While you are running around busily being different, take time to measure your performance. This is done best in the context of what is important to your clients. We live in a world of numbers, use them to your advantage.
Home sellers might like to know:
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What was your sales volume in the past year?
- What percentage of your listings has sold in the past month?
- What was the average time on the market
- For what percentage of your listings were you also the selling agent?
- What is your accuracy record in determining the market value for homes?
- What is the selling-price-to-asking-price ratio for your listings? In other words, when an offer arrives, how close to full price are you able to negotiate for your sellers? How does this compare with the industry average? Or, in still other words, how good a negotiator are you?
Buyers will be interested in the following:
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How many homes do you expect to show me before we find the right one?
- How many homes can we expect to see in a day?
- What was your sales volume in the past year?
- In a buyers’ market, what is the selling-price-to-asking-price ratio for homes you have sold as a buyer-broker? In other words, how much off the asking price are you able to negotiate for your buyers? How does this compare with the industry average?
- In a sellers’ market, what is your average number of offers per buyer? In other words, how effective are you are at winning your buyer’s home of choice in multiple-offer situations?
The most effective way to measure your performance is to keep track of your own experience and to compare it with local industry averages. Can you think of additional measures of performance?
Utilize the information you generate by telling your prospective clients your record, how you achieved each success, and how it is likely to benefit them. This can be a powerful addition to your marketing arsenal. The negotiating effectiveness questions above have a direct bearing on your client’s pocketbook and are especially important. If you find your personal statistics do not compare well with industry averages, you will want to take corrective action. No matter how you stack up in the performance statistics league, just by keeping a record, you will be showing that you understand what is important to your clients and that you care.
In addition to the quantitative measures noted above, there are many subjective but equally important ways that you can add value to a real estate transaction. Remember that your annual income will seek the level of your value to your clients. Be prepared to answer the critical questions, and be prepared to sell your value if your clients are too shy to ask.
The following are questions that all clients might have:
How can you be contacted immediately? Agent-to-agent and client-to-agent communications can be critical. A pager should alert you immediately to any waiting messages.
Do you specialize in a particular area? You need to be experienced working with both buyers and sellers over a wide area. With modern technology and a little ambition, it is very easy to cover the entire residential market.
Can you supply names of references? References can help strangers feel more at ease. A written set of testimonials can also be valuable.
Answer these questions for your sellers:
- How will you determine the expected contract price for a home? Appraisal by comparables is generally accepted as the very best method to predict the market value of a home. Learn how to do this in your sleep.
- Where should the initial asking price be set for a home? Your answer to this question will demonstrate your basic understanding of the market. The answer depends on the average selling-price-to-asking-price ratio and the rate of increase or decrease in area home prices. Be sure that you have up-to-date information on these statistics.
- What usually sells your listings? The MLS? Signs? Advertisements? The industry average is overwhelmingly clear: Over nine out of ten home buyers come from the computerized MLS through another agent, not from your direct sales efforts. You are in touch with the market: No, you will not actually find a buyer directly. Therefore, the information entered into the MLS computer is critical to your success! You are your seller’s connection to the buyer. Your computer literacy is one of the most important things you have to sell.
- How many showings should a seller expect each week, and how many showings will a home need to find a buyer? Provide valuable information so that your seller knows what to expect. Traffic is the key to success. Know these numbers.
Be sure to answer these questions for your buyer clients:
- Do you offer buyer-broker (or buyer-agent) services? The concept has become very popular in some areas. If buyer-brokerage is popular in your area, you will be able to provide valuable services.
- What are some of the critical decisions involved in searching the MLS to find a home? You have to think like a computer in order to find your buyer a home in an efficient manner. Be sure you know how to work the MLS like a champion, and then sell your expertise.
- How will we determine a fair price to pay for a home? Describe the information available in the MLS database on comparable sold properties, including the asking and contract prices, and summarize how the information will be utilized. Do you provide your buyers with a market value analysis?
- How should the price be set for the initial offer? This question should lead to a general discussion about how the initial offer relates to the final offer and how your buyer can avoid ending up there. Since the discussion will be highly hypothetical at this point, focus on your negotiating experience.
- What is your strategy for a hot sellers’ market? Be prepared describe how you will beat the other buyers to win your buyer’s home of choice.
Use the questions and answers above to define your value to your clients. Your ability to have them understand your critical role in a real estate transaction will help ensure their satisfaction and their appreciation, which is critical to your long-term success.
