Have The Courage To Tell The Truth

While your clients may want you to tell them what they want to hear, they are paying you to be the professional and tell them what they need to hear to buy or sell in today’s market.

It’s much easier and doesn’t take a whole lot of skill to go on a listing appointment and simply tell the seller what they want to hear about price, marketing, and what it will take to get their home sold.

Many agents do this because it’s obviously much easier in many cases.  But, let me ask you, when you go to an attorney for legal advice or to a doctor for medical advice, do you want them to tell you what you want to hear, or what it will take to properly handle your circumstance?  I would venture to say that 99% of you will agree with the latter.

In today’s market price is one of the biggest factors in whether or not a home will sell, if not THE biggest factor.  Being honest with the seller about true market conditions and property values is critical when on a listing appointment, and when working together from that point forward.

In my experience of selling an average of 110 homes a year, even in this market, I am finding that price is something that must be looked at on a consistent basis.  If the house is in good condition, in a good location, and is not selling, price is the issue.  You must have the courage to tell the seller the truth and stand up for the price it will take to actually get the home sold.

It doesn’t matter how much marketing you do or how many open houses you hold, if the price is not right the home will not sell in this market.  Have the courage to tell the sellers this instead of painting the bed of roses that you and your marketing plan can get the home sold.

Be prepared with your market stats ahead of time and take this on the listing appointment with you the first time around.  Going in as prepared as you can the first time around is always best.  Guys, let’s face it we don’t get a second chance to make the first impression, so why not go in fully intending to take the listing and get the contract signed at the price it will take to sell the home the first time around?

Besides why on earth would you want to go back to the house 2 and 3 times when you can simply go in once and take the listing?

Yes, the market is finally starting to pick up a little in most locations.  However, don’t make your seller feel like we’re suddenly in a seller’s market again, because we aren’t.  In fact, if the truth be known it will probably be well into next year at this time before we’ll see the market really begin to recover.  Have the courage to let your sellers know this.

With buyers, tell them the truth about what to expect when making offers on foreclosures and HUD properties.  It’s a long drawn out process with long response times and extended closing times due to the volume of competition that’s out there and all the red tape that you have to go through.

Can you get a good deal? Yes, of course you can.  And again, simply have the courage to tell the buyers what to expect up front.   Don’t paint the bed of roses and forget to be honest about what they can expect.  Many of my coaching clients have had deals in the last 6 months become quite sour from the buyer having unrealistic expectations on these so called deals.

Educate your buyers as well up front about the market conditions before you even go out.  Let them know ahead of time and show them market stats to back it up, that while the market is still a buyer’s market, the list to sale price ratio’s in many markets are still fairly decent.  While the media is reporting that you can expect to get steals on property right now, that really isn’t the case in many markets.

Studies have shown that many sellers just aren’t willing to take the ridiculous low ball offers that buyers want to make right now.  Having the courage to educate your buyers up front on all this will save you time, frustration, energy and make it a much smoother experience for the both of you.

I believe in educating both the buyers and sellers UP FRONT about as much as we can.  I believe it’s best to tell them from the very beginning that you want to make sure they understand all the options, all the steps that will need to take place, what we as the agent will be doing, and what we need them to do, in order to have a successful transaction together.

Talk about the market, pricing, market trends, the home inspection, the loan application, the closing process, the waiting periods, the things that can possibly come up and go wrong, the moving plans, the contracts and paperwork that they’ll both have to sign.  Tell your sellers up front that no contract is a done deal until they get their check.

Don’t lead them to believe that just because you got a contract signed that the deal will close.  We all know this is the last thing from the truth.  Again, have the courage to tell the truth in all areas.   Our clients don’t know what they don’t know and our job is to educate them, protect them, and properly represent their best interests.  It commands honesty and integrity.

Instead of being caught off guard when handling objections and questions in this challenging market, be prepared.  Write down the most common objections you are facing right now and come up with some honest, scripted answers.

If you don’t want to write your own, you can purchase our book, Now What Do I Say?, a collection of over 425 answers to over 70 of the most common questions and objections that you’ll face in the real estate business.  Visit our products page on our website at www.yourethedifference.com to order your copy today.  Stay tuned to our blogs and articles for our May products sale, and upcoming coaching courses beginning in May.

I hope you are on track to Making 2009 YOUR year!

