Well, are you….
(Before I begin this post, please let me humbly say THANKS! for the hundreds of e-mails that have been pouring in. I love it, keep them coming to Rick@RickBrash.com.)
OK…
I can’t think of a more compelling USP, differentiating message for a Real Estate agent to use describing his/her commitment to the process of selling a home than this:
“Your Home Sold Guaranteed at a Price Acceptable to You…or I’ll Just Buy it Myself”.
For many members just gaining an understanding of correct USP marketing, the initial decision run this program causes a few sleepless nights for the simple reason: “What if I have to buy one”? I know the first time I ran an ad that featured the Guaranteed Sale offer USP prominently across the top of the ad in our local Real Estate Paper it kept me awake the night before it came out. Yup, I was nervous. But now, looking back a few years, I really wish I had started using the USP sooner. So I thought we could focus on why it’s so powerful and why we should logically progress towards using the program. If you are considering implementing this USP in your branded marketing this should help.
The first order of business is to keep a copy of our blue Guaranteed Sale Manual at your finger tips at all times. This is our reference manual and it lays out the guidelines exactly the way the program works and how you can successfully implement it into your business model. The first time I received that manual I was in Toronto for my very first SuperConference and I absolutely inhaled the concept as if it were something that would cure every woe in my life. At least at the time that’s how it felt. I was nervous but immediately saw the power in the offer. I just had no idea how to make it work. Lack of experience and FEAR took over I suppose. For me the key thing to remember about this program is “the why”. The why is twofold…
Reason 1: OUTSTANDING MARKETING, it really makes the phone ring. The big question that circles through a seller’s mind who’s calling you about your offer is: Why would an agent offer to guarantee someone’s sale? Simply, because no one else is willing to shoulder accountability and that becomes a crucial deciding point for a seller prospect who is measuring us up.
Reason 2: It BRINGS COMPLETE DIFFERENTIATION in an overcrowded local market. As our coaching members have heard me say at least a thousand times; Typical agents, practicing typical things will simply generate typical results. The average, typical agent won’t guarantee the sale of their client’s home because A) they don’t know how, and B) they don’t believe in carrying that much accountability. So what’s the typical result of that course of action? Most agents will do less than 5 deals in the next 12 months. We can see why offering to GUARANTEE a sale vs. just listing a house make us stand out as a beacon in a sea of typical agents…
Marketing is everything, especially in this industry where training is weak, results are barely trackable, and a huge percentage of agents working today can barely make a living. I was one of those agents once so I can stand up and say that from both error and experience. So, that’s why we should run the USP on every branded piece of branded marketing we run.
Now, what about “the WHO”? Whose sale are we willing to guarantee? What are the guidelines and how can we be sure we won’t end up buying everything we guarantee?
Simply, it’s the BUYERS HOME that we guarantee to sell, plain and simple. Why the BUYER? Because in order to qualify for the program, a home buyer needs to be moving up into one of our listings. Reflect on our sign rider offer: “Move Up To This Home and I’ll Buy Your For Cash”
The common situation many prospective Home Hunters face when really wanting to move is this: Since they are tied up financially in their current home, making a solid, non-contingent offer on a newer, more suitable home is often not possible. Their financial institution has said that until they get their current home sold, their new mortgage, on the home they want to buy, won’t be approved. Statistics say that 7 out of 10 working families can only debt service one mortgage and that’s the one they have already. So, in order to qualify to make a solid, non-contingent offer on our listing the buyer can get financed, they need a contract on their home. Since we are in the business of writing and negotiating contracts, who better to make this offer than us?
Remember, the typical agent can’t or won’t do this and instead of guaranteeing him/herself three (3) ends worth of commission, they have given up control and are now just praying for a sale on the BUYERS HOME instead of proactively generating the sale themselves. As well, their seller is not very happy because they don’t have a firm offer to work with. EVERYONE, including the Realtor, is in a HOLDING pattern, at the mercy of the market, other buyers, other agents, and a general feeling of the unknown has set in. In these situations, Murphy’s Law has a way of creeping in as well.
OK, ao now I know what you really want me to talk about, the numbers. How does that work so we don’t go bankrupt buying houses that we really only want to sell? Great question but don’t forget these key items as we lay it out for all parties involved to see. Remember, it’s all based on the biggest fear most agents seem to share about getting started with the guaranteed sale program, having he money to shell out in the event they have to close on one if it goes full term and doesn’t sell the traditional way. Understandably, that’s a fairly concrete worry, after all the USP is clear that in 90 or 120 days we’ll buy the home. If financially we are not in a position to buy homes at the end of our promised term, we really need to think twice about running the program. However, before we run off all hot and bothered, mad at the world because the program really DOES work but we think we can’t afford to do it, lets take a look at the technical side of it so your your decision is based on truth and reality, not rumor and myth.
