It wasn’t all that long ago that a house would sell regardless of how it looked, smelled or presented itself – well, WAKE UP, times have changed and so have buyers.  Savvy agents recognize that a shift means its showtime for a listing.  Your listing must win a beauty contest and a price war!

As an agent you face two obstacles; the seller’s reluctance to invest in staging and the buyer’s inability to envision how a property will look when it is in its best condition.  Generally speaking, staging is an essential part of marketing a home.  Keller tells you the numbers are on your side, “a review of over 2,800 properties in eight cities found that staged homes, on average, sold in half the time that non-staged homes did.  The sellers with staged homes ended up with 6.3 percent more than their asking price, on average.”

Sellers, while they grasp the benefits of staging, may not see the necessity of staging their home.  They have spent money, time and effort in fixing and filling it with their stuff and it bears their personal taste.  But now, the house needs to appeal to the broadest possible segment of likely buyers.  And, you need to convince the seller that you don’t live in a house the same way you put a house up for sale.

Gary Keller in his book Shift suggests that you might want to use the “3P-2F Formula” in suggesting improvements:

♦  Plantings

♦  Paint

♦  Pictures

♦  Furnishings

♦  Fixtures

The house’s appeal has to start at the curb, if they don’t like the outside, they may never see the inside.  And, buyers spend a lot of time on the front porch while the agent is accessing the key.  Keller advises taking sellers through the house room by room asking them in each area what three things they would do to improve the appeal for that particular area.  The following areas are especially important to buyers:

♦  Entryway

♦  Kitchen

♦  Master bedroom and bath

♦  Main living areas

♦  Other bedrooms

♦  Backyard

In the event that sellers cannot name three things they need to do to improve those areas, you need to be ready with a list to help them out.

Be sure to suggest a thorough cleaning, windows especially need to sparkle.  You may need to address clutter; clutter eats equity because clutter eats space.  You certainly don’t have to be the one that does any of this, if you want to that’s great, but there are professional stagers you can use as another option.  Some agents provide one or two hours of a staging consultation as a part of their listing package.  There are advantages to having a third-party professional deliver the bad news especially when you are talking about their precious personal photos or knick-knacks.  Remember that the entire idea of staging is to create a neutral environment where buyers can envision their own things.

There are already so many thing you can’t change about a home; its location, square footage and amenities that staging becomes imperative to accentuate the true value of a home and when done effectively can actually create value.  Keller says, “Pricing and staging are the issues of the day in a shift…..pricing gets you in the game – staging gets you the offer.”

DF

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You are NOT going to like this but you need to hear it anyway if you want to remain in the real estate business -

YOU NEED TO GENERATE LEADS!!!

Most of our dislike for lead generation is based on pure myth:

•  Myth: It is too difficult and no fun.

♦  Myth Buster: You’re confusing effort with enjoyment.

• Myth: I’m too busy and it takes too much time.

♦ Myth Buster: It’s an issue of making time and then protecting it.

• Myth: I’m afraid of making mistakes.

♦ Myth Buster: It is nothing more than a set of skills easy to learn.

• Myth: I don’t have the capital and it costs too much.

♦ Myth Buster: You don’t have to spend any money if you don’t want to and the old saying, “It takes money to make money” is pure nonsense.

• Myth: I don’t like it and I just plain fought it.

♦ Myth Buster: There are no natural born lead generators so let’s face it, refusing to do lead generation is like a butcher who refused to touch meat!  It won’t work.

There are some simple steps to effective lead generation:

Step One – Find out what doesn’t work and STOP DOING IT!  The only way you can know this is to associate your valid leads and your sources with closed sales.  If you haven’t kept those records, start right now.

Step Two – Figure out what works and do more of it.  Identify your lead sources and concentrate on the top four sources.  Keller says to narrow your focus and then concentrate on the Message and the Method.

