Become a Listings Pro

When I speak around the country or around my town, every time I ask the audience if they want listing leads, everyone vigorously raises their hands. I won’t be able to cover all of my tips for becoming a Listing Pro in this short blog, but I would like to introduce a couple key components.

MARKETING

A challenge for many in the real estate industry is marketing. I cover marketing under “How to Become a Listings Pro” because this is our chance to change and put the consumer first. Good listing marketing is the difference to becoming a listings pro.

Old school marketing is mailing postcards of the listing to the neighborhood and calling that marketing, but that is not how buyers are shopping. It’s possible a neighbor will receive the postcard and want to move within the neighborhood or it’s possible a renter will see the postcard and want to buy, but it is not the best place to be marketing a listing. Advertising in magazines is also an example poor old school real estate marketing. Old school marketing is more about marketing the listing agent, not the property for sale.

New school marketing aims to generates more traffic to the listing. Overall, I generate 3-5x more traffic to a listing than the average agent. I help people present their house like its their wedding day. Then I use direct to consumer advertising – that is advertising to where the people are watching. This includes advertising on Facebook and Instagram.

IDENTIFY PEOPLE WHO WANT TO SELL

Another key component is to be able to identify people who own a house and want to move. People are staying in their homes longer, it used to be an average of 5 years, now it’s 10 years. Many people open up the discuss of moving about 3-4 yrs before they move. It is up to you to identify where they are in the moving process.

I think one of the best strategies to find seller leads is to hold an Open House, because the people who come in are indicating they are thinking about moving – your follow up process is the key, along with your web presence. You need to have a strong Google presence – this is a very underestimated factor.

I’ve been talking about this for the past 5+ years, and over this time, I still see a lack of strong websites. If you’re going to become an elite listing agent then your website needs to exude one thing – that your are a local area expert.

Learn more how to become a listings pro with Agent Truth!

Listing Strategies

CMA Mania

Why do I call this CMA Mania? Because I am looking to the evolution of the CMA (Comparative Market Analysis.) Frankly, there is too many elaborate CMAs being used by realtors today. Elaborate CMAs were necessary up until the early 2000s before Zillow, Trulia and Realtor.com existed. Today, the consumer has access to all of these sites to easily learn how many homes in their neighborhood have sold and for how much. So, it’s really no longer necessary for realtors to spend their time providing the consumer with all of the traditional CMA information.

USE DIFFERENT CMAs

CMA Mania is the idea that you are going to send different CMAs at different times, these CMAs are not going to always include house information. For example, after you host an open house, send all visitors a CMA that is a glorified information packet about you as a realtor. Then use different CMA before having an appointment with a potential client, most of this CMA is marketing documents on how you can help them sell their house faster for top dollar.

KEEP YOUR CMAs SIMPLE

Agents frequently get confused about CMAs, because they are often taught by their brokerages that CMAs need to be more elaborate than they need to be. I personally like CMAs to be in a simple form and not just a list to show comparative sales. I prefer to focus more on sharing marketing information that I will use to sell the house, instead of dozen pages of neighborhood comps.

Listing Strategies

House Pricing Strategy

Pricing a house can be difficult because too often agents feel pressured to list the house at a price the sellers want. Yet, the best agent for the seller is an agent who tells the seller what the house will actually sell at. Over the last 500 houses I have sold, my listing price has been within 2% of the sales price 98% of the time.

AGGRESSIVE, PASSIVE AND NON-COMPETITIVE

I like to use three prices when pricing a house; a low, medium and high price that I call Aggressive, Passive and Non-Competitive. I believe if the house is listed with the Aggressive price, the house will get multiple offers and sell the first weekend. The Aggressive number is usually below or right at the current comps. Next is the Passive price. I like to set the Passive price 3-5% above the current comps, this is usually the top end of the range for the neighborhood. The Non-Competitive price is the highest price. When giving sellers this price I always preface it by letting them know that we can list the house at this price, but there will not be as much traffic through the house and even though the house may sell at this price, I don’t think it will.

NEVER USE PRICE-PER-SQUARE-FOOT

My pricing strategy never includes price-per-square-foot, because I think neighborhoods sell in a range. I think price-per-square-foot is a derivative value that is wrong 30% of the time. Agents who only use price-per-square foot to determine the listing price often lack experience and knowledge. Agent Truth training classes are here to give you that knowledge to become a real estate expert.

