
RULE 3: REMAIN NEUTRAL
AT
ALL TIMES
Make sure that you remain outside the agreement between the buyer and the seller. This is likely the hardest thing for most real -estate agents. Remember, you are a facilitator; your job is to bring buyer and seller together. All decisions are to be made by the clients, not you! For example, if the buyer wants to cancel a contract over what you think is a small repair item, it is his decision, not yours. All you can do is inform him of your opinion based on your experience, but he has to make the decision. I am not saying that you shouldnt have an opinionbut when two parties write a contract and come to an agreement, guess what? You are not a party in the agreement! The agreement is between the buyer and the seller, not between you and either of them! Remember, all decisions must be made by the clients.
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RULE 4: NO AGREEMENT MEANS DOING NO WORK

This is a rule to live by. Do not do any work until you get agreement from your potential client. Remember, when a customer calls, he has ideas in his mind about what you should do for him. Your number-one priority is to explain to him the details of how you work and see if he will agree to use you as his agent. Here are examples of some agreements you may seek with clients. Agent: Mr. Johnson, it is important to me that we be a good t to work together; if I agree to show you the house, would you be willing to have a conversation about working together? This will take about fteen minutes, and if we are not a good t, would you let me know at that time? Agent: Mr. Johnson, I am glad to meet with you about listing your home. Before we schedule a meeting, it is important that we design the meeting together. I would like to take some time to determine if we are a good t to work together. Would you be willing to have a conversation about that? This will take about fteen minutes, and if you feel that I am not a good t, would you tell me at that time? Agent: Mr. Johnson, I am so glad that you called about nding out the value of your home, and I would like to share some information about this process with you. Would that be okay? Client: Yes. Agent: Mr. Johnson, it takes me about an hour to research the value of your home, and the computer will only
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tell me so much. It is important to me that I give you an accurate value for your home. What I have found in the past is that when I give a number from the computer and then I visit the house, there is usually a signi cant difference in the opinion of value. So instead of me sending you a report or calling you with a number, I would like to set an appointment to come by and see your home. Would that be okay? Client: Yes. Then you can go into the conversational pattern, explaining how you work. Client: No. I really dont want you to come to my house. Can you just give me an idea of what it might be worth? We are just thinking about selling. Remember, no agreement means no work for you. This would be your response in such a situation: Agent: Mr. Johnson, you just said that you dont want me coming to your house and that you are just thinking about selling. Is that accurate? Client: Yes. Agent: Mr. Johnson, I appreciate you sharing that with me. What is it about me or another agent coming to your home that concerns you? Client (possible responses): Well, I am just not ready to talk with a salesperson yet. We are just thinking and are not ready at this time to put it on the market. We have a friend who is a realtor, and I just want another opinion. All of these responses give you more information and an opportunity to ask questions, but in the course of the
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conversation, never agree to do work without an agreement. So, one idea for how to respond could be: Agent: Mr. Johnson, I work differently than other agents, and as I said before, it usually takes me about an hour to complete the computer analysis to determine the value of your home. You said that you dont want to meet with me in person, is that right? (Always verify.) So, Mr. Johnson, what I would like to do is give you some options that might meet both of our interests. I have an interest in getting paid for the work that I do. Normally, the way I get paid is by selling a home and earning a commission. In this case, because you dont want to meet with me in person, I would have to charge you for the time it takes me to do the analysis on your home. Does that make sense? In a situation like this, I normally charge eighty- ve dollars for the analysis of your home. How would you like to pay for that? This is a great conversational pattern because you get to use the words, I have an interest in getting paid for the work that I do. Arent those powerful words? It sends a clear message that you normally require a meeting, but even though he is not willing to meet, you are still willing to do the workbut for a charge. You will be able to determine Mr. Johnsons intentions quickly when he refuses to pay you for the evaluation. In my experience if the person doesnt want to meet with you and or pay you for your work, they are wasting your time and have no intention of ever working with you. This conversational pattern is a great tool because, you just saved yourself at least an hour that
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you would never get paid for. You have also set the tone for Mr. Johnson that that your services are not free. Remember, only you can de ne yourself as a professional, no one is going to do it for you, and the way you do that is to CHARGE for your services.
RULE 5: GO SLOW
TO
GO FASTER
This could be the most important rule of all. I have found in my experience that if you dont take the time up front to explain how you work and discuss common assumptions that people have about real -estate agents, you set yourself up for failure. De ning how you work needs to be seen as de ning the parameters of the relationship. This includes explaining the process for buying or selling a home, what you will do, what you wont do, and why. For example, feedback is important to sellers, and some clients have assumptions and unrealistic expectations that everyone who shows the home will immediately send feedback. But it doesnt work that way, so you need to set low expectations for feedback on listings. In fact, I have created an expectations list that I give my clients, and the rst item on my list states that I will send one request for feedback, which is an automated e-mail built into our showing system. If I get feedback, it goes directly to the clients. If there is no feedback, then the client should understand that the agent and his client are not interested. The only feedback
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that is even important is that there is an offer on the way! By going over this expectations list with my client, I dont have to worry down the road about him calling and complaining about getting feedback. The expectations list helps to clear up any assumptions he may have about how I should be working. This rule is so important that I have a rule about this rule. Dont move forward until you have had this conversation with your client. In other words, dont do a lot of work until you have an opportunity to explain in detail what you do and what you dont do and get agreement.
CHAPTER SUMMARY
These rules are my rules. I would suggest that you take these and use them as a base line for developing your own rules. Take some time right now to think about what you will and will not do for a client. Write these ideas down. Take some time to think about what you feel is important to convey to a client before you move forward and agree to work with him. One of the most valuable rules is designing the process with your client. When you simply ask your client a question like: What is important to you? you will be miles above other real-estate agents. When you ask this question, you will get all sorts of responses, but one response that I loved getting is: What I want is for you to handle everything for me. I am going to be in New Zealand for the next ve years, and I wont be able to do anything
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with regard to selling this home. I need for you to do everything. Wouldnt it be great if all clients would just let you do everything? If they would let you price the house as you see t and market it the way you know it should be marketed? Choose the home inspector, the attorney, the repairman? You know, it would be great if you could take the client out of the process altogether, but sorry! You cant, and because you cant, you must include him in the design of the process. If you dont, you are setting yourself up for failure. The inclusion of your clients in the process will save you, because they will feel that they are in it with you as opposed to putting the entire burden of everything on your shoulders. Thus, they will not become dissatis ed and disgruntled. Two examples of how I have included the clients are: (1) I print postcards announcing that their house is going on the market and take 2550 of these (with stamps) over to the sellers house and ask them to send them to their friends, church members etc. This is a great idea, and you will be so surprised at how many call you and say, Can you bring me more of those postcards? (2) A second marketing piece I do is a yer, and I ask them to place this in the break room at their of ce. Sometimes they will do your suggestions and sometimes they wont, but either way, you are getting them to participate in the process. The other important bene t you are getting is an endorsement from them to all of their friends about you. This works toward building a referral pipeline of business.
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My wife loves to scrapbook. During the course of our marriage, she must have put together a dozen or more of these picture books. The technology and the detail surrounding the scrapbooking industry are staggering. However, when I compare my mothers older scrapbooks or picture books to my wifes newer more modern scrapbooks, wow! What a difference! The most noticeable difference is what I would call the framing of the scrapbook page. For example, she can place American ag and reworks stickers in the frame with pictures of the Fourth of July. The ve rules that you just read frame the picture for you and your client. My mothers old scrapbooks had the pictures just thrown on the page in no particular order, with no particular theme. Sure, you can view the photos, but there is no clear message portrayed. In contrast, my wifes properly framed photo albums have a very clear theme and message for every page of the scrapbook. Do you have to frame the transaction to sell a home? No, but the picture is so much better, and you have a much clearer message with your client; you create an appeal with your clients that makes them want to show everyone the scrapbook that you created. One of the companies that my wife orders her scrapbooking materials from is called Precious Memories. If you properly frame the ground rules and the way you work with clients, you will create precious memories of yourself and of the transaction. There is no better advertising in the world than a previous client telling everyone about you and about his good experience with you. Frame the pictures for
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building a successful referral business. It is worth the time and effort that you spend.
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CHAPTER 3
THE BOND THAT BINDS
When I have observed real-estate agents fail with a client, the majority of the time it is because they failed to build a meaningful rapport with their clients. Many times, we are so eager to get the clients into the car so that we can go out and show them houses that we fail to follow the basic steps of the selling systems we have created. I would imagine that many agents have heard a trainer talk about building rapport, but my guess is that most dont fully understand how or why you should take the time to do this. The de nition of meaningful rapport is to establish an unbreakable connection with a client. One guideline to keep in mind is slow down! Most customers are excited about seeing a house you have listed or one they have found online, and they just cant wait to
go see it. I am not saying dont go show the house, because the truth is that if you dont, another agent will. Think of the home-buying process as a chess gameby the time a client calls you and wants to go out to see a house, he may be at checkmate in his mind even though he should be just setting up the board to play the game. Your job is to rewind your clients thinking process to the rst step, which is to set up the board. Having a buyer set up the board means getting him in a position to buy. You have to be on the lookout for sellers who want to go out and look at homes when their own home is not under contract or sold. One underlying assumption that I make regarding selling is that people choose to work with people whom they know and trust. Getting to know someone takes time, and trust needs to be earned. Imagine that you are a single guy and you decide that you are going to nd a wife. You go to the jewelry store and you purchase a beautiful diamond ring. Next, you go to a bar, you nd a beautiful woman, you go up to her and say, Will you marry me? The likelihood that the woman is going to marry you is slim to none. Why? Because she doesnt know you! This is, in essence, what we do in our minds with clients. We think that because they signed up on our Web site or requested information, they have automatically chosen us to represent them during the transaction. This is not the case at all. One thing we know about adults and their decision making is: if an adult makes a well-informed decision to work with you, that decision (choice) is worth
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more than any buyers agreement or written contract that you can secure with your client. Think about any human behavior, and this will make sense. Take smoking, for example. Studies have proven over and over that it is not until an adult makes the decision to quit that it actually ever happens. I have struggled with weight loss and poor eating habits all of my life, and it was not until I decided to lose the weight that it actually started to happen. The same principal applies to your clients. You want them to choose you and to make that choice with lots of relevant information as to why. So many agents jump in their car to go meet a client for the rst time at a home, show them the home, and never take the time to have a conversation about how they might work together. This is a golden opportunity to show the client what great value you bring in representing them. But you have to have the conversation. Throughout this book, I will be showing you conversational patterns that make those conversations easy. If you practice the patterns that I teach, you will have con dence going into any meeting. Most trainers in the world today are trying to teach agents magic formulas to get clients, but they fail to properly train them as to what they need to do when they actually do get the call or the appointment. I believe in systematic selling. What I mean by systematic selling is that you, as the real-estate consultant, lead your client down the path to closing. You do this by implementing steps along the path, or milestones, that you are able to recognize as signs
27
that your client is staying on the path. This has the added bene t of making you aware when the client loses his way or steps away from the path, so that you can plant the proper breadcrumb to lead him back to the path, or get him to the closing table. You never get a second chance to make a rst impression. We have all heard this familiar phrase that Head and Shoulders shampoo used in its commercials for many years. This statement is so true when it comes to sales. Everything that you do must be by design! Everything: how you answer the phone, how you respond to e-mails, how you ll out your contracts, how you negotiate. Everything you do must be planned and by design. Professional athletes practice; no captain of a ship pulls out of port without plotting a course. When you do get that call to go show the house, your rapport building must begin with the initial conversation on the phone. How do you build rapport? Simple answer is: ask great questions, and listen to the answers. Here are some great questions that you should consider asking when you have your very rst encounter:
OPENING PATTERN PART 1ETHICAL AGENT

Imagine that the customer calls about your listing, an online nd, or possibly a sign. I am glad to help you and get you information about this house, but as a realtor, I am not supposed to consult
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with someone elses client, and because I am an ethical agent, I have to ask you: Are you currently working with an agent? (Pause) Take note of the particular words in the pattern. You start by agreeing to get the requested information, so he believes that you are going to help him. Make it a point to emphasize the words, I am an ethical agent. This allows you the opportunity to plant the idea that you are trustworthy by telling him that you are ethical. This is a subliminal message that comes across loud and clear in this script. Most people value ethical people, and therefore the client is more likely to be ethical with you. Thus, he is more likely to answer the question honestly about whether he is or is not working with another agent. This one pattern, when used systematically, consistently, and automatically, will save you lots of time in keeping you from doing work for people who are already working with another realestate agent. If yes, you may want to ask: Okay, what is your agents name? I probably should get in touch with him for you so that he knows you are interested in this house. If he cant give you the name of his agent, he probably doesnt have an agent and is using this as a defense mechanism. If he cant give you a name, ask more questions. What rm is he with? Did you sign an agreement for representation? Do you have a copy? If no, move to next series of questions. This part is for if he is not working with another agent:
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OPENING PATTERN PART 2BUILDING RAPPORT

1. I am glad to schedule a time to show you this house. Can you tell me what it is about this house that you like? (then listen and take notes) 2. Re-cap what he said, to ensure that you heard him correctly Okay, great, so let me make sure I understand. You like this house because it is all brick, it is on the golf course, and it is a ranch model. Is that correct? 3. Assuming he says yes, your next question should be: Can you tell me more about what is important about the house being all brick and a ranch model? You could also include the golf course portion as well. This technique is what I call Peeling the Onion. Imagine that truth is like an onionand yes, you have some truth on the outside layers; he does like all brick. But the real truth is located closer to the center of the onion, and you have to do all that you can do to get to the center of the onion. You get to the center by asking questions. When you say, Can you tell me more about that? or What is important about the house being all brick? you accomplish several things: First, you are sounding very different from any other agent he has spoken with over the phone. Second, you are starting to build rapport. Subconsciously you are telling him that you care about what is important to him. When you ask: What is important? and
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John Horne
when you repeat his answers, you are demonstrating that you care enough to listen to what he is saying and that you truly heard him. Another impression you make by con rming your understanding is that you are attempting to connect with him. By using these questioning techniques, you are actually getting the client to start thinking about what is important to him, and you are also getting him to start thinking by design. Lets go back to the questioning exercise. Agent: Can you tell me more about what is important about the house being a brick ranch? The clients answer might sound like this: Well, we believe there are fewer problems with brick homes, and we want a ranch because our current home is a two story, and we dont want to walk up and down steps anymore. You need to check in with him regarding his answers to peel away another layer of the onion.
YOUR
QUESTION MIGHT BE:
What leads you to believe that you have fewer problems with brick homes? I assume that you have had bad experiences in the past with homes that were not all brick? Am I right? (Pause, listen to his answer, and take notes.) You mention that your current house has stairs and that you are tired of going up and down steps. Mrs. Johnson, I have found that I do a much better job
31
of nding the perfect home for my clients by asking lots of questions and gathering as much information as I can. Would you mind sharing more with me about the fact that you dont want to go up and down stairs? Is there anything else that I should know? (Pause, listen to his answer, and take notes.) Again, you are just going deeper with the clients on the phone by asking questions. My rule is to always go at least two layers deep with your questions. Their answers may sound something like this: Well we had a home with stucco, and we just had a nightmare with that material, or My husband has bad knees and he just cant do stairs anymore. I hope this sample conversation demonstrates how you can get closer to the middle of the onion by using these questioning techniques. When you do this, you are well on your way to building meaningful rapport with your client. Your conversation went from: Can you come show us this house? to gathering a deep understanding of what is important to him.
OPENING PATTERN PART 3KEEPING PROMISES

