A Lethal Listing Presentation
Now let’s take the pieces and put them together into a “lethal” listing presentation. For quick review, what are the pieces? The first piece is knowing your market statistics so that you’re truly the best agent for the job. Becoming the market authority. Then the next piece is knowing the value of the subject property so that you can get the top dollar for your seller client. By knowing how to prepare the ultimate CMA, your foundation is complete.
Beginning the process without laying this foundation simply won’t work. It’s absolutely critical that you go through these first two steps before you learn the listing presentation, simply because the presentation builds on this foundation! If you’re just skimming through this approach so you can get to the “magic words” to say, you are wasting your time. This approach is not about having magic words. It’s about creating a magnetism that will attract your listing clients to you. That comes from building the foundation.
Without building your foundation on solid ground, you’ll instead be building your presentation on quicksand, and you won’t be able to list properties using this powerful and unique method. Why? Because you won’t have the most important element of any sale: the believability factor.
This listing approach is counter-intuitive. It is going to fly in the face of what 95% of the other agents are telling your client. As such, it demands that you have credibility. If you don’t have credibility, the listing approach will never sell because you’re asking the client to place his faith in an approach that, in all likelihood, he’s never heard of before. Take the time to build the foundation.
Last year there were more than 1.1 million Realtors® in America, so I guess you could say that there are 1.1 million ways to sell a house. But the truth is that there are really only two ways to sell a house: you can sell it by price, or you can sell it by traffic. Every other sales method is a subsidiary of one of these two. We’ll explore the two different approaches at length and discuss how they differ and how one of them will yield far better results for your client while making you more money.
The Traditional or Price Approach. I’ve read dozens of books — probably hundreds of books — on the subject of real estate. Many of these books speak of the importance of listing real estate, and all of them describe nearly identical listing approaches, with only slight differences. Now, the reason for all this sameness is obvious: it’s the way listings have been done since the beginning of real estate. It’s the old “if it ain’t broke, don’t fix it” thing. Well, I’m here to tell you that it is broke! If you expect to make a lot of money in real estate, you need to determine what everybody else is doing and then do the opposite.
Okay, here’s the basic formula for the “traditional” or “price” approach. As you’ll recall, we talked earlier about building a CMA, or comparative market analysis, for your client. The traditional approach teaches us to find the “reasonable range” of value and then try to list the property on the low end of that range. That’s why we used closed comparables only, and not active listings as comparables. It’s why we aren’t taught to adjust upward for the list-to-sale ratio. We start as low as the client will let us.
If the home doesn’t sell within a month or so, we’re all taught to…what? You got it! To ask for a reduction in price. Then if the property still doesn’t sell, we lower the price again, and again, and again, until eventually we find a buyer for the place. Think about it: we’re selling the house by price. We’re using the price as our marketing tool. That’s why we continue to lower the price, or wait for appreciation in the market to lower the price for us, until the house eventually sells.
One of the reasons this approach works well for the agent is that it places the entire burden of selling the home on the seller! Another reason for using the traditional approach is that the agent doesn’t have to spend a lot of money marketing the house. He doesn’t have to spend a lot of time or effort devising a marketing plan or promoting the property because the price is doing the selling for him. There’s no doubt that this approach will work, of course: it’s been working for decades with good and bad agents alike. However, there are a few drawbacks to the traditional approach that are seldom mentioned.
First and foremost is the agency issue. It’s your job as the listing agent to represent the seller’s interests, which include getting the absolute top dollar for the property. However, most agents don’t get top dollar when they use this approach, and the reason is as simple as supply-and-demand. When there are fewer buyers competing for a home, the sale price may need to be discounted substantially in order to attract interest. In economics-speak, “with a fixed supply and a scarce demand (i.e. fewer buyers), prices drop.”
Another drawback to using this approach is lack of speed: several months may pass before the traditional approach begins to have an effect. In the process, the home often becomes stigmatized. After several reductions, it’s not even shown to potential buyers because it’s been on the market “too long” and is now assumed to have something wrong with it. If the agent starts the process too high and then reduces the price too slowly, the home becomes very difficult to sell at any price.
Many times, listing agents unwittingly become de-facto buyer sub-agents. Even though I don’t know a single listing agent who would intentionally sell out his client, it’s entirely too easy with the traditional listing approach to help the buyer rather than the seller. And, yes, I realize that my judgment may sound harsh, but if you’ll honestly examine this method, you’ll have to agree that, very often, it doesn’t yield the best results for the seller.
View all articles in this series:
- The New Ultimate Listing Presentation (Part 1)
- The New Ultimate Listing Presentation (Part 2)
- The New Ultimate Listing Presentation (Part 3)
- The New Ultimate Listing Presentation (Part 4)
- The New Ultimate Listing Presentation (Part 5)
- The New Ultimate Listing Presentation (Part 6)
- The New Ultimate Listing Presentation (Part 7)
- The New Ultimate Listing Presentation (Part 8)
- The New Ultimate Listing Presentation (Part 9)
- The New Ultimate Listing Presentation (Part 10)
- The New Ultimate Listing Presentation (Part 11)
- The New Ultimate Listing Presentation (Part 12)
- The New Ultimate Listing Presentation (Part 13)
- The New Ultimate Listing Presentation (Part 14)
- The New Ultimate Listing Presentation (Part 15)
- The New Ultimate Listing Presentation (Part 16)
- The New Ultimate Listing Presentation (Part 17)
- The New Ultimate Listing Presentation (Part 18)
- The New Ultimate Listing Presentation (Part 19)
- The New Ultimate Listing Presentation (Part 20)
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Matt Jones is the founder and CEO of FavoriteAgent.com, nationally syndicated columnist, broker, and best selling author of LCM: The Secret to Success in the New Age of Real Estate, The Ultimate Listing Presentation, Traffic: How to Sell Fast and Net More, Becoming a Mega-Producer, The Science of Online Marketing, 10 Steps to Real Estate Success, 20 Questions: Everything You Always Wanted to Know about Real Estate but Were Afraid to Ask, The Virtual Office Model, Max-Bang!, and The NEW Ultimate Listing Presentation. Jones' North Carolina-based company has been profiled by major media outlets as an innovator and a pioneer in the industry, and CNN's Pulse on America claimed FavoriteAgent.com is "changing the way real estate is being done in America." This article is syndicated in the following locations: iTunes, YouTube, Stitcher Radio, BlogMattBlog.com, RealBlogging.com, NewsGeni.us, TheCommissionCheck.com, RevampedAgent.com, and now Amazon Kindle.