| |||||||||||
When you know more than others, clients will come looking for you!
By Leon Y. d’Ancona, B.T.L., M.T.L., RRESI
Real estate is the most populated profession around. In many large cities you will find over 20,000 real estate professionals competing for business.
Fortunately no other industry presents its members with so much information. Need precise information which are the best areas you should you work? What types of homes are selling? What price ranges were best sellers last month? What were the highest turnover streets? All the information is yours for the asking.
The source of all this information is your MLS. Yet fewer than half of one percent of realtors bother getting accurate statistical information. Because consumers tend to be the most informed ever, if you want to get their business, they rightfully expect you to know a lot more than they do. So if you are in real estate for the long term, tell it as it is, with facts and figures.
Professionals who strive to be informed need to realize that reading a newspaper is not good enough, because your clients read as well. When all is said and done buyers and sellers look for the person who impresses them with professional knowledge. Here are 4 ways you will be the most informed:
Days on market
Know the days on market for the geographical area you are working in. Prepare trending graphs for the last year. This information gives visual credence to the longer listing you are likely asking for in today’s market. D.O.M. will vary widely from area to area.
Days on Market are a harbinger of what lies ahead for the next few months. Use them as your measure of consumer confidence, because your client will not have this powerful forecaster.
Sold to ask ratios
Have the last 12-months of sold to ask ratios ready. Sellers should be shown what market conditions allow them to expect. Buyers need to be in tune with the fact that offering way less than what is asked for, will not further their cause.
In today’s difficult real estate market 93% of a reasonable last asking price is not uncommon. Prepare your seller for what lies ahead. Use this measure of seller’s confidence in the market.
Homes sold at 100% or more of the last asking price.
I have long been a proponent of the measure of: What percent of homes sold at 100% or more of the last asking price. That figure varies from as high as 60% to as low of 3%. It is a logical reflection of market conditions that real estate agents should use constantly, yet very few do.
This tells the vendor that any offer he is likely to receive will need tough and very persuasive negotiation. It tells buyers that the first offer is not likely going to be accepted. Long before the word “commission” is mentioned your clients should have understood that there is a lot more to buying and selling a home than they thought.
Units sold
The most obvious, yet infrequently used by professionals, is the measure of units sold. Saying that in an entire metropolitan area sales were up or down does not indicate a high status of knowledge. Your prospective client already knows that. Being prepared with a graph about the clients’ own narrow district makes a lot more sense.
If picture is worth a thousand words, then the graph that follows certainly shows the need for the seller in this case to be flexible in his pricing aspirations.
Even the most stubborn seller will understand that times have changed in real estate. And while she may have been reading great things about her city, it is her neighborhood that the purchaser will evaluate in his offer.
Your approach to clients should be permeated with honesty and integrity backed by irrefutable current statistics. You might lose a client here and there, but clients do not automatically provide income. When a client is totally unrealistic my advice is to bow out graciously saying. “Mr. & Mrs. Smith, I understand you are wanting $350,000 for your home and believe me I wish you well. But may I ask you for a favor? If your home does not sell with the other agent, please call me again, and I will do my best to get you the best price this market will allow.”
In conclusion here is a statistic that will work for you based on my experience of more than two decades of coaching agents, team leaders, owners and brokers in the use of real estate statistics. Those who adopted the premise of informing the consumer with advanced information about their upcoming decision have consistently outperformed their peers. More than 85% of this elite crowd moved up to an earning plateau of being in the top 9% of income earners.
Using statistics especially when provided by a third party allows you to take the approach that you are a “victim of the market” as much as your client is. You no more control what the housing market is doing than you control the stock market.
There are lots of homes selling, what are you waiting for?