Another part of building meaningful rapport is to connect in a way that is memorable. The purpose of this script is to lead a meaningful conversation to a personal level. So now you have asked some great questions. You have had a good conversation, and you need to start taking some control
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of the process. Here is a great pattern that you can use to begin connecting on a more personal level with your client. This is a powerful script, because when you open yourself up to share something personal with him, it makes him feel more comfortable about sharing something personal with you. There are some rules and insights to remember with this pattern. 1. Find a reason to not make the rst appointment. 2. If you have children, always use them as the reason for not taking the appointment. Not agreeing to the rst appointment time helps you do three things: a. Test to see if the client is cooperative and exible. b. Demonstrate that you are a person, and you have a life outside of work. c. Show that you are not desperate for a sale. Remember, you need to be memorable and different from other agents with whom he has spoken. What would most typical non-skilled agents say? Yes, tomorrow at 2 PM would be ne. They also wouldnt realize that they lost such a great opportunity to plant the most important trust seed that you can plant; that you dont break promises.
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Agent: Thanks for sharing that information with me. I nd that if I have a good understanding of what needs and wants you have, I can help you nd the perfect home. When would you like to go see this home? Client: 2 PM tomorrow. Agent: Okay, would you mind if we make it 4 PM tomorrow instead? It is important that you know that I am available to help you, but my son has a soccer game and I promised him that I would be there; I dont break promises to anyone. Do you have children? Speci cally mentioning that you dont break promises to anyone plants another trust seed in his brain. Use the words, I dont break promises. This translates in his brain tothis agent wont break promises to me. The only reason you dont agree to the rst meeting is to be able to use the words, I dont break promises. Remember that my training guides your client down the path to closing. This is a serious bread crumb that you just laid down at the beginning of the path. Assume the sell by saying, I nd that if I have a really good understanding of what needs you have, I can do a better
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job of helping you to nd the perfect home. You have just assumed that he is going to let you help him, which means you are that much closer to getting an agreement from him. If he does not understand why you cant meet at his requested time and he doesnt eat the bread crumb by not agreeing to the later appointment, you should probably ask: Is this is the type of client with whom I want to work? What it tells you is that this client doesnt understand that keeping your promises is very important. Do you think that he takes his promises seriously? What does this tell you about any promises or agreements that you get from him? In other words, if he doesnt understand about keeping commitments, do you think he will ever keep his future commitments to you? Fill in the script with one of these options: 1. If you have children use them as the rst reason. My son has a soccer game tomorrow at 2 PM. I promised him that I would be there, and I dont break promises to anyone. My kids are my rst priority. Do you have children? 2. If you dont have children, u se an activity as the reason. Make sure it is an activity that you can talk about. Dont say that you are meeting with a garden club if you know nothing about gardening. Some good examples may be: bowling league, church, family social. So lets go back to the questions and answers. (You just asked if he has any children.)
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His answer might be: Client: Yes, we have two girls. Both are married and have moved away from the area. If you get an answer like this, you are really doing well, and this technique is working! He just took a bite of your bread crumb. This is a sign that he is cooperating with you. He is opening up to you and is giving you personal information. If he says yes, he has kids, always ask more questions about his kids! Your next scripts may sound something like this: Agent: Wow! Two girls (You are repeating what he just told you, establishing again that you are listening.) I have a boy and a girl, and they bring so much joy to my life. Has it been a hard transition to make with them leaving home? or you could simply say: I assume that it has been hard to adjust to being without them? Note: Look at the above pattern carefully. Notice that I mentioned that I have a boy and a girl. This is what I call the association technique. The association technique should be used whenever you discover that you have something in common with the client. In this case, he has children and I have children. He mentioned that he has two girls. I immediately go back with, I have a boy and a girl. I associate with him mentally. I am painting a picture of me for him. Lets assume that he tells you how dif cult the transition has been. This is going to be a sad place, and normally you want to stay away from sad places with your client. However, this presents such a great opportunity for connection with
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your client. You absolutely have to ask a question. To go from a negative to a positive with a client intentionally shift the emphasis back to you and your situation.
EXAMPLE
OF
GOING
FROM A
NEGATIVE
TO
POSITIVE:
Agent: I bet that has been hard. (show compassion) My son is about to start drivers ed. and my daughter is beginning piano lessons. I bet you have been through all of that? or I assume that you have been through all of this? Client: Oh, yes, I remember when I took my daughter Julie out in our station wagon and she hit every mailbox on our street. Key learning: You just went from a negativethe children leaving hometo a positive memory. I could tell you lots of stories about how I built meaningful rapport with couples by simply talking and sharing stories about our kids. Children are an easy way to connect at a memorable level. I am sure that some of you are wonderingwhat if they dont have kids, or what if you dont have kids, how do you go about building rapport then?
PATTERN
FOR AN
AGENT
OR
CLIENT
WITH
NO CHILDREN:
You have to keep asking questions. If you get negative responses, you need to structure your questions more open ended. For example:
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Agent: Do you have any children? Client: No, we dont have any children. Agent: Well, I am sorry that my son has a game tomorrow. I cant remember what my life was like before children. I sort of feel like a taxi cab driver sometimes. Do you guys have any activities that you like to do on the weekends? (open ended and not too invasive) Client: No, not really. Agent: Put it back on yourself. Well I have to say, I think I have a problem. (joking) I am addicted to bowling. I do enjoy the friendships that I have made through my bowling league. What sort of things do you enjoy? (open endedhere you have also planted the trust seed of friendship. You imply that you would enjoy a making a friendship with them.)
UNCOOPERATIVE CLIENT
Note: If you have a client who is not answering your questions, and you get to a point where he is not sharing information, you are going to have to start asking yourself if this is the type of client with whom you want to work. I value working with cooperative clients. If you sense or feel that they are not sharing, one pattern you could use would be: Agent: Mr. Johnson, Ive noticed that you are not really responsive to some of my questions. I get the feeling you dont want to share information with me. Is that correct? Or
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John Horne
Agent: Mr. Johnson, I would like to mention to you something that I have observed. I noticed that you havent been responsive to my questions. I feel like you arent really open to sharing. Is that accurate? Client: Be prepared for him to say something like: Youre right, I dont feel like sharing. This gives you a great opportunity to say: Mr. Johnson, I appreciate your letting me know how you feel. I have found in the past that usually clients who arent willing to share information feel the way they do because they have had bad experiences with sales people in the past. Is that the case with you? This opens the door for you to go right into telling Mr. Johnson the details of how you work. So you just opened the door to nding out more and connecting. Hopefully at this point you have connected. But you are not through yet! Using this same example, lets say that you have, in fact, agreed to meet him at the house at 4 PM. Before you hang up, you need to use the script in Opening Pattern Part 5.
OPENING PATTERN PART 4QUALIFYING

After you have begun to develop rapport with the client, begin to ask qualifying questions such as these. Does he have a house to sell? Is he prequali ed?
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Can he afford the house? Does he have a job? One great question is: Tell me about your current living situation. Do you own a home now? At this point you are gathering gold. Consider gold to be information that the client is sharing.
OPENING PATTERN PART 5SETTING
THE
APPOINTMENT
Agent: Mr. and Mrs. Johnson, I am going to schedule our showing for 4 PM tomorrow, and I will just meet you there at the house. Do you know how to get there? Client: Yes. Agent: In the past, I have found that it has been important for us to exchange phone numbers, just in case I am running behind or something happens. Would that be okay? Client: Sure. exchange numbers Agent: Great. Also, everyone in this business works differently, and it is important that I explain what role I play as your realestate consultant. It is important for you to make an informed decision about working with me. If I agree to show you the house, would you be willing to have a conversation tomorrow in person about how we might work together?
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Client: Yes. Agent: After we talk, if you decide that we are not a good t, would you let me know? If I feel that we arent a good t, Ill let you know as well. (assume yes) Agent: If no, ask more questions: What it is about having that conversation that you have reservations about? Agent: One last thing; you should probably know that it will take about fteen minutes to show the house and talk. We can certainly take more time if necessary, but I like to give clients an idea of how much time our appointment may take, because I understand how valuable your time is. Ill see you tomorrow! This pattern is so important for setting the rst meeting. It is totally by design. This script helps set you up for success. First, by meeting them at the house, you take the pressure off. Most people would prefer not to ride with you or be forced into a con ned place with someone they dont know. Also, if they agree to exchange phone numbers, they are following the system. This is a signal to you that things are going in the right direction. Remember, you are guiding the client down the path, and these conversational patterns are what you use as breadcrumbs to keep him moving in the right direction. Exchanging numbers implies that it would be alright for you to call him and for him to call you. By mentioning to clients that everyone is different, you are really telling them that you are different. By using the words, It is important for you to make an informed choice about working with me or not working with me,
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you are telling them that it will be okay to choose to not work with you. This lets them know that you are not going to put the hard sell on them or pressure them. Also, you shift the emphasis from making a choice about buying the house to making the choice to use you as their agent. Notice what I didnt say. I didnt say anything about them being pre-quali ed. I didnt say anything about making an offer. I didnt say anything about seeing other properties. Remember the chess-game analogy. I am setting up the board to play the game. When you set the expectations of how much time they should plan, you are really telling them that you are only planning to take fteen minutes. By telling them that you understand how valuable their time is, you are really saying that your time is valuable also. This script is powerful, because you set the tone for the rst meeting. You send a clear message that there is no pressure, and you limit the amount of time required to spend with them. Remember, you may be making a choice that they are not a t for you. You may meet them and not like them or may choose to not work with them. By setting a time limit, if you decide to not work with them, you can simply say: Well, we agreed that we would only spend fteen minutes for the rst meeting, and our time is up. Thanks for meeting with me. The time limit gives you a way out, and this can really help you with the disconnect. Disconnecting from a client in a way that is not offensive or abrasive is really important. You can go to this
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meeting con dently, knowing that if you determine that you dont want to work with these clients, you can simply remind them that we agreed to a time limit of fteen minutes and that you have to move on to another appointment. Customer selection is an important key to success. Dont ever be afraid to say no to a client. Your time is extremely valuable. If you use some of my lead generators, you will have more clients, so you can take more time to pick and choose who you would like to work with.
CHAPTER SUMMARY
Con dence is what allows you to say no to a client. Con dence in your systems, con dence in your abilities, and con dence in your boundaries are all priceless. The problem or challenge is to put systems in place that generate reliable, dependable leads every month. If you are interested in learning my lead-generating systems, you can go to my Web site at www.agentedgetraining.com. A great real-estate agent and a person whom I admire a lot in our eld, Heidi Hines, taught me a very valuable lesson. She sat down with me one day and told me that when she began saying no to clients was when she really began making lots of money in real estate. It is in our nature to trust people that have boundaries. People choose to work with people whom they trust, so setting boundaries, not just saying yes to what the client wants, helps you to earn respect. Think of
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it like this: i f you and I were working together on a project and I saw you going the wrong direction, would you want me to intervene and say something to get you back on the right path, or would you prefer that I not say anything and let you go down the wrong path, make a wrong decision, and ultimately waste time, energy, and effort on a fruitless venture? How can a client ever trust you if you just jump and run and say yes to his every wish? Your client needs to know that you not only have the experience and knowledge to point him in the right direction but that you will actually stop him from making a mistake.
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CHAPTER 4
DONT FALL IN A CUSTOMERS HOLE
There is an old Russian saying: Never dig a hole for someone else, because you always end up in the hole. One of two things happens when you receive a call from a potential clientwho in our business we call a prospect, and some even go so far as to call him a suspect (and I believe the latter may be a better description). Either you fall into his system, or he falls into your system. You have to be of the mindset that he is going to fall into your system, or you will nd yourself asking, How did I contribute to my own failure? Imagine that an acquaintance calls you up (not a friend, an acquaintance) and says, Bill, could you come over and dig a hole for me? My back has been giving me some trouble, and someone told me that there could be buried treasure right here in my
backyard. There are three ways in which you can respond to this question: 1. Heck no. 2. Whatever you want. 3. My way or the highway. Heck no people: I am not digging a hole for you. In our business you cant be a heck no person. If you say, Im not going to dig a hole for you, then you will never get any business! You are going to have to get dirty. You are going to have to pick up a shovel and dig. If you dont dig, you will never uncover the buried treasure. Yes, whatever you want: This person says that he will dig whatever hole you want, whenever you wantjust please accept him, and let him come dig the hole for you. He is a rescuer and savior. This please-accept-me person is what I used to be when I rst started in the business. People would call, and I would jump and run and go under the guise of providing great customer service. I have had the bene t of learning from some of the very top people in our industry, and I was working beside one of the top producers in our area. I would often wonder, Why is he having success, while here I am providing great service and jumping and running, but I am not selling or having success like him? Have you ever seen the Disney movie entitled: The Little Mermaid? Ariel is down in her little hideaway, and one day she decides to swim to the surface. She sees her handsome beau (Prince Eric) on board a ship. She
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John Horne
observes that he has legs, and she sings a song. In the song she says (paraphrased here), When is it my turn? I want more. I want to be where the people are. I want to hear them laughing, up where they walk, up where they run. Wouldnt it be nice to be part of that world? I found myself wanting more, I wanted to be a big-time producer. I wanted to operate like these other agents were operating. I wanted to sell ten houses a month and have my name on the agent board. How many of you feel like you are selling the bottom-of-the-barrel houses to the bottom-ofthe-barrel clients? How many of you are out there saying, I want more! My way or the highway: Yes, Ill dig the hole if you agree to do it my way. Ill do it Saturday at three oclock. You must also agree that the hole will only be six inches deep, and well use my equipment if I dont have to sweat, if you provide beverages, and if you promise that I wont get dirty. Then I will agree to dig the hole for you. The tough part about this lesson is that we believe in our heart that if we jump up, run, and provide great service, this will somehow get us to the level of the top producer. What I learned is that it doesnt work that way. It is a hard pill to swallow, and in a lot of ways it doesnt make sense. I am not saying that you dont have to provide great service. What you absolutely must do is gure out a way to dig the hole for your clients, your way. If you dig the hole their way and on their terms, not only are you going to end up dirty and in the hole, but once you get in it, the clients will throw
47
dirt on you while you are inside the hole. Have you ever had clients throw dirt on you? In our business, to be a top-level agent, you have to agree to dig the hole. But dig the hole on your terms and in a way that makes sense for both parties. This means in a systematic, methodical, and controlled way. It is you and not the client who controls the system. The beauty of the system of selling that I teach is that you can control the transaction and the client in such a way as to lead him down the path to closing. You do it in a way that is not offensive, and most importantly, you will nd the buried treasure in the form of a referral, in addition to the commission.
FAILURE
TO
ACT
I cant remember where I heard this little learning story; probably at a conference somewhere, but it has always stuck with me. Imagine that there are ve frogs on a log that is rushing down a river toward a waterfall. Two of the frogs decide to jump off the log. How many frogs are left on the log? The answer is: ve frogs. Remember, words are important. The scenario only mentions that two of the frogs decided to jump off the log; it never said that they actually jumped. Sure, this was a trick question, but whenever I coach agents, I give them a list of things that they need to do to get more business. Inevitably, when I
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John Horne
make my follow-up coaching call the next week, they have not accomplished any of the tasks that I instructed them to do. There are many ways in which we contribute to our own failure, but the number-one reason we fail is because we fail to act. When I re ect on my own failures, of which I have had many, most of the time, I did contribute to that failure in one way or another. It is only by examining your failures in full and honest detail that you begin to recognize when and how you went in the wrong direction. I recently experienced a failure that I will share with you for learning purposes. I recently had a client (seller) that I was representing, and I was fortunate enough to get his house under contract in nine days. This happened during the worst market that our area had experienced in a good number of years, so I was feeling pretty good about getting his home sold in such a short period of time. Where I failed was in not following one of my own rules during the listing consultation. I love quotes, and Teddy Roosevelt once said, Trust but Verify. This is a motto that I have lived by for awhile, and so far the only time this motto has failed, is when I fail to verify. One rule that I follow during a listing appointment is to verify payoff information. During this particular consultation, I admittedly was in a hurry to get to another meeting, and I made the mistake of taking my clients word on his payoff number. The mistake was not a deal breaker. In this case, my seller speci cally said that his payoff on both rst and second mortgages
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was $217,000. I wrote this down on the inside of my listing folder. This note taking is what saved me later. At the closing table, we discovered that the payoff amount was $2,500 more. This may not seem like the end of the world or a big deal to you and me. But my client thought he was getting $2,500 more at closing than he was actually getting back. Of course, who did he blame? Me! I knew the number was wrong. Of course, my client was getting upset, and I was able to quickly ascertain where the mistake was. This didnt make it any easier for him to swallow. It did shift some responsibility from me back to him as I showed him the original gure that he had given me of $217,000. Some would say that I shouldnt consider this a failure, but my client perceived that he was getting more back than he actually was, and it was my fault. You see, I set a higher expectation than I was able to achieve. So the de nition of a failure in our world is: not meeting the expectations that we set with our clients. It is much better to set low expectations and achieve higher ones, than to set high expectations and actually perform lower.
SET LOWER EXPECTATIONS
AND
OVER DELIVER
Setting unachievable expectations is often one way we contribute to our own failure. For example, if you tell a seller that you will be calling every Friday at 1 PM to tell him what activity there has been on his house and then you dont
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make that call for whatever reason, you have just failed your client. A better script may be: Agent: Mr. and Mrs. Johnson, sellers often get worried or assume that I am not doing anything to sell their home if they dont hear from me. Please know that if you dont hear from me, it doesnt mean that I am not doing anything to sell your home. Can we mutually agree that you will let me know if you start wondering or beginning to have doubts about what I am doing or not doing to sell your house? Will you give me a call and have a conversation with me about that? This script will save you because you give your clients permission to call and discuss dif cult topics. Instead of sitting over at their house stewing about the fact that a neighbor told them that their agent did two open houses and you havent done any, now they can at least call and have a conversation about why you may not be doing an open house. I use the open-house example because several times a week I hear from sellers: Our agent didnt even offer to do an open house. I share with them that the likelihood of selling a home from an open house is about one in four hundred (national average). This means you have to have four hundred people come to the open house before you actually get an offer. The sellers start to understand that having an open house really doesnt help sell their home. We all know the television shows that people watch are not a true re ection of how the real market works.
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There are several ways in which you can set lower expectations. Here are some example patterns that you can use to develop this skill:
BUYER
1. Mr. and Mrs. Johnson, tomorrow we will be looking at eight houses, and I have not personally viewed these houses. Please be prepared for possible disappointment. If we dont see any that you like, we can regroup and continue our search. 2. Mr. and Mrs. Johnson, if we get to a house tomorrow and you dont like it, do not hesitate to let me know. You will not hurt my feelings. In fact, it is better to tell me as soon as you know that it wont work, and why, so that we can get moving to the next home. 3. Mr. and Mrs. Johnson, the pre-approval process is not an easy one. You will be required to give the lender lots of paperwork and details about your nances. I want to prepare you by letting you know that this can be a frustrating part of the process, and it is often not fun. If you get the information to the lender in a timely fashion, it will make the process easier. 4. Mr. and Mrs. Johnson, people often ask me how long it takes to nd a home, and the truth is that it can take a long time. I work with some clients for a month and some clients for two days. But you should realistically
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plan on taking a minimum of two weeks to nd the right house. 5. Mr. and Mrs. Johnson, I have some great news. The sellers have accepted our offer. However, I dont want you to get your hopes up. Imagine that we are crossing a very large lake, and right now all we have accomplished is getting into the canoe. We have a lot of paddling to do to get to the other side. Sometimes, halfway across the lake, your canoe gets a hole in it. Sometimes you can make it across; o ther times you sink. I am going to do everything in my power to make sure that we dont get any holes in our canoe. But for now, keep your life jackets on, because we are not anywhere near dry land yet. 6. Mr. and Mrs. Johnson, I want to have a conversation with you about the inspection process. I often work with buyers who have an unrealistic expectation about the condition of a previously owned home. They think that the house should have no problems and nothing should be wrong. This is never the case. When you get the inspection report, remember, inspectors are paid to nd problems. If you look hard enough, you can nd something wrong with anything. The reason I share this information with you is so that when you get the report, you will not be taken by surprise. There will be items
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on the repair list, and the process is that we sit down together and go through it line by line.
SELLER
1. Mr. and Mrs. Johnson, I have found in the past that sellers believe their home will sell more quickly than what the market data indicates. The average days on the market for your area are 120 days, and it is important to give you a realistic idea of how long it will take to sell your home. 2. Mr. and Mrs. Johnson, I like to explain to my sellers some of the things that you can expect to happen during this process of trying to sell your home. First, it is going to get frustrating trying to keep your house clean and organized for showings while still living here. I recommend dividing the duties between you by areas. For example, Mr. Johnson, you may be responsible for making sure that the bathrooms are in order before you leave for work. Mrs. Johnson, you may be responsible for making sure the kitchen and living areas are in order. You cannot leave the house without it being ready for a showing. Someone could call at 10 AM and want to see it at 10:15 AM. Second, you should expect that people are going to look at everything. Often they will open your refrigerator, so make sure that you dont have anything strong smelling in the fridge. They will look in your
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closet, and sometimes real-estate agents forget to lock the doors when they leave. These things are just the price of doing business when trying to sell your home. 3. Mr. and Mrs. Johnson, it is important that you understand how I work, so I would like to share with you some of my core beliefs with regard to dealing with clients. Would that be okay? First, I assume that it is important to you to sell at the highest possible price, in the shortest amount of time. Is that accurate? In order to do this, we are going to have to develop a plan of action to sell your house that can accomplish this. Are you willing to do the things necessary to get your home sold? 4. Mr. and Mrs. Johnson, real estate can be a bumpy road. Sometimes we go under contract and everything looks great on the front end, but halfway through or even toward the end of the transaction, deals fall apart. I like to think of myself as the captain of the ship, and I will let you know if I see rough waters ahead. I may even say something like, Be sure that your life-jackets are on, because we have some bad information on the repair request that we have to get through. 5. Mr. and Mrs. Johnson, this is a really competitive market, and we have to price your home aggressively to get it sold. Do you agree? 6. Mr. and Mrs. Johnson, I have to have a dif cult conversation with you. This not easy to share, but I believe that the only way to make great decisions is to
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consider all of the relevant information. I believe that your house is overpriced, and here is why.
LOWER EXPECTATIONS CONTINUED