Message – If you read “Real Estate Rainmaker” by Dan Gooder Richard you will fully understand this type of solution marketing. Find the areas of pain in this market such as buyers worried about paying too much, sellers worried about how long it will take to sell and, of course, have we reached “bottom”.  Concentrating on your message brings a solution to that pain.  Keller suggested, for example, using “bargain” in this market because buyers are attracted to that aspect.  It should not be difficult in your advertising to offer a solution to some of the problems in this market.

Method – How are you delivering the message?  There are only two ways of generating leads – marketing and prospecting.  Marketing is attracting business, in a sellers’ market that works well because the product sells itself. (Marketing = Attracting) Prospecting is seeking business and in a buyers’ market when the product no longer sells itself you MUST prospect!  (Prospecting = Seeking) Marketing is passive and reactive (i.e. mailing, etc.) while prospecting is active and proactive.  By the way, marketing can cost a ton of money while prospecting can be practically free.

Step Three -Now that you have honed your message and your methods its time to put them to work.   Ramp It Up!  “To do this you must subscribe to one simple belief; dealing with business never takes precedence over finding business.”  If you don’t embrace this philosophy, everything else will interfere and you will constantly find other things that seem more important.  You must block out your lead generation time and consistently focus on prospecting and marketing.  Keller suggested you time block three (3) hours each day for this important activity and “if you erase, you must replace”.   I almost fell out of my chair when I first read that but the book lays out EXACTLY how to block out the time and then a step-by-step list of what needs to be done in those three hours daily.  I highly suggest that you read the book but you probably know that by now.

Finally, Keller says when the market slows it is naturally for agents to “cocoon” hanging around their office or home waiting for the market to pick up.  Instead, gear up.  Real estate and lead generation are both contact sports.  Your job is to find ways to get in the path of motivated buyers and sellers.

DF

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It isn’t often that you’re introduced to a book that could quite literally change your perspective on this market or at the very least, change the way you conduct your business but I was recently given such a book.  The title is simple enough “Shift” by Gary Keller who asserts that its not about the market….It’s about what you DO!  Wow, that’s a different spin on a tough market, what could matter that much in today’s economy?  I was about to find out.  The information was so valuable, insightful and timely that I wanted to write my first book report since graduate school and tell you what I learned.

It wouldn’t be possible to tell you everything that is valuable in this book; you’ll need to read it for yourself to see what applies to you.  However, I can pick out a few things in some select chapters that can increase your business and relieve some stress.  Over the next couple of weeks, I will give you a brief overview of this wonderful book with a review of some specific chapters.

After a brief introduction that addresses how economic and real estate shifts happen and the kind of personal financial strategies that you need in order to survive, the book moves to the anatomy of a shift.  While many people talk about the types of markets we face, Keller effectively labels them:

1.       Buyers’ Market – More than 7 month’s inventory

2.       Balanced Market – 5 to 7 months of inventory.

3.       Sellers’ Market - Less than 5 months inventory.

This is valuable information that comes in handy when talking about prospecting vs. marketing (no they are NOT the same thing!), so keep them in mind.  Keller wastes no time or extra words listing what he believes to be the core competencies of a business.  I am going to assume that you know you are running a business, you are the CEO and the employee, and the primary objective of any business is to make a profit.  Given those assumptions there are fundamental priorities for your business.

Six Core Competencies of a Business

1.       Lead generation, capture and convert to appointments.

2.       Present to buyers and sellers and get agreement.

3.       Show buyers and market sellers for required results.

4.       Write and negotiate contracts.

5.       Coordinate the sale to closing.

6.       Manage the money.

Keller also gives you twelve tactics to help you deal with tough times.

#1      Mindset and action

#2      Expense Management

#3      Leverage

#4      Lead Generation

#5      Lead Conversion

#6      Internet Lead Conversion

#7      Seller Pricing Strategies

#8      Seller Staging Strategies

#9      Overcoming Buyer Reluctance

#10    Creative Financing

#11    Short Sales, Foreclosures and REO

#12    Issues and Solutions

So that’s the game plan, obviously these articles aren’t going to replace reading the book but over the next few articles you WILL get the essence of how to change your business strategies to survive and thrive in these tough times.

DF

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