Success as a Real Estate Agent for Dummies PDF
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01_799556 ffirs.qxp 5/31/06 7:23 PM Page i Success as a Real Estate Agent FOR DUMmIES ‰ by Dirk Zeller 01_799556 ffirs.qxp 5/31/06 7:23 PM Page ii Success as a Real Estate Agent For Dummies® Published by Wiley Publishing, Inc. 111 River St. Hoboken, NJ 07030-5774 www.wiley.com Copyright © 2006 by Wiley Publishing, Inc., Indianapolis, Indiana Published simultaneously in Canada No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, scanning, or otherwise, except as per- mitted under Sections 107 or 108 of the 1976 United States Copyright Act, without either the prior written permission of the Publisher, or authorization through payment of the appropriate per-copy fee to the Copyright Clearance Center, 222 Rosewood Drive, Danvers, MA 01923, 978-750-8400, fax 978-646-8600. Requests to the Publisher for permission should be addressed to the Legal Department, Wiley Publishing, Inc., 10475 Crosspoint Blvd., Indianapolis, IN 46256, 317-572-3447, fax 317-572-4355, or online at http:// www.wiley.com/go/permissions. Trademarks: Wiley, the Wiley Publishing logo, For Dummies, the Dummies Man logo, A Reference for the Rest of Us!, The Dummies Way, Dummies Daily, The Fun and Easy Way, Dummies.com and related trade dress are trademarks or registered trademarks of John Wiley & Sons, Inc. and/or its affiliates in the United States and other countries, and may not be used without written permission. All other trademarks are the property of their respective owners. Wiley Publishing, Inc., is not associated with any product or vendor mentioned in this book. 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Library of Congress Control Number: 2006923950 ISBN-13: 978-0-471-79955-9 ISBN-10: 0-471-79955-6 Manufactured in the United States of America 10 9 8 7 6 5 4 3 2 1 1O/RZ/QW/QW/IN 01_799556 ffirs.qxp 5/31/06 7:23 PM Page iii About the Author Dirk Zeller,who as an agent rose to the top of the real estate field quickly, has been on a meteoric rise since he began his career in 1990. Throughout his sales career, Dirk was recognized numerous times as one of the leading agents in North America. He has been described by industry insiders as the most successful agent in terms of high production with life balance. His ability to sell more than 150 homes annually, while only working Monday through Thursday and taking Friday, Saturday, and Sunday off weekly, is legendary in the real estate field. Dirk turned his selling success into coaching significance through founding Real Estate Champions. Real Estate Champions is the premier coaching com- pany in the real estate industry with clients worldwide. Dirk’s clients average more than a $200,000 increase in their income annually. Dirk has created such revolutionary programs as “Protect Your Commission,” “Stewardship Selling,” “The Champion Listing Agent,” and “Positioning Yourself as the Expert.” These programs and others like them have changed the lives of hundreds of thousands of real estate agents worldwide. Dirk is one of the most published authors in the areas of success, life balance, sales training, and business development in the real estate field. He has more than 250 published articles to his credit. His weekly Coaches Cornernewslet- ter is read by over 200,000 subscribers each week. His book Your First Year in Real Estate(Prima Publishing) has sold just shy of 100,000 copies in just a few years. Dirk is also one of the most sought-after speakers in the real estate arena. He has spoken to agents and managers at the local, regional, national, and international level for most of the large real estate brands, such as Coldwell Banker, RE/MAX, Century 21, ERA, and Prudential. He has shared the stage with such notable speakers as Zig Ziglar, Brian Tracy, and Les Brown. Besides contributing to the real estate agent community, Dirk and his wife of 16 years, Joan, are very active in their church. They live with their 4-year-old son, Wesley, and 8-month-old daughter, Annabelle, in Bend, Oregon. 01_799556 ffirs.qxp 5/31/06 7:23 PM Page v Dedication So many people have contributed to my success in life, from my parents to my two brothers, my mentors and coaches, and now my two children, Wesley and Annabelle. No one, however, has contributed to my success in the real estate field more than my wife, Joan. I dedicate this book to her: my supporter, encourager, coach, role play partner, accountability partner, and best friend. The success that has been achieved in real estate sales, writing, speaking, training, and coaching was achieved only through our partnership. We did it together! Some 16 years later, I’m still amazed at God’s grace in giving me a wife without compare. Author’s Acknowledgments Just as a successful business is always a collaborative effort, so is a book. While I receive the unfair lion’s share of the credit, countless others are behind the scenes making me look good. To Barbara Schenck, who took my experiences, strategies, thoughts, and techniques and put them into the Dummies format you enjoy, thank you. This book would not exist without your enduring effort and patience. To the team at Real Estate Champions, an incredible group of people who change people’s lives each day, you are the best. Thank you to our support staff of Judy Cox and Julie Porfirio whose loyalty all these years means so much to me and to Luci Hamilton and Mary Stewart whose passion to serve others is unparalleled. A special thanks to Rachelle Cotton who arduously read every unreadable handwritten word and typed, corrected, and revised the whole manuscript while enduring every last-minute induced deadline . . . Thanks. To our coaches and salespeople who really change the lives of everyone they touch; to our marketing staff of Dan Matejsek and Shaylor Murray; everyone at Real Estate Champions had a hand in this book. I also need to thank the team at Wiley. Tracy Boggier, acquisition editor, Chrissy Guthrie, project editor, Jessica Smith, copy editor, and the Composi- tion Department. You are truly pros at what you do. I also want to thank Ken Edwards, technical reviewer, as well as my literary agent, Barry Neville, of The Neville Agency. Lastly, I must thank my personal clients and our Real Estate Champions clients. With you constantly challenging us and wanting passionately to improve, you drive us to work so hard to stay ahead. It would be easy to become complacent, but you don’t let us. Thanks! 