Failure is a subject that is not easy to deal with. However, when you fail, you have an opportunity to learn. One small thing that you can do after every appointment is to make a list of the things that went well and the things that didnt go the way you wanted. I had a listing appointment last night that didnt go the way I wanted because I got off track with my listing presentation. I went away from my system and it collapsed. The reason I share this with you is because we all fail and make mistakes. The important thing is that I was easily able to recognize the point at which I went off path and steered the ship back in the right direction. I encourage you after every meeting, after every failure, to take a few minutes to ask yourself: How did I contribute to the failure? Dont say that house didnt sell because of the market, staging, or because of pricing. In other words, ask yourself: What could I have done differently to in uence how they decided on price? Is there anything I could have done differently to help them stage the home better? By examining how you contribute to a failure, you can learn and improve your techniques. After working with agents and dealing with all sorts of issues and dif cult situations, I have found that success and
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truth go hand in hand. In other words, the more truthful you are with clients, the more successful you will be. We fail when we create internal fears and barriers that prevent us from telling clients the truth. For example, you may know that a clients home is not worth his perceived price or value, but you fear that if you tell him that, you may not get the listing. One of my core beliefs is that if you fail to tell the client the truth or if you hide important information, you create unintended results. If you take the listing at a price that is over market value, what is the likelihood that it will sell? Slim to none. Every once in awhile you might get lucky and sell one that is overpriced, but the norm is that if a home is overpriced, it is going to stay on the market for a long time. It usually only sells after the seller agrees to lower the price. The truth, the whole truth, and nothing but the truth, is not always a pleasant issue to deal with. Unfortunately, most clients dont want to face the truth. What I have found is that the sooner they face it, the sooner you can get results. One example to share with you is a situation that you will encounter when dealing with a buyer. One important hurdle is getting him quali ed for a loan. Agent: Do you have good credit? Client: Oh yes; there will/should be no problem with obtaining a loan. Agent: When you get this response, you need to immediately say to him, You just said there would be no problem in your getting a loan, is that right? What
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speci cally leads you to believe that there will be no problem? Client: If he responds with anything other than, I have already met with my lender, and he has sent me a pre-approval letter, you have to dig deeper. The buyer may say, Well, I have great credit, and I have never had a late payment on anything. Now you know that he hasnt been pre-approved, and you need to start sharing and educating your client. The next script might sound something like this: Agent: You said that you have great credit and no late payments. Thanks for sharing that with me. However, in my experience, there are often items on your credit report that you may not be aware of. If we do go out and nd a perfect house and you fall in love with it, I assume that you want to get the best deal. Is that accurate? Assume yes Agent: The way to get you the best deal is to make your offer very appealing to the seller, and without you rst being in a position to buy, no seller is going to take your offer seriously. Every seller is going to ask, How are your clients going to pay for this house? Usually, we answer that question right up front by sending him a copy of your prequali cation letter along with the offer. This puts you in a much better negotiating position than a buyer without prequali cation is in. I also need to share with you my interest in getting you pre-quali ed. I have an interest in getting paid. I dont get paid anything unless you buy a house, so
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what I have worked out for people who want to shop for homes but are not pre-quali ed is an hourly rate of $340. I have had to do this because in the past, when I have worked with clients who didnt get pre-quali ed, they usually never purchase anything. Therefore, I dont get paid for the time that I spend with them. So your options are: (1) You can get pre-quali ed and continue to use my services at no charge. (2) Not get pre-quali ed and pay my hourly rate to view homes, or (3) Choose a less experienced real-estate agent who might agree to show you around for free. How would you like to proceed? The reason I share this information with you is because I have a core belief in limiting risk and saving time, so would you be willing to speak with my preferred lender and get this taken care of prior to our scheduling time to go out and view houses? If yes, set them up. If no, you have to keep digging. Every once in awhile, I will get a no; they dont want to meet with a lender. This should be a huge red ag for you, and you have to assume that there is a reason why they dont want to go through the pre-quali cation process. Some of you may read this script and nd it dif cult or uncomfortable to charge for your services. The consequence of not charging them is you do not get paid. I dont know about you, but I would much rather be at home with my family than out hauling and hoping that the buyers in my car can qualify. Remember, you are the professional, you are the expert, you have the real-estate license, and if you dont act like a professional, you become an amateur. Professionals
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get paid. If a client doesnt want to meet with a lender or get pre-quali ed, you should rst recognize this as a problem. Second, inquire as to their reasoning in a genuine, curious way. If you dont, then you run the risk of doing a lot of work with clients who are simply window shopping and using you for the ride. I recently encountered an agent who was setting himself up for failure. He brought in an ad for me to review. The ad looked very similar to this:
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Talk about setting yourself up for failure! There are so many things wrong with this advertisement. I asked Jim several questions about his listing program, and here are the responses that you might nd interesting: If they do everything that I say, I can sell their home in thirty days. If they price it $10,000 below market value, it will sell quickly. I asked him: What do you think people will believe about your postcard that says you can sell their home in 30 days, when the average days on the market are 180 days and we are in the worst housing market that we have seen in over fteen years? They will probably think this is some sort of scam. I asked him: What would you think if you received a postcard like this in the mail? I wouldnt even read this; I wouldnt take it seriously. When he said those words, I think his awareness started to kick in. We do this type of thing all the time. We over promise and under deliver, thinking that if we can just get them to call us, we can make it work out. In this case, there is no way that Jim was going to win. Even if people did take him seriously and called the number and listed their house with him, he would fail. Houses in this particular area just werent selling. Funny thing is, even at a $10,000
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reduction in price, he wouldnt have sold most of the houses here. The city had recently re-drawn the school district lines that shifted the students in this neighborhood from a really good school to a relatively bad school district. So it wouldnt have mattered if the homes were reduced $25,000; not many people would now buy in a neighborhood that fed into that school. I redirected his efforts, changed his ad, and he sent the new advertisement to a neighborhood where homes were selling. His new ad made no false promises and concentrated on his new listing program (that I helped him develop). Then he had a lot of success.
CHAPTER SUMMARY
Take a few minutes and ask yourself this question: What am I doing to contribute to my own failure? Try to generate a list of four or ve top things that you are doing or not doing that keep you from being a top-producing agent. I am not talking about answers like, We are in a bad market, or Its just the slow time of year, or None of my buyers are ready yet. I am talking about answers that point the critical nger directly at you. Like, I know that I am not sending out a newsletter like I should, or I know that I am not cold-calling like I should. Another great answer may be, I know that I am failing because I am a please-accept-me agent, and I dont have a system. When you start asking yourself what you are doing to contribute to your failure,
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you begin to understand what a powerful impact change can have. If you read the preface to this book, you read the story of Paul Potts. Paul didnt fail in his effort to become an opera singer; he failed to create opportunities for exposing his talent to the world. If you think about it, he changed his course of failure by choosing to take a chance on Britains Got Talent. Just like now, by reading this book, you have a choice. You can choose to continue your current methods of selling, or you can make a choice to change. Once you make the decision to change the way you are doing things, the very rst step is to do what Paul Potts did . Find a way to expose your talent to the world. If the world knows what is inside of you your desire to get results for your clients, to take care of them, to protect them, to get them the house of their dreamsthen the results will be exactly what Paul Pottss results were. His rst album has already gone platinum; likewise, you will be a top agent in your market.
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CHAPTER 5
LOVE AND HATETWO EMOTIONS TO DEAL WITH
You come to love not by nding the perfect person but by seeing an imperfect person perfectly. -Sam Keen, Harvard Psychologist and Philosopher. What is love? Love is the strongest emotion that we experience. For some, it is his child looking up at him saying, I love you Daddy. For others, it is nding that special person without whom you cannot live. Some of you reading this might be thinking about Tina Turners hit: Whats Love Got to do With It? Well, love has everything to do with a real-estate transaction. What are the rst words people say when they nd the right house? I love it! What is love? Love is an idea that is manifested in ones mind in different ways. Some get the idea of homeownership
and believe that having a home will give them a feeling that they couldnt achieve by merely being renters. Some manifest love in their mind through another person, and some manifest love for other material things like a motorcycle or car. I had a friend who owned a corvette. He loved this corvette so much that he wouldnt even drive the car in the rain. We all manifest love in different ways through different things. I remember my rst home. I was engaged to be married. My wifes lease was expiring about three months prior to our wedding. I found myself making a decision about whether to rent a place or purchase a home. I was working in public service at the time, and my wife was a school teacher. Together, at the end of the month, we had about two dollars left in our checking account. We found our starter home, new construction, and the builder/bank was allowing customers to do sweat equity. This sweat equity program was a perfect t for us. As a part of the sweat equity program, we did the insulation, interior painting, and landscaping. For doing these items during the construction process, we were credited $5,000 toward our down payment, and we were able to borrow the rest of the money on a 100 percent term. The interesting thing about our situation was that when we went to the model home, my wife fell in love with it. We ended up not even considering any of the other oor plans offered. I knew this was the home she wanted. Here I am, my wife is in love with this cute little house, and I knew in my heart that she was more in love with
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the idea of the house than with home ownership. It was so interesting to watch my wife fall out of love with the house. We started putting the insulation in the home in the middle of the summer, and my wife quickly crossed the ne line between love and hate. It was about 98 degrees with no air-conditioning, and laying insulation in the attic of a small, 1.5-story home was no picnic. Next came the interior painting: walls, doors, and trim. My wife was beginning to hate this little house. Finally, we found ourselves spreading grass seed, in a futile effort to get grass to grow in 100 degree heat. The transformation from love to hate didnt take long. I tell you this story to demonstrate that your clients fall in love with the idea of a home, but often they are not prepared for the reality of homeownership.
REALITY SCRIPTSUSE
TO
REINFORCE
THAT
THEY NEED YOU.
Agent: Buying a home is not like going to an electronics store and buying a stereo off the shelf; it just doesnt work that way. Agent: Can you imagine purchasing $100,000 worth of stock without seeking the aid of a stock advisor or professional stock broker? We all know that most wealthy people surround themselves with the very best attorneys, stock brokers, real-estate advisors, CPAs etc. Most wealthy people will not make an investment of that nature without seeking the advice of a professional.
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I caution you about love, because there is a ne line between love and hate. I want you to start listening for your client to say, I love it. This is a great buying signal, but it should also serve as a red ag for you to start lowering the clients expectations. No house is perfect, not even new construction. If you dont lay the groundwork for problems that could arise, then you are going to create unintended consequences. Sometimes these consequences can create mistrust and a feeling that you are not protecting or ghting for your client. For example, you have a client who nds a house that he loves, but while you are there, you notice or think there could be some issues with the roof. If you let the client fall in loveand especially if you say things like: Oh, isnt this house great? or This house is perfect! you are setting yourself up for failure. Later when the inspection report shows a leaky old roof that needs to be replaced, who do you think the buyer is going to blame? Remember, you just said, Isnt this house perfect? You have sold them on the fact that you are a house expert right? That you know houses, and you are this great real-estate agent. Then why didnt you point out a roof problem? If you fall into the normal sales trap of saying, Isnt this the perfect house? you can see why a client might start to doubt and mistrust you when the inspection report shows problems with the perfect house. Your clients will start to have doubts about you, and the thought will creep into their minds that you dont really care about
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them; you just want them to buy something. Doubt and mistrust lead to fear. Fear will kill your deal. Having clients that are afraid will always result in a bad experience. You have to do everything you can do to be realistic, and lower their expectations.
SCRIPTS
TO
LEVEL OUT
THE
EMOTIONS:
Agent: I know you like the house, but remember that we are not to the nish line yet. We still have to get through inspections, appraisals, and the due diligence period. I dont want to discourage you, but we still have a long way to go before we come to terms. Agent: I know you like the house, and I believe it is a great t for you as well; however, I need to remind you that there could be hidden defects that we may not know about. Until we get all the information, we wont be sure that this is the right house for you. Agent: I know you are excited about the house. If it is okay, I would like to take some time and walk around the house with you to point out some things that I think could be a problem. I like for my clients to make informed decisions; let me show you some things that may come up. Agent: I know you are excited about the house, but remember that right now you are just about to get on board the ship and set sail. On the outside, it looks like a great ship, but for all we know there could be an engine or
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electrical problem. We wont know all of the information until we get the inspection completed, okay? Here is the cycle that normally happens during the home-buying process:
This chart demonstrates that when people start out in the home-buying process, they are very much in love with the idea of homeownership. But as the process transpires, they begin to have doubts and fears, and the hate emotion starts to show up. This chart demonstrates a normal
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transaction. Imagine how these emotions change and vary during a transaction with a terrible home inspection report, for example. You may be asking yourself, What do I do to combat this? In my experience, I have found that if you set really low expectations and try your best to keep this line level at all times (or as level as you can), the transaction will go much smoother. Dont go into Commission Mode when you see the client falling in love with a house. I know it sounds strange, but this should be a red ag in your mind, and you need to start framing the transaction and lowering expectations. Use the previous scripts to try to bring your clients emotions to a lower level. You dont want to discourage or curb their enthusiasm, but if you dont lower the expectations, you can easily nd yourself on the wrong end with your clients when things go wrong. They will be pointing the nger at you, saying things like: You said this was a great house. You said this is a great t for us. Because this is an emotional purchase, they will have to nd a release for their disappointment, and that outlet will inevitably be you. I have seen agents who were highly skilled at knowing how to lower expectations. Those agents are the ones who get more deals and more referrals. The agents who let their clients fall in love and maintain this illusion that everything is perfect and great are the ones who end up with clients who are completely crushed when things go wrong. You do not get referrals when clients are crushed. Several years ago, my wife and I were considering purchasing a rather pricey SUV vehicle. We had a vacation
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home in the mountains. We found ourselves from time to time in need of four-wheel-drive capability in order to be able to traverse the snowy road that led to our little cabin in the woods. We went to the dealership, and we looked at one vehicle and were totally impressed with its four-wheeldrive ability. We didnt fall in love, but we almost did! I spoke with a salesperson who had a couple of rewards for top salesperson on his desk. He also was recognized for having the most referral business at the dealership. After we had talked with him more about our needs, he said to us, These cars are not perfect. I was shocked. He knew that we liked the vehicle and were probably going to buy it, but he simply said, These vehicles do have problems from time to time, and I would not own one without a manufacturers warranty. He then went on to share with us some of the common problems they experienced as well as the average days of service for the vehicles. I was falling out of love with every piece of information that he gave. We decided against the purchase right then and there. I asked the salesperson why he had shared with us those things about the repairs and required maintenance on the vehicles. I told him that we probably would have purchased one if we hadnt had that information. His response was, Do you see that award for getting the most referrals of anyone in the of ce? Well, you get referrals by being honest, and I cannot allow anyone to purchase without knowing the whole truth. You have to do the maintenance on these vehicles. If you dont, you will never be happy. He went on to say, Happy people refer you to other people.
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It was obvious to me that this salesperson understood that it was more important for him to have a happy customer than it was to get a sale and earn a commission. The formula is simple: happy customers refer people to you, and unhappy people do not. How do you have a happy customer? In this case, by educating customers so they can make an informed decision. He formed one of my ground rules, which is making sure that everyone understands what important words mean. He was focused on the referral, not on the sale, and that is exactly why he was the number-one salesman for referrals in his of ce. One other important thing to note is that shortly after this meeting at the dealership, a friend of mine began looking for a four-wheel-drive vehicle. I recommended that he talk with this salesperson. I referred my friend over to him, and I remember saying to my friend, Only deal with Steve; he will tell you everything about these vehicles. My friend called me later and told me that he had purchased a vehicle through Steve. So you see, it does work. Sometimes you dont make the sale. When you start to view your business in the long term, you begin to have a natural desire to ensure that clients understand the truth even if the truth means that you lose a sale. This is when you will see referrals start owing in. A customer that is not satis ed with your service, is extremely damaging to your business. This is not acceptable . There are serious consequences of having dissatis ed customers. When you fully understand and appreciate that it is better to lose a sale, than have
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a negative outcome, you achieve a maturity in business that people recognize. This will result in a desire for your services.
CHAPTER SUMMARY
In conclusion of the love/fear chapter, buying a home is an emotional event. The emotions can go from love to fear and from fear to hate in a matter of seconds. You have to be able to recognize these emotions in order to intervene in a way that levels your client out as much as possible. You do this in an effort to prevent the consequences that occur when things go wrongand if it can go wrong, it usually will. There is nothing wrong with clients being in love with their home. This is what you want. My advice is to make sure that they are in love with all of the information about the home, and the only way to do that is to keep their emotions level until you are able to get all of the information. You wont know everything until the inspections and due diligence are completed. Even then, you must prepare the client for the fact that inspectors miss things and that home ownership requires an attitude of care and maintenance!
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CHAPTER 6
SMART MARKETING
When I teach my Marketing and Advertising class, I ask the students to tell me four things about themselves. It is really interesting to hear the answers to this question. Most of them say things like: I am a very experienced real-estate agent. I am a very ethical broker. Some say: I work a lot in XYZ area. I often hear: I like working with people. All of those answers are fair answers that make sense, but look at the question again. Tell me four things about you; you as an individual. This is sort of a trick question, but this is how you begin to develop your marketing plan. Until you fully understand who you are, you can never market yourself to the world. By examining the four things about yourself, you can really start to formulate the reason that people should choose you. My answer is: I love a great
chicken parmesan dish served just at the right temperature with mozzarella cheese melted on top. I love to go out in the backyard with my son and play soccer, and I am the rst one to cheer when he scores. I love to hear my daughter play the violin. Although her notes are for the most part off key, they are still music to my ears. I love slow dancing in the kitchen with my wife. Now, do you have a much different picture about me? You see, this is what marketing is. It is telling the world who you are in a way that they can relate to and connect with. Let me ask you, if you could get on the radio and tell the world four things about yourself, what would they be? Take some time right now to write them down. Dont focus on your professional resume; focus on yourself as a person. The truth is, no one cares about your professional resume. If you can get them to care at all, it will be about you as a person. You see, to the world, you are simply a salesperson. To the world, you are a commodity, and when you are selling a commodity product, you have to do everything you can to make your product different from that of the competition. The way you make yourself different is to gure out what is unique about you. Four things to know about me: 1. 2. 3. 4.