First, remembering that it’s the BUYERS HOME WE PUT THE GUARANTEE ON, we see there’s a pretty good potential for generated commission income from offering a guaranteed sale. After all, guaranteeing the sale of someone’s home so they can bring a firm, no conditional offer on one of our listings creates what we call in my market, a Double Dipper – we’re about to receive both the listing side of the commission AND the buying side.
Let’s use some real numbers as a comparison but first, let’s list something…
Let’s say we listed Mr. and Mrs. Jones’s home last week, a nice two storey with double garage and a huge fenced yard in a great, very desirable area. We’ve put it on at $449,900. It was our USP ad featuring the headline “Your Home Sold Guaranteed at a Price Acceptable to You or We’ll Buy it Ourselves” that caught the eye of Mr. Jones so he called in (this really is a stellar marketing concept by the way) looking for more information. After all, no one else made this bold of a statement in the local real estate paper.
As with all leads, well practiced, strong conversion skills created the appointment to go over, meet the Jones family and discuss the sale of their home.
Now that we’ve done that, have met the family, have seen the home, and have reviewed with them our listing presentation gaining their trust and commitment, discussed price and terms of the listing and even though Mr. and Mrs. Jones DON’T qualify for the Guaranteed Sale Program due to their impending move out of town to the retirement cottage they bought years ago, they are impressed with our expertise. One of the things they really liked was we helped them actually identify who their prospective buyer is likely going to be – someone that will need to sell their current home first so they can buy a home with a non non-contingent offer and qualify for financing. That someone will likely be a family that is younger, has kids, and a need for the amenities the Jones’s home offers. Things like more space, the safe fenced yard and the School District.
In our listing presentation, we have also taken the time to show the contrasting difference between what we will be doing to generate a faster sale through our TRADE-UP PROGRAM and what the typical agent will do once they list a home. The average agent pretty much just sits back, praying for a buyer to come along and then wait for another 4 months after they have convinced the Jones family to accept a contingent offer subject to the sale of the buyers home. (very common offer these days) We have explained that our exclusive TRADE-UP PROGRAM actually generates an immediate offer on the BUYERS home, enabling Mr. and Mrs. Jones to receive that firm cash offer they are wanting as soon as possible, without waiting for all kinds of conditions to be fulfilled.
Try this next time you are discussing the TRADE-UP PROGRAM: Ask the sellers if they really understand how a contingent offer works. Most don’t. Then tell them what happens if the buyer’s agent isn’t strong and lists THAT home too high which, again, is common. Not only does everyone sit, wait, and wonder, but also the home is not even being shown, because the listing agent doesn’t really understand the process themselves. Then ask your client “Do you know what else happens? NOTHING! Because without a sale yours IS NOT closing either. Oh and by the way, agents hate showing houses that are pending with contingent offers.” What a schmoz. Remember, sellers don’t really want a LISTING, they just want a sale.
So, Mr. and Mrs. Jones’ sale will look something like this:
Now, here’s the method to get all of it PLUS one more commission on top of this double-ender (NOTE: you’ll earn 3 paid sides of commission for every guarantee you write) plus create a VERY happy, repeat customer thanks to your forward thinking and absolute WOW!! service.
But before you all start e-mailing me like last month, yes, I charge $495 on every transaction that takes place through my team. Frankly, it’s easy to get and with our buyers, we charge it up front, the night they sign our buyer’s agreement. Sellers pay it at closing and, yes, my fee for service is what it is. Running the business takes capital, and I can handle the commission objection 10 different ways if I have to. I know what I’m worth as does every top producing agent in YOUR marketplace. It, like our commission, in MY business model is not negotiable on my terms, especially when my $$$ are on the line for a GUARANTEED SALE SCENARIO. Truly, presented correctly, Mr. and Mrs. Jones see huge value in working with me or my team and have no trouble paying my fee for service. That is why they listed the night we were there.
So the home gets listed, our normal system for selling takes over including our entire team engaged in the process. Everyone from courier, photographer, sign installer, and agent partners plays a part in the program. It’s a system that works over and over and over again. Predictably, a week later, we get a call from Mr. Jensen, who was dropping off his son’s teammate after practice and saw my For Sale sign out front of Mr. and Mrs. Jones’ home. He and his wife had been looking for something a little bigger and in this neighborhood that services the school district his three kids sons are already in. What really caught his eye was my TRADE UP sign rider: “BUY THIS HOME and WE’LL BUY YOURS” That sign rider caused exactly the reaction it’s designed to cause: Mr. Jensen wondered to himself “Hmm…I wonder how they do that?” That though pattern causes Mr. Jensen’s needs to surface plus it creates a wondering which in turn creates a call on the sign: The two most typical question arise: How much is that home you have listed? And what does that statement on your for sale sign mean?’