01_799556 ffirs.qxp 5/31/06 7:23 PM Page vi Publisher’s Acknowledgments We’re proud of this book; please send us your comments through our Dummies online registration form located at www.dummies.com/register/. Some of the people who helped bring this book to market include the following: Acquisitions, Editorial, and Composition Services Media Development Project Coordinator: Jennifer Theriot Project Editor: Christina Guthrie Layout and Graphics: Claudia Bell, Karl Brandt, Acquisitions Editor: Tracy Boggier Carl Byers, Stephanie D. Jumper, Barbara Moore, Barry Offringa, Copy Editors: Sarah Faulkner,Jessica Smith Alicia B. South Editorial Program Coordinator: Hanna K. Scott Proofreaders: John Greenough, Technical Editor: Dr. Kenneth W. Edwards Jessica Kramer, Christy Pingleton, Editorial Manager:Christine Meloy Beck Techbooks Editorial Assistant: Erin Calligan, Nadine Bell, Indexer: Techbooks David Lutton Special Help Cover Photos: © Jeff Cadge/Getty Images Elizabeth Rea Cartoons: Rich Tennant (www.the5thwave.com) Publishing and Editorial for Consumer Dummies Diane Graves Steele, Vice President and Publisher, Consumer Dummies Joyce Pepple, Acquisitions Director, Consumer Dummies Kristin A. Cocks, Product Development Director, Consumer Dummies Michael Spring, Vice President and Publisher, Travel Kelly Regan,Editorial Director, Travel Publishing for Technology Dummies Andy Cummings,Vice President and Publisher, Dummies Technology/General User Composition Services Gerry Fahey,Vice President of Production Services Debbie Stailey,Director of Composition Services 02_799556 ftoc.qxp 5/31/06 7:23 PM Page vii Contents at a Glance Introduction.................................................................1 Part I: Acquiring the Keys to Real Estate Success...........7 Chapter 1: Discovering the Skills of a Successful Agent................................................9 Chapter 2: Residential versus Commercial: Deciding Which Type of Real Estate Is Right for You......................................................................................21 Chapter 3: Pairing with the Right Agency.....................................................................41 Chapter 4: Researching and Understanding Your Marketplace.................................61 Part II: Prospecting for Buyers and Sellers ...................73 Chapter 5: Prospecting Your Way to Listings and Sales..............................................75 Chapter 6: Mining Gold from Referrals..........................................................................95 Chapter 7: Winning Business from Expired and FSBO Listings................................115 Chapter 8: A Time-Tested Prospecting Tool: Planning and Hosting a Successful Open House............................................................................................139 Chapter 9: Presenting and Closing Listing Contracts................................................157 Part III: Developing a Winning Sales Strategy............183 Chapter 10: Determining a Home’s Ideal List Price....................................................185 Chapter 11: Getting the House Ready for Showing....................................................203 Chapter 12: Marketing Yourself and Your Properties Online and in Print..............221 Chapter 13: Negotiating the Contract and Closing the Deal.....................................245 Part IV: Running a Successful Real Estate Business....261 Chapter 14: Staking Your Competitive Position.........................................................263 Chapter 15: Keeping Clients for Life............................................................................281 Chapter 16: Maximizing Your Time..............................................................................305 Part V: The Part of Tens ............................................327 Chapter 17: Ten Must-Haves for a Successful Real Estate Agent.............................329 Chapter 18: Ten Tips for Working with Buyers...........................................................335 Chapter 19: Ten Biggest Mistakes and How to Avoid Them.....................................341 Chapter 20: Ten Web Sites for Real Estate Agents.....................................................347 Index.......................................................................351 02_799556 ftoc.qxp 5/31/06 7:23 PM Page ix Table of Contents Introduction..................................................................1 About This Book...............................................................................................1 Conventions Used in This Book.....................................................................2 What You’re Not to Read.................................................................................3 Foolish Assumptions.......................................................................................3 How This Book Is Organized...........................................................................3 Part I: Acquiring the Keys to Real Estate Success..............................4 Part II: Prospecting For Buyers and Sellers.........................................4 Part III: Developing a Winning Sales Strategy.....................................4 Part IV: Running a Successful Real Estate Business...........................5 Part V: The Part of Tens.........................................................................5 Icons Used in This Book..................................................................................5 Where to Go from Here....................................................................................6 Part I: Acquiring the Keys to Real Estate Success............7 Chapter 1: Discovering the Skills of a Successful Agent . . . . . . . . . . .9 Having a Financial Goal.................................................................................10 Acting and Working Like a Top-Level Professional....................................11 Serving as a fiduciary representative................................................11 Guiding financial decisions.................................................................13 Avoiding the role of a home inventory access provider.................13 Winning Customers........................................................................................14 Understanding the importance of customer creation over customer service.....................................................................14 