Tips for Time Management

As I stated last post, time management is the single biggest challenge for real estate agents.  So, here are some tips for managing your time:

Go to bed same time every night on work nights – To manage your time, you need to establish a routine.  Most people who have a 9-5 type job know when they’re supposed to get up for work.  And, if they’re parents with kids, then they know what time they have to get up to get the kids off to school.  So, if you need a certain amount of sleep to be on your game the next day, start your “next” day by going to bed at a reasonable hour, and get into a routine of going to bed around the same time each night.

Get up the same time every morning – based on what I spoke about above, this would seem obvious.  However, you’d be surprised at the number of real estate agents who stay out/up late and sleep until they wake up.  Then they get into the office whenever.  To be able to manage your time at all, you need to be consistent with the start of your day.

Develop a morning routine - Hopefully, you’re starting to get the idea that time management is about creating habits and routines.  Most people have a morning routine already, it just may not serve them or be very powerful.  Waking up, showering, getting dressed, grabbing your coffee and running out the door isn’t a very powerful routine.  There are many things you can start your day with that will make your mindset unstoppable.  There’s exercise, reading/writing goals and affirmations, practicing scripts, objection handlers and presentations just to name a few.

Be at least 5 minutes early to everything – Have you ever had a flat tire?  Ever been in an unexpected traffic jam?  Ever forgot something at home, and had to turn around?  Have you ever got into your car and realized you’re below the “E” and desperately need gas in order to make it to where you’re going?  Did you ever try to run out the door to be somewhere and get a phone call that you needed to deal with?

The point is, no matter how much we plan and schedule, things happen that get in the way.  If we go around just giving ourselves the exact amount of time needed to get somewhere, we’re going to get burned pretty regularly.

And here’s the big problem:  we’ll have a nice excuse as to why we were late, when really we just didn’t plan ahead.  And, whatever we say (barring a real emergency) will be only an excuse in the mind of the person we tell it to.  Yeah, that’s kind of the unwritten, inside joke on ourselves that we forget about.  We think we’re fooling people with our good excuse about getting behind a school bus, but the seller who was expecting you 15 minutes ago is REALLY thinking, you should have left earlier, school buses always run around 3pm, and we’re really just not that important to you, are we?

Time orient your tasks - To-do lists can be very helpful.  The problem lies in letting the tasks dictate your schedule, rather than having your schedule dictate the time devoted to the tasks.  You need to set a time limit on your tasks, and be intentional about keeping to those times.  Human beings will always take the time allotted to complete tasks.  So, if you have 5 things to do today that might take you 90 minutes, you’ll find that you actually took most, if not all, of the day to get them done.

Phone calls come in, your thoughts drift, you see an email you want to respond to…all sorts of things come into play during your day that will distract you and take you off your list.

Conversely, if you give yourself time limits on either each task, or the list of tasks, you’ll find you get them done quicker.

Be time intentional when starting anything – Just generally be aware of the time you spend doing things.  They say time flies when you’re having fun.  Well, computers must be really fun because people spend hours upon hours on them and don’t seem to realize how much time has gone by.

Rather than just going through your day seeing what takes you where, look to be intentional about the time you spend doing anything.

Time your conversations – Another time killer is the phone call.  You pick up the phone and it’s your seller calling to check in.  Next thing you know it’s 45 minutes later and you’re agreeing to three open houses in the next month.

Set a time for your conversations so they don’t get away from you.  It’s very easy to set up in the beginning.  All you do is let whoever you’re speaking to know that you have a certain amount of time to talk.

Create a schedule – This is one of the hardest things to do for independent contractors (i.e. real estate agents), yet the most powerful thing you could ever do for your business (and your life).  If you take the above tips, you already have the makings of a schedule.  Then fill in your daily activities and you’re off and running.

Ask people to keep you on schedule – This is big because on your own you simply will not stay on your schedule.  The best way to make sure keep any commitment is to make sure you’re being held accountable to that commitment.  For example, if you secretly go on a diet, then no one will know that you’re cheating when you eat those cookies.  That doesn’t help you at all.

Have your spouse, family, colleagues, broker/manager, coach, friends all keep you on your schedule (this is really difficult because most of us don’t want to be on a schedule, and certainly don’t want anyone telling us to stay on our schedule.  Or, worse yet don’t want our bosses and spouses finding out we really don’t do that much all day!).

And, help people keep on your schedule.  Post your schedule in your home and work environments for all to see.  And tell people the times you have available to do things.  If it’s a client, you give them a choice of two available times rather than letting them tell you when they can meet.  If it’s a co-worker, tell them you can’t talk to them right now, but you’ll be available at 10:30.

And change your voice mail to reflect your schedule.  Tell people when you will return calls.  People love that and will respect that, as long as you actually do return the calls when you say you will.