After some careful posturing, and a determination of what their timing and motivation is, a BUYER’S APPOINTMENT / MEETING / CONSULTATION gets scheduled at Mr. and Mrs. Jensen’s home that same evening and I go over to see what can be done. (by the way, we go to their home because our initial conversion script has us asking them if they need to sell first BEFORE buying again and they said that was their siutuation)
Once we get our consultation done we realize that Mr. and Mrs. Jensen are pretty typical family people. The home they live in now has a market vale of about $300,000 and they have about $175,000 in equity tied up on it. Thye have a 4 yr old First mortgage that’s current at a good interest rate. However, to start the home shopping process, they need a sale first. They will qualify to buy the new home they called on for sure but, like most working families, they have some financial challenges. They live quite comfortably one full time income plus Mrs. Jensen’s part time income. They have some credit card debt that is up to date and they are also making a vehicle payment. For them to buy the Jones home, it looks like their debt service puts them at about 52% before they sell. Typically, too high to qualify for another mortgage and the last thing they want to do is make two mortgage payments, even for a short time. Truly the Real Estate Catch 22 traps them in their current home.
Now stop for a moment and think what the AVERAGE or TYPICAL agent would do at this point… First, the typical agent would NOT have conducted a buyer’s consultation; instead, he (or she) would have run over to the Jones home and showed it to the Jensen’s. Then, after using all the closing techniques ever invented, that agent would have slammed the Jensen’s into an offer contingent on their sale. He then would have listed the Jensen home at a higher price because right now all that agent is seeing are dollar signs.
But look at the PROPER way to glue this transaction together. It’s done calmly, without frustration, fancy talking or slick hard sell closing methods.
The first thing done would be to determine what the Jensen’s are looking for (BUYER PROFILE SYSTEM). The second thing would be to get them under exclusive Buyers Agreement and then help them get their finances in order. Then, after helping them see that there IS a way to get them into the Jones home, we would arrange a viewing.
Now best-case scenario sees the Jensens wanting to buy the Jones home after the viewing and some discussion. So they press you to get more information on your solution to their Real Estate Catch 22 situation. The biggest hurdle they have is actually being able to buy the Jones home before selling themselves. Their bank and my mortgage specialist confirmed that they need a sale first to move ahead. So, simply, it’s the sale of their current home that’s actually the missing puzzle piece. Does that seem sensible? Absolutely!
So let’s give them the offer they need to go ahead and get their financing in order and make a non-conditional offer on the Jones home. Explain to them that your offer is likely not the one that is going to end up buying the home but for the sake of the bank, it’s going to allow them to qualify for the new mortgage and ultimately buy the Jones home. Believe me, they will be clients for life after this.
Here is what the offer would be based on: Proposed market Value: $298,000 – $305,000 (I always work in the low to middle of the value range so I would probably use $300,000 as the benchmark)
Closing date: 120 days up the road
The Jensen’s also know that we’ll be marketing this home hard to get it sold sooner for far more money. They also know that truthfully I DON’T WANT TO BUY THE HOUSE IF AT ALL POSSIBLE. In our conversations I’ve made that plain and simple. However, I will do this so they can buy the other, more suitable home and get going sooner than later. They now have definite dates (normalcy) they can work with. They can NOW approach their bank, apply for a new mortgage because THEIR HOME IS NOW SOLD AS FAR AS THE BANK IS CONCERNED.
List the home today at $304,900 and structure in regular price reductions (bi weekly or monthly) until the home is sold. They will always take an offer that represents more money in their pocket than what you have offered
So who has benefited? Absolutely EVERYONE involved.
If you know your numbers, and understand how your “DOM” (days on market) affects your business, you can run this program with little or no fear of ever having to buy a home. Craig tells me his guaranteed homes sell in less than 90 days and after all the years he has been doing the program, he has only had to buy two homes. However, look at the numbers. They’re purchased 85 or 86% of market value. How bad of an investment is that? A great piece of real estate purchased way below value. You could easily gain Rock Star status in YOUR market place by mastering this one concept that not only makes YOU stand out, but causes your phone to ring off the hook. The USP does exactly what it’s been engineered it to do. Makes prospects ask the simple question “how does it work”? No doubt, he’s glad to explain it to them.
Oh and to conclude this post, what happened to all of the folks involved? Well, Mr. and Mrs. Jones have retired to a warmer climate, no snow shoveling (yay!!), no winter boots and the Jensen’s just celebrated their 2nd year anniversary in their new home. They love it, the kids are all A students.
Any Realtor who learns and applies this program to his business can pocket HUGE $$ in commissions. This group of transactions would look much like this: From the sale of the house that was guaranteed (the Jensens), $11,832 was generated because 22 days AFTER it was listed the Jensen’s received an offer from another agent and it was negotiated to negotiated it to 98.6% of list price (his average) Also, don’t forget the commission of $32,000+ was earned and collected from the Jones sale. See now where the minimum of 3 sides of commissions came from? Also note that there were 3 transaction fees in there as well, $1485. So a massive commission by simply offering and using USP in the marketing and understanding what buyers and sellers REALLY need. Does it make sense? In every sense of the word!
Your Home Sold at a Price Acceptable to You, or We’ll Buy It…
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