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I know a very successful agent in our area, and it just so happens that she is a breast cancer survivor. For every commission she earns, she donates 10 percent to a local cancer charity. She has a great story, and she tells the story to everyone. She talks about how grateful she is to God for saving her from a terminal illness. She talks about how scared she was of losing everything. In fact, when you go to her Web site, the only thing that even mentions real estate is the button that says search for homes. Some of you may be thinking that it is dirty of her to use a charity to make money. Well, some may have a moral conviction about not using a charity, but I see this as a huge part of who she is. Do I want to work with someone who is striving to cure cancer? Or do I want to work with the Neighborhood Expert? I am sure some would choose the neighborhood expert over the cancer donation. The point is that she is giving people a choice. Just so you know, she is so busy that she has had to hire buyers agents to work on her team. Think of it like this: do you know how many people out there are cancer survivors? The estimate is that every person in the United States knows at least one person that has been affected in some way by cancer. Whatever your story is, be sure to tell it. Not all of us have cancer, and maybe you have another cause that you would like to work toward. Maybe you like Habitat for Humanity, or maybe your church has a large community service that it is working on. You dont have to have a charity, but you do have to have a story. The story needs to be compelling
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and one that says something about you. Can you imagine how many referrals the cancer agent gets? Think about the conversations that people have about her. They dont just say, I recommend her. People say: I recommend her, and with every commission she earns, she is ghting cancer. She even has on her Web site a graphic of a thermometer that shows how much money she has raised for breast cancer so far. When people see this, they psychologically want to help. The focus shifts from purchasing a house to the cause. Now, keep in mind, she still has to provide great service, but isnt it hard to become angry and upset with the woman who is ghting cancer? The term marketing comes from the 1930s era when, during the great depression, vendors would load their carts and roll them to Market Street. The phrase of going to market or marketing was born. Wikipedia states the de nition of marketing as the act of communicating, delivering, and exchanging offerings that have value for customers. Marketing includes three subcategories: advertising, distribution, and selling. Lets begin with creating a marketing plan. There are four aspects to creating a marketing plan. They are: Product, Pricing, Placement, and Promotion. Product: There are literally dozens of products that we sell in real estate. Condos, single family homes, , patio homes, high rise condos, land, farms, strip malls, of ce space, retail space and the list goes on. Some of the people categories include: rst time home buyers,
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downsizers, move up clients, luxury home buyers, retirees, and country club residents to name just a few. The most important aspect of creating a marketing plan is to decide what product you are going to sell. With real estate, it is important to pick a direction or target market and aim for that goal. I operated for many years as what I like to call a generalist. Think of it as a general practitioner in a physicians of ce. He can examine you and treat you for whatever may be ailing you. But just like in the physician world, it wasnt until I de ned myself in the market that I really began to make money. Some may choose commercial or luxury homes or golf-course communities. I chose to be the golf-course specialist, and often my ads included a free round of golf or Meet me at the club to talk about your real estate needs. I would even post my of ce hours at the clubhouse from 46 on Thursdays in case someone wanted to come by and talk. I specialized in four large golfcourse communities, with high end homes and over eight hundred homes in the community. I advertised heavily in these communities and sent newsletters to each of these communities as well. I sponsored and played in golf tournaments. I had Web sites for each of the neighborhoods. One Web site was www.buyhighlandcreek.com. Highland Creek was the name of one of the neighborhoods that I targeted. People would often go to the Web site to see the listings in Highland Creek. My target was home sellers in these four golf-course communities. I picked this because I really enjoy golf, and I also strategically positioned myself
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with homes that were starting around $200,000 and went all the way up to over 1 million. This was the price point I wanted to work in. I also lived very close to all four of these communities. Just as I did, you have to decide what product is right for you. If I were just starting out in real estate, I would probably pick the rst-time home buyer market. First-time home buyers need your help, and they are probably going to be selling in ve years or less. Remember when I talked about explaining what important terms mean and making something real to people. A great example would be for rst-time home buyers. Instead of advertising a home for sale at $149,000, your ad should say: Own this home for $1,000 per month. Do you see the difference? That way a rst-time home buyer can understand what $149,000 means in terms of monthly payments, and he can compare that number to what he is paying in rent. The monthly payment is what matters to a rst-time home buyer. Another good choice might be to target relocation clients. People moving into your area need your help. They dont know about the schools, neighborhoods, churches, restaurants, etc. The rst step in developing a marketing plan is to decide what product you are going to sell. This doesnt have to be a house or a type of house; it can be a lifestyle. For example, condo living is often advertised as maintenance free. Your ad might say: Dont cut grass ever again! Do you think this might appeal to a senior out there who has no choice but to cut grass in the heat?
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Pricing: I am not necessarily talking about pricing of individual houses, although that is very important. But what this step is referring to is pricing for your services. Many agents are discounting their services. I am not arguing that agents shouldnt discount their services, but I would like to suggest that you may think about what you charge in a different way. Never discount the value of what you do. What you do is worth a lot of money. You have the realestate license. You are the expert, not the client. If that were not the case, he wouldnt need you. Decide on a price for your services and your time. Most professional business consultants charge upwards of $500 per hour. Why would you think that your time is worth less? I cannot put a price on the time that I spend with my family, and my away from home time is extremely precious. In order for people to take me away from my family and the things in my life that I love, they have to pay for it, and it is not cheap. I understand that you may have to discount to get the business or the added edge over your competition, but never discount how valuable your time is. What you do for people can make the difference between a great investment and a poor one. After reading this book, your negotiating skills alone make you worth more than the commission that your clients will have to pay you! Placement: Think of placement in terms of how you place yourself in front of your target. Just as I left golf balls on the stoops or front porches of homes, you also have to plan how you are going to place you in front of your
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target. The absolute best position to be in is a face-to-face meeting. How do you do that? Well, you could go door to door. A lot of agents probably cringe at the idea, but going door to door and simply introducing yourself by giving a business card, newsletter, or some other marketing piece, is one way to be face to face. I know some of you are thinking that there is no way you could be comfortable doing this. This should be your rst challenge. Expose yourself to areas of discomfort. By doing this, you will grow. I have to honestly admit that I am not a very social person by nature. I found that having to meet with strangers and go to social functions was totally out of my comfort zone. I have forced myself to do it, and now I am much more con dent and better at being a social person. Right now, gure out what area is not comfortable for you. It may be: cold calls, face-to-face meetings, public speaking, communicating by e-mail, etc. What areas do you feel are weak for you? How are you going to place yourself in front of your target? Some of you are probably jumping on the Web site/ Internet wave. This is a good way to expose who you are to clients, but nothing beats a face-to-face meeting. Use the Web site as a tool, not as the only way to bring clients to you. Have meetings, attend social functions, provide lunch to a company, or sponsor a bowling league, football camp, or golf tournament. Whatever you do as far as placing yourself in front of your target, dont ever get away from the face-toface meeting.
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Promotion: This is the nal step toward developing your plan. Promotion is really advertising. It comes in many forms: TV, radio, print, yers, postcards, e-mails, news releases, or many other forms of media that you use to promote your services. Advertising can be really expensive, so choosing the right media can be challenging to say the least. You are going to have to advertise in some form or fashion if you plan on being successful in real estate. What makes an ad effective? Which ads yield the best results, and why? In my experience, the ads that yield the most effective results are those that mention the desirable areas of town. Remember the old adage location, location, location. For example, lets say the south side of town is known to be a very desirable area. If I run an ad that says: Great South-Side Starter Homes versus Great Starter Homes, it yields better results. Another strategy that has yielded great results for me is actually advertising a low down-payment program. I always try to dispel the myth that you need thousands to put down in order to purchase a home. It is simply not true.
1-800 NUMBER
One really effective tool that I recommend is to have a 1-800 number with extension numbers designated for every advertisement. This is effective because (according to the NAV-National Association of Voice Technology) we can prove
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that people will call and listen to a recorded message 84 percent more often than when they have to call and speak with a live person. This allows you to record a personal message that can convey your voice and personality. This will also save you time from dealing with people who are calling about basic information or who are not really interested. They can get the basic information from the recording, and you will not waste your time returning calls. The other advantage this gives you is that of nding buyer clients. Most of the 1-800 number providers send you a report with all of the people that have called your 1-800 number. This gives you an opportunity to call the people back, introduce yourself, and ask if they have any other questions or nd out if they are working with another agent. With regard to yers in yer boxes in front of my listings, I will put one extension number on the front of the yer and a different extension number for the back of the yer. The back of my yers always have payment information and a unique loan program. This way when I give them a call back, I know which side of the yer they were more interested inthe house or the loan program. 1-800 numbers can be a great way to generate leads and gather information about your listings. You can also use these with yers, postcards, home magazine ads, etc. If you are interested in studying this further, you can simply do an Internet search for 1-800 numbers; there are literally dozens of providers that you can contact. It is money well spent, and I would encourage you to obtain a 1-800 number.
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NEWSLETTER
Another effective advertising tool is a newsletter. I developed and sent an eight-page newsletter every month to my database or sphere-of-in uence mailing list. I sent about 150 of these each month, and it is a very effective marketing tool. I would also keep copies of my newsletters in my car to take into grocery stores, doctors of ces, dentists of ces, you name it. Everywhere I went, I left a newsletter. A really effective place to leave one is on the back of the commode at restaurants and of ce complexes. I would stop at business parks and simply walk in and go to the bathroom. While there, I would place a newsletter on the commodes, as if someone had brought it in to read. The newsletter would have my Web site information and also my e-mail address. One tool I use is to ask a trivia question in each edition and announce the winner every month. I knew that my commode plan was working because I would often get answers to the newsletter question via an e-mail from someone not on my mailing list. This meant that someone from the doctors of ce or the bathroom was responding. Guess what? When they responded by sending me an e-mail, I then had their e-mail address and would respond by thanking them for responding and asking if I could add their home address to my mailing list. Of course, I didnt always get their home address, but most of the time I did. How else was I going to send them their prize without having their mailing address? This was a really effective
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way of building my mailing list. One important formula to remember is that 150 people in your database, touched two times per month, should yield you $50,000 in commissions. (This, of course, is market speci c.) The touch is the important part. One of my touches was my newsletter. I believed in it because I had so many positive responses from my newsletter.
POSTCARDS
My second touch was usually a postcard announcing one of my listings or an update with market conditions and statistics, etc.
PHONE CALLS
Each day I had a goal of actually talking with ve people in my database. This is not as simple as it may sound. I mean actually getting ve people on the phone and speaking with them. This meant that I had to make twenty- ve calls in order to actually talk with ve people.
LUNCHES
AND
COFFEE
One other marketing idea for you is to set up lunches and coffee visits. How this worked for me was: I would call a
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person on my list and say: Hey Bill, are you free for me to come by and take you to lunch today? I would always go to his place of work so that he could introduce me to his coworkers. This was a great way to meet people, and of course I had a newsletter or business card with me. A newsletter is a great give-away, and it is de nitely softer than a business card. I would also do what I called the coffee visit. This was an easy way to get into his place of business. I would call and say, Hey Bill, I was wondering if I could bring some coffee by your of ce. Are you going to be there? Of course most of the time, he would say yes. I would always ask how many people were in the of ce and say that I would bring enough for his coworkers too. If he said to bring fteen coffees, I would bring fteen. But of course, I would always take a stack of newsletters to give away. Remember, these were people I knew. I had either sold them a house or else I knew them from church or some other social setting. I would also tell them the truth and be really transparent and let them know that I would like to come by their of ce one day and bring coffee and hand out my newsletters. When you say that to someone who thinks you just did a great job for him, he will often say, John, can you provide me with a stack of newsletters? I will give them out for you. This is what you want! It always saved me time from having to go out to the of ces, and there is no better cross-sell for you than for someone to endorse you.
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WEB
SITES
Web sites are invaluable as a marketing tool. There are some components of a Web site that are really important. First, the ow of the Web site has to be easy and elementary. The best Web sites are those that dont give the client too many choices. The best design would be a site that says, Click here if you are a buyer, and Click here if you are a seller. Then once he clicks the appropriate box, he is prompted to: Register here to search for homes, or Register here for home-selling strategies and information. If he doesnt register, he doesnt move forward. If you are not capturing leads with your Web site, you may as well take your money and throw it out the window. The registration may be as simple as his name and e-mail address. The next step might be that he can search for a few homes, but after lets say four homes, he has to put in more information to continue. Information like: mailing address, phone number, how long have you been looking, have you spoken to a lender. The second registration should be more of a small survey. The formula for a great Web site looks like this:
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Breadcrumb marketing is the act of giving clients a piece of breadin our case, informationto lead them to where you want them to go. In order to lure the customers down the path, you give them a really good bread crumb up front. Remember, as stated in Chapter 3, you dont want to start by asking them to register or give you information immediately. Trust takes time, but in the case of the Internet, you have to capture their information. If you start out forcing them to register, it is like asking them to marry you without even going on a date. You should put some really good bread crumbs on your site. I love an introductory video. This can be a powerful tool, as the clients get to see, hear, and discover who you are. Free reports are also a great, tasty breadcrumb to have available. Allow them to get some good information and then force them to register to continue. One facet of your Web site we have to discuss is what I like to call the stickiness of your Web site. We know that Web site users will register at more than one Web site. The best way to explain the stickiness concept is with a story. I recently went to a gun show. For those of you not familiar with it, a gun show is like a ea market where a person can purchase hand-guns, ri es, shotguns, etc. After arrival at the market, I quickly found the type of gun I was looking for. There were approximately fty vendors, and all of them had the same exact gun that appealed to me. Nearly all of the vendors had the gun priced about the same, within a couple of dollars. When I was ready to buy, I simply went vendor to vendor in search of the one that would give
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me the best deal. I went to the rst table and talked with the gentleman and asked if there was any room to negotiate on price. He said no. I went to the next vendor and asked the same thing, until I found a vendor who was ready to deal. Guess which one got the sale? This leads me to the next marketing topic: Your unique selling proposition. A unique selling proposition is what makes a person want to choose you out of all the other real-estate agents in your area. It is what makes you unique, and in the case of your Web site, it is what can help in uence a client to stick. The longer a person is on your Web site, the higher your chances are of securing him as a client. Imagine if the very rst vendor at the gun show had said something like: We dont discount price, but we do provide a two-year, no-questions-asked warranty. If anything happens to that weapon for the rst two years, we replace it for free. Be sure to ask the other vendors if they provide a warranty. If they dont, you should buy from us. This would have been a great, unique selling proposition. It probably would have been enough to in uence me once I checked with some other vendors. In the case of your Web site, you need to get your unique selling proposition out there very quickly. It may be something like: Buy a home with John anytime in the month of November and get a free home warranty at closing. Another example, Go under contract with John by the end of the month, and get $500 back at closing. I am never one to advocate lowering your price, but in the world of the Internet, you have to get a sticky message out there
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very quickly. It has to be interesting enough to get the client to stay. Remember the gun-show scenario? The guns at the vendors tables were exactly the same. I purchased the gun from the dealer who gave me an incentive. I know that you are better than the other agents out there, but if you dont get the client to stick around long enough for you to show your value, you are losing business. Price seems to be the easiest, most effective way to in uence the client to stick. Think about it like this. You didnt know anything about the agents in your area, and you picked up a home magazine. All of the ads looked pretty much the same, except there was one ad that said, Buy a home with me, and receive a free home warranty. Would you not be inclined to call that agent over the others in the magazine? Only you can decide what your unique selling proposition is, but the rule to remember is: Get the message out there quickly (it should probably be the rst thing the client sees on your Web site). Price is generally the easiest, most effective way to in uence a client to stick. Note: You should think of the Internet/Web site as the modern-day telephone. It is nothing more than a communication tool. Remember, your job is to convert from a lead to an appointment and an appointment to a contract and a contract to close. I have never seen a Web site write a contract for a client; you have participate. Think of the Web site scenario as though you are sitting with a group of people and one raises his hand and says: I am thinking about buying or selling a home. What do most
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great teachers do when a student raises his hand? They call on the student! You have to actually pick up the phone or communicate with the client. You must view the Web site as a way to capture those people who are raising their hands.
CHAPTER SUMMARY
In conclusion, marketing has some important components. First, you have to develop a marketing plan. You do that by determining who you are and what target you would like to hit. Its important that you pick a target that you enjoy, such as rst-time home buyers, sellers in a certain area, move-up clients, or condo specialist. Pick a target and work toward that target. Second, know what you charge. Pricing is important. Dont discount or devalue how important your time and work are. Placement is the third step in creating a marketing plan. Think of this as product placement, like in a grocery store. They always put the candy and gum next to the register to tempt you to make a purchase. Placing your services in front of people can be a challenge, but the best place you can be is actually in a face-toface meeting with the potential client. Promotion is the nal part of the marketing plan. This is really advertising, and the way you advertise or promote your services can be effective or ineffective depending on the design and style of the advertisement. List speci c locations or hot neighborhoods that are desirable, and use a 1-800 number
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in your advertisement. Try advertising a payment or a low down-payment program, and remember to use the Internet as a communication tool. Finally, remember that you have to bring the client to close. If you dont, all the advertising in the world is not going to mean one penny in your pocket.
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CHAPTER 7
UNCOOPERATIVE CLIENTS
This is the pattern that you should always follow when you have your rst encounter with your client. Start with the building rapport phase, and work your way down this chart to determine if you should continue to work with the potential client. This chapter mainly deals with how you should test the potential client for cooperation and what to do if he is uncooperative. Getting an agreement for either a conversation or a payment is very important. It is the beginning of setting boundaries with your client. Setting boundaries is essential for being successful at real-estate sales. Have you ever heard that the best way to get a boyfriend or girlfriend is by not looking? The reason why this logic works is because if you are looking, you send out signals of desperation. Most
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desperate people are not very attractive or valuable. When you are desperate, you reek of weakness and inexperience. In other words, if you send out signals to a potential client that you are desperate, he will run away! I know that you might be thinking that if you dont go out and show him the house, he is just going to call another agent who will. I would argue that this is perfectly ne. Let the other agent go out and waste his time. You concentrate on working with clients who are going to actually buy and, more importantly, clients who will refer you to other people. On the off chance that you ask a buyer if he is willing to have a conversation with you about how you might work together, and he says something like: I would just like you to show us the house, you have to decide if you want to move forward with showing the property. My conversation with that person would be: Agent: Mr. Johnson, you just shared with me that you would prefer that I just show you the property and not have the conversation about how we might work together. It is important that I share with you that I normally do not agree to show a property without having an agreement to have this type of conversation. Mr. Johnson, without having this conversation, the only way I can agree to show you this property is to charge you for my time. I charge $125 per hour with a two-hour minimum. How would you like to pay for this? This pattern looks like this:
