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The Intelligent Price Reduction Strategy

If you’re a typical Real Estate agent, you’ve probably got about $100,000 worth of uncashed commission checks in your desk drawer, or as some people refer to them—your collection of over-priced listings. 

It’s kind of like that stamp collection you had when you were a kid.  You still have the stamps; you just never look at them anymore.

The only difference is your stamp collection is probably NOT worth $100,000.

Here is the standard list of excuses used for NOT fixing your problem, and NOT being $100,000 richer. Pick your favorite!

  1. You’re too busy (chasing after new business, rather than taking care of the business you already have)
  2. Your clients are stubborn and won’t listen to you
  3. You’re bad with confrontation
  4. You’ve got a showing booked for Friday, and you’re hoping for a miracle!
  5. The market is awful, so there’s nothing you can do
  6. You feel dumb for recommending the price in the first place
  7. (Insert your...
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The Phone Call

communication pricing Aug 29, 2019

“Hello, this is Sammy Seller.  I’d like to speak with you about listing our home.”

Yay!  This is the best phone call!  Right?

I remember getting this call at times and being so excited, I lost my mind and forgot to ask all kinds of important questions.

To resolve this, I made a simple Seller Information Form (SIF) with space for the following information:

  • Name(s) – The caller and every other decision-maker
  • Address (!)
  • Phone number(s) – Just in case I need to clarify something before the appointment
  • Email address(es) – Stay tuned for a very important ‘Real Agent Memo’ next week about why you should send the Sold Comparables by email before the Listing Presentation
  • Referral source – If it wasn’t a referral, use this space to specify why they called you – It’s important to track the source of your business, for future reference
  • Appointment Date and Time - Make sure every decision-maker is...
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Your Price or Their Price?

communication pricing Aug 22, 2019

“Is this your price or their price?”

Every experienced REALTOR® has heard this question and knows exactly what it means, “Is this the price you recommended to your clients?

Or, the one they insisted on, despite the evidence that clearly shows it makes no sense?”

As a general rule, EVERYONE on the planet believes their home is worth more than it actually is.  There are several reasons for this:

  1. In the owner’s eyes, their home was the best one available within their budget and within their search criteria, at the time when they purchased it.
  2. Buyers subconsciously justify the price they paid, and tend to believe they got a “good deal.”
  3. Owners tend to focus on the best features of their property, either ignoring or justifying negative features, “Oh, the sound of the train is quite soothing once you get used to it!”
  4. For competing properties, they tend to do the opposite; focusing on the worst features, and ignoring the best...
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The Big Picture on Pricing

When I’m building a CMA, I have a very specific and unique process.  Let’s call it the “Criteria Manipulation - CMA” (CM-CMA).

I do NOT pick and choose the comparables that I “want them to see”.

Instead, I select the search criteria that gives me the results I want.  I start out with a large list, and systematically tweak the criteria until I come up with the right group of comparables that are going to tell the story I want my clients to hear.

When I say, “the story I want them to hear”, let me be clear:  I’ve ALWAYS got my clients’ best interests at heart (I want them to achieve the highest possible price).  However, I design the CMA to get the right message across.  For example, I don’t want any confusing “outliers” in my search results.

I continue tweaking the search criteria towards the end goal of showing the picture I want to show.

I’ve developed the CM-CMA methodology...

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Be Positive. And Negative.

EVERY property has a Balance Sheet.  If you add up the assets and liabilities correctly, chances are you’ve found the sweet spot on the price — not too low and not too high.

But how do you convince the seller?  After all; almost every seller thinks their property is worth more than it is.  That’s because they tend to compare the best features of their property against the worst features of the competing properties.  Also, they have a curious ability to twist a negative into a positive!

“Check out our tiny backyard!  It only takes five minutes to mow the lawn, while the poor neighbour is slaving away for an hour!”

This is totally normal.  After all; they bought the property because they liked it better than anything else that was available at the time, for their own reasons.

If you go in and start slamming all the negatives to get them to “see the light” and “price it right,” you’re going to...

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The Flurry of Activity

pricing Jun 20, 2019

Whenever you list a property, there’s almost always a “flurry of activity” at the very beginning of the listing period.

These are the “current buyers”; the group who were already actively looking BEFORE your new listing hit the market.  Chances are, these buyers have already viewed most or all of your direct competitors.  So, what are they doing now?

They’re waiting for new listings!

The flurry comes on strong at the beginning of your listing and dies out just as quickly.  The current buyers don’t want to miss out on seeing your hot new listing.  These buyers are ready, willing, and able to buy, as soon as they see the right property.

Aside from “current buyers” there are two other main buyer groups – “new buyers” who are just beginning their search, and “bargain hunters,” who typically wait until your property has been on the market for a while before they start lobbing...

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The Spring Squeeze

pricing Jun 13, 2019

In one of my previous lives, I was in the motorcycle parts business, which is very seasonal.  There’s not a lot of activity through the winter months, and then the spring hits hard, and it’s pandemonium for a couple of months. 

I’ve found that it’s not much different in Real Estate.  While it’s true that properties sell all year round, a skilled agent learns to have increased awareness of the seasonality of the business, especially for certain market segments.

For example, young families are most likely to be out looking for their new home in the spring, so they can take possession in July or August before school starts in the fall.

If you take a look at the monthly sales volume for this type of home specifically, there is up to FOUR times as much volume in the busiest months (May and June) as compared to the slowest months (December and January). 

Note: I’m looking at my local (Calgary) market for this data, but it’s not...

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The New Stats Are Out!

Do you dread analytical questions about the market? 

Do you struggle with how to explain to clients how the market may affect the sale of their property?

Do you have over-priced listings right now that are stressing you out?

Keep reading, and I’ll solve ALL these problems for you.

Personally, I always thought that having a clear understanding of current market conditions was the #1 most important part of my listing presentation.

In my local market, we have a high percentage of analytical types, including thousands of engineers and other scientific people.  But these are not the only people who appreciate this type of information.  Studies have shown that a very significant percentage of the population have a preference for analytical thinking.

If you’re not giving these people what they want, you are most definitely limiting your potential. 

It’s not as hard as you might think to put together a Market Analytics section for your listing...

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Price It Right or Walk Away

Have you ever knowingly accepted an over-priced listing?

We all have.  And here’s what happens, almost every time.

  1. The seller contacts you frequently wanting to know what you’re doing to “market the property”.
  2. You waste all kinds of time doing Open Houses and other activities, hoping beyond reason that somehow, it’s going to sell.
  3. You’re concentrating an undue amount of energy on your worst listing, to the detriment of your good listings.
  4. The sellers are completely resistant to any price adjustments. Big surprise: They haven’t suddenly become reasonable. ‍
  5. It ends badly. In their eyes, you’re a terrible REALTOR®. And guess what?  That’s what they’re telling others. 
  6. The listing expires. They list it with your competitor for the proper price (the one you recommended) and it sells right away. ‍

The kick in the head comes later when you notice that same competitor’s signs popping...

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