You time – Don’t forget to schedule some time for yourself.  You will quickly burn out in this business if you’re “on” 24/7.  Get a massage, take a nature walk, go on a date (with your spouse if you’re married)…do fun things.  Heck, the easiest thing to do is take a legitimate lunch hour instead of eating lunch from the bag on the way back from the drive-thru.

Prepare the day or night before – Get your things in order before you have to attend to them.  Pick your clothes the night before.  Have the majority of the numbers you’re going to call, or doors you’re going to knock prepared the day before.  That way, you don’t waste valuable time when you come in and lose the momentum your morning routine will have created for you.  Nothing takes you off your game worse than coming in all fired up and realizing you have to get on the computer and find numbers to call or doors to knock.  If you go for expired’s and FSBO’s, consider a service like Leadsenders, TheRedX or Landvoice.  For something like $50 a month, they will pull all of the expired’s and FSBO’s of the day for you and provide you with numbers first thing in the morning.

Remember, the main thing is if you’re not on your schedule you’re on someone else’s, and that person doesn’t care about what’s going on in your life and business.

Servicing Sellers

Today I created a letter for the 65 listings that I have and I wanted to share what I wrote with you in hopes that you can take something from it and be able to use it in your business and service to your sellers.
Where you would normally see my stats, I simply put an X, so that you can feel free to use your stats, your team’s stats, or your office stats.  Just make sure you indicate what you’re using so as not to mislead your seller.

“While we realize that you are very concerned and frustrated with the current housing market, and your home not selling as quickly as we would all like it to, we wanted to drop some quick thoughts to you.This is somewhat of a long email and I ask that you please take the time to read it in its entirety.

After being in this business for over 20 years, this is one of the strangest markets I have ever seen.  Homes that I think will sell aren’t.  And the ones I think will sell quickly, seem to be taking what seems like forever to sell.

You would think with interest rates being lower than they’ve been in over 40 years, and with the tax credits that are being offered that buyers would be buying left and right.  However, they seem to still be in very much of a “wait and see” mode.  I think mostly in fear of job security more than anything.

Additionally, lenders continue to have very strict guidelines on who can qualify for a loan right now.  Due to the volume of foreclosures in recent years, the underwriters are expecting perfect credit, strong income and long term job security to obtain financing.  This is next to impossible for many buyers right now as a result of the economic situation that we are in.

Despite the market, Tony and I have sold X homes so far this year and I feel confident that our marketing plan is not the question.  The average agent sells only between 2-5 homes all year, even in a good market.  Last year, despite the market we still sold X homes.

Am I tooting my own horn?  No.  I am reassuring you that you are with the right team and the right company.  (Here is where you can briefly talk about your company, office, team or personal stats/achievements.  Keep it brief and informative).

It is simply time, price, and finding the right buyer.  Unfortunately, price remains the biggest factor in what is selling right now.  Due to the overwhelming publicity about the housing market, pricing, and it being a buyer’s market, buyers simply are not willing to pay the prices that we all want them to right now.  They are all looking for “deal”.  We also have a huge volume of foreclosures to compete with and their low pricing to get them moved.  This makes for a very interesting and challenging market when it comes to selling a home and trying to get top dollar.

Honestly, adjusting the price every 30 days is a good idea if you are not receiving any showings, interest, and or offers.  If the house is not being shown, this is an indication that the price is too high because buyers aren’t even choosing to look at the home.

I want to quickly address open houses, as I know you see a lot of agents doing them and I want you to know why we don’t.  According to the National Association of Realtors, less than 1% of homes are sold as a result of an open house.  Most agents actually don’t know this stat, and think, along with sellers that it will help sell the home.  Besides, it makes the seller feel like the agent is doing something.  However, those agents pick up potential buyer leads so it’s more helpful to them than to the seller.

In today’s world with all the technology of computers and the internet, believe me, if a buyer is looking to be in the area and price range, they know about your home!  Studies have shown that most buyers go to the internet first, color magazines, and then to Realtors to find a home.  All Realtors are already aware of your home being for sale through the multiple listing service which is where all agents go to search for homes for their buyers.  Furthermore, each time you lower the price, you come back to the forefront of all X agents in (your market) by showing up on the daily report as a “price reduced”.

I also want to address the issue of why other agents and companies may be showing your home more often than we are.  This is always a question in any seller’s mind, why aren’t you showing my home?  And, it’s a great question.  The answer is, our job as your listing agent is to actively and aggressively market your home to ALL buyers, not just the buyers that we are working with.  Our job is to get your home sold as quickly as we can, and in order to do that you want the home exposed to all of the agents in the marketplace so that they can show the home to the buyers they are working with as well.