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This sends a clear message that you do have boundaries and that you get paid for what you do. If he doesnt want to pay the $125 per hour and he doesnt want to agree to have a conversation about working with you, then you have to decide what you would like to do. Remember that if you decide to move forward with this client on his terms, not yours, you set yourself up for some unintended consequences. Those consequences may be that you waste your time going out and showing properties to someone who has no intention of working with you. The truth about setting boundaries is that real-estate agents have to change the way we view our job. What I mean by that is that we have to stop working for free. Other professional business consultants do not work for free. Why should we? The other aspect of charging and viewing yourself as a professional consultant versus a jump and run type of agent is that you are setting yourself apart from everyone else out there. You are different from the other real-estate agents with whom they have spoken. You have taken a stand and said, No, I wont just jump up and go show you a house; not without a conversation or payment for my time. This makes a potential client see you in a different light. The thoughts that the clients have about you are: He charges, and he operates differently. There must be something better about working with him, because he charges. People have a mindset out there that if something is free, it is worth exactly what they have paid for it. If you provide
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service for free, what type of value is that customer going to put on the service you provide? There is a priceless value to having boundaries. If clients do not want to be cooperative and grant agreement to spend a few minutes talking with you, then do you think they are going to be cooperative during the transaction? I have very rarely encountered a client who is not willing to at least have a conversation with me about the way we might work together. I am so glad that I have incorporated this into my initial conversations with potential clients because I could never put a price tag on all of the time, effort, and energy that it has saved me. I have an interest in utilizing every minute of every day in a way that is going to help me achieve my goals. I do not want to waste one minute of my valuable time on customers who are uncooperative.
CHAPTER SUMMARY
Some of you may be thinking that you will lose out on a lot of business by charging a client when faced with an uncooperative customer. It is actually quite the opposite. You will lose out on a lot of business by agreeing to compromise your boundaries and work with uncooperative clients. Every minute that you spend trying to please and nurture that customer who has been uncooperative from the start, you take away from a client who would be much easier to work with and who is more likely to refer you to other people in
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the end. In summary, to correct a client who is falling out of your system: Charge him. You are saying to him that he might get away with this with a lesser-quali ed, lesserexperienced agent, but he is not getting away with it with you. Ultimately, you are sending the message that you are a professional, that your time is valuable (because it is), and that you are completely okay with him walking away. This makes you really attractive. It screams to him that you are con dent and that you have worth.
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CHAPTER 8
SUPER AGENT
Negotiation is one of the toughest things that we as realestate agents do, and many books have been written on the topic. Lets begin by talking about your rst discussions about negotiations with your clients. Some great scripts that I use are: Agent: I will negotiate for you as though every penny were my own. Agent: Buying a home is an emotional event, and during an emotional time, most people make poor decisions. They think with their heart and not their brain. This is why you need someone like me to negotiate for you. Agent: If you were a surgeon, you would never do surgery on yourself, because performing surgery on yourself is much different from doing it on a patient. Negotiation for
a home is the same way. You need someone who is thinking about it as a pure investment decision, not an emotional decision. Agent: I negotiate like a bull dog. I dont stop until we get the very best deal. Agent: My negotiating skills alone are worth a lot more than the commission that youll pay me. Agent: A lot of clients think that negotiation is all about price, but that is not the case. Price is important, but there are other factors to consider. For example, the closing date is part of negotiation. If you close at the end of the month verses the beginning of the month, you save on prorated taxes and interest. Negotiation can include things like refrigerators, window treatments, or repair items. I want you to realize that negotiation is not only about price. In fact, if I believe that a house is priced correctly, I will encourage you to pay what the house is worth. There are some important rules to remember regarding negotiation: 1. Have a conversation with your clients up front to set expectations low. Keep in mind that they are watching television and getting other information from neighbors and friends about what you should or should not be doing for them. You have to set the record straight up front with your clients. If you dont, they may think that you are not ghting for them or doing your job if you dont get them $5,000 off of the asking price. What
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if the house is clearly priced below market, and they are already getting the house $5,000 below value? How dif cult is it going to be to go in and negotiate even more off of the price? Dont set yourself up for failure in this area. I have had great success in explaining to a client that, regardless of the price, we are going to offer what the house is worth, and that I will help him determine that with factual information. If a house is priced right, we will pay what it is worth. The negative to trying to get it below its value is that a potential buyer can create negative consequences by actually lowering the average selling square-foot value in that neighborhood. A buyer doesnt want to go into a market that is declining. Therefore, I always recommend that the client pay what the house is worth, regardless of the price. Most importantly, remember that if you fail to have this conversation with your client in the beginning, you can create a feeling from him that you are not ghting for him. 2. The person who gives or tells his number rst is the one who loses. What I mean by that is this. Lets say you are representing a seller, and you have a buyers agent who calls. He says, Can you give me an idea of what the seller will actually accept? Or, Look, I dont want to waste my time or your time. Where do we need to be to get this home? I am sure that most of you have heard all types of questions like these from experienced buyers agents who want you to give them your
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number. The answer to any and all of these questions is simple: Make Us an Offer. In other words, do not give them your sellers number. Lets say you have the house priced at $150,000, but your seller will really accept $140,000. If you give him the $140,000 number, the buyer may have been willing to offer $145,000 but will only pay what you tell him. Never give your number rst if you represent the seller. The sellers have a little disadvantage in this cat-and-mouse game of negotiation because they have to put a price on the MLS. They are in essence giving their number rst. Also, as a seller, remember that it is good to plan to give some. Psychologically, it makes the buyer feel good if he thinks he is getting a deal. Buyers these days expect to get something off of the asking price. I always share this with my sellers so that they are prepared for what to expect. Sellers always have a number that they are willing to accept. You have to nd out what that number is at your initial consultation. Knowledge is power, and sometimes you have to dig and dig to get to the real number with the seller. 3. Buyers who make a really low rst offer usually end up paying more than they would have paid had they made a more reasonable offer. The way this works is:
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Negotiation is not an art form. Its not really even a skill set. It is going to bat for your client in the best way you know how. How do you become a better negotiator? My guess is that you probably are a really good negotiator already. You just arent highlighting to your clients those times when you go to bat for them. There is nothing wrong with pointing out something that you did for your client, whether it was negotiating a better closing date or negotiating a refrigerator into the deal. Standing up and shouting to your client, Look what I did for you is really important. It is what makes him remember you. One thing I used to do with my buyers after they closed was to send them a report. That report looked like this:
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Buyers Agent Report for Mr. and Mrs. Johnson
I always included this report in my le (for the of ce) as well. This is what I like to call, The Proof is in the Pudding report. If you keep track of these numbers, by the end of the year you can send a postcard out to all of the people in your database saying something like: This year, John Horne negotiated over $75,000 in pricing for home buyers. This is powerful advertising, and you are able to do this because you have proof! This report is also a great tool to use when you meet with potential new buyer clients. You could pull out a few of these reports and say, Here are a few examples
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of what I have been able to do for clients in the past, and when we are all through, you will get your own report. This can also help you to show a potential new client just some of the tasks that you do as a buyers agent.
RULES
OF
NEGOTIATION CONTD
4. You really have very little control over a sellers number. What I mean is, every seller has a number that he either will or will not (or cannot) go below. You can make all of the offers in the world, but if the offer is below his set number, he is not going to accept it. No matter how hard you negotiate on your clients behalf. 5. Determine the best rst offer. I have lots of students who ask me the best way to go about making the rst offer. I put together this visual chart to help with the rst steps of making an offer.
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Pattern for Making First Offer
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STEPS
TO
DETERMINE OFFER:
The rst step is to research heavily to determine the value of the property. Information is the key to success with any negotiation. If you dont know what the property is worth, how can you advise your client with regard to what he should pay. The second step is to attempt to discover defects with the property. The reason you are doing this is that you want to give the listing agent ammunition that he can use when he goes to the seller with your offer. One item that agents often missis generally a good piece of ammunition to useis the roof. My conversation with making this offer would sound like this: Mr. Listing Agent, I realize that this offer is lower than what your seller was expecting. However, we noticed that the roof is showing signs of wear. In fact, it looks like it may need to be replaced in just a couple of years, so we discounted our price based on the prorated cost of a new roof. Do you see how you are actually helping the listing agent by giving him a legitimate reason for the lower price? When he discusses this with his seller, he will be making an argument for you. Keep in mind, you start with demonstrating what the house is worth by researching the comparables, and I always send those with my rst offer (if the seller is off on price). Then I would reduce the adjusted value for the prorated roof amount. Here is a chart to demonstrate the pattern:
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6. I often call the listing agent to see if he will send me the comps that he used to determine price. The conversational pattern might sound like this: Agent: Mr. Listing Agent, I have a client who is interested in your listing at 123 Main Street. I am having a really hard time determining value based on the comparable properties. Can you help me? Give me some ammunition that I can use to justify the price. If you can send me over some comparables to help, I might get my client to come up on his offer. Based on what I am seeing, I cant justify the price. There could be something that I am missing; can you help me?
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This is a great strategy, especially if the house is really overpriced. Basically, you are calling the listing agent and saying in a nice way, My clients are interested, but not at this price. You will know very quickly if your comparables are incorrect. If the listing agent is con dent that the house will bring the list price, she should have no problem sending you the comparables. If she doesnt send them to you, then you know that she knows the house is overpriced. This gives you a huge advantage, and you need to start setting the stage with the listing agent. There is nothing wrong with you sending over your comparables. In fact, it should really help your case with the listing agent. 7. This next strategy is what I call: Letting the sellers win on price. Psychologically, we know that something in the brain happens when a seller gets an offer close to list price. The endorphins start owing, and he starts calculating in his head the amount of money that he will make. Sellers generally get excited when they get an offer that is reasonably close to list price. This strategy, then, is the following: when you sit down with your buyers, you look for other items that are not based on price, especially when the sellers have the home priced correctly. You and your buyers create a list of items that they would like to include that will add value to them but wont necessarily take away from the seller. Some examples are: bar stools, refrigerators, washers and dryers, closing date, home warranty, curtains, window
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treatments, lawn mowersjust to name a few. These items may not mean that much to the seller, but for a buyer, especially a rst-time home buyer, they can mean a lot.
CHAPTER SUMMARY
Set expectations with regard to negotiation. Encourage your clients to pay what the home is worth, and set realistic expectations as far as getting the seller to come down from the list price. Remember that negotiating skills deal with more than just the purchase price. Closing date, personal property, and repair negotiations are all a part of your role as a negotiator. In my experience, buyers who make low offers generally end up paying more for the property than they would have paid if they had offered a more reasonable price up front. Dont be afraid to tell the client what you have done for him. Use a report or chart like the Proof Is in the Pudding chart to track your success. This will show a potential buyer client or seller client that you are able to get results. Remember that all sellers have their number. This number is generally their bottom line, and no matter what you do, it is dif cult to get them below this number.
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CHAPTER 9
LISTING SECRETS
I am a rm believer in the phrase: You must list to survive. Dont get me wrong. I know of rms that concentrate on buyer representation, and they are doing really well. However, think of the production numbers they could have if they also listed property for sale. Listing and marketing homes for sale, in my opinion, is what real estate is all about. Some advantages to listing properties are: You have your sign out front! This helps you build name recognition and helps in getting buyers. You have yer boxes in front of houses, which can also help you get buyers. The sellers themselves are going to move somewhere. So you can either get a double hit which is what I call a
sell and a purchase, or if the seller is moving out of the area, you can work him for a referral out of town. You have inventory and something to advertise. You have a place to do an open house. You have something to advertise on Craigslist. You have something to talk about with your sphere of in uence! You have something that will hopefully sell, creating revenue.
If you list the right properties the right way, you will be successful in real estate. It is just that simple.
WHAT IS
RIGHT PROPERTY?
Right property is more easily de ned by de ning the wrong property. Characteristics of a wrong property: 1. Located in a bad school district. (schools and realestate values go hand in hand) 2. Sellers arent motivated to sell; they are simply shing to see what they can get. 3. House is located near a train track, airport, or other commercial nuisance. 4. Steep driveway. 5. Seller is unrealistic about price. 6. House is in terrible condition. 7. Seller has done nothing to get ready.
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8. Yard and curb appeal are not up to speed. 9. Sellers are smokers and they smoke in the house. 10. Sellers have pets that they are not making provisions for, and/or they have not cleaned/replaced the carpet. 11. Sellers are separated and/or in the middle of a divorce. 12. Sellers are in such a nancial condition that they cant afford to sell and pay you! 13. History shows average days on the market of 120 or more. 14. House has been listed numerous times by numerous agents with no sales. All of the above are red ags that you need to look for. It doesnt automatically mean that you shouldnt list these properties. However, it does mean that you need to seriously consider if it is going to be worth the time and energy to list them. Lets touch on each of these brie y. 1. House is located in a bad school district. This is a dif cult position for a seller because homes in bad school districts do sell, but they usually take longer and are not as valuable. I personally would not take a listing like this unless the sellers were in agreement to have a very realistic below-market-value asking price for the home. The sellers would have to cooperate with me and follow my instructions. There is an argument to be made that some people dont care about schools because they dont have children. This is true. However, the majority of buyers are going to be concerned with
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school districts. I am a numbers person. If the majority of houses in this area are not selling in a timely fashion, do I really want to concentrate my time, energy, and effort on a property that will probably not sell, even in the best of times? Remember: location, location, location. It has never been truer, and a home in a bad school zone is in a bad location. 2. Sellers are not motivated to sell. When you have your initial consultation with a seller, you will get a feel for his motivation to sell. If you hear him say things like: We really dont have to sell, this should be a red ag for you, and you should intervene. That script should sound like this: Agent: Mr. Johnson, you just said that you really dont need to sell. Can you tell me more about that? What does that mean? If there is no pain, there can be no sell. What I mean by that is if the seller just wants to throw the bait out there to see if anyone bites, that is not a listing that I want to take. With a situation like this, there are no guarantees that the seller will sell even if you get a full price offer. I look for real reasons to sell, like a job transfer, retiring to Florida, or cant afford the house anymore. These are true motivations for selling. Dont waste your time on a shing expedition. Your job is to sell, nothing more, nothing less. 3. House is located near train track or other commercial nuisance. This again wouldnt be a de nite no for
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me; however, the sellers would have to compensate for the nuisance with price. If the house is located in a ight path and the sellers have their house priced at market value, it will not sell. You have to disclose any commercial nuisances. Why would anyone pay market value for a house in a commercial nuisance zone, when he can simply move out of that area and get one for the same price? If the seller agreed to cooperate with me regarding staging and pricing the home, I would possibly consider taking this type of listing. If there were any resistance to my instructions, I would walk away. 4. There are several things that are deal breakers with clients. Steep driveways rank really high on the list. There are some property defects that can only be compensated for with price. A steep driveway is one of them. The seller is probably not going to pay to re-grade the driveway area, even if, structurally, he/ she could. The only way to make that house more attractive is by lowering the price. 5. I have heard and believe that 92 percent of all of your marketing power is in price. All homeowners believe that their home is worth more than it is. It is a personal re ection of the homeowner. Homeowners cant understand that their home is only worth what the market will bear. If you are meeting with a homeowner who is unrealistic about price and you cannot convince him to the contrary, do not list the house. I realize that some of you might be thinking:
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Well it cant hurt if I put the house out there on the market at a higher price, or If I dont put my sign in the yard, someone else will. My job as a realestate trainer is to teach you to sell houses, not waste your time, energy, and effort on something that will not yield fruit. Your job is to sell. Let me give you an analogy: If I put my wifes SUV out on the street corner with a sign on it that says: For Sale: 1 million dollars. How long is it going to stay for sale at that price? When I meet with a seller, I always test the waters to see if he has an idea of what his house is worth by asking: What do you have in mind for a list price? Sometimes he says, Well, you tell me. This is a clear indication that he is shopping real-estate agents, and he is going to go with the agent who gives him the highest price. It is really interesting how people assume that if I tell them a higher price, that somehow, I am better or the best choice for a real-estate broker. This is known in the industry as buying the listing. One other response that you might get is a range: We think we can get between $145,000 and $160,000. This is a clear indication that they have spoken with another agent who has taken the safe way out by giving them a range. The agent is non-committal and playing it safe by not taking a chance on offending the client. I usually follow up with a question like: Oh, what leads you to believe that it is worth between
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$145,000 and $160,000? This is a great question, because sometimes, depending on the honesty of the client, he will say, Well, that is what the agent from xyz company told us. When he does this, it could help you, e specially, if you are familiar with that agents sales tactics. I used to know all of my major competitors techniques, and I would sell against them. For example, if you know of a broker who always reduces his commission to get the listing, you could sell against him by saying, If another broker comes in and says that he will sell your home for less than a full commission, you better believe you are going to get less than the best results. In other words, you get what you pay for. My recommendation when going into a listing presentation is to have the value of the home narrowed down to almost the exact dollar amount. Dont give them a range. Dont play it safe. Agent: Mr. and Mrs. Johnson, I think your home is going to bring $147,431 and here is why. Now look at the wording here. I didnt say that you should price your home at $147,431. I said I think your home will bring that amount. Also, I never give them a price on the rst meeting. This is very important, and the script that I use is this: Agent: Mr. and Mrs. Johnson, I would love to meet with you regarding listing your home, but I need to set the expectation with you that I will not be able to give
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you a price upon my arrival at your home. Only a very inexperienced agent would be willing to come to your home without having seen it and give you an accurate price or price range. In my experience, I need to come to your home and take a tour so you can show me the ins and outs of the property. Then I will take my notes back to my of ce and send you a detailed report of an exact dollar amount that I believe your home will bring on the open market. Does that sound fair? By using this line, I am completely slamming the competition, because most agents jump up, run out, and go meet Mr. and Mrs. Johnson with a CMA in hand. They do this based on averages, not taking the time to do the due diligence to look into what the property is actually worth. You learn so much about the homes when you take the tour with the homeowner. This also helps you to shift the focus from the house to you and what you do to help sell their home. One great technique that I use, generally on a second appointment, is to take the sellers and show them a couple of homes in the area. I choose homes that are similar in size in order to give them a reference as to what their house is worth. The reason I do this, especially with people who are unrealistic about price, is because value isnt real to them until they are physically standing in another house. You may even be able to show him the same oor plan for a lower price. Then I say: Agent: Mr. and Mrs. Johnson, you believe that your home is worth $20,000 more than this house, even though
