Posts Tagged ‘For Sale By Owner’

Where Realtors Are Missing Sales Opportunities – Part 2

The world of sales is changing and this includes the real estate market. Finding new sales opportunities in an evolving marketing requires thinking and doing things differently.

sales-opportunities

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Currently the majority of business models within the residential real estate market is a 50/50 split of the commission paid by the owner of the home being sold. One realtor lists a home and usually a realtor from another firm sells the home.

Even though many realtors only want to list a home because this is the way they have done it for years, they are missing sales opportunities when the home does not sell.  Depending upon the time involved, there could be tens to hundreds of hours wasted when the home fails to sell.  All those hours devoted to marketing are lost and worse yet there is no revenue.

Enter the For Sale By Owner sellers and realtors are even more entrenched into just listing the house.  How ridiculous given there are a plethora of sales opportunities to be had to increase sales.

For example, instead of fighting the For Sale By Owner seller, why not act as a real estate consultant? Create a an affordable, alacarte fee schedule for the following:

  • Advising on how to make your home “show ready”
  • Providing more professional looking photographs to even taking a video
  • Writing actual marketing copy to be placed on free real estate listing websites such as Zillow
  • Offering to provide a lock box to even just a MLS number
  • Establishing a dedicated website
  • Posting to social media sites such as Facebook, Twitter, Instagram, etc.

Instead of hoping to get paid for marketing services, now the real estate agent gets paid for his or her efforts. Even better, the real estate agent is now developing a relationship with the For Sale By Owner seller.  Since people buy from people they know and trust, the realtor is becoming a trusted resource. Here is a potential sales referral resource as well.

As it has been said, if you keep doing the same thing over and over again hoping for different results, you are embracing insanity.  Now is the time to get ahead of the residential real estate market and actually get paid for your marketing services (listing) instead of hoping another realtor brings a buyer to your listing.

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Where Realtors Are Missing Sales Opportunities – Part 1

The real estate market is changing. Yet many realtors are not adapting and leveraging those changes.  They are missing incredible sales opportunities by sticking to their existing business model as well as past sales behaviors.

sales-opportunities

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Right now in most communities, there is incredible sales opportunities (think low hanging fruit) which with a little effort can be turned into sales revenue.  However, because of existing business models and past sales behaviors these sales opportunities continues to be ignored.

So what is this low hanging sales fruit? 

The answer is For Sale By Owner.

Many realtors or real estate agents or brokers view For Sale By Owner as a threat.  Their goal is to list the home because it is a fairly easy commission provided the home sells.  The real estate industry statistics continue to show 80-90% of all homes are sold by a realtor not associated with the listing firm.

Since the sales commission is usually split 50/50 between the listing broker and the selling broker, asking for a commission from a For Sale By Owner seller does not decrease revenue.  In fact, if the realtor actually brings a qualified buyer to the seller, revenue is increased as is profitability. The realtor does not have to pay for:

  • Any marketing
  • Any lock boxes
  • Any other operational costs associated with listing the home

What this REALLY means is the realtor must truly be a salesperson. Also, the real estate agent must know how to negotiate. He or she must demonstrate value especially to a potentially jaded homeowner.

Chances are the homeowner had already had one or two realtors without success or has heard other horror stories.  The National Association of Realtors commissioned the Danger Report in 2015. This report revealed the number one danger at 100% threat level is the incompetence of  residential real estate agents. No wonder many homeowners have reason to be concerned.

Yes in some instances, the home may have been priced too high or there may have been other issues.  However with today’s Internet sites such as Zillow, homeowners are becoming far more educated than in the past. To ignore For Sale By Owner Homes especially if you as the realtor want to increase sales is frankly illogical and may speak to your real issue – a fear of selling.

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One Sales Strategy to Sell More Homes

Salespeople, good salespeople, continually seek new sales strategies to increase sales.  For realtors or real estate agents, they may be ignoring this sales strategy – For Sale By Owner.

sales-strategyWith well over 75% of all homes not sold by the listing real estate agent, realtors are selling the inventory of other realtors.  This inventory excludes the ever growing marketing of For Sale By Owner.  Yes this market has seen highs and lows as the overall real estate market has experienced.  However it is ripe for the picking as they say.

Some realtors may look at the For Sale By Owner homes as a threat to their incomes. If I was a real estate agent, I would look at these FSBO homes as a viable sales strategy being ignored by other realtors.  These FSBO homes are low hanging fruit.