Some of you may already know this, but in case you don’t, we offer half of the commission you are paying us to other Realtors to sell your home.  So, based on this, with over X agents in (your market), other agents and companies are going to be showing the home way more often than we will.  In most home sales there are two agents involved.  Every now and again the listing agent finds and brings the buyer, but more often there is another agent who is working with the buyer.

Guys, trust me, if we have a buyer who is financially qualified to buy your home, and looking for a home like yours, in your area, we are absolutely going to show it.  As your agent it does us no justice whatsoever to not do whatever we can to get your home sold as quickly as possible, as we don’t get paid until you get paid.

I realize this is not the most exciting and positive news for you to hear as my seller.  However, my job as your professional is to be honest with you about what is actually going on in the market so you can make an educated decision concerning what is right for you at this time regarding the sale of your home.

I have attached a quick update on exactly what we’ve done and are continuing to do as far as marketing your home.

At this time I want to say that if you do not really have to sell your home or are not highly motivated to do so, it may be best to take the home off the market and wait until next year when things will hopefully turn around and be more of a seller’s market.  The thing to consider first is, we, of course, have no guarantee of what next year will bring.  As with anything, it is only speculation.

I also recommend that you really take a look at money and pricing.  If you wait, you will have spent x more dollars on payments on the house, maintenance, insurance, utilities, etc.  So in the end, does it really make sense to wait?  Same thing with pricing your home to sell if you choose to stay on the market.  While I keep talking about having to lower the price to be sold, you want to look at what really is your bottom line?  When you keep investing the above each month while the home is not selling hoping to get a certain price are you really ahead in the end?  Or, would it make more sense to simply reduce the price, gain yourself fresh, new exposure, and get the home sold?

Only you can answer these questions for yourself, and we are here to assist, educate, and advise you through these uncharted waters of this market.  Please let me know what specific questions we can answer for you after reading this.  You may have just recently adjusted the price of your home, and again, this is something that in this market should be looked at every 30 days if you are not getting interest, activity and offers.  If you want to discuss adjusting the price with us, please email or call me.

If you decide that you would like to take your home off the market, please let us know so we can take care of the formalities.

As always, we appreciate your business very much, and will continue to work hard toward getting the home sold and keeping you up to date every step of the way.

I hope this is helpful to you.  As I’ve been typing this post, I’ve already had email responses from two of my sellers asking me to reduct the price.

As always, please visit our website at www.yourethedifference.com for products, coaching, and courses that we offer.

The single biggest problem/challenge for agents…

The single biggest problem/challenge for agents is, hands down, time management.

Let’s face it, most agents got into real estate because they didn’t want to be tied down to a 9 to 5.  They wanted freedom.  They wanted to be able to come and go as they please.

So, that’s why if you’re reading this in your office on any given workday, you’re likely surrounded by less than half the agents who work there.

That’s why some agents come in a couple of days a week.

That’s why some agents “work” from home.

That’s why some agents never get into the office before 10:30am.

That’s why some agents leave at 3-3:30pm (and I’m not talking about the one’s who have to pick up their children from school).

That’s why some agents take a three hour lunch at 11:30, after they just took a 45 minute coffee break at 10:30.

That’s why some agents come in at a decent hour and screw around on the computer for 2-3 hours before they actually start to not make calls or door knock for new business.

And, consequently…

That’s why many agents take any call at any time and run out to show people property to unqualified buyers.

That’s why many agents will sit all day at an open house, on a dead end road that people actually have to try to find, on a rainy Saturday.

That’s why many agents will go on an unqualified listing appointment at 7pm and come back without the listing.

That’s why the average number of homes sold a year per agent in the U. S. consistently hovers around four.

And, that quite possibly could be why you, the reader, may not have the listings, pendings, closings and money you really want.

Being able to manage your time is the single biggest key to your success.

The simplest way to manage your time is to create habits, routines and schedule.  Start to go to bed at the same time every night.  Get up at the same time every morning.

If creating a schedule is taboo for you at this point (we’ll work on that later), then create a to-do list.  However, the key to managing your to-do list is to make it “time” oriented, and NOT “task” oriented.

Time oriented means you assign time limits to the tasks at hand rather than just work on the task until it’s done.  I know it sounds like I just told you not to finish your tasks, however it’s been proven that human beings will stretch out their tasks to the time allotted.

