by Bernice Ross
Inman News Features
Here are five ways to avoid these costly “money traps” in your business:
1. Avoid taking over-priced listings.
There are three steps you can take that will reduce the probability you’ll be stuck with an over-priced listing. First, you must know your market statistics and specifically, what percentage of the inventory is selling each month. Even in a heated seller’s market, it’s rare for more than 25 percent of the houses to sell in any given month. What this means is that 75 percent of the listings won’t sell. In a buyer’s market, the probability the seller won’t sell may be 90 percent or more. The trick here is to let the seller decide where to price the property once they have seen the probability their house won’t sell. In most cases, the sellers will be more realistic about the price. If they aren’t, the second step is to obtain their consent to reduce the price at the end of 30 days or when you have had 10 showings with no offers. If they still won’t agree to the price reduction after testing the market, the third step is to smile, thank them for the opportunity to discuss the marketing of their property, and then walk away. Often times the shock of having an agent walk away from the listing presentation is enough to get the seller to be realistic. If not, you’ve just avoided squandering lots of opportunity time as well as a lot of your hard-earned marketing dollars.
2. Show sellers the benefit in listing their property with a full commission.
Agents with poor negotiating skills have nothing more to sell than a cut-rate commission. To achieve the highest price possible for a property, the seller must have maximum exposure as well as having an agent who has strong negotiating skills. A reduced commission lowers the seller’s exposure to the market place. Agents are human and most will show properties where they can earn the highest commission. Second, agents who can’t negotiate a full commission are not likely to be very effective on behalf of the seller at the negotiation table. If their agent is not an effective negotiator, how can the seller possibly hope to get the most for their property?
3. Avoid buyers who are not ready to step up to the plate.
Don’t waste your time working with buyers unless they meet all of the following criteria: First, they must be pre-qualified with a lender. Second, they must be willing to work with you exclusively. Third, they must have the desire, need and ability to purchase in the next 30-60 days. If they don’t meet each of these criteria, there’s a good chance they’re not serious about buying and will be costing you lots of “opportunity dollars.”
4. Stop wasting “opportunity dollars” at the office.
There are two strategies to help you do this. First, only go to the office when you have a specific reason for being there. When you’re in the office, focus on completing what you came there to do and then leave. You’re better off visiting with your referral database or prospecting out in the field. Second, if you must be in the office, avoid the gossip and chitchat. If someone regularly disturbs your work time, a great way to get rid of them is to ask them to go door-knocking or to join you in doing 50 cold calls. Also, if you receive a non-business related call, offer to call the person back after work. Your goal is to make your office time “work time.” Save the socializing for after work.
5. Stop working with service providers who don’t give you top-notch service.
Many of the busiest agents have specific service providers to whom they refer their business. To obtain their business, the service provider agrees to make sure the agent’s needs are addressed as soon as possible. Another strategy for improving communication with everyone involved in a transaction is to use e-mail or one of the many online tracking systems that allows all parties in the transaction to communicate with each other.
—Bernice Ross is an owner of Realestatecoach.com and
can be reached at [email protected].