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Real Estate is a Numbers Game

So it’s January and I am starting to see some movement again.  People are looking towards the future and planning moves for the spring (once it gets a little warmer).  Mixed in with clients who are serious about looking at buying a new home are the dreamers.  These are the people who wish to move, but because of any number of personal issues, now is just not the right time for them.

Being a real estate agent, it is important to know who is serious and who will just spin your wheels.  I have had some back to back situations recently where I began working with some people who were in no way able to seriously consider moving.

How do you know when a person is not a good client to take on?  Below is a quick list of signs that might give you pause in deciding to work with someone.

1.  The customer is unwilling or continuously puts off getting their pre-approval or credit report.

Serious buyers will make sure everything is in place before they begin to look.  They know that if they find their dream home, they will want to put in an offer right away.  The market is moving quickly.  Homes won’t last until you have been pre-approved.

2.  You only get an email or a phone number, but not both.  

I have found that these are people who really just want some quick information, but aren’t serious about looking for a home.

3.  The customer’s list of expectations in a home isn’t reasonable.

I have spoken with people who want a 5 bedroom, 4 bathroom home in an upscale neighborhood for less than half the price of what any home in that neighborhood would go for.  I have also dealt with the people who think they can pick up a foreclosure at a rock bottom price in perfect move in condition.

4.  There is no time line and they are incredibly vague,

They don’t know what they will do with their current residence, how much they are able/willing to spend and what area they are interested in looking at.

5.  They are working with a realtor, their family is full of realtors or their friend is a realtor.

I have been surprised when during the course of a conversation, I am able to find out they already have a realtor.  I will hear the excuses that the realtor is dragging their feet or they just want to look at this one property.  If you have a realtor, I will not be able to help you.

I also get the customers who let me know how many realtors they know.  They won’t say why they won’t work with them, but they tend to challenge what information you give them and after finding out about a specific question (how much their home is worth, or just wanting to check one property) they end up with the realtor they already know.

I was talking with one of the agents at work about the cycle of real estate.  It seems that I will have a dry spell, then get a bunch of potential clients that fall into the above range and then finally get a group of serious buyers. The agent I spoke with put it this way, real estate is a numbers game.  Expect to go through 12 customers before you hit on the serious buyer.

As someone who is used to traditional sales where each person lost is money lost, I have had to change my perspective.  I can’t look at each interaction that falls through as money lost, but instead I must look at it as each lost person brings me closer to the serious client.

For anyone out there who is just starting out in real estate, I hope this information is not only helpful, but will help to take some of the pressure off of you.  I would also like to mention that for every example above, there are clients that will pan out.  The important thing is to be able to ask valuable questions and really pay attention to not only the words, but also the actions of the potential client.  It doesn’t matter if they are serious or not, people will reveal themselves.  The tips above just might move the process along faster for you.

Here’s another great article you might like:

http://www.trulia.com/email/anews/pro.truliablog.com/sellers/7-psychological-red-flags-to-sellers-that-will-cost-you-money

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Posted by on February 5, 2013 in advice, business, career planning

 

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Real Estate Agents are not Salespeople. We are Consultants.

When I decided to get into real estate, I figured that my background would be a perfect fit.  I have a strong history in the sales field.  I was really good in my field, and truly enjoyed the social aspect of a sales job.

When I took the classes and worked with a mentor, sales was what was discussed.  There were strategies and outlines.  There were even scripts you could use.  It wasn’t until I really got off the ground that I realized that sales has nothing to do with being a good real estate agent.

I’m sure there are agents out there that will argue that this is a sales job, but let me tell you why I think it’s not. My feeling is that if you are a good agent, you are not a salesperson but a consultant.  This is one of the few jobs where it doesn’t matter how hard you might try to sell someone on a home.  Buying a home is incredibly emotional.  It is also one of the biggest expenses you will have in a lifetime.  I don’t know anyone who is casual enough to allow a salesperson to come in and twist their arm to buy a home that might not be right for them.  Let me state it another way.  I could never be that person who puts pressure on a client.

My personal feeling is that if you are a good real estate agent, you will treat your client like you would treat a good friend.  There is respect, understanding and help in figuring out what type of home might suit that particular client best.

As a real estate agent, you are there to guide your client.  You must be knowledgeable and able to teach them the steps in home ownership.  You are the person that a client will go to for consultation.  Maybe the time is right for a customer to buy, and maybe it’s not.  The goal is not to sell a home, but to help a customer decide what’s right for them.

