Which buyers are real?

Always at the top of every Realtor's mind is, "Is this a real buyer? Are they ready to buy now? Am I wasting my time?"

It is not an easy question to answer. The old saying, "if it walks and talks like a duck, it's a duck!" doesn't work in this case. Lots of people want to buy a house. Lots of them can pay for one. Lots of people are both. All of them will go looking at houses with you, in your car at $4 per gallon. Then they don't buy. You have wasted precious hours (and hours!) of time with them for nothing.

What's a rookie to do? Is there a real way to tell who is going to buy from those that just want to look?

There is a way to limit your losses, if not cut them completely. It is not complicated, but it is also difficult to do. It requires you to take a stand for how you want to work in this business and say NO. The basic steps are:

1. First have an in-depth conversation with all the buyers about their needs. Go well beyond the price, number of bedrooms and baths. Get them to talk at length about their emotional needs. What things mean to them at the heart level.
   


2. Get them to your trusted lender to get qualified by someone you trust. They may get their loan from anyone, but before you move forward with them, be sure they are qualified.
   


3. Find out, by asking pointedly, what would stop them from buying right now. What obstacles are in the way that need to be dealt with? Attorney or parental approval, down payment issues, credit issues, physical or job-related issues. Find them out first.
   


4. Talk through everything before you go out to pick a house. Stop using "showing" and start using "picking" a home. Make it clear that when you go out to pick a home, they are in the decision making stage, not information gathering and education stage. Get agreement that is your purpose in going out.
   


5. Go out with them to pick amongst no more than 5 properties. If they don't pick on of those, talk it over. Take responsibility if they don't pick one. You missed something. You choose the best of the available properties.

It is not complicated. However, it will take fortitude on your part. It is a lot easier to just take everyone out, driving them from home to home with no criteria for determining how you spend your time. You can HOPE one will finally buy.

REAL facts about floor time.

For those of you who don't know me, I have been a consultant, trainer and owner/operator and in the real estate industry for some 30 years. I have demonstrated to thousands of brokers and owners over that period the proof * of what I am going to tell you.

Floor time is the real estate industry's way of not spending money on answering the phone or spending money on call centers and receptionists. In studies I have conducted over and over and easily demonstrate, the consumer is asked for an appointment about 2% of the time. That means out of 100 consumers calling in response to ads and signs, about 2 are ever even asked for an appointment. When they see the property it is primarily because THEY (the consumer) asks the agent for an appointment.

No one in this business really trains agents to manage the phone and ask for the appointment. 82%...yes EIGHTY TWO PERCENT! of the consumers calling in on the phone are going to do something real estate related in 6-9 months. Approximately 20% to 30% are going to buy or sell now.

In the last market study I was involved in, (Chicago) it was actually 18.8%. The rest (about 80%) are seeking information as part of the early buying/selling cycle.

The inbound call frequency, does not usually justify the return on time invested (ROTI) when tested against other types of prospecting activities. Many others have far greater return. The ultimate test of ROTI is exclusively a function of inbound frequency, which is a function of the local market . So, traditionally, good producing agents don't take or want floor time and they are right. That leaves marginal producing agents answering the phone and generally doing a very poor job.

A close examination of agents who claim their production is from the floor generally shows that is not the case (unless they are marginal and that is the only business they have.)

We had one agent that was given over 75 leads from our call center and did only 13 transactions...another agent was given 27 leads and did 23 transactions. So it is clearly a matter of skill and training.

Production results from capture and competence. Floor time is extraordinarily rich source of leads, but very sporadic and sparse over time. That means every contact is worth meeting if you can. If you stay in touch for 6-9 months they have a very high ROTI. But that is not the time you spent on the floor! It is the time you spend in touch with them over time.

Bottom line...Floor time is good for capture, but bad for the agent to spend time trying!

Open houses are a very close second in density of leads. But having 3-5 people showing up and making no appointments makes them a waste of time too. At some point, inbound call centers may be the future of this business. It serves the agents interest, and serves the clients needs.

If you are intending to develop real business, both short term and long term, the real issue for you will be your own capture rate. If you are not capable of making appointments with 60% or more of the people at your open house or floor time, you will struggle to develop business.

Capture rate is everything when it comes to building your business!

*Any one who would like to challenge these facts may contact me and I will be happy to provide you with empirical documentation and you can prove this yourself.

Who is (and isn't ) making money in this real estate market?

People ask us, "What am I doing wrong?
I made money and did lots of transactions last year, but this year I am really struggling."

Because of our Journey to Mastery™ and other consulting, we have some insight into what is working and what is not.

What is NOT working is business as usual.
Almost 80% of the working Realtors started less than 10 years ago. That means they have only experienced the constantly rising, seller's market of the late 90's through 2007. They developed skills and habits based on the realties of that kind of market.

• They "farmed," meaning they sent postcards to a geographic area on regular basis, usually once each month or every other month.
• They sent out "Just Listed" and "Just Sold" postcards.
• They decided they were Listing Agents and ignored buyers who did not want to buy their listings.
  
• They advertised in the local newspapers and Homes magazines.
  They worked to "Get my name out there."
  
• They waited for their past clients to call them with referrals.
  

In other words, they used a passive and accidental approach to business development.

Who is making money today?

People who are proactive. People who are DOING the things that drive business to them.

• They are holding open houses and asking for appointments with every person who comes in.
  
• They are staying in touch with every person who makes any indication that real estate buying is in their future.
  
• They call every past client they have on a very regular basis to ask about referrals.
  
• They refuse to take listings except with people with a real commitment to sell.
  
• They work with buyers who are ready and able to buy right now.
  
• They keep in contact and nurture the needs of buyer (and sellers) who are going to be ready in the future.
  
• They work ONLY with people who are committed to work exclusively with them.
  

Visit our websites:

JourneyToMastery.com

NewLicenseTraining.com

Recruit2Coaching.com