The challenge is to having the FSBO pay a sales commission.  This is where being a true salesperson comes into play. Here you can share your knowledge about a particular neighborhood or type of home being sold.

My sense is the reluctance to work with FSBO is one of FEAR. What if I work with them and they use me and my knowledge?

F = False     E = Evidence     A = Appearing     R = Real

Welcome to the real world of sales. There is no guarantee in sales.  Maybe this is why the reliance on listing commissions?

A sales scarcity mentality surely will deliver scarce sales in any industry.

Here is where having a simple contract with the FSBO seller is essential.  Discussing fees up front is also important.

Of course not all homes make for a good showing. Some homeowners may require an education about what is needed to sell a house.  A good salesperson would have much of that information in a brochure along with additional resources such as a home inspector, a certified appraiser, mortgage lender, title company to a real estate attorney.

Real Estate Sales Coaching Tip:  Establish key relationships with other professionals

People buy from people they know and trust.  Become the trusted authority within the local FSBO real estate market.  This sales strategy reflects the blue ocean strategy needed to increase sales in today’s every changing residential real estate market.

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Real Estate Agents Why Aren’t You Personalizing Your Direct Mail Marketing?

Believe it or not the residential real estate market has changed.  A study by Caslon & Co. revealed personalized marketing can generate three times the response rate.  Now is the time to accept the fact impersonalized direct mail marketing has gone the way of the Dodo Bird.

direct-mail-marketingPersonalized direct mail marketing has always known to be the better path. Yet excuses of its takes too much time to the inability to write effective marketing messages seem to still justify the use of impersonalized real estate marketing messages.

Given the majority of residential real estate agents do not have that many sales leads, personalization is quite easy, yet impersonalization continues.  Anyone can make a copy of a “canned” marketing flyer, hand write an envelope, put a first class stamp out and drop it in the mail. This is not take rocket science. Worse yet, some real estate agents make copies of a copy and believe that will attract positive attention.

What is forgotten are these 3 sales buying rules:

#1 – People buy from people they know and trust

#2 – People buy first on emotion; justified by logic

#3 – People buy on value unique to them

These 3 sales buying rules are why personalizing direct mail marketing is essential especially when these other two facts are thrown into the decision making process:

#1 – Today’s sellers and buyers are far better educated

#2 – Up to 60% of the buying decision has been made before you have connected with any sellers or buyers

As we are in the process of selling our home through For Sale By Owner, 100% of the direct mail marketing we have received has been:

  • Impersonal
  • Generic
  • No value to us
  • Poorly written or presented
  • Waste of our time to even open or read it

Some of the residential real estate agents’ direct mail messages have attempted the old tricks of:

  • Use fear
  • Sell on commission (money)
  • Use “top rated real estate agent”

Then there is the overriding factor of generally insulting the homeowner by mailing copies of a copy to not answering the phone even when we call the residential real estate agents all who assure us they want our business.  If you can’t answer the phone after the fourth ring, you truly aren’t that hungry for new sales leads.

Personalized direct mail marketing may require a little research regarding the seller of the residential real estate. With today’s Internet, that research can be conducted from any office or mobile device with Internet connections.

If you want to increase sales by securing more sales leads, then begin to invest the time to personalize your residential real estate direct mail marketing.  Stop with the impersonalized letters to what used to work.  Discover what is important to that seller of any home even if they have listed it as For Sale By Owner.  You just may discover selling real estate can become a lot easier and even a lot more fun.

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Leanne Hoagland-Smith is THE People and Process Problem Solver. She supports forward thinking leaders in bridging the gaps between the two problems restricting strategic business growth – people and processes. Leanne can be reached at 219.508.2859 central time USA.  Follow her on Twitter or check out her profile on LinkedIn

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How to Boost Residential Real Estate Sales – Part 3

Over nine years have passed since I wrote this article “7 Tips for Real Estate Agents’ Success.”  The very first tip was those who are in residential real estate sales are small business owners. Yet, the statistics of failure to limited success by realtors appears this critical increase sales tip continues to be ignored.

residential-real-estate-salesThe Danger Report commissioned by the National Association of Realtors identifies probably the key reason for so many realtors not embracing this reality of being small business owners – Masses of Marginal Agents Destroy Reputation.  This key danger finding is essential to the livelihood of the residential real estate industry.