Listing Strategies

How to Run Comparables to Determine the Proper List Price of a House for a Real Estate Agents

How to run comparables for the listing price and hopefully the selling price of a home is more challenging than it sounds. The real estate industry has brokers and MLS trainers teaching classes how run comps. Yet, my motto on running comps is similar to the comp methods that industry Russell Shaw equated. His motto, as well as mine, is that comps were independently determined. Over the past five years I’ve tracked my sales, during this time my comps have been about 95% accurate.

KEY FACTORS IN WHAT MAKES A COMP COMPARABLE

I follow the same method every time I list a house. The first thing I do is I look through the tax records. I look at who the owner is, when they bought the house and other major qualifications that determine the price of the house. First and foremost, the neighborhood the house is built in is a major qualification. Neighborhoods are like families and families have characteristics. For example you have characteristics of your mother and your father, therefore those characteristics are undeniably a part of who you are and houses are very similar to this. Houses in a neighborhood are typically all built by the same builder within a couple years, so all the ACs are about the same age, all the roofs are about the same age and other features will be the same within the neighborhood.

One of the biggest determination when running comps for a house, is also one that is most commonly misused, that is the appreciation of the house since it last sold. There are too many factors of the house and the neighborhood that may have changed during the time it last sold to use the appreciation.

The next major qualification I look for is how many levels the house has. The selling price varies significantly between one level and two level houses. I don’t think it’s ever a good idea to use a two level comp for a one level house and vice versa.

Another determining factor is lot size. Whether the house has a pool or no pool is also important. Lastly, I look at square footage.

THE MOST DIFFICULT PART

The most difficlut part in running comps can be looking at the best house that sold, then looking and the quality of the upgrades and the trendiest of the upgrades. The top spaces to look for upgrades are first the kitchen, then the master bath, then the outdoor space and flooring. How do all of these compare to the house you are running comps for?

Hopefully using these parameters will narrow down your search to somewhere between five and fifteen homes to give you the most accurate comparable.

Listing Strategies

 

How to Make a House Sexy

I think the key to understanding how to make your house sexy is recognizing the fact that selling homes is very similar to online dating. This is because the way to get the most people interested is to make the house attractive, or in this case sexy. The key is understanding what housing trends are the most desirable. There are certain looks in real estate most people find attractive, just like in dating there are certain looks most people find attractive.

Buying a house is often an emotional decision. Why do we call it “How to Make a House Sexy”? Because we are appealing to the emotional side of the buyer.

HOME SELLING IS LIKE ONLINE DATING

When I first got into real estate in 2003 many houses for sale only had a few listing photos, mostly of just the front of the house. Fast forward to 2019, now most listings have thirty or more photos! How many listing photos do you need? I think you need somewhere between 7-15 photos of the best features of the house. The curiosity to see more creates seduction, thus bringing more buyers in the house. Similarly in online dating, people show off their best features with hopes of meeting someone for a date to learn more about each other. The goal in home selling is to seduce buyers by making your listings “sexy” so buyers will want to come “date” them.

HOW TO MAKE A HOUSE SEXY

It’s not a requirement to show all rooms of a house in the listing photos. Use only pictures that highlight the best features of the house that are clean with nice lighting. Show off only the best features of the house, leaving something to be desired is sexy. A home is typically the most expensive thing people buy, so they will want to come look in person before making a final decision. The goal is to make your listings “sexy” so the most amount of buyers will want to come “date” it.

Listing Strategies

Photo Seduction

Photo Seduction is trying to entice buyers to get out from behind their computer, to leave work or home, to get out from their car, to want to come see the house in person. Currently I find, especially a listing with a lot of functional obsolescence , you need more people to come in the house.

Photo Seduction

Photo Seduction is the ability to get more traffic to the house. The more buyers you get to come look, the more buyers you get interested, thus increasing demand. Also, getting more buyers in the house will help educate your seller if the house is overpriced.