For example, let’s say you have 5 real important tasks to do today, that if you really got down to it you could probably get done in 2.5 hours of consistent work.  If you don’t limit yourself to roughly 30 minutes per task, you’ll find that it will take all day to get the tasks done.  All sorts of things will happen to ensure you don’t get your work done in a timely manner, some of it will be self-imposed.

However, when you give yourself a time limit, you will work diligently to get the tasks done.

Does that mean you’ll get all your work done in the time alloted every time?  No.  But you’ll get much more done, much faster, when you work in time increments, than if you simply go about doing your tasks with no thoughts of time at all.

I’ll go into more detail on tips for time management in the next post.

How would you handle this?

An agent client of ours recently found themselves in this situation with their buyer:

Buyer is qualified to $390,000 and makes two offers on two different properties within a few days.

First offer on listing #1 is $350,000 on a $455,000 listing, hoping to get the seller to come down (listing agent encouraged all offers due to divorce situation, home’s been on for quite some time).

Seller #1 counters at $445,000.

Buyer then makes $360,000 offer on listing #2, which is listed at $395,000 and been on the market for about a week.  A little more than a full day goes by, more like 30 hours, and seller #2 counters at $385,000.

Your buyer tells you to call back right away, counter at $370,000, and says to tell the listing agent that they have an offer in on another property, all the while telling you they don’t want to lose this second listing.

What would you do?

I took an unscientific poll of about 10 agents.  All of them said they would call the listing agent and try to get the deal done quickly, expecting a counter of $375-$380K and doing their best to get the buyer up.

You could do that, and maybe get lucky.  The problem with that is there are two things at play here: 1. what to do in negotiations, in general, and 2. what to do in this particular negotiation based on the data you have.

As I recently stated in my Tips For Successful Negotiating blog posts, in general, the quicker one party call’s back the other party, the more leverage the other party has.  They will perceive the quick counter as attachment to the deal.  And, in this particular case, they would be totally correct.

You see, specifically to this agent’s situation, the buyer’s negotiation and motivation were totally at odds with each other.  The buyer stated he wanted the house badly, and wanted his agent to immediately counter back.  However, at the same time, the buyer wanted the counter to be $15,000 less than the seller’s counter, and also have his agent pump their chest about having an offer in on another property.

Think of the message the buyer is sending to the seller.  The immediate call back shows attachment.  The mentioning of the other offer is supposed to show the buyer is not attached, but actually would end up having the opposite effect.  The seller would undoubtedly think it’s a ploy.  You’re mentioning this other offer to either show me you’re not attached, or to get me to come down quickly so I don’t lose you…yet you’re the one who called me back immediately.

Now, let’s add in the fact that the last counter from the seller took almost a day and a half…and the buyer said he doesn’t want to lose this property (to other potential buyers).  So, if the seller counters again, or heck, even decides to accept at that price, it’ll likely take another day and a half before they call back.

Do you see how the buyer is mixed up?  He’s trying to play big-time negotiator but he’s extremely attached to the outcome.  It’s like he’s playing poker and doesn’t realize his opponents have seen his hole cards.

Now, I don’t advocate telling either party what to do, that’s not being a negotiator, that’s getting involved in the deal.  God forbid you tell a buyer/seller to do something and it blows up in their face, kiss the client goodbye.  Or, worse yet, your client takes your advice and then learns of someone who got a better deal in a similar situation in the near future.  At that point, you might be up for a lawsuit and/or loss of license.

However, in this case, it is pretty obvious that what the client wants, and what the client is saying are diametrically opposed to each other, so some guidance is warranted.  Even so, I’m wouldn’t tell the client what to do.  Start by asking questions.

“Mr. Buyer, I understand what you want me to do, and can I ask you a question?”

“Sure.”

“What’s more important to you, getting the house at $370,000 or getting the house?”

You’re answer will tell you what’s next.  Obviously, if they want the house at the price, then do what they told you to do.  You could suggest that you wait a couple hours before you call back with the counter.  You could also explain that mentioning the other offer will probably have an adverse affect, but it’s still up to them (the buyer).

However, if they answer that it’s more important for them to get the house, then you can explain all of your concerns and ask them to make their decision based on the concerns.

In this case, the buyer heard the agent’s concerns and upped their counter considerably, agreeing not to mention the first offer.  At the time of this posting, the buyer and seller had come to a verbal agreement.

The key was the agent was listening to the client, and heard their motivation.

If you want to practice what to say and how to say it, please visit our website at www.yourethedifference.com and look into our telecourses, coaching and the Role Play Connection, or call us at 609-601-1296.