Since we have placed our home under the For Sale By Owner banner, I have personally witnessed the good, the bad and the ugly when it comes to real estate agents.  Of the nearly dozen or so who have reached out to us, only two have made repeated calls just to stay in contact. The majority have either made one call or sent up to three direct mail pieces and then quit.  Follow-up is a critical sales skill for any successful small business.

Read Part 2 – How to Boost Residential Real Estate Sales

Successful small business owners stay ahead of the market flow. They look for changes in the economy, the community and their own industries.  Additionally, these forward thinking leaders look to continually hone their knowledge and expertise.   Marginal professionalism will not cut it in any small business less alone one that is people driven and involves the most costly investment people will ever make.

When those in residential real estate sales embrace the attitude of being small business owners, this will help to close the delta between “great real estate service and poor real estate service.” (The Danger Report).   Until that attitude shift happens, the delta between great and poor will probably only increase instead of decrease.

* * * * *

Leanne Hoagland-Smith is THE People and Process Problem Solver. She supports forward thinking leaders in bridging the gaps between the two problems restricting strategic business growth – people and processes. Leanne can be reached at 219.508.2859 central time USA.  Follow her on Twitter or check out her profile on LinkedIn.

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Real Estate Agents FSBO Is Your Opportunity to Increase Sales

For Sale By Owner (FSBO) real estate market is expanding.  Many realtors look at this as a barrier to a no sale. They fail to recognize the vast sea of opportunity to increase sales.  Some real estate agents are even resentful of this emerging market and whine to others within their industry or spheres of influence.

increase sales

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From my own experience in selling our home under the FSBO sales process, I am astounded as to how easily most real estate agents give up.  Having several long established friendships with successful realtors, I reached out to one of them and asked him (Paul Kennedy) if he and his wife, Jackie,  ever sold FSBO homes?  His response was “Yes, quite frequently.”  He and his wife did this years before the current expansion of the For Sale By Owner industry.

Salespeople must adapt to market changes if they wish to increase sales.  For Sale By Owner is just a market change as buying cars online or the rise of the Big Box Stores.  Those real estate agents who can adapt will increase sales; those who cannot adapt will lose sales.

Here are my steps as a Red Jacket in a Sea of For Sale Signs to turn For Sale By Owner residential real estate properties into opportunities to increase sales.

#1 – Engage in Research

If I was a real estate agent and came across a FSBO residential real estate property, I would first do my research.  Possibly the home is on Zillow, FSBO or Craig’s list?  Then I would check out the property at the Recorder’s office at county courthouse. Additionally I would attempt to learn as much about the seller as possible.

#2 – Check Out My Pre-Qualified Buyer’s List

My next action would be to see if I had ideal customers as pre-qualified buyers interested in a home in that price range, square footage, school district, etc.  Additionally I might call my favorite mortgage broker or banker and ask him or her about any more recent pre-qualified buyers.

#3 – Call the FSBO Homeowners

Next I would call the homeowners. I would ask if  I could tour the property.

This first meeting would be all about building the relationship.  This is not the time to be adversarial with the homeowner nor is it the time to make snide remarks.

Also I as the real estate agent I want to ensure it meets those qualified buyers I have in my “back pocket” as I do not want to anger them as well.  Finally here is where the real estate agent picks up additional and very valuable future negotiating information such as:

  • What is prompting the move?
  • How did the FSBO sellers determine the price?
  • Where is there room for negotiation such as flooring allowance?
  • Does the FSBO seller have a time lime for moving (urgency)?
  • How many people have called or tour the home?
  • Is there a bottom line number that must be met after everything is said and down?

#4 – Ask to Bring a Sales Lead

Now is the time to ask.  If I was the real estate agent, I would ask the For Sales By Owner sellers if they are open to having one of my pre-qualified buyers (think sales lead) tour the home.  If the FSBO seller brings up the sales commission fee, I would say:

“Let’s hold off at this time because such discussion is rather premature.  Neither one of us know if my client is truly interested in your home and more importantly is interested in making an offer. May we hold this discussion to later?” 

This question provides a psychological advantage for the real estate agent especially if he or she learns the seller wants to move by a certain date.

#5 – Tour the Home with the Sales Lead; An Offer Is Presented

The real estate agent tours the home with the pre-qualified sales lead.  They leave and the sales lead tells the realtor he, she or they want to make an offer.  Now is the time to discuss and negotiate commission.