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it is the same oor plan. Can you help me understand why anyone would pay $20,000 more for your home when he could get this one for $20,000 less? The human mind starts to reason when it is shown a visual comparison. This is a great technique because when you do this, you really begin to see a transformation with your clients. Either they will agree to get their home priced at a more reasonable, acceptable level, or you can decide to walk away and not waste your time. It helps you in either situation. This also helps them to form an idea of what their competition is on the market. I try to show them a couple of homes that are staged really well so that they can see what their home needs to look like in order to compete with other houses for sale. So my listing appointment really consists of two meetings: The rst is to take a tour, convey information about me and what I do, and get a feel for what they believe the price for their home should be. The second visit is when I show them their competition to let them see what they are up against. At the end of our second meeting, we go back to their home and review what I think their home will bring, and I ask them how they would like to proceed. The pattern looks like this:
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PATTERN
FOR
FIRST LISTING APPOINTMENT:
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PATTERN
FOR
SECOND LISTING MEETING:
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What is most important about your listing appointment is to have a detailed conversation with your potential client about the appointments and what their expectations should be. Here are a couple of scripts that I use that you can integrate into your conversations:
IMPORTANT SCRIPTS
FOR
LISTING APPOINTMENTS:
Agent: Mr. and Mrs. Johnson, thanks for calling me regarding possibly listing your home. I am so excited for you and your decision to move. It is important that I explain the process with you and explain how I work. Would that be okay? (assume yes) Agent: Mr. and Mrs. Johnson, I dont work like most real-estate brokers with whom you may speak. I take the consultative approach rather than a strong, pushy, sales-type approach. That means that I come take a look at your home, give you recommendations, and talk with you in detail about your goals and what you are trying to achieve. Then we formulate a plan from there. How does that sound? Agent: Mr. and Mrs. Johnson, when I set up appointments to talk about how we might work together, I nd it is important to talk about the appointment together
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so that you know what to expect. First, our meeting shouldnt take more than about forty minutes. I would like to start by taking a tour of the property with you. I like to start outside and work through the inside of the house. I will not be able to give you a value for your home at the rst meeting. I normally take really good notes and go back to my of ce the next day to determine what I think your home will bring on the open market. Only a really inexperienced agent would agree to give you a price at the rst meeting, especially if he/she hasnt actually seen the property. After we take the tour and I give you some recommendations, would it be okay for us to meet for a few minutes to talk about how I might be able to help you and to go over the marketing ideas and plans that I have for you? I will also talk with you about commissions and about the home-selling process in general. Does this sound okay to you? What to do when people call and say, John, we want you to come out and list our home for us. You will get calls like this from time to time, especially when you start really building a great referral-based business. People will have chosen you before you ever meet with them. This can be a good thing; however, it is still really important that they genuinely choose you.
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What I mean by this is that usually if a friend or colleague refers you, that friend has chosen you. That is great, but in order for the potential client to genuinely choose you, you have to give him relevant information so that he can make the informed decision. Dont fall into the trap of taking the easy way out and listing the home without explaining how you work. This will come back to bite you every time! A great script to use in this case is the following: Agent: Mr. and Mrs. Johnson, I am so glad that you called, and I really appreciate that Bill referred you to me. In my experience, it is really important for me to come out and introduce myself and talk with you and give you some really important information about how I work. I cant tell you how much it means to me when people refer me to their friends and family, but what is more important to me is that you feel comfortable about choosing me as well. I would like to talk about our rst appointment and what that might look like. Would that be okay? This script is a soft approach. You acknowledge the referring friend and then emphasize that you want the client to feel great about her choice. Then you go right into your listing appointment script. Lets nish the list about what makes a property wrong.
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6. From time to time, you are going to interview with people for listings, but when you arrive at their home you will realize that the house is in terrible condition. Dont discount this as a reason to not list. Remember, your job is to sell, and you never get a second chance to make a rst impression. If you list a home that is in terrible condition, you are setting yourself up for failure. Even if the house has a discounted price, you will fail. Sometimes the house is going to be in such bad condition that no reduction in price can offset the condition. One of the worst listing appointments I ever had was a referral from a great friend. I arrived at the house, which was actually located on a great corner lot and had tons of potential. This was a house where an elderly woman had lived and recently passed away. Her son met me at the property, and as we were walking in, he asked me, Are you allergic to cats? Well I am highly allergic to cats, and told him that. Then he politely handed me a surgical mask to wear when entering the home. I knew that I was in trouble. It turns out this lady had been feeding and taking in stray cats t o the tune of about forty-plus cats. Needless to say, after seeing the mess and how destroyed the home was, I told the son that this would not be a good t and that I was not interested in listing the home. Of course, sometimes when this happens, it makes the client want you even more! He
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continued to seek my help and convinced me that the home would be totally cleaned up and ready to show. I knew that the only way this property would be ready would be to completely burn it down and rebuild it. I told the son to call me when it was cleaned up and that I would come back by and check it out. He never called, and no other agents would list it either. The last I heard, he had it for sale by owner. Take pride in having your sign out front of the house. Is every house going to be perfect? No. However, the seller has to be willing to improve the condition. The way I handle these situations is simply to give him a month to make the improvements that I require. Then I come back and check the house. If no improvement has taken place, I still refuse to list the home. It is just that simple. 7. Seller has done nothing to get ready. This goes hand in hand with poor condition of the house but speaks to the heart of the seller even more than Number 6 does. If you arrive at a house for your listing appointment and the seller has not done anything to get ready for your visit, such as clean up, this should be a red ag for you. A seller should know that you are coming. Usually I schedule the appointment two days ahead of time. If they have not even picked up, I recognize this as a potential problem. I understand that all people live differently, but there is no excuse to not have the house ready for your appointment. The real question
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here is, To what lengths are the sellers willing to go in order to sell? I always like to tell sellers that it is a job to keep the house ready to show at all times. It takes sacri ce and effort and is a daily requirement to get things in order every day. Some sellers say that they will do whatever it takes to sell, but when it comes to actually caring for the house, they dont. What do you do if you nd yourself with a seller who hasnt prepared for your meeting? You have to confront the sellers about it. You cannot sit by and stick your head in the sand and ignore the elephant in the room. Here is what my script sounds like: Agent: Mr. and Mrs. Johnson, I noticed that the house is not really picked up, and it looks like you havent done anything to get the house ready for our meetings. Is that accurate? Agent: Mr. and Mrs. Johnson, my concern is that if you didnt pick up the house knowing that I was coming over, what is going to happen when a potential customer comes over to view the home? Sure, they may get offended by your confronting thembut so what? Do you really want to list a home in which the sellers havent even taken any time to simply straighten up before you get there? In other words, if they get upset, you havent lost anything. Sometimes being confronted by an outside party really serves to motivate people. If they decide to not choose you, it is not a big deal.
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Let another real-estate agent waste his time, effort, energy, and money listing a house that is never going to sell. Remember, there are three important Ps to listing a home: Price, Presentation, and Promotion. Your sellers have to be willing to make the home presentable, or it is never going to sell. 8. It has been said that a buyer makes up his mind in forty-two seconds. In other words, you have forty-two seconds from the time the buyer opens the car door until he decides if this house would work for him. If the curb appeal is not strong enough, then that fortytwo seconds can get cut literally into ten seconds. I have even had buyers say, You dont even need to stop the car here. They didnt even take the time to cut the grass. I have also had clients that say, Wow! Look how much effort they put into planting the nice owers. The landscaping looks so good. I cant wait to see what the inside looks like. The landscaping and yard speak to the level of care that a seller takes with regard to his home. If the outside is well taken care of, the assumption is that the seller must care about the inside as much or more than the outside. This gives the potential buyer the feeling that he is buying a safe, secure investment that has probably been well maintained. Encourage your sellers to plant owers, trim the grass, maybe even spend a few hundred dollars on pine needles and sprucing up the entire
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yard. It helps to frame the house and sets the tone from the beginning of the showing. 9. Smoking is the number one reason for not choosing a particular home in America. If you interview potential sellers and they are smokers who smoke in the house, you should seriously consider not taking this listing. Why waste your time, effort, and energy on a home that is not going to sell? In fact, I have had buyers who immediately eliminate a home from their list as soon as they walk in and smell smoke or even think they smell smoke. The other very important thing is that if you do decide to take on this listing, you need to insist on certain things. They need to repaint all of the rooms, replace all carpet, and have all of the furniture steam cleaned. You are going to catch a lot of ack over this from the seller, but again, so what? If he doesnt like what you are telling him, let him list with someone else. I recently went on a listing appointment in which the sellers were smoking inside the house. After I confronted them, they said, We will start smoking outside. To them, this was the answer to getting rid of thirty years worth of smoke smell inside the home. Needless to say, they didnt want to paint the house or remove the carpets, and I didnt list the home. The home is still on the market 289 days later, and after speaking with the clients again, they are now willing to do the work that is required. Their listing agreement with their current broker is nearly
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over. They contacted me back and are now saying, John, we will do whatever you want us to do to sell our house. Sometimes people have to learn the hard way, and the main thing to keep in mind is, You have to be willing to say no. 10. Pets can be a huge problem when trying to sell a home. Provisions absolutely have to be made. If your sellers have pets, there are several factors to consider. First, what is the condition of the carpet? Sellers who have pets that have lived in the home for awhile normally dont realize that the carpet is stained and in need of replacement. Unfortunately, you have to bring it to their attention and simply tell them that the carpet needs to be replaced or cleaned. Most of the time the carpet cannot be cleaned well enough to correct the problem, so I always recommend new carpet. This new carpet creates another problem. What happens if the dog messes on the new carpet? Some sellers want to offer a carpet allowance, and some want to waste time and money on cleaning the carpet, which generally will not work. It is especially dif cult when the stains have been there for awhile. I always try to get them to put their money toward new carpet and not waste their money on the cleaning. It is always better to put in a neutral carpet rather than doing a carpet allowance. I hear arguments all the time about the fact that the buyers can choose the colors if we give an allowance. Of course, this
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all sounds great, but you cannot put a price on the impact of fresh new carpet. There is something to be said for the smell of new carpet as well. When you are at a fair and you smell the onions and peppers cooking, you begin to get hungry. The selling begins with the smell that drifts into the crowd. The smell makes it hard to resist. It works the same with buyers and new carpet. The formula gets even better with new carpet and paint. If you can get that smell, it is like money in the bank. That is why the new car smell is prominent at used-car lots, because used-car salespeople have gured out that if they can make a used car smell and look like a new car, they can get more sales and more money for the cars. The same is true in housing. Remember, you have forty-two seconds to convince a buyer that this house is for him, so let him smell the newness of the carpet. It will produce offers! 11. Sellers are separated or in the middle of a divorce. I have a great real-estate friend, and his entire marketing niche is separated and divorcing couples. In fact, his ad says: Getting a divorce? I can help. This ad immediately makes you think that he is a divorce attorney, but no, he is a real-estate agent. Now just imagine when people call his 1-800 number to listen to his free recorded message and they hear his wonderful message about how he can help with their divorce. His message says something like: I understand that a divorce can devastate you emotionally, physically,
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and nancially. Where I am most helpful is with the nancial problems of divorce. I can sell your home quickly! Needless to say, he has not been very successful at developing this niche into a pro table business. There are several reasons why I choose to not work with divorcing or separating people. Before I tell you to not work with them, let me tell you how to work with them if you decide to do this. Most states have laws surrounding legal separation as far as what separated couples are allowed to do during the separation period. If you are going to work with divorcing or separating people, make sure that you are familiar with the laws surrounding the separation restrictions. Some states speci cally say that real estate cannot be sold during the time the couple is separated. This is usually a one-year period before divorce can be granted. The reason for this restriction is so that one spouse does not have an advantage over the other. For example: if the male spouse is the breadwinner and cheats on his wife, who is a homemaker raising two small children, can you see where selling the home and splitting the equity could actually give him an advantage? In other words, if it were to go to court, do you think there could be a possibility that the wife could be granted the house and the cheating husband made to pay for it? You see, if they sell and split the equity, she loses even the possibility of getting to keep the house and her lifestyle. If the house sells during the separation period, she
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is already out of the house and probably in an apartment trying to make it. This would most certainly put her at a disadvantage. If you are going to work with divorcing couples, the correct way to go about developing this niche is to partner with a great divorce attorney. Quite often, couples will want to sell their home, but you should only agree to list a home for sale after the divorce has been granted. Why do I choose to not work with couples in this situation? Usually the couple is already emotionally stressed, and I nd that selling a home is a very stressful addition to their lives. It results in petty arguments over small repairs and a dif cult (to say the least) logistical problem of having to meet with them at different places. Often they dont have the money to do what is necessary to sell. It costs money to sell your home. People dont want to face that in normal situations, much less in a separation and divorce situation. In my experience this is a no-win for any agent. Inevitably, when the offer comes in, it is a nearly impossible task to get the couple, who are already mad and upset with each other, to ever come to an agreement on price and terms. Not only are you burdened with negotiating with the buyer, but negotiating with your own sellers individually to agree.
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My mother used to always say, Be careful what you ask for; you just might get it! This has never been more applicable than in choosing to work with divorcing couples, because when the offer comes, it can be dif cult. Risk: There is one risk that most agents do not think of with regard to working with couples in these situations. Most MLS agreements have an offer of compensation or commission to an agent who brings a ready, willing, and able buyer for the property. Often, divorcing couples say things like, Lets price it low, and just get rid of it so that we can move on. What does a listing agent love to hear more than anything? Price it low and get rid of it! Of course, only seeing commission dollars when they hear these words, most listing agents do this and price it as low as they can. I have seen this go bad when the couple prices the home so low that when the offer comes in, they have second thoughts about just getting rid of the home, and they always want more money. Usually, this leads to a buyers agent bringing a full-price offer and the couple still not coming to agreement to sell. In our state, if this happens and a buyers agent brings a ready, willing, and able buyer to the table, we would owe that cooperating rm a commission for bringing us a buyer. We would be stuck because the sellers wont agree to sell. This leads to even more problems with the listing rm having to go after his own client for a commission. You never
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want to be put in this position. Try to remember that people in these high-stress, high-emotional situations are sometimes not really thinking clearly. They make quick emotional decisions. This is where we as humans always make mistakes. When we are angry, hurt, upset, emotional, or desperate is usually when we make matters worse for ourselves. I am not advising you to never consider working with couples who are divorcing. However, if you can avoid it or can simply make it your policy to only work with these clients after the divorce is nal, your job will be so much easier! I say, let some other agent put himself in the middle of this mess, and you move on to more positive business. 12. Never work for freenever. I have seen agents agree to list a home for free because the seller cant afford to pay them a commission, on the promise of getting the business when the seller buys. What a complete waste of your time, effort, and energy. If a person cannot afford to pay you a commission when selling, You are not the agent for him! Move on to more positive business. One important issue with regard to this rule is that you have to nd out what the seller owes. Now, you may be thinking: I always ask what he owes. This is great, but it is your responsibility to ensure he has the equity or the ability to pay you. You can ask he what he owes, but a better way to do this is to use this script:
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Agent: Mr. and Mrs. Johnson, it is my policy to verify what you owe on the property. Can you call your lender and have him fax or e-mail you the payoff information? I have to put a copy of that in my le. Once we have a more accurate number from your lender, I can give you a better idea of what you can expect to pro t from the sale of your home. Then I say: Agent: Mr. and Mrs. Johnson, I cannot put your house on the market until I actually get this veri cation from your lender, so please make it a priority. It is important that you understand that I am responsible for offering a commission to a buyers agent, and if I list your home for an amount that would not allow a commission to be paid, my rm would then be forced to pay this. I cannot put the home on the MLS until I get this report from your lender. **Be sure that you ask them if they have a home equity line. You need payoff amounts from both. **Be sure that you give yourself a bufferif they are really close, always be conservative and give yourself some room on price. What this means is that before you allow your seller to enter into an agreement with a buyer, you need to be sure that you review these numbers and that you have a buffer of at least $2,500. Your area may need a larger buffer, depending on the market and the size/price of the property. 13. If you are interviewing to take over a listing and the home has been listed for over 120 days, dont take
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the listing unless you can nd out what is wrong and correct it! This could be a matter of the home being way overpriced. I recently had a situation in which the home was overpriced by $20,000, and when the sellers contacted me for my interview, they said, John, why didnt our agent share this information with us? Of course, you never ever bad mouth or talk down about their previous agent. Usually, I say something like: Agent: Mr. and Mrs. Johnson, I cant really comment on what your previous agent did, but let me tell you more about what I do and how I came up with the proper price for your home. I simply shift the negative back to a positive. Never go down the negative road with your clients. It is so easy to get caught up in bashing another agent or rm, But dont do this. It will re ect negatively on you, and one other thing to keep in mind is that when you talk badly about another agent, this just compounds any doubt that they have about agents in general. It gives us all a bad name. The 120-day point is important. This is four months on the market. If a home has not gone under contract in 120 days, there is de nitely something wrong. For most markets (of course your market could be different), if you dont gure out what is wrong, dont take the listing. More than likely it is the seller that is the problem. What I have found is that if his home is priced and marketed correctly,
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and I dont see anything obviously wrong, it could mean that either your seller is really unlucky, or he is the problem. Keep digging until you gure out what is going on or until you decide to stop investigating and move on. Rule of thumb: if it is priced right and marketed correctly, it should have sold in 120 days. 14. If the house has a history of having been listed numerous times by different agents, this is another sign of an issue with the seller. Usually, this means that the seller hired one agent, wasnt pleased with his performance, then hired another, and then another. Nowhere along the way has the seller taken any responsibility for how he may be contributing to the failure of the sale of the house. It is really easy for the seller to blame the realtor for the house not selling. Most of the time, the agent can only do so much. It is the seller who has to agree to pricing and presentation. Without cooperation from the seller, especially with regard to price, you are wasting your time to consider listing this property.