Tips for successful negotiating – part 2

To continue the tips from my last post, here are more tips for successful negotiating:

7. Don’t let your opinion get in the way – I touched on this a little above. There is no place in negotiations for your ego, so realize that your opinion is only your opinion. There’s no need to defend your listing price, or protect a client from potentially paying too much. Too many agents get in the way of negotiations without actually letting the client decide what they want. I know, you think you’re a great agent, and you priced the home so well. And did you consider that maybe the seller was willing to come down lower than they told you, or really needs to sell now more than ever and will take that deal? Who are you to stand in their way? All you can do is give your client the data and let them decide what they want to do for themselves.

This also goes for when the client asks, “What would you do?” If you fall into the trap of answering that question, as many agents do (it’s tough to resist when someone asks you for your “expertise”), please, please, please, try not to answer that question. Instead ask them what they want to do. Many times that answer is the key to the deal.

“Scott, what would you do?”

“That’s a good question, Mr. Seller, what were you thinking of doing?”

“Well, we figured we’d come down $10,000 and see what happens.”

“Great idea, I’ll call the other agent.”

It’s that simple. But what if they press you for an answer. At that point, I would do everything I could to make sure they know you’re not TELLING them what to do. “Look, it’s not my money, so I really can’t tell you what to do. If it were me, I’d probably want to counter 2-3% to show them I’m willing to negotiate, and that I want to sell. But that’s completely up to you. Do you want to go that route?”

8. Get rid of the drama – Many agents will stir up drama during negotiations for many reasons. One reason is that they’re just drama kings or queens; everything is dramatic. Another reason is they’re really attached to the outcome and it shows through. Many agents will look to throw the other agent and/or client under the bus, unnecessarily, so they create drama as a justification for their commission, in a “see how hard I’m working for you?” kind of way.

Get rid of it all. It’s a waste of time and energy, it causes stress, and it doesn’t help the negotiation one bit.

9. Find motivation – Often times money and motivation get in the way of each other. A buyer may need to move quickly, may have found they house they really want, yet decides at the most inopportune moment that “I’m not going to overpay for this house!”

Overpaying for the house is usually a vague term that really has no meaning. If pressed, most times, a buyer doesn’t really know what the amount is that would have them overpay, or not. They might have a number in mind they won’t go beyond, but that may not be the same. Besides, if they tell you they won’t spend more than $250,000, you’d really have to question if you have a motivated client (or a real client at all) if they won’t take the seller’s counter of $251,500.

However, if you know the motivation of your client, you can then bring that to the forefront when negotiating. You can remind them of their stated motivation, and how what they’re now doing goes against it. “Mr. Seller, I understand you don’t want to counter, yet you need to move by July, and this is the only offer we’ve had in the 75 days you’ve been on the market. Are you okay with this buyer walking away? Can you afford to wait another 75 days to find another buyer?”

10. Ask questions – If you go back and look at the dialogue examples in these tips, you’ll notice that the agent in the examples is always asking questions. “Do you think you can get your buyers to come up a little more?” ” What were you thinking of doing?” “Do you want to go that route?” All questions. Selling is always about asking great questions, it’s not about telling. That’s true in negotiations more than any other time. No one likes to be told what to do, more so when it’s their money on the line. Your first inclination should always be to ask a question.

11. Understand the scope – To you, this is just numbers on a contract. To the client this is a lot of money, and/or their home. The average agent sells 3-4 homes a year, your clients might buy/sell 3 or 4 times in their adult lives. You do this kind of thing daily, for a living. Don’t just roll over the numbers and issues as if it doesn’t matter. Give this stuff the respect it deserves in your client’s minds. They have a lot on their plates, and are thinking about many different things and how it all affects them and their family. So when you can’t understand why they won’t just come down $1,000 bucks, think about being in their position. Usually it’ll all come around when you treat the issue and the client with they deserve.

12. Don’t let your commission become part of the deal – This is the worst thing I can think of, and the quickest negotiating tactic that most agents seem to posses. Your commission is NOT a part of the deal. Resist the urge to give it up in the middle of negotiations because you need the deal to go through. That’s not being a good negotiator, that’s being a doormat with no sense of self worth. You work hard for your money. The buyer saw the list price, and you’ve schooled them on the averaged list to sale ratio in the market. So why all of the sudden do they get close to a deal, and get some of your commission to make it work? Same thing with the seller. You’ve already negotiated your commission on the listing agreement (hopefully it’s full!!!!), so why do they think they can re-open those negotiations when you’ve brought them a ready, willing and able buyer? Besides, they get 94% of the sales price, you get 3% before your split.

