Career Training - Real Estate Agents, How to List at the Right Price

by Daryl Rouse

Step 1: Pre-appointment preparation

The work you do before you ever go to the property will set the tone for how you are perceived by the seller. Let me explain. You want to be able to show the seller (not tell them) that you are professional and organized.

This will allow you to exhibit leadership and authority People like to be led down the path to a decision, if they value what you say and how you act. This will lay the foundation for the trust relationship to begin. People will do business with people they like and respect, but they have to trust you first. So how do we do this? When you first make the appointment, ask lots of intelligent questions. Questions help build rapport and show the client that you are caring enough to ask about their needs and their particular situation. Here are some examples:

-What are you looking for in an Agent?
-Tell me about your previous experiences buying and selling (if they have sold before)?
-What are the three most important aspects of the sale for you?

The questions you ask will show your experience and knowledge (this is not related to time in the business). Next, send a letter and an e-mail to confirm the appointment time (yes, both if you can). Include a pre-sell packet your appointment confirmation. This packet should include information about you and your company that will "pre-sell" you to the client. The packet should help the client feel like they know you prior to actually meeting you. Finally, call the day before and confirm. You're on your way.

Step 2: Educate the client about why you are their best choice:

It is important that you educate the seller as to why you are the most qualified agent to list their house today (yes, I use that terminology). The objective here is to show value through differentiation. Depending upon your level of experience, you will relate your personal statistics, or by association, your company's statistics. The seller cares about one thing here, and that is that you are confident in what you say. In addition to discussing you and your company's successes, also spend some time talking about:

-the number of buyers you generate and how you generate them
-the number of buyers you have represented successfully
-the numbers of buyers you personally find that buy your listings
-how you encourage other agents to show your listings

Ultimately, the seller wants to know that you know how to get buyers to their home.

Step 3: Educate the seller about the current market conditions and about future market predictions.

Your job is to give the perception that you know all things Real Estate. Too often as Realtors we skip over this step assuming the seller knows what is going on. This could be a costly assumption, which will manifest itself later in the presentation. Make sure you discuss the trends of the market and support your statements with documentation. This can be in the form of MLS statistics, articles from your local paper and articles from real estate experts, (source online). Be sure to discuss:

-time on the market
-list price to sales price ratio
-percentage of properties that don't sell (expireds, withdrawn and cancelled)
-number of active listings (the seller's competition)
-expectations of the buyer (closing costs paid, negotiation on price, etc)
-typical financing structures that a buyer will use to purchase the subject property.

Step 4: Define how you set the price on a property.

Avoid using the term "Market Value", sellers do not like that phrase. Do not produce the CMA yet. You HAVE TO get the seller to understand that as an agent, you do not control pricing, a seller does not control pricing and a buyer does not control pricing. Pricing is established by a mutual agreement between the buyer and the seller, period. The evidence we use for that is recent closed comparable sales. A closed sale is a demonstration of a buyer and a seller agreeing on a value for a given property. Using closed comps is a very important tool in determining price and an OK starting point. However, depending on whether your market is moving up or down rapidly, comps can be misleading. The seller must understand the price they ultimately choose will have to be carefully monitored to determine whether that price is the right price. This is done this by deduction. The price is wrong if there has been a lack of activity, calls, showings, offers and acceptable offers. This may take two weeks or two months to determine, depending on your market. There are four levels of activity:
A) No showings
B) Showings
C) Showings and unacceptable offers
D) Showings and acceptable offers.

At this point you are merely educating the seller as to the different scenarios. Don't talk specific pricing on their property yet.

Step 5: Tell the seller how you get paid. It is ok to discuss this, as the seller is the one paying.

Make sure the seller understands that you are paid as a percentage of the actual sales price. The reason you are making this clear is to eliminate the objections later on the right price (which normally is lower than the seller wants). In effect, the lower the price, the less you get paid. As an agent I would always tell the seller (in a joking way) that I wished all property was worth a lot more.

Step 6: Educate the seller on the "suspect" tactics that some Realtors use to secure a listing.

Tread lightly here. You do not want to taint our industry and your reputation by directly accusing particular agents or companies. That being said don't hold back with the generalities. Let me list off a few:

-Agents will list at the seller's price, making the seller the expert, this is back to front.

-Agents will list high just to get a sign in the yard to attract more listings, not buyers.

-Agents will list high and their only focus will be to get a price reduction before the seller decides to cancel.

-Agents will say they have a buyer waiting for a house like this, just to get the listing.

-Agents will reduce commission because it is the only tool they have to entice the seller to list, this is the no value approach. Because the seller doesn't pay a commission unless the property sells. The agent can reduce to 1% but if it doesn't sell, it is a hollow promise (trick).

-Agents will tell sellers they can get more money. Again I ask how? The buyer will ultimately decide on the offer price (with the advice of their agent) and then the seller has to agree.

-Agents declare that they are area expert because they have the most listings. In reality, they have the most unsold property at any time.

-Agents declare they can sell the property quicker. Again, I ask how? Can they produce a buyer out of thin air? I don't think so.

Agents who use the above mentioned tactics prey on the seller's lack of knowledge. Remember, if the seller buys into any of these offensive sales tactics it is only because you have not communicated clearly to them the repercussions of their actions. Listing with the wrong agent at the wrong price will only prolong the inevitable price adjustment. Additionally, the seller will have made another one, two, three or more mortgage payments and will still not have their property sold.

Step 7: NOW present the facts of the CMA and the Net Sheet.

If you have done a thorough job in steps 1-6, you will find the seller to be a lot more cooperative and will have a greater of understanding of how to price property. Only one tip here: Do not associate yourself to the price by saying "I think the price should be . . .", instead say "The market is showing us the price should be . . . Remember, we don't control the price, the market does.

Step 8: DO NOT continue with the presentation unless you have established and agreed upon the listing price.

This step is critical. If you do continue, the obstacle that you will have to overcome will be the price. If you cannot get the seller to agree with you and you have used logic and the truth to try to overcome his objections, pack you gear up and leave. Hard to do, but you will feel a lot better about yourself, knowing you did the right thing. You will now have less headaches and less stress knowing you don't have to try convincing an unrealistic seller every week to give you that elusive price reduction. The upside: now you have more time to relax or more time to prospect for more motivated sellers

Once you have established and agreed on the price, discuss the marketing and exposure of the property and then ask the seller to sign the listing. As agents, we have to understand that the sellers are normal in their quest to get the highest price. Our job is to educate them using truth and logic. Remember, the most important part of the listing presentation is how you deal with pricing, if the seller trusts and understands you, the listing will be yours at the right price.

Daryl Rouse has been in the real estate business for over twenty years. He has ranked in the top 1% in the country (USA). His achievements are outstanding when you understand where he came from and what he had to overcome to realize his goals. Daryl had months where he sold over 30 houses and listed more than 40 properties. His consistency is testiment to his application of time tested strategies. He has a philosophy: Find the simplest way to do everything while maintaining a consumer-centric business model. All of Daryl's successes are able to be replicated by the newbie agent or the veteran. In 1993 Daryl created his coaching/training company, Peak Performance Quest. Through this medium he has taught over 1000 seminars . Everything Daryl teaches is borne from actual experience. He speaks candidly about his first year in the business, and what a disaster it was (6 hrs prospecting per day and only 2 sales). Daryl knows the average agent can relate. The good news is year 2 and every year after got a LOT better. Go to http://www.PeakPerformanceQuest.com for more info on coaching/training.

Article Source: http://EzineArticles.com/?expert=Daryl_Rouse