CHAPTER SUMMARY
This chapter is ultimately about client selection. When I talk about client selection here, I really mean house selection. With a listing, the client and house are one and the same.
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You may have a great house that would normally qualify, but the seller is uncooperative and not willing to price it correctly. You may have a seller who is cooperative but a house that just isnt going to sell. Dont be afraid to move on. Listings cost you money. You have to spend money on signs, advertising, lockboxes, yers, and various other expenses. That is why it is imperative that you be very selective about the homes that you list. Dont get caught up in the mindset that if I dont list it someone else will. Let them! Let another agent spend his money on a home that will not sell. My job is to make you aware of how to make more money in this business. Have you ever heard the saying: A penny saved is a penny earned? Save your money! Dont take on a listing that will not sell, no matter how nice the sellers are. Even if they were referred to you, remember your systems and your guidelines. If you make an exception, that is okay, as long as you are okay with the consequences for which you set yourself up. Keep in mind the 3 Ps: Price, Presentation, and Promotion. If you dont have those three things in place, the home will not sell.
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CHAPTER 10
PEEL THE ONION
I have learned some great lessons in my life from some fantastic people. One of those is my friend and great teacher, Roger Schwarz, who is a brilliant psychologist and consultant. He has taught me so much about how the mind works and has given me the gift of meaningful conversation. One of the most important lessons that I have learned from Roger is the lesson of not discounting people and what they can contribute to the process. Through Rogers help and insight, I was able to recognize this as a weak point in the way I conducted conversations with buyers. Since then, I have been able to develop a very reliable and impactful pattern to follow when conducting my initial consultation with my buyers. Rule Number 1 is: Never discount or dismiss the buyers contribution to the process. Where
I have made mistakes in the past is that I assumed the buyers would simply take my advice. They would buy the house that I advised was the best choice, and they would automatically accept my opinion, as I was the expert. What is important about this paradigm shift in my mind and in my conversational pattern since that time is that my experiences with clients are now much more meaningful and impactful. Some examples of discounting are: Listening to one spouses opinion over the other. Valuing one persons choices over the other. Not including one of the decision makers in the process. Assuming that the client cant contribute because he isnt familiar with the area. Assuming that the client cant contribute because he doesnt know or understand the home-buying process. Generally making assumptions about the clients thoughts without checking in or verifying those assumptions.
STEP ONE: PEELING AWAY
THE
ONION
We are all born into the world with an open and clean heart. We believe that people are inherently good, and we believe in our parents and trust them when they tell us about Santa Claus and the Tooth Fairy. We are innocent, and we are humbly open to accepting what people tell us as truth.
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As we grow up, we experience pain through situations and disappointments that occur in our lives. When we get our rst spanking, we realize that life isnt all fun and games. When things happen to offset or disprove what we believed to be good and pure, we start to build protective walls around our heart and soul to protect ourselves from harm. Think about your rst heartbreak and how you changed your outlook on love and relationships after that person you loved broke up with you. You didnt let down your guard as easily the next time. With all of the things that disappoint us in life and all the situations that cause us pain, the natural reaction of the body and mind is to build up layers of protection to prevent hurt from happening again. I have a friend who is a brick mason. His hands are calloused and hard from the painful task of laying bricks for eight to ten hours per day. His hands have built up layer upon layer of hardened skin to protect him from the pain of the literally hundreds of small cuts he receives every day from laying brick. Our mind works the same way. Our minds natural reaction to pain is to create barriers that are supposed to protect us from cuts. My point is that when you meet with clients, they have their walls up. The only way to get through those walls is for you to ask questions and listen to the answers in a way that is genuine and pure in motive. Think of this process as peeling the layers of an onion. The truth is somewhere in the middle or core of the onion. I will share with you a real life example: I received a call from one of my previous clients about a friend with whom he wanted me to work. He
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described his friend as being a hard worker who ran his own landscaping company. He told me that his friend came to the United States from Mexico, had recently become a citizen, and desired to own a home. He told me that his friend had two daughters and a son, they were living in a threebedroom home, and they needed more room. I agreed to meet with him. I called and introduced myself and set up the meeting. We decided to meet at his home that evening. Here is what our conversation looked like: Me: Thanks for having me over, Mr. Vargas. Steve told me a little about your situation, and where I like to begin with families is to meet everyone. Would that be okay? Mr. Vargas called his reluctant teenage daughters and his son to the living room. Mr. Vargas: This is Susanne, Mary, and my son Jose. He had already introduced me to his wife, Karen. Me: Nice to meet all of you. My Name is John Horne, and I am a real-estate consultant. I am going to be talking with your mom and dad about possibly helping them nd a new home. One of my core beliefs is including everyone in the process. I have a recommendation, if it is okay with the group, as to how we might begin. Would you (speaking to the kids) mind writing down a few things that would be important to you about the new home and e-mailing me your ideas? (I gave all of them a business card with my e-mail address, and of course they said sure.) Thank you. I cant promise that we will nd a home that has everything you want, but this helps me to start painting the picture of your new home.
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Mr. Vargas dismissed the children, and it was just the three of us left. Me: Mr. and Mrs. Vargas, I need to share some information with you about the way I work. Would that be okay? Mr. Vargas: Yes. Me: I am a real-estate consultant, not a salesperson, so my approach is very different from what you may have seen on TV or heard about from your friends and family. My approach includes these three steps: First: Evaluate the status of the client. Second: De ne the goals of the client. Third: Formulate a plan with the client to achieve those goals. Mr. and Mrs. Vargas, it is important that you be in agreement with this process, because I cannot do a great job for you without your input and participation. Do you agree? Mr. Vargas: Yes. Me: Mr. and Mrs. Vargas, before we get into the process, you have a choice to make. There are literally thousands of real-estate sales people with whom you can choose to work. I know that Steve recommended me to you, but it is really important that you make a free and informed choice to work with me, or work with a more traditional salesperson. The best way that I can describe my services to you is with a comparison. Imagine right now that you are in an airport and you are standing at the ticket counter. You have twenty- ve or more choices in airlines from which you can choose. Some people choose to go with the cheapest
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airline. They nd themselves taking a chance on the seat they get, the type of plane they y on, and the experience of the pilot. Others choose a more mainstream-type airline that is a little more expensive. They are rushed onto the plane, and they sit in a cramped seat. The pilot takes the most direct route no matter how bad the turbulence is, in order to stay on schedule. When you go to get on your return ight home, you nd yourself on a completely different plane with a different pilot. Some people choose to take a private jet with an experienced pilot who takes the time to avoid storms as they appear on the radar so that his passengers dont experience any bumps along the way. When people y on these private jets, their plane is waiting for them at the airport for their return ight. They have the same plane, the same comfortable seats, and the same experienced pilot who lands them safely on the ground. Mr. and Mrs. Vargas, if you should choose me, I am most like the private jet but without the expensive price tag. In fact, my prices are no different from a traditional salesperson. You may be asking yourself how I can provide this type of service and not charge more money. The answer is that I simply ask you to refer me to your friends and family when they are in need of real-estate help. Instead of me spending a lot of money on advertising and chasing leads, my clients refer me to people whom they know. Instead of wasting time chasing business, I am spending more quality time working with clients like you. What kinds of questions do you have? Mr. Vargas: None.
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Me: Well, Mr. and Mrs. Vargas, you have to make a choice. You can choose to buy a home on your own without someone helping you, which I dont advise. You can choose to work with a traditional salesperson and take your chances on having a bumpy ight. Or you can choose to work with me. How would you like to proceed? (pause) *Dont say anything.* Mr. Vargas: We would like to choose to work with you. Me: Great. Lets get started. I want to break into the conversation to explain a few things about the conversation so far. Remember, everything I teach is by design, and it is imperative that before you go into the conversation about the airplane, you explain the three-step process of consultation: evaluation, goal setting, and goal achievement. This is much different from saying, Lets plan a day to go out and look at houses. You could even say: Agent: Mr. and Mrs. Vargas, I used to operate like a traditional salesperson operates. A salesperson will schedule time to go out and look at houses in hopes that we will nd the right one. However, now I nd that by following this system, we work smarter and more ef ciently, and we dont waste a lot of time on houses that arent a good t. Keep in mind what I mentioned earlier in the book. Clients who want to go straight out and look at houses are generally at checkmate when they should really just be at the point in the process of setting up the board to play. This goal-setting conversation is a way to get the client to mentally back up
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and set up the board. You can use this approach when going out to meet a client at a home that he wants to see. This conversation may sound like this: Agent: Mr. Johnson, if I agree to take the time to show you the house, will you agree to take about ten minutes to discuss how we might work together? Is that fair? Assume agreement, and assume that you are at the house now with Mr. Johnson, and he has looked at the home. Agent: Mr. Johnson, we said over the phone that we would have a discussion about how we might work together, and I would like to share with you some information about how I work. Would that be okay? (Assume yes) Mr. Johnson, I am a real-estate consultant, not a salesperson. What that means is that I follow a system that allows us to work very ef ciently and keeps us from wasting a lot of time looking at houses that arent a t. The rst step in the process is evaluation, which means we talk about your nancial situation and the desired payment you would like to make. The next step is goal setting, which involves de ning what is important about the home you are looking for. The last step is nding the home that achieves your goal and getting you into that home. Mr. Johnson, I realize that we dont know each other at all, and I wouldnt expect you to make any decisions about working with me after only one meeting. What I have found in the past is that people get frustrated and often make mistakes when trying to purchase a home without the help of a real-estate agent. Most people
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think that it will cost them more money to have an agent or that they can get a better deal without an agent, and this is simply not true. If you are interested in talking more, the next step in the process would be to set up a time when we could get together. I usually like to meet at my of ce where we can actually start looking through some homes online to begin creating a pro le of the types of homes you like and dont like. It normally takes about twenty- ve minutes, but this can save you hours of wasted time and energy looking in areas and at homes that dont t. How would you like to proceed? Notice that with this conversation, I didnt go into the airport dialogue. This conversation is designed to be brief with a lot of impact. Most adults make quick decisions. The more you talk, the more you expose yourself to the client. In the early stages, you just want to give him enough to get him to the next step. Also, you dont have a lot of rapport with the client at this time, so you dont want to pressure him or try to move him to make a decision about you. This is breadcrumb selling. Give him some great breadcrumbs such as, My process allows us to work very ef ciently and not waste time. What you are really saying to him is that if he works with you, you wont waste his time. Another great piece of bread here is that people get frustrated and often make mistakes when they work without an agent. What this translates to with the client is that if he works with you, he wont be as frustrated and wont make a mistake. You also let him know that it doesnt cost him any more money
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to work with an agent. Take note of the last section of the conversation. You say, By creating a pro le of the types of homes you like and dont like, you can save hours of wasted time and energy. This is an example of a double hook. You mention early in the conversation that your system saves him time, and you come back to it at the end again to hook him. Think of it like shing. You make your rst cast and you pull your bait right beside the sh. He looks at it and sees it, but is hesitant to take a bite. So you cast again, letting him take another look, and if the bait is attractive enough, he will bite and you can set the hook. Lets go back to the Vargas conversation: (They just chose me to be their agent.) Me: Mr. and Mrs. Vargas, the rst step in the process is evaluation. In order for me to start developing a plan for us, I will need to ask you some fairly probing questions. Would that be alright? Mr. and Mrs. Vargas: Yes. Me: Lets start with why you are looking to move. Mr. and Mrs. Vargas: Well, we are just running out of room. Our two daughters are sharing a room right now, and each of them really needs to have her own room. Me: Mrs. Vargas, you just said that your two daughters each need their own room. Can you tell me more about that? Mrs. Vargas: What is happening is that Mary is going into her brothers room and bothering Jose. He really needs a place away from his sisters.
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Me: Mrs. Vargas, can you tell me more about this situation. You said that Mary is bothering Jose, and I am curious about this. Mr. Vargas: John, Jose just got into UNCC (University of NC Charlotte) and he needs a quiet place where he can study. Me: Okay, I am beginning to understand. Let me check in to make sure: Mary and Suzanne are often going into Joses room and bothering him, and he cant get his studies done with the current situation. Mr. Vargas: Yes, thats right. Me: Mr. Vargas, I assume that it is important that Jose does well in school, since this is a main reason for the move. What about Jose doing well in school is important to you? Mr. Vargas: John, you have to understand (he is getting emotional now), Jose is the rst person in our family to ever go to college. If it is the last thing that I do in my life, Jose is going to get his degree. Me: Mr. Vargas, thank you for sharing that information. Now I fully understand how important this is. I pledge to you that I will do everything in my power to nd you the perfect property. I want to stop the conversation here in order to demonstrate the technique. Notice that I kept asking questions until I got to the real reason for the move. I could have stopped at: the girls need a room of their own. But by going deeper, I had a better understanding, and I also could get on board with their mission and goal of Jose earning his
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degree. I want to jump ahead and tell you the end of the story. Of course, the next step was to get them quali ed with a great lender and then to start looking for the house. I restricted my search to four bedrooms but was unable to nd anything that met their requirements and their limited budget. I decided to look outside the parameter of a four bedroom, and I began looking at three bedrooms with bonus rooms or larger square footage. One day, I found a three-bedroom home that was listed with a detached garage apartment. I didnt bother Mr. Vargas with even telling him about the property. I decided to drive over and take a look. I knew that the house was located close to the college, so close that Jose could possibly walk or ride a bicycle to class. I pulled into the driveway, and from the outside, I could tell that the house was fairly small and in decent shape. I retrieved the key from the lockbox and made my way up the stairs along the outside of the two-car detached garage. I opened the door to the garage apartment, and on the wall was a mural of the UNCC mascot. The garage apartment had a small, dorm-size refrigerator, a full bath, and a small kitchenette. I noticed that in the corner it had a large drafting table. I called Mr. Vargas immediately and asked him if he could get over to this house. He dropped what he was doing and was there in about twenty minutes time. Before he arrived, I examined the interior of the main house, and there was nothing special. It was in need of some cleaning and minor cosmetic work, but it did have the three bedrooms so that each of
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the girls could have her own room. As soon as Mr. Vargas arrived, I took him directly up to the garage apartment. I dont know if you have ever had the experience of seeing a little girls face when she sees Cinderellas castle at Disney World for the rst time, but that is exactly what Mr. Vargass face re ected. He was almost in tears, and I found out later that Jose wanted to be an architect, and the drafting table was what really put Mr. Vargas over the edge. We brie y walked through the main house, and before he had even seen the master, he looked at me with determination and said, John, get me this house. Not every experience is this emotional, and not every experience has the same great outcome. Every once in awhile, this job affords you the opportunity to ful ll a clients mission. This was one of those moments. Do you think I had to worry about negotiating a price on this house? No. Mr. Vargas was going to get this house if he had to pay full price, and he probably would have purchased it with a horrible repair list. You see, when you understand the mission of your clients, you can create almost magical referral moments. I didnt make a lot of money off the commission from this transaction, but Mr. Vargas and his wife have referred me to at least twenty of their friends.
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CONSULTATION PATTERN:
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GOAL SETTING
After the client has chosen you (and you have chosen him), it is time to formulate your goals. Use your questioning techniques to ascertain the reason for the move, whether buying or selling, and use that reasoning to formulate your goals. The sequence that follows gives you an idea of the natural cycle that occurs with the goal setting part of the process.
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FINANCIAL GOAL:
Every home buyer is an investor, and every investor wants to make a good investment. The nancial goals part of the process is crucial to your success in moving forward. It is so important that you have a lender partner whom you can trust. Whoever you partner is, you must make sure that he understands the way you operate and the importance of the nancial goals that you and your clients discuss. Think of yourself in this role as nancial planner. We normally dont like to see ourselves in this role, but for most people, the house payment is the largest bill they have every month. It makes perfect sense for you to sit down with your clients and discuss their nancial goals when it comes to the realestate purchase. Make sure that your lender partner does not encourage them to spend over their monthly payment goal. Most lenders will approve buyers for more than the buyer should really spend. It is your job to educate your buyers as to the payments and make sure that their monthly payment is not out of line with their nancial picture. A big mistake you can make is to assume that the lender has worked this out with the client and not question this buyer. You should start by discussing the buyers monthly budget. Most people dont have a monthly budget, and you can be the rst to start talking with them about the importance of a monthly budget and a nancial plan. A simple spreadsheet of income and expenditures is the way to begin. I have created a template that you can use, and it is available at
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www.agentedgetraining.com There you can nd all of the templates that I use when having a consultation with my clients. Property Goal: The next part of the nancial goal is to make sure that the clients have a realistic view of the housing market and prices in your area. Normally, if I lose clients or choose to not work with them, it is at this stage in the process. For example, i f my clients want/expect to nd a home for $200,000 in a neighborhood or area where the homes start at $300,000, usually this is a sign that the clients dont have a realistic view of the housing market. I will review the house prices with them. I dont waste a lot of time trying to convince them that what they ask for doesnt exist. I would simply explain to them that we are not a t and put them in the not ready list that I have in my database. If there are houses that meet their nancial plan, then I have the green light to start showing properties. I always create a pro le sheet. Mine includes a checklist of features that might be important to the client. My list starts with type of exterior, brick, siding, stucco, then works its way inside to items such as double sinks, granite counter tops, and hardwood oors. If you dont have a list, you should create one. One exercise I found that is really fun and helpful for your clients, especially if it is a couple, is to give them the checklist and ask them to ll it out separately. Their homework is to discuss their individual lists and compile one list that they both can agree on. This
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exercise will get them thinking about what they truly want in a home, and it opens up the line of communication between the two early in the process. What this does for you is that it prevents arguments and indecision later in the process. A couple might normally argue over hardwoods or not, but now they have already discussed this issue and know what is important to each other. Once you get their pro le sheet, you start compiling a list of homes to view. You should always use a buyers book to organize and aid with documenting results. If you are not familiar with a buyers book and how to put one together, you can nd the templates and a video explaining the use of the buyers book at www.agentedgetraining.com. This book is a great psychological tool because it allows you to eliminate houses by ripping them out of the book. By the end of the showings for the day, there are usually only two or three houses left in the book for consideration. This creates the need for action and is a great tool to use to create urgency with your clients.
GOAL ACHIEVEMENT/EXECUTION
It is important that your client understand that you are not alone in this process. I love to use the script: Agent: I have assembled a team that works with me. My team consists of one of the best lenders in the