Be strong, and get the other agent to be strong too. If you are asked to cut your commission to make the deal happen, simply let the parties know your commission is NOT a part of the deal. Tell them to focus on the deal, the house, the other party when negotiating.

Motivated people might hem and haw, but will eventually do the deal. Unmotivated people aren’t worthy of being your clients, and will possibly even be those people who end up walking away from the deal anyway. Those that stay might end up being those mean clients, who get mad at you and you can’t call anymore. At the very least, it’s a horrible precedent to set for them in the future and any other referrals down the line, because you know they’ll expect, and tell everyone else to expect you to cut your commission in the future.

If you’d like to learn more, visit www.yourethedifference.com, or call us for a free, no-obligation coaching call at 609-601-1296

Tips for successful negotiating – part 1

Negotiating is a big part of real estate.  Yet, surprisingly, many, if not most agents don’t know the first thing about how to properly negotiate.  And many agents who think they’re good negotiators, usually end up negotiating their commissions down to get the deal done, or upsetting one or both parties along the way.  The unfortunate trap is that, generally, considering yourself to be a good negotiator is egotistical.  Good negotiators know that there is no place in negotiations for ego.

So here are some tips to help you become a good negotiator, so to speak:

1. Remove your ego – This is a huge stumbling block in negotiations.  You’re not trying to win here, you’re trying to successfully bring a buyer and seller to an amicable financial agreement.  It’s not about you being smarter or better than the other agent.  It’s not about you defending the price of your listing.  It’s not about you outwitting the buyer and/or seller.  It’s not about you at all.  It’s about the buyer and seller coming to an agreement and happily moving forward.  Get out of the way.

2. Win-win – I’m sure you’ve heard this before, as it is pretty much the most basic rule in Negotiating 101:  The best negotiations end with all parties feeling like they won.  And by that, I don’t mean feeling like they won and the other party lost.  As I stated above, both parties need to feel they came to an amicable agreement and want to happily move forward.

In this market, I’m sure you’ve seen, heard, or been involved in deals where one party gets out of the deal almost right after they agreed to it.  That’s because that party felt forced, coerced, cajoled, bamboozled, or anything else other than being in an amicable agreement about the price.

And beware the deals that stay together like this.  They usually end up with one, or both of the parties going after your commission.  At the very least, you may end up with a past client that doesn’t want to deal with you, or refer you business ever again.

3. Who are you negotiating for/with? – You need to realize that you’re a third party negotiator.  You’re not selling your own house, and you’re not spending your own money to buy the house.  You represent one, or both, parties in the transaction…you, yourself, are NOT a party in the transaction.  So don’t beat up your client, because they’ll remember what you said.  Which means, when it’s all said and done, you may end up with no deal, or a sour client you can’t call anymore, as I mentioned above.

4. Don’t be attached/Don’t be the most attached – This is a very basic idea, and one of the hardest to practice.  You’ve done the work, you’ve brought a buyer and a seller together, now it’s time to get paid, right?  Wrong.  You get paid when you successfully take a deal to closing.  The real truth is that you need to be doing consistent lead generation, daily, so that you have enough business such that you don’t feel the need to be attached to any one specific deal.  The less attached you are, the better you’ll negotiate.

And, by the way, don’t be the most attached party in the deal.  There may come a time where your client doesn’t call you back as fast as you want, or the other agent doesn’t get back to you for a day or so.  If you find yourself making more than one phone call to any of them, you are now the most attached party in the deal.  That means that you want this deal more than anyone else involved, more than the buyer and/or seller!  That’s definitely not good for negotiating.

Also, everything is about perception.  Even though you are the listing agent (example), when you repeatedly call your client for a counter offer, the seller’s perception is that you are the messenger for the buyer, and they’ll read your multiple calls as BUYER attachment.  And if they think they have an advantage over the other party, if they think the buyer’s really anxious to get the house, they’ll be less likely to counter, won’t they?  At the very least, they’ll start playing real hard ball, which could impede the negotiations.

Many an attached agent has killed a deal before it got together because they were more attached than the actual buyer and seller.  The clients misread the agent’s attachment for the other party’s attachment and changed their negotiating tactics accordingly, resulting in no deal.

5. Align with the parties involved – Again, this is not a contest.  You need to be on your client’s side, and you need to be on the other agent’s side.  To many agents think they’re at war with the other agent, when that’s the dumbest thought process you could have.  Wars have casualties, not good outcomes.  You need to understand where all parties are coming from, and align with them.

If you have the buyer, really understand how a buyer might feel in this market.  Everyone’s telling them it’s such a buyer’s market, yet you want them to pay $5,000 more.  How would you feel?

