Commentary by Craig Proctor
RISMEDIA, April 17, 2008-It’s no news to you that we’re operating in a tough market. Inventory is at an all-time high, and in many markets across the country, you have to list 20 properties to sell one. This is a difficult challenge for many agents, and a lot of them are packing it in and getting out of the business.
On the flip side, despite the current market, there are still many successful agents who will continue to make serious money selling real estate despite the bad market. So how is this possible that some agents actually do better in down markets?
Here’s the problem. Traditionally, agents were focused on generating leads and appointments. They were focused on signing up as many buyers and sellers as possible to contracts. Up to a few years ago, this was the right thing to do. But think about this. If those buyers and sellers are not buying and selling, you’re not making any money. The important thing to understand, especially in the current market, is that you shouldn’t be focused on leads and contracts and listings, but rather on getting more buyers who absolutely must buy and sellers who absolutely must sell – I call these “Sure Thing” prospects. These are the only leads you should be following through to appointment. All other leads are actually detrimental to your business because they’re adding expense, wasted effort or both.
And what is selling in today’s market?
Well, let me give you seven sure-thing target groups that will earn you commission when you need it … “now;” not “if;” not “maybe.” Not “perhaps down the road.” But right now. Why? Because these seven groups are highly motivated for emotional and financial reasons. For these people a purchase or a sale isn’t an “option,” it’s a “necessity,” and they need a Realtor – they need you – to help them accomplish that necessity.
Seven “Sure-Thing” Prospects You Must Be Targeting to Get Sales
1. Life-Event Prospects – These are prospects whose living needs and circumstances have abruptly changed because of a dramatic life event. People get married, they have babies, they get divorced, they die, and these things are happening despite the marketplace. These prospects suddenly need to buy or sell real estate, and by specifically targeting prospects who are in this natural ebb and flow of life, you’ve plugged yourself into a highly motivated group.
2. Sellers who already have a contract on another property – Many people don’t want to take the step of listing their home for sale until they know exactly where they’re going. So when they come across a home for sale that they absolutely fall in love with, sometimes they make a very fast decision to place an unconditional offer on it. They’re now suddenly in a situation where they must sell their existing home fast. These prospects are some of the best buyers to work with because they’re much more open to listening to what you have to say about the market, and willing to price their home properly so that it will sell.
3. Bank Foreclosures and REOs – REOs (Bank Foreclosures) can represent a jackpot, especially in the current market because, again, you’ve got a motivated seller that you never have to ask for price reductions, and once you open the pipeline, the referrals simply come to you on a steady basis. You might think you need connections to break into the tight-knit circle that puts you on the receiving end of this business. Let’s face it – it’s often pretty political. If a banker has a friend or relative who’s in real estate, who do you think the referral is going to go to? But there are many agents who are reaping the considerable benefits of this focus by using a step-by-step system (exactly what to say and do, and precisely what to show the financial institutions. In a market where only one in twenty listings are selling (i.e. 5%), an incredible 95% of our REO listings are selling.
4. Short Sales – These are people who are upside down and no longer have enough equity in their home. Something like 5-7% of Americans are behind on their mortgage payments right now, so asset managers and loss mitigation departments are overrun by people getting foreclosed on. By running ads that target Short Sale Prospects, you’ll not only attract great prospects, but these people will often even pay you an upfront retainer to put the short sale package together.
5. Corporate Relos – There are hundreds of companies that handle these. By plugging yourself into these companies, you’ll have relos sent to you on a consistent basis. You know what’s great about these prospects? They come into town for a day or two, look at ten homes and buy one. How easy is that?
6. Builder Close-Outs – There are many builders who are stuck with homes they can’t sell and this is becoming a big problem. Foot traffic is still okay for most of these builders, but the problem is they can’t sell their new construction (most of which are move up homes) because buyers can’t sell their existing homes in order to buy from the builders. Some agents have seized on this opportunity by offering a program that removes the risk from the builders, making their homes more likely to sell, and providing the agents with a steady stream of motivated sellers.
7. Motivated Investors – It’s a perfect time to target this group because it’s an awesome time for investors to buy. Some agents have a system in place that has investors lining up at their door and actually paying them an upfront fee for the access they provide them to the best deals.
So how is it that some agents do better in down markets? You now have the answer: they do better (and you can and will do better) if you take the time to understand the market – understand this market — and learn how to adapt your mindset and strategies so you stop spinning your wheels. Focusing your marketing efforts on targeting some or all of these “sure-thing” prospects is an excellent start.
Bryan Pellican, an REO agent in Las Vegas who is currently working with more than a dozen banks on foreclosed properties, had positive results following these ‘sure thing’ steps.
“Close to two years ago I was contacted by Countrywide and asked if I wanted to handle some foreclosure properties for them,” Pellican said. “I said, ‘Sure, by the way how did you find out about me?’ They said ‘We were looking through HomeSteps (a division of Freddie Mac) and noticed you had registered with them a while back so we thought we would give you a try.’ ”
“That conversation opened up my eyes to a whole new world of real estate,” he said. “I realized that I needed to get my name out there in places where the banks actually look for new hires. Now I am managing over 400 properties and closing 50-60 sales a month. One big key to working with the banks is to apply, sign up, register, and send in resumes to as many places as you can get your hands on. It is a little bit of grunt work upfront, but it has paid off big time for me.”
About the Author: Billion Dollar AgentTM Craig Proctor has been in the top 10 for RE/MAX Worldwide for 15 years and is a real estate trainer who does what he teaches. Proctor consistently sells over 500 homes per year to earn almost $4 million in commission. Over 25,000 agents nationwide use Proctor’s system to make more money in less time.
For more information, visit http://www.hypertracker.com/go/cp/a11a080416/. Here, you can also learn about Proctor’s 3-day SuperConference where he trains agents on the marketing and step-by-step systems they need to put in place to have these lucrative prospects lining up at their door.
To receive free training from Proctor with no obligation, visit: http://www.hypertracker.com/go/cp/a11b080416/.
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