Developing sales ability to win customers.......................................15 Gaining customers no matter the market conditions......................16 Becoming a Listing Agent..............................................................................17 Pathways to Success: Which Will You Take?..............................................18 Chapter 2: Residential versus Commercial: Deciding Which Type of Real Estate Is Right for You . . . . . . . . . . . . . . . . . . . . . . .21 Sizing Up the Differences between Residential and Commercial Agents....................................................................................21 Comparing commercial and residential real estate: It’s apples to oranges.......................................................................22 Weighing advantages and disadvantages..........................................24 Selecting Your Specialty................................................................................38 Evaluating your risk tolerance............................................................38 Taking the 7-question litmus test.......................................................39 02_799556 ftoc.qxp 5/31/06 7:23 PM Page x x Success as a Real Estate Agent For Dummies Chapter 3: Pairing with the Right Agency . . . . . . . . . . . . . . . . . . . . . . . .41 Weighing Your Agency Options....................................................................41 Enthusiasm, coffee, and doughnuts: What makes a good office?...42 Considering the rules you’ll be playing by.......................................44 Does size really matter?.......................................................................46 Prioritizing your values and expectations........................................47 Narrowing Your Agency Short List...............................................................48 Do your homework...............................................................................48 12 questions to ask each broker.........................................................50 Making agency comparisons...............................................................53 And the winner is . . ............................................................................53 Joining Your New Agency Team...................................................................54 Building a relationship with your manager.......................................54 Forming partnerships..........................................................................56 Chapter 4: Researching and Understanding Your Marketplace . . . . .61 Three Truths that Rule Every Real Estate Market.....................................62 Acquiring Knowledge about Your Marketplace.........................................63 Collecting marketplace information from key sources...................63 Analyzing the facts and figures...........................................................66 Compiling a marketplace analysis......................................................69 Projecting trends on the horizon.......................................................70 Putting Your Findings to Work......................................................................71 Sharing your market research to build prospect relationships.....72 Distributing your findings to gain publicity......................................72 Part II: Prospecting for Buyers and Sellers....................73 Chapter 5: Prospecting Your Way to Listings and Sales . . . . . . . . . . .75 What Prospecting Is — and Isn’t..................................................................75 Prospecting for Listings versus Buyers.......................................................77 Prospecting for listings........................................................................77 Prospecting for buyers........................................................................78 The Four Pillars of Prospecting....................................................................79 1. Set a daily time and place for prospecting....................................79 2. Fight off distractions........................................................................79 3. Follow the plan.................................................................................80 4. Be faithful to yourself and finish what you start..........................81 Putting Prospecting to Work for You...........................................................82 Targeting prospects.............................................................................82 Setting and achieving prospecting goals...........................................83 Shattering the myths............................................................................85 Finding Safety and Success in Numbers......................................................88 The law of accumulation.....................................................................88 The power of consistency...................................................................89 02_799556 ftoc.qxp 5/31/06 7:23 PM Page xi xi Table of Contents The never-ending prospecting cycle..................................................89 Tracking daily goals and results.........................................................90 Managing contacts...............................................................................91 Message in a Bottle: Staying in Touch.........................................................92 Chapter 6: Mining Gold from Referrals . . . . . . . . . . . . . . . . . . . . . . . . . .95 Referral Truths and Consequences.............................................................95 Building a Referral-Based Clientele..............................................................96 Sources of referrals..............................................................................96 Constructing a referral database........................................................99 Three golden rules for cultivating referrals......................................99 Developing Your Referral Strategy.............................................................105 Helping people send you the type of referrals you seek...............106 Setting your goal.................................................................................107 Approaching your referral sources..................................................108 Asking the right questions at the right time...................................110 