How to Get More People to Come See Your Listings

The key to Photo Seduction is making the house looks great, not the furniture. Too much furniture and accessories can make the house look small in listing photos. How many listing photos do you need? I think you need somewhere in the range of 7-15 photos for you average listing. The real estate industry continues to feel a need to demand more photos, but I have sold homes in all price ranges with only 3-5 listing photos. If you are going to have limited photos, what do you need photos of? Generally, a picture of the outside of the house and key components of the inside. Some key components are the kitchen and the master bathroom. It’s important to make sure photographed spaces are uncluttered, well lit and the rooms are freshly painted. The better the pictures look, the more likely buyers will desire to see more. The curiosity to see more creates seduction, thus bringing more buyers in the house and creating more demand for you seller!

Listing Strategies

Understanding Functional Obsolescence

This is one of the most important concepts that a real estate agent can learn if they want to take their representation to the next level-the concept is that not all homes are created equal. Agents need to understand price per square foot is a novices way of interpreting the market, they are just averages. The reality is real estate is much more complex than averages, especially as you get into the luxury market with homes over $500k, over $1 million and over $5 million plus.

FUNCTIONAL OBSOLESCENCE

Agents need to understand they may be dismissing features of the house. For example, some features in a kitchen are counters and cabinets. Granite countertops comes in different levels and there are different types of cabinetry. Cabinetry quality vastly ranges from pre-fabricated assembled with staples to custom cabinetry assembled with tongue and groove joints. Other kitchen items are backsplashes and appliances. Agents need to have an understanding there is a value of every detail in the house. To fully understand this, agents need to understand functional obsolescence-those are the items that will keep a buyer from buying a house. Therefore, having a negative impact on other features of a house. For example, if a house backs to the railroad tracks, that’s considered functional obsolescence because there is a huge swath of buyers that you have taken out of the marketplace, thus reducing the demand, therefore the house sells for less. In this example of a house backing to railroad tracks, it’s worth 12-15% off the price of the asking price versus a standard lot.

When I was a buyers agent looking at my first one to two thousand homes, there were particular items I would notice. For instance, I would notice maybe nine out of ten, or maybe in ten out of ten buyers would not like a home. If you are only selling ten houses a year you may only run into this only once every few months, so you pass it off as my buyers just didn’t like it without realizing all of the buyers that saw that home didn’t like it for the same reasons.

IMPACT

As you gain more experience selling 50, 100 or more houses a year, you realize the impact these items have and the financial impact. I use the word “impact” because when you impact demand, when you impact the amount of people that will buy something, then you impact the price.

Why as a real estate agent do you want to know what functional obsolescence is? On the buy-side it helps you puts deals together. The more information you can supply in negotiation that is able to be understood by both the buyer and the seller, then the more deals you can put together when everyone sees the same rationale. Likewise, on the sell-side, now you add additional value items into the transaction, so you make the house worth more and the seller can accept the sales price. The reality is that you are always going to have to overcome a functional obsolescence and removing some of it releases significant value in return.

Listing Strategies

Get Better at Selling Your Own Listings

It is easy for real estate agents to get complacent in the marketing of their own listings beyond the hundreds of relationships their brokers and the association have already concreted for them.  The past success of this is still winning new listings and sales. The majority of time in the recent past, another realtor would bring their client after the realtor emailed them the home or they found limited information online and contacted their agent to show them and get more details.  In years past, the buyer did not have the access to information the internet now provides, hungry for house details, more consumers would engage agents earlier in the home buying process relying on them to provide this information, allowing this old school marketing to reach all consumers. This is only one side of the new world of real estate.

Realtors now have more access to consumers in the home buying process but its going to require more effort to draw them out.  

Realtors have traditionally spent more time trying to attract other realtors because they were the one in charge of getting their client to come.  This model is weakening as the buying public is out in front of the search process exposing themselves to listing agents like never before.  This is very cool as next generation marketing methods are changing as we speak away from traditional models. This will cause further innovation in the world of real estate and what has encouraged us to come out with the Real Estate 2020 podcast, to discuss the evolution of the industry and what it takes to be successful.

The advancement of technology, the explosion of photography and the acceptance of realtors letting the consumer control the house finding has decreased the engagement of their traditional buy side agents and empowered the consumers to shop alone until ready to write.  