If you have the seller, really understand how they might feel after their house has been on the market for 6 months, reduced multiple times to where they’re barely going to break even, and you’re telling them to come down another $5,000.

And, finally, treat the other agent with respect and honesty.  Align with him/her.  You’re both working towards a common goal.  You want the other agent to negotiate FOR you and your client, not AGAINST you.  “I’m really sorry, Bob, my seller’s are just about at break even point.  They are down as far as they can go, and really want to sell the house to your buyers, but can’t really go lower.  Do you think you can get your buyers up a little more?”  will get the other agent on your side as opposed to “This is priced right, and they’ve come down enough.  You need to get your buyers up.”

6. Time – Don’t stop everything else you should be doing (ahem…getting more business), and don’t be in such a rush to talk to your client.  Remember, you don’t want to be, or appear to be the most attached party in the deal.  So, to again put yourself in your client’s shoes, imagine if you get three calls, with three counters from your agent, in 3 hours.  Regardless of if you’re the buyer or the seller, doesn’t that make you feel like the other party really, really, wants the deal to come through?  Wouldn’t you naturally want to withdraw from that barrage, and maybe even take a day or two to think about things, thereby letting the other party sweat a little?  Exactly.

I promise you, if you take your time, you’ll find that everyone will be calling you.  You’re client will call you to find out if there’s any new news.  The other agent’s client will be calling them, and the agent will be calling you, etc.  I’m not saying purposely avoid calling your clients, or the other agent, I’m simply saying that the quicker you make those calls, the less emotional attachment the parties will feel.  Studies have shown that people buy (sign contracts) on emotion, it’s that simple.  If someone feels like they’re losing the house they want, or the buyer they need, they’ll be more apt to negotiate fairly.

I’ll continue this post with six more tips in my next post.

In the meantime, if you’re interested in learning about negotiating, what to say and how to say it, objection handling, or any other sales training, visit our site at www.yourethedifference.com, or call us at 609-601-1296 for a free, no-obligation coaching call.

State of your business address for 2Q 2009

Welcome to the 2nd quarter of 2009!

Now that you’re here, let’s move forward.

If you had a bad 1st quarter, shake it off.

What do you need to do differently?

What do you need to learn?

What do you need to practice?

What do you need to do more of?

What do you need to do less of?

Are you being accountable?  Do you have a coach or accountability partner to hold you to doing what you say you want to do?

I hope by now that you have gotten over the “market” excuse.  The national hype can really wreak havoc on an agent’s mindset; yet in most markets, homes are selling daily.  Maybe not as many as used to be, but so what?

I had some local agents in my market in New Jersey do an exercise where they went on the MLS and looked up the amount of listings that came on and pendings that went under contract in March.

The number of listings was over 1,200, or more than 40 listings a day!  Even if they went by last year’s numbers, where almost 70% of the listings wouldn’t sell, 12 saleable listings per day came on the market in March.

The number of pendings was over 350, meaning almost 12 properties a day went under contract in March.

And, you know what?  That’s half off the pace from two years ago when almost 700 properties sold per month.  But, so-the-hell-what???

If you’re letting yourself buy into that, that’s just your mind’s way of justifying and giving excuses for not working to get business.  With 12 saleable properties listed and 12 properites pending every day of the month, do you think you could get 1 or 2 of each a week if you really tried?

The answer is, and must be, YES.

Of course you can…there’s clearly more than enough business for you to go out and get yours.

And that has to be the key, you have to be willing to go out and get the business daily and consistently.

Now, if you had a good quarter, shake that off, too.

Certainly give yourself credit, accolades and even perhaps rewards for having a great quarter…but don’t rest on your laurels.

Complacency can creep in very easily.  And it doesn’t announce itself until you’re knee deep into a crappy next quarter, or worse yet an “unexplainable” crappy year…that seemed to start of so well.

Ask yourself the same questions above, and really turn it on now.  Time to blow the doors off your yearly goals.

You have yearly goals, right?  Please tell me you have yearly goals!!!

Whether you had a good or bad 1st quarter, make sure you have goals, you’re focusing on them daily, and shake off last quarter so you can have a great 2nd quarter!!

**If you want practice, join the Role Play Connection, starting Tuesday’s at 12pm PT / 3pm ET, for only $29 a month!  Practice with myself, my partner and You’re The Difference co-founder, Christy Crouch, and other agents across North America looking to better their skills, themselves and their business.  It’s one call a week for 30 minutes.

Email info@yourethedifference.com for more information or to sign up.