Handling the referrals you receive...................................................111 Developing Referral Relationships.............................................................112 Making first-time contact..................................................................112 Converting referrals into clients or referral sources.....................113 Chapter 7: Winning Business from Expired and FSBO Listings . . . .115 Three Reasons to Work Expired and FSBO Listings................................116 Turning Bad Listings to Good Business: The ABCs of Expired Listings..................................................................117 Finding expired listings......................................................................117 Treating expired listings as high-probability leads........................118 Engaging an expired listing...............................................................119 Qualifying expired listings.................................................................122 Calling the seller: What to say and how to say it...........................123 Entering the For-Sale-By-Owner World......................................................127 Why bother with FSBOs?...................................................................127 Finding FSBO listings.........................................................................128 Converting FSBO listings: The successful agent’s approach........129 Playing the game of lead follow-up..................................................135 Chapter 8: A Time-Tested Prospecting Tool: Planning and Hosting a Successful Open House . . . . . . . . . . . . . . . . . . . . . . . . . . . . .139 Why Host an Open House?..........................................................................140 A chance to meet potential clients face to face..............................140 A way to meet the needs of dual-income families..........................142 A means of catering to the do-it-yourselfer’s home-buying needs........................................................................142 A high-touch opportunity in a high-tech world..............................143 Setting and Achieving Your Open House Objectives...............................144 Planning Your Open Houses to Gain Maximum Exposure......................145 Featuring a high-appeal home..........................................................146 Looking good: Leveraging the power of curb appeal....................146 02_799556 ftoc.qxp 5/31/06 7:23 PM Page xii xii Success as a Real Estate Agent For Dummies Inviting the neighbors........................................................................148 Don’t skimp: Feature a home in the upper-middle price range....148 Showing the way: Leading prospects to the open house..............149 Being the Host with the Most: Effectively Managing the Open House...150 Doing your homework before prospects arrive.............................150 Wallflower or social butterfly: Meeting and greeting during the open house...................................................................153 Securing the deal by following up after the open house...............155 Chapter 9: Presenting and Closing Listing Contracts . . . . . . . . . . . . .157 Qualifying Your Prospects..........................................................................158 Why and how to qualify prospects..................................................158 Checking your prospect’s “DNA”......................................................161 Fundamentals for Presenting Listings to Qualified Prospects...............164 Know the purpose of your presentation.........................................164 Make your presentation useful and interesting..............................165 Keep it short and sweet.....................................................................166 Focus on four keys to a great delivery............................................167 Stay in control.....................................................................................170 Giving a Quality Presentation: A Four-Phase Formula............................171 Getting off to a good start.................................................................171 Setting yourself apart from the real estate agent pack.................172 Presenting prices................................................................................176 Going for the close.............................................................................178 Dealing with Sales Objections....................................................................178 Delaying objections............................................................................178 Handling objections in four easy steps...........................................179 Asking for the Order....................................................................................181 Bringing the Presentation to a Natural Conclusion.................................181 Part III: Developing a Winning Sales Strategy.............183 Chapter 10: Determining a Home’s Ideal List Price . . . . . . . . . . . . . . .185 Examining Pricing Approaches..................................................................185 The ABCs of CMAs.......................................................................................186 Staying current...................................................................................188 Factors that contribute to a CMA.....................................................188 Creating a CMA...................................................................................190 CMA mistakes to avoid......................................................................192 Taking CMA results with a grain of salt...........................................193 Developing Your Pricing Philosophy.........................................................194 Avoiding overpricing just to please the buyer...............................195 Steering clear of starting high and reducing later.........................196 Coming in on-the-button....................................................................197 Troubleshooting Advice for Pricing Problems.........................................198 Reducing prices: A five-step formula...............................................198 Accepting over-priced listings..........................................................201
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