This approach is not exposing the consumer to portals to get their data.  This has also changed the influence that agents have on reaching the consumer directly through effective and enhanced market brought online.  This enables listing agents to reach their intended target consumer directly, the buyer, making it easier to sell the house versus selling through the agent.  The intent is not to cut out the buyer broker (I double dipped less 5% of my sales as I keep my reputation high) and often buyers have an agent they prefer to write the contract, but to get more traffic through your house in hopes of selling faster and for more money.  Your goal as a listing agent is to drive maximum traffic through your listings, which leads to faster sales for higher return for the seller.  Advertising directly targeting the consumer goes way beyond photos in MLS that are syndicated to agents and consumers, and now leading agents will win deals at massive rates when they understand how to leverage this paradigm shift.

Now that consumer friendly companies that are in control of the data, like Zillow, Trulia, Homes.com and Realtor.com, that have eloborated and expanded the offering gaining the trust of consumers.  I am talking about how realtors can leverage this versus selling against it.  These portals are accepting consumer contact information hand over fist.  It is best to get engaged with the portals, understand the offerings and benefits in hopes of luring their viewers to the homes you are trying to sell and this does not mean buying the leads. The best way to do this is clearly the open house.  We have seen spectacular results having 50% of our homes sell from open houses over the past 6 months, which amount to 4-5 sales per month.

Listing Strategies

Preparing to Sell

 

Before putting their homes on the market, Zillow reports sellers spend about seven months on average thinking about their decision. The older the seller, the longer they spend thinking about it, with the oldest generation spending twice as much time as the youngest sellers to commit to selling their home. On average, Millennials spend five months in contemplation, while Gen Xers spend six months, Boomers spend eight months and Silent Gen sellers spend 10 months.

MILE LONG LIST BEFORE THE SALE

Anyone who has sold a house knows there is always a mile-long to-do list before the for sale sign goes up. Getting rid of stuff, some of it accumulated over decades with older sellers, is the most difficult task for sellers. Many sellers indicate “decluttering” as difficult or very difficult when preparing their home for sale.

SELLERS MAKE AT LEAST TWO RENOVATIONS

Most homes need some TLC before listing, thus being part of the delay in deciding to sell. On average, sellers make at least two renovations or improvements to prepare to sell their home, with 79% of sellers making at least one improvement. Painting the home’s interior is the most common update, followed by landscaping the yard, replacing or repairing carpeting or flooring, and making improvements to the bathroom. Only 21% of sellers list their home “as-is”. Younger sellers are most likely to make improvements prior to selling compared to older sellers.

Are you having a hard time persuading your clients to make the necessary updates to sell their home? WE CAN HELP!

Renovating to Sell for Top Dollar

Being able to estimate renovation costs for home updates is impactful for both the buyer and the seller side. When working with buyers, they may see a home they’re interested in online but they’re concerned that the updates they desire won’t fit within their budget.  They may overestimate the costs required for those updates, and perhaps won’t consider homes at a higher price point because of this inaccurate information.

When working with sellers, being able to estimate accurate renovation costs will help to convince the seller to set a more realistic listing price.  Moreover, updating a home will help it to sell much more quickly.  Sellers typically don’t have a realistic idea of the actual costs of updating their home.  Setting up some estimates from contractors will go a long way toward educating your client about the actual costs of updating their home, and will help you to become even more of a subject matter expert as a seller’s agent.  

Convincing sellers to make the updates that buyers want is a little more difficult in today’s market.  Ten years ago, when the house down the street with the same square footage and the same floor plan sold for a higher price, it didn’t matter if that house had updates that yours didn’t, because you couldn’t see them without going inside the house itself.  Nowadays the impact of the internet and the syndication of listings with tons of photos has made price per square foot comparisons irrelevant.  

Buyers can see the upgrades they want, and if the listing doesn’t have those upgrades, the offered price will be discounted accordingly.  

When considering what to update and upgrade, price ranges and impacts on the buyer should be considered.  Buyers make a decision based on emotion within the first 7 steps inside the house.  Consider where the seller’s updating dollars will have the most impact.  For example, it’s important to focus first on the spaces where updates will have the most impact.  

Kitchens are the most important rooms in a home.  

Then, outdoor space is important in terms of updating, especially here in Arizona.  Make sure the pool deck is in good condition, either by painting or replacing.  Sun exposure fades the decking, and makes it feel old and worn.  Also, try to eliminate functional obsolescence.  Sellers shouldn’t out-upgrade their neighborhood.  Always consider the impacts of neighborhood on value of upgrades, and discourage upgrades more than the neighborhood requires or supports.  Bottom line, sellers shouldn’t price themselves out of their neighborhoods.