If you go about your job in this manner, the rewards will come.  A customer might use you later down the road because of your honesty and integrity.  You will gain a good reputation, and yes, you will sell homes and make a good living.

It’s all perspective.  I know that I would be turned off by an agent who felt like a salesperson.  On the other hand, an agent that acted as a consultant would impress me and leave a lasting good impression.

For those of you just starting out in real estate, this way of looking at your job might be of enormous benefit to you.  If you are an agent, how do you approach your job?  Are you a salesperson or a consultant?

 
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Posted by on January 22, 2013 in advice, career, houses for sale, real estate

 

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All Your Dreams and Wishes Won’t Come True

I think it’s time to clarify something about real estate agents.  Although we go to school and learn about the law, contracts, ethics and such, we don’t take a class in magic.  I wish we did, it would be beyond helpful and fascinating all at the same time.

Unfortunately, more times than I thought possible, people will get in touch with a realtor and expect to find the impossible.  I am all for tracking down a person’s dream house.  It would make my day as much as the customer I would be working with.  That said, sometimes the criteria that people come up with is just not going to help them find a place to live.

Let me give you an example.  I spoke with someone recently that called about a home for sale.  The home was pending, so I offered to find them another place to look at.  I began to go down the list of information needed to find them a home.  When I asked about the price range, they said they could not say because they only knew what they would pay for a condo.  So I asked them what was the most they would consider paying for any place.  The answer was nothing more than $25,000 but only for a condo (strange answer. but true).  I then asked them if they had been pre-approved.  They said that they would not be getting pre-approved, they would be paying in cash.  So of course, that answered the question of how much they were willing to pay.

They gave me information on what cities, how many bedrooms and bathrooms and time frame.  Basically, they could buy at any time, but were in no rush and had a place to stay until they found something.  OK, so I asked for an email.  This way, I could put in their criteria and they would receive an email whenever something matching their description was listed.  If they liked what they saw, they could call me and I would set up an appointment for them to view the home.  This potential customer had no email because it didn’t work out well for them (whatever that means) and said they would call me if they saw anything they were interested in.  In the mean time, if I came across any condo’s for $25,000 or less in the area they were looking at, I could give them a call.  There was just one final detail.  They wanted a deal and only wanted to look at short-sales and foreclosures.  The place would have to be move in ready with very minimal amount of work needing to be done (painting for example).

I spoke with another person recently who had to have at least three bedrooms, two bathrooms, a minimum of 1600 sq ft, a basement, garage and if I could find a pool it would be preferable.  They didn’t want to pay more than $85,000 and had a list of only the most upscale neighborhoods to look at.  Nothing else was reasonable to them.  I couldn’t tweak the criteria for a one and a half bath or a home without a basement.  Neighboring cities were out of the question.  I put all of their information together and showed them that nothing was available.

This family had a deadline of sixty days before they would be without a home.  They also felt they should be able to get a deal on a short-sale or foreclosed home in move in condition.  I showed them that with a few tweaks to their criteria they could get a fabulous move in ready home in their price range with the square feet they wanted.  The response was that they knew that if they waited it out the right home would fall into their lap.

Look, I don’t want to see any family end up homeless.  I suggested they look into an apartment while they searched for the home of their dreams.  Maybe it is out there, somewhere.  Who am I to judge?  I can only go off of what our computer program pulls up for homes on the market.

In the end, if someone is looking for a home, they might want to consider a few things.  Foreclosures and short-sales are often not nearly the deals people think they are.  Months can go by after an offer is accepted and then the deal might fall through.  Having a short time line of when you need to be in a home pretty much cancels out trying to get one of these “supposed” bargains.  Another thing to consider is that most of these homes are truly wrecked and need professional help to restore them.

Housing prices in general are going up at a fairly good clip.  What you saw a few months back is not the price you will get on that same home today.  The last thing I would like to mention is that some concessions might need to be made.  Make a list of the most important traits a home should have.  Sure, reach for the sky and try to get everything you would like.  At the same time, be aware that everything is a pretty tough thing to find and that having a few items you are willing to give up can make the difference between getting a home or living without one.

 
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Posted by on September 30, 2012 in career, lifestyle, opinion, people, thoughts

 

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