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industry, a great attorney, a reliable home inspector, a great appraiser, and one of the best handymen around. Your client has to believe that you can get the job done, and he knows that you cannot do it by yourself. Your team members must completely understand your consultative approach, so make sure that you meet with them and explain how you do business. They also need to give you a great cross sale. What I mean by this is that you need to tell them to reinforce to the client that he made a great decision when choosing you as his real-estate agent. The very rst thing out of his mouth should beoh yes, you are John Hornes client. He is absolutely the best in the business; you couldnt have made a better choice in a realestate agent. Psychologically, this is another endorsement and is proof to them as to how good you are. I also had one other requirement for my team members, and that was that if they wanted to be on my team, they had to send me referrals of their own. This speaks to creating a referral network, and that is a whole book in itself, but you can nd more information at my Web site. Execution is imperative for success. This is where you can really shine and show your expertise in an effort to get referrals. Make sure that you under promise and over deliver. Try to create referral moments and most importantly, keep your clients informed every step of the way. Communication can really make the difference between a satis ed customer and a happy, screaming, raving fan.
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CHAPTER SUMMARY
Peeling the onion is a great technique to use during your initial consultation with buyers. By asking meaningful questions, you are able to get to a deeper learning and connection with your buyers. By getting to the core or the real motivation as to why someone is buying, you can start to formulate goals that everyone in the group understands. This will help you when it comes time to make an offer on the right house that meets the clients goals, because they will be able to recognize it as an overall t. Remember that the underlying theme of this book is awareness. By asking these questions and determining the nancial goals and the housing goals of the clients, you are actually helping them to become aware of what they really want. Clients are often at checkmate in their minds even though they havent even set the board up to play the game. They make assumptions about home ownership, about what is important, about which neighborhoods are good and bad, and about what features of a home are important or not. Most have no real idea as to the inside information that you should have about the area where you work. For example, you should know if the school board just re-drew the lines for a particular neighborhood. You may have buyers that see homes in this neighborhood at a discounted price, and their natural inclination would be to think that they are getting a great deal. You should warn them about the school district lines changing and the fact that the home values in
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that neighborhood will drop due to the families selling out to get their children in a better school district. All clients make assumptions about what you should do for them. By explaining to them how you work and how your approach is different, you are able to eliminate false assumptions about your performance. Dont make the mistake of not having a consultation with your buyers. You set yourself up for unintended consequences when you do. Framing the way that you work allows you to de ne the rules of the game. By doing this, you set expectations that you can actually attain during the home-buying process. Meeting and/or exceeding expectations with a client is what equals a referral, and that is the overall goal.
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CHAPTER 11
EVERYONE IS A POTENTIAL SALE
Have you ever heard the saying: Save the Best for Last? I cannot convey to you the power of conversation and language, and I am going to share with you some great conversational skills in this chapter that will absolutely make you more money. Skilled conversation and the ability to talk with people in a more meaningful way can really make a difference when it comes to selling. My mother used to tell me as a kid, Be careful what you say, because you can never truly take a word back. Words are like bullets from a gun. Once you re the shot, you cant change your mind and say, Come back, I didnt mean to shoot you. No matter how much you apologize or ask for forgiveness, people always remember the words that you speak. When you are in real-estate sales, it is imperative that you understand that
you are in the people business. You are not in the house business, the condo business, or the land business. Sure, you may use those terms to de ne the type of market in which you like to work, but there can be no sale without people. If you follow my model, people are also the source of referrals and future business, so it is essential that you develop your conversational skills. I learned the lesson that everyone is a potential sale by actually talking with everyone whom I encountered about real estate. You may be thinking that you dont want to be known as the annoying guy/gal who is always trying to sell real estate, and I dont either. I try to concentrate my conversations around the person with whom I am speaking. What I mean by this is that I focus on what his life is about, not mine. The only goal that you are trying to achieve when talking with someone is to be able to get him on your list. Your job from now on is to build a list of people to put in your database/mailing list. Remember the fundamental idea that people choose to work with people whom they know and trust. In order to open the window to who you are, you have to communicate with them on a regular basis. I nd that the best way to accomplish this is through my newsletters and postcards. Templates for these can also be found at www. agentedgetraining.com . Everywhere you go, you encounter people. Restaurants, business meetings, social settings, libraries, schools, soccer gamespeople are everywhere. Next time you are at a social function, you should think, Wow, look at all this business! I like to take it a step farther, and
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I actually set a goal when I am at a social function to get as many names on my list as I can. One tool that has made this so much easier is online social media. I dont mean that you should use Facebook, Twitter, and LinkedIn to generate business (although you can), but use these social mediums to follow up with people whom you meet. I used to have to try to get peoples names and addresses at parties and write them down, etc. Now I can simply remember their names and send them a friend request on Facebook to follow up from the parties or social functions. So let me give you an example: One evening about a week ago, I was having a meal with a colleague, and the waiter came to the table. I noticed that he had a northern almost Jersey type of accent. I followed step one of my pattern, which is to observe something about the person and inquire. Me: I noticed that you have a northern accent. (pause) I didnt say anything; I simply made an observation. Then he stepped right in and said, Waiter: Yes, I am from New Jersey. Me: Well, welcome to North Carolina. (jokingly) Then I said: You said you were from New Jersey; what brings you to Charlotte? Waiter: My wife and I were tired of the cold weather, and she had an opportunity to move with her job. So I quit my job up there and we made the move. He went on to tell me that they had only been in our area for about two months. I want to stop right here and caution you. Most real-estate agents would go right into,
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Where are you living now? or Have you found a house yet? Dont do this. It is really easy to fall into the sales mode, but you really need to stay in the people mode. Ask yourself what types of needs they might have just moving to the area. Of course, there are so many things that you would love to nd out about them like: Do they have children? Have they made friends here? Do they go to church? Do they need a good babysitter? Do they know about the museums? Do they know about the shopping malls? You know that Joe is new to the area, and you know that his wife transferred here with her job, but there are lots of things that you dont know. Be aware of your setting. In this case, he was working, and it was not the ideal situation for going too deep with him. **Most people will reciprocate when you ask, What type of work do you do? I asked Joe, Me: You said that your wife transferred here with her job. What type of job does she have? Waiter: She works for Fidelity Financial. Me: Great. Does she like that? Waiter: Oh yes; she loves her job. Then I knew it was coming. He said, What do you do? Me: I help people nd great homes to purchase, and I also help people sell their homes. Notice that I didnt say, I am a realtor or I am in real estate. I gave my job meaning, not a title. He did what most people do. He said: Waiter: Oh, you are in real estate. I might need to get your card. Tip: Never give a card without getting a card or their information.
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Me: Tell you what, after we nish eating, why dont we exchange information? I would like to send you some great information about Charlotte. I work with a lot of people who are new to the area, and most of them need help getting to know people and nding the right church, doctors, and dentists. I can de nitely help you with that sort of information. I would love to share some great recommendations with you. He said, That would be great. After dessert, I called him over, pen in hand and said, Joe what is your mailing address? He immediately gave me his address, and I asked him for his last name as well. I held my business card in my hand, not giving it over until I had his information. This is psychologicalit is like telling a four year old, You can have a cookie once your bed is made. After he gave me his information, I handed him my card and told him that the number on the card was my cell phone and to please call me if he needed anything. The next day, I mailed a handwritten note addressed to: The Jackson Family. I didnt get his wifes name, but I wanted her to open the letter if she happened to get to the mail rst. Tip: Always handwrite the note and the outside address on the card. The note read as follows: Joe, It was a pleasure to meet you and get to know a little about you and your wife at the restaurant last night. In the next day or so, you
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will get a package from me with lots of great information about Charlotte. I realize that you may not know a lot of people here yet, but I know nearly everything there is to know about Charlotte. Dont hesitate to call me if you need anything. John Horne Please note that I didnt say, Would you like to go out and look at homes? or Are you currently in an apartment? or Have you talked with a lender? Remember the analogy of asking a total stranger to marry you? I am trying to get to know him, and I want him to get to know me. I dont know that I want to enter into a relationship with him, and all I am doing is letting him know that I am open to talking further. The key to this working for you is to take it slow. At this point, Joe knows that I am in the real-estate business, and if he wants to go look at homes, he will let me know. I am more focused on getting to know him than nding him a home. Tip: Always do what you say you are going to do. Of course, I mailed them a relocation package with all sorts of great information about Charlotte. I always send these in a priority envelope, as it adds impact with the client. The next step in my system is to send a postcard to the potential client. I will wait a few days to send the postcard. All of my postcards tell a success story of some kind. The one I sent to Joe and his wife told the story of a couple that was
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new to the area and how I took them to St. Gabriel church on our tour of Charlotte. It also explained that the client eventually purchased a home near the church. I always ask my relocation clients if they attend church and what type of church. My script is: Agent: I have had clients in the past to whom church was really important. Is living near a church something that is important to you? They simply say yes or no. If they say yes, you de nitely need to take them to a couple of churches during your tour of the area. With relocation clients, my rst day is a tour of Charlotte, and churches are included in the tour. Most of the churches are staffed during the daytime, and I simply stop in at the of ce, explain that I am a realestate broker, and introduce my clients. I explain that my clients are thinking of moving to the area and that they wanted to stop in to take a look at the church. Then I ask if that is okay. This is absolutely a great thing to do because the people at the churches are so kind and friendly to them. They usually take them around and show them classrooms and daycare opportunities for the kids. If schools are important to my relocation families, I take them to the schools as well. Thats right. I walk right in with my clients, introduce myself as a real-estate broker, and introduce my clients. I explain that they are thinking of moving to the area and wanted to check out the school. The personnel at most of the schools are very accommodating. They normally give us a visitors pass to let us look around. Moving to an
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area is very intimidating to most people. When you take the time to paint a mental picture in their mind as to what living here will look like, they start to feel either really comfortable or uncomfortable about their move. I have had clients who learned in one day that Charlotte was not a t for them, and I have had other clients fall in love with Charlotte in one day. Of course, I cant show them all of the schools and all the churches in the city in one day, but I try to focus on the schools and churches that are in the areas that the clients can afford. You wouldnt want to take a client to a school in the district where the houses are $400,000 if your client can only afford a home that is $150,000. You have to show the clients a real picture of what life will be like. It is more important for me to have clients who are happy and will refer me than clients who buy and later regret their decision. I have a core belief that it is in my best interest for my clients to make an informed decision. Taking them to schools, churches, parks, community centers, museums, and bus routes are all a part of giving them great information about the area where they are buying. Whom are they going to blame if they purchase a home without all of the relevant information and then discover that they dont like where they bought? Before you can do any of these types of visits, you have to have a great pro le of your client. You create this pro le by asking questions. Here is the conversational pattern that can help you when talking with or approaching a total stranger.
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Let me share with you another real-life example. About three years ago, I was at a tire store getting some new tires for my wifes car. I sat in the waiting room and noticed about ve other people in there. Immediately I recognized this as a great opportunity. Here were ve people I didnt know whom I would love to get on my mailing list. I decided that I was going to work the room. The lady beside me looked to be about fty- ve years old or so, and I noticed that she was a little agitated. I simply said, Me: You look a little frustrated. (pause) Lady: She jumped right in and said, Yes, I am. I have been waiting for awhile. They had to send someone across town to get the particular tire that is needed for my car. Me: Im sorry that you have had to wait. I hate waiting myself. I went on by saying, You said that you were frustrated about having to wait? Lady: Yes, my husband and I were planning to go to Florida today, but we thought we should get better tires before we make the trip. I am frustrated because if this takes too long, we wont be able to leave today. Me: Wow, Florida is a long trip. I bet that will be fun. I assume you are going for vacation? Lady: No, my husband just retired, and we are going down to look at some retirement communities. Me: That is so exciting. You said your husband just retired. What type of work did he do? Lady: Well truthfully, that is another reason why I am frustrated. He was supposed to be here taking care of
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the tires while I nished packing. But they wanted him to come by the of ce today, so he went to work, and I came for the tires. He says that he will only be there for a couple of hours, but I know that he will be there all day. Then she asked, What kind of work do you do? Me: I help people nd great homes to buy, and I also help people sell their homes. Lady: Well, we may need a realtor to sell our house, if I can ever get my husband to stop working. Me: I know that we dont really know each other, but I actually work a lot in this area. Would you like to exchange information, in case you are able to get your husband to retire? (joking) She agreed. I had my card, and I had to ask the clerk at the counter for a pen. I wrote her information down on a magazine and ripped that page out and put it in my pocket. I explained to her that I send out a monthly newsletter and that I would like to put her on my mailing list. She agreed. About nine months later, I received a call from her and she said: Lady: I dont know if you remember me, but you and I talked at the tire store, and I have nally been able to get him to retire. She went on to say that she wanted me to come out and talk with them, and I did. The wonderful thing about this was that I not only got the listing, but I was able to convert two buyers off the sign and sell their home without compensating a buyers agent. That one conversation in the tire store resulted in about $20,000 in commissions. Everyone is a potential client. After she and
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I exchanged information, one by one I worked the waiting room at the tire store. Not everyone was as friendly, and not everyone wanted to exchange information, but one out of ve did. I use this question-and-answer technique nearly everywhere I go. One of my favorite stories is of a time when I talked with a lady in an elevator, and before you knew it, we were exchanging information. I want to touch on how I use Facebook and other social media. Now instead of actually having to write down their information, which can be awkward, I simply ask for their names. Then I ask, Are you on Facebook? If they say yes, I ask if I can send them a friend request. They normally say yes, and as soon as I can, I send them a friend request and a note asking for their mailing address. The only thing that has really changed for me with regard to this technique is being able to look the people up on Facebook and contact them later via that medium. I cannot emphasize enough that you still have to try to get their mailing address, write the handwritten note cards, and do the mailing list touches. This is the backbone for creating a great referral system that works. When I teach this conversational technique, I always have agents that come to me saying: I just cant talk with a total stranger. I have also heard, I cant see myself doing this. I nd this so interesting when agents who are in sales feel that they cant talk with a total stranger. I always coach them by asking: What about talking to a stranger bothers you? I get all kinds of responses, such as: What if they
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think that I am some pushy salesperson? I always respond to that with Guess what? You are a salesperson! It is really surprising that I get feedback from agents who are afraid to do this. I always like to get them mentally prepared by asking: What is the worst thing that could happen? They reject you in some way. I follow up with, What is it about them rejecting you that bothers you? I could understand or relate a little more if the rejection were coming from a friend or family member or even a church member, but from a total stranger? I have two opinions about this. One is: you have far more to gain than you have to lose by taking a chance to talk with someone. Secondly: if you are not the kind of person who can do this, you may want to spend some time in deep re ection to nd out if you are really a t for a sales-type position. One key lesson that I have learned from all of my experience working with some of the very top people in all sorts of industry is: dont play out of position. Think of it like a baseball team. If you cant throw the ball really fast and accurately, you shouldnt be the pitcher for the team. In order to determine whether you are playing out of position, you have to get to a place where you can quietly and honestly answer some basic questions about your abilities. If you truly cant see yourself making a conversation with a total stranger about what you do, sales may not be the best position or career for you. I have a really good friend who knows a lot about construction. If you were to give him the right tools and supplies, he could
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probably build you a castle. His logic in getting into realestate sales was that he knew everything about houses how they were constructed, what problems to look for, etc. He assumed that selling houses was about houses, not people. He quickly found himself not having any success in selling houses. He came to me and wanted to know why it wasnt working out for him. Of course, after I helped him through some self-examination he realized that he was de nitely out of position and that a better choice for him was maybe the home-inspection business. He now has a very successful inspection company and is doing really well.
CHAPTER SUMMARY
In my quest to develop great sales systems for real-estate agents, I have discovered some great truths that I would be remiss to not mention here. First, your job as a real-estate consultant is important work. Your main responsibility to the consumer is to protect him at all costs. Your input and advice can make a huge difference in peoples lives. Second, the agents who are extremely successful focus on the referral, not on the commission. When I meet with and consult with top agents, one observation is clear: they know and understand their mission, and they work toward their mission every day. It turns out that when you focus on mission, the money follows.
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Third, you cannot put a value on the worth of following a system. You must develop a system and be disciplined in working it. Fourth, you have to have the ability to shift and change with the market. At the time of writing this book, our economy is down, and the real-estate market is surrounded with short sales and foreclosures. Top agents work with what the market presents, and they gure out a way to make it work. They can withstand the ebbs and tides of the markets. Fifth and nally, professionals have coaches. Michael Jordan, Tiger Woods, Brett Favre, and nearly all top athletes have not only trainers but personal coaches as well. There are lots of sales trainers in the industry today. Be sure that your coach has the experience and the know-how to get you to the nish line. At www.agentedgetraining.com you can participate in my training and webinars at a very affordable price. I encourage you to nd a coach who can hold you accountable. When someone asks you every day: What have you accomplished today that increased your business? you tend to focus more on meaningful activities, which in turn makes you more money. I recently watched a special on NBC about the Ironman Triathlon that is held every year. There are always some great inspirational stories about certain athletes, and one in particular touched me this year. It was the story of a young man who was born with two legs that, in his words, never seemed to work. After many years of only being able to scoot across the oor and suffering through surgery after
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surgery in hopes of gaining the freedom to walk, he realized that if he cut the defective limbs off, he could replace them with new, mechanical, prosthetic legs that would enable him to walk and hopefully run. He told the doctors to cut off his legs that had been hindering him for so long. The surgeon agreed, and they removed both of his legs. After the surgery, he began the daunting task of learning to walk with his new legs. He slowly learned to walk, then run, and was able to complete an Ironman Triathlon. My question to you is: What is hindering your success? What in your life do you need to cut off so that you can accomplish your mission? It wasnt until this young man was willing to take a risk in leaving behind the methods that he knew in order to try a new way to walk that he was able to soar!
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JUST SHUT UP AND BUY THE HOUSE

JUST SHUT UP AND BUY THE HOUSE

Just Shut Up And Buy The House

Chapter 6 Chapter 7 Chapter 8 Chapter 9

Smart Marketing Uncooperative Clients Super Agent Listing Secrets

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Chapter 10 Peel the Onion Chapter 11 Everyone Is a Potential Sale

BY: BILL GALLAGHER

Just Shut Up And Buy The House

Just Shut Up And Buy The House

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RULE 3: REMAIN NEUTRAL

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RULE 4: NO AGREEMENT MEANS DOING NO WORK

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OPENING PATTERN PART 1ETHICAL AGENT

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OPENING PATTERN PART 2BUILDING RAPPORT

QUESTION MIGHT BE:

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OPENING PATTERN PART 3KEEPING PROMISES

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OPENING PATTERN PART 4QUALIFYING

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OPENING PATTERN PART 5SETTING

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SET LOWER EXPECTATIONS

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LOWER EXPECTATIONS CONTINUED

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THEY NEED YOU.

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