#6 – Negotiate

I, as the real estate agent ,would make a call to quickly schedule a face to face appointment with the sellers.  During this in person meeting, I might say something like:

“Earlier you mentioned my sales commission and I said such discussion was premature.  My clients who just toured your home have expressed a solid interest in making an offer at full price.  So what are your thoughts about this offer? “

Here is where negotiation enters because the truly top performing real estate agent has all of her or his facts and can crunch the numbers.  Of course, depending upon the agreement with the real estate broker there may be some limitations.  However, as one of my residential real estate builder friends and another client who became very wealthy in flipping homes said “Everything is negotiable.”

If the real estate agent has already done his or her number crunching based on the information she or he has received, the likelihood of a sale has just been dramatically increased.  Bottom line the FSBO sellers want to sell the home.

Even if the offer is not as full asking price, there may still be movement to allow some commission.  Again, this is where the research comes into play within the negotiation process.

Personally, if a real estate agent showed some real sales skills (and conducting an open house is marketing not selling), I would be more than willing to discuss his or her sales commission fee.  The challenge is many (not all) real estate agents within residential real estate are not top performing sales people with demonstrated sales skills.

The lack of demonstrated sales skills is why real estate agents cannot increase sales.

FSBO becomes an excuse not to sell and not an opportunity to sell.

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Leanne Hoagland-Smith is THE People and Process Problem Solver. She supports forward thinking leaders in bridging the gaps between the two problems restricting strategic business growth – people and processes. Leanne can be reached at 219.508.2859 central time USA.  Follow her on Twitter or check out her profile on LinkedIn

 

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Realtors – Your Marketing Message Sucks – Part 05

Technology through  the Internet and social media has changed the real estate market.  Educated buyers are now the driving force.  Unfortunately, the marketing message by many realtors has not reacted positively to that change.

marketing-messageWebsites such as Zillow, Trulia, Realtor or For Sale By Owner along with Craig’s list and Facebook have allowed for an almost instantaneous connection to real estate listings.  Buyers let their fingers tap the keyboards of their smart phones, tablets or desktops. No longer are they using their fingers to flip the yellow pages, classified advertisements or even monthly publications.

In 2013, listings on For Sale By Owner jumped 14%.  This trend continues to increase much like the trend for shopping for cars or other services over the Internet.

What realtors can do is to change their marketing message.  Now is the time to educate their potential customers.

If a homeowner is walking the For Sale By Owner path, then the marketing message must demonstrate strength via knowledge while creating an emotionally compelling message.  For example instead of saying the realtor is among the top producers, why not provide specific numbers such as:

“In your area, For Sale By Owner homes average 3 months on the market and are sold at 10% under listing price.  For the last six months, I have sold 90% of my listings in 30 days at listing price or above.  What could you do with those extra 60 days and extra money?

  • Not potentially lose the property you were seeking after you sell your home?
  • Not have two months of additional stress?”

Maybe it is me, but if I received such a marketing message, I would be inclined to speak with that real estate agent.  For he or she has connected to my value drivers of time and possibly money.

The other reason a realtor’s marketing message may frankly suck is because the end game is now  finding the right ideal buyer based on the ideal customer profile .  There  now appears to be some confusion about what is a benefit and who is an ideal customer or buyer.

One of the poor direct mail pieces I received stated:

“we pre-qualify all interested buyers, ensuring only those who can afford your home tour it…Call us to hear above even more benefits of listing your home with us”

Not all pre-qualified buyers are interested in every home they can afford. Also pre-qualification is more about ensuring the right potential ideal customer tours the home.  Pre-qualification is not a benefit in today’s market.  What would have made a much better marketing message is something like this:

“We have several pre-qualified buyers in your price range who are looking for a great school district and a move in ready home. Please give us a call to learn more about other results we can deliver for you if you list your home with us.”

Now if you were selling your home, what marketing message is emotionally stronger?  Again my sense is the later one. The first one is quite frankly boring and not emotionally compelling.

This 5 part series has touched a few nerves among local realtors here in Northwest IN and it should.  Given the numbers of few successful real estate agents, their marketing is probably the greatest external barrier to their real estate sales success outside of their own internal barriers.

Tomorrow I will reprint an article. 7 Tips to Real Estate Agents’ Success, that I wrote over 9 years ago and has appeared in countless online newsletters to Chambers of Commerce.  This article is still as true today as it was back then.

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Leanne Hoagland-Smith is THE People and Process Problem Solver. She supports forward thinking leaders in bridging the gaps between the two problems restricting strategic business growth – people and processes. Leanne can be reached 219.508.2859 central time USA.  Follow her on Twitter or check out her profile on LinkedIn

 

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