Need help weathering the storm in today’s real estate market? If so, reach for Gary Keller’s new book, "Shift" — it’s the lifesaver you need today to thrive tomorrow.
Market shifts happen. We have seasonal market shifts as well as major market shifts. Along with co-authors Dave Jenks and Jay Papasan, Gary Keller outlines the 12 proven tactics that successful agents are using to navigate today’s "shifted" market.
1. Mindset and action
Keller argues that you can’t control the market, but you can control how you respond. "Growth comes from clarity, priorities and action." To prosper, you must have clear, written goals as well as an action plan for implementing those goals. You must also proactively prospect and market for leads and then convert them into closed business.
2. Re-margin your business — expense management
"The number one determinant of thriving is lead generation, but the number one determinant of surviving is expense management." When the market shifts, you must create a new budget that matches your revenue. If you are not already tracking your profitability, begin by slashing expenses until each dollar that you spend returns its original amount plus a reasonable profit. Evaluate every single business expense — and if it doesn’t make money, eliminate it!
3. Do more with less — leverage
Keller says that "up markets conceal, tough markets reveal." This is a time to upgrade both your people and your systems. His recommendation is to think "assistance first, assistants second." In other words, hire based upon tasks. Identify what you do well and focus on that. Outsource other activities that can be handled more cheaply and competently by someone else.
4. Find the motivated
Lead generation will make or break your business in a shifted market. List each of your closed transactions as well as the activity responsible for generating the lead. Next, determine the number of closed transactions resulting from each activity and rank them. Identify the top 50 percent and put all your time, effort and financial resources into these activities. Drop the rest. To maximize results, do more prospecting (making contact with people) rather than marketing (people contacting you). Include a "call to action" in every marketing piece. Remember, dealing with business never takes precedence over finding business.
5. Lead conversion
When you first talk to a lead, ask for contact information up front. Since the majority of clients interview only one agent, your goal is to convert the appointment into signed business. To do this, build connection by asking key questions about who your leads are, what they need or want, what’s motivating them, how soon they need it, and what plans they have. Master your scripts and dialogues so you can easily overcome any objections.
6. Catch people in your Web
Ida Terbert of Keller Williams Raleigh says, "We make our Web sites come alive with great content and reasons to register with us." Keller’s research suggests that every 700 visitors should yield one buyer appointment and one seller appointment. Another agent said, "You need thin bait and fat bait. Thin bait gets the visitor to your site — fat bait gets them to register." "Thin bait" is your marketing. "Fat bait" includes offers or other services that motivates Web visitors to give their contact information.
7. Price ahead of the market
In a market where prices are declining, tell your sellers, "We’re in a race against time. The best price you will get is the one you get now. If you wait, the price will just be lower." Turn down unrealistic sellers and encourage sellers to take the first offer they receive. Waiting can and will cost them money.
8. Seller staging strategies
To sell in a shifted market, staging is critical. "Staged homes, on average, sold in half the time that nonstaged homes did and ended up with 6.3 percent more than their asking price on average." To persuade sellers, take pictures of cluttered closets and rooms before and after staging. Then ask which ones capture their attention. In terms of how to stage, use the 3P-2F Formula: plantings, paint, pictures, fixtures and furnishings.
9. Overcome buyer reluctance
"The biggest myth of shift" is that you can time the market. Rather than trying to time the market, Keller suggests that you ask buyers, "Has the market dropped enough now to make a sensible purchase?" When you work with buyers, you must assess whether they are able to buy (i.e., get a mortgage); whether they are sufficiently motivated to buy now; and whether they have a sense of urgency. If they don’t meet these criteria, keep searching for buyers who do.
10. Creative financing
Keller outlines 25 creative areas of financing including things sellers can do to sell their house, what buyers can do, as well as what the lender can do. Among these are lease-options, lease-purchases, employer-assisted mortgages, special government grants and bond programs. Two reputable resources for providing funds to buyers for down payments are the Nehemiah Corp. and AmeriDream.
11. Master short sales, foreclosures and REOs
"Shift" provides a detailed discussion of what is needed to close difficult transactions as well as pitfalls to avoid.
12. Bulletproof the transaction
Keller outlines six areas where transactions can go wrong: inspections and repairs; appraisals; loan approval and funding; other contingencies; the cooperating agent; and deadlines. Avoid difficulties by focusing on what can go wrong at each step and take proactive steps to avoid it.
"Shift" is rich in easy-to-understand strategies, charts, and illustrations that show you exactly what you need to do to thrive in today’s very challenging and "shifted" real estate market.
Bernice Ross, national speaker and CEO of Realestatecoach.com, is the author of "Waging War on Real Estate’s Discounters" and "Who’s the Best Person to Sell My House?" Both are available online. She can be reached at bernice@realestatecoach.com or visit her blog at LuxuryClues.com.
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