Three Core Messages for Building Value With a Buyer
by Dirk Zeller
Monday, April 23, 2012
There are three core messages that need to be conveyed to a buyer and they need to be the first things discussed with a buyer. Most agents never discuss these concepts. These three are directly linked to building the value of your services and obtaining exclusivity of your services in return. They are:
- All real estate agents are not the same.
- It really matters who represents your interests.
- My market knowledge is superior to other agents'.
Let's look at each of these Champion Agent truths together.
1. All real estate agents are not the same.
One of the primary messages used by inferior agents and discounting agents is that we are all the same; that there is essentially no difference between Champion Agents and other agents. We need to convey that each agent operates an independent business and applies different techniques to arrive at the purchase of a home. One may employ a Kia level strategy of service, amenities, and experience, while another uses a Mercedes level of strategy of service, amenities, and experience. You want to create a clear distinction between what you do and what other agents do. An analogy outside of real estate that illustrates service and quality differentials is highly effective. I have found that car comparisons are easy to use because car companies have spent billions over the years branding their products and establishing the fact that all cars and car dealerships are not the same. Our job, at this stage, is to show and demonstrate the differences between us and their preconceived feelings and beliefs that we are all the same.
You could even use the meeting you are conducting as a demonstration that you are different. Your desire to create a delighted client is so high that you conduct these meetings to ensure a successful outcome for them. Most agents just want to stick them in a car and sell them a home as fast as possible. Your philosophy differs from those other agents. You hold yourself to a higher service standard than that.
"There is a tremendous difference in the agents you can work with. Each agent operates independently and approaches their business in a different way. There are differences in knowledge, skills, strategy, attitude, experience, communication, negotiating style, and ultimately, results. I spend time with you up front to clearly understand your objectives and needs to ensure a successful relationship. Does that make sense?"
2. It really matters who represents your interests.
In this section, you are building the value of your service and moving it away from the guy who looks up properties to show and opens doors. A Champion Agent knows those are the least valuable parts of their service. Any agent can plunk a few keys on the keyboard of a computer and posses an MLS key.
There is a story about a senior executive who was having problems with his computer. They called in their technology expert to fix his problem. The technology expert looked at the computer diagnostically for a few minutes. He then reached into his briefcase for a small hammer; he tapped on the computer three times, and it was fixed. He then handed a bill to the senior executive for $500.
The executive said, "I won't pay this; you were only here five minutes. That's outrageous! I want you to itemize this bill." The technology expert then itemized the bill. It read: "Two dollars for tapping on the computer and $498 for knowing where to tap!" What you are trying to tell the buyer is it's easy to get a hammer and start hitting the computer. God knows there have been many times I have taken more than a small hammer to my computer! The buyer needs to know that you are one of the few agents in the marketplace who knows where to tap. The agent a buyer uses to represent their interests in securing their next house can affect:
- The home you select
- The long term appreciation you generate through your home
- Your financial position years down the road
- Your ability to avoid legal pitfalls
- How your offer is presented
- The financing you receive
- The stress you experience through the transaction
- The timeliness of the closing.
- The communication during and after the transaction
- The price you pay for a home
When looking at all of these factors that an agent influences, it's easy to demonstrate how important a decision about who will represent their interests in their purchase will be for them and their family. There are also factors that affect them financially and emotionally. There are security issues, as well. These factors can have negative consequences that can extend well into the next decade for them. Selecting the wrong agent now won't just affect them on this house but can affect the next few houses, as well as their long-term financial security for them and their family.
You could ask the buyer which of these issues or factors concerns them the most. Getting them to understand, at this juncture, that selecting the wrong agent can cause two, three, five or even more of these to be heavily negative for them. At this stage, you must let them know you understand how important your job really is to your clients. Therefore, you have developed a process to ensure all their buying factors are in your favor.
"Do you see an agent's influence and the effect on your home purchase if the agent isn't the right one?
Doesn't it make sense when I say that it fundamentally matters whom you select to represent your interests?"
3. My market knowledge is superior to other agents'.
Because many of the previous listed factors are intertwined with market knowledge, the home they select, appreciation, long-term financial position, how the offer is presented, stress, and the price they pay are all connected to market knowledge. We have to prove that our market knowledge is top notch. When looking at market knowledge, there are two core areas.
The study and evaluation of the supply and demand aspects of the marketplace; a Champion views the market in terms of how the law of supply and demand connects with the marketplace right now. Educating yourself and then your clients on this demonstrates value. It also enables you to have a solid discussion with them about how the market can change quickly. If a lot of houses sell quickly in the next thirty days with limited new inventory coming on the market, the selection will be lower, and their bargaining power will also be reduced. There are few agents who really understand the effects of the law of supply and demand on the marketplace. Yet, this age old law dictates a lot of what happens in the marketplace.
A Champion Agent tracks active inventory in predetermined price points. They track the number of homes sold monthly in those price points, as well. Additionally, they monitor the list price to sales price ratios and days on the market numbers. Finally, if they are a true Champion, they will calculate the absorption rate or available month's worth of inventory remaining. This figure can be easily calculated by dividing monthly sales into the current inventory numbers. This will give you a clear, quantifiable measure of the competitiveness of the marketplace the buyer will encounter. It will also convey the breadth of selection they can expect to encounter in the marketplace. If your marketplace has six months worth of inventory, they can expect a good selection of homes to choose from. If it only has one month, the volume of homes to select from is diminished. One market is like a Wal-Mart Super Center; the other market is a corner 7-11 convenience store in terms of inventory and selection.
By completing this type of analysis quarterly or monthly, you receive a tremendous snapshot of how competitive the marketplace is currently and how competitive we will need to be. The reason I used the word snapshot is because the analysis is for one moment in time. We have to explain to a client that clear distinction. Too often, people feel that our analysis, whether it is for a buyer or a seller's CMA, should be good forever. It's just a snapshot of now.
"Do you see why my clients can make better decisions?
Is it clear how this creates an advantage for my exclusive clients?
Is this the type of service you are looking for?"
Transaction process knowledge is the other subsection of market knowledge. There are few agents who have actually created a step-by-step process they follow in serving the client; a checklist that moves the client along the path to home ownership. What are the steps that you take before securing a property for your client? What are the steps you take once you have secured the property to ensure a timely, low-stress closing?
There is a process for each one of us for a transaction that allows the buyers to experience less stress and anxiety. Most purchasers experience, at best, what I describe as controlled chaos. The transaction and clients are being thrust into emergency deadlines because the lender, attorney, other agent, or even the buyer or seller didn't perform in a timely manner, and we found out a little later than we should have.
"Our clients experience a well-timed and structured process that leads to our end objective of a smooth closing. Having helped __________ people in my career and over __________ in the last year, you can rest easy that, with each step of the process, we will complete it timely and with excellence and will communicate the activities all throughout the transaction."
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