I was talking with a Diamond member of Pittard’s Winners Circle recently. The topic came around to telling sellers the truth about the likely selling prices of their properties.
This million-dollar producer said, “I tell sellers that in this market their properties will sell for $x. If they aren’t willing to price near that, I won’t take on their listing.” He hastened to add that he explains this to sellers more tactfully than that, but his point is that sellers must be told the truth about the likely selling price by their lister. MORE
“It takes courage to tell the truth and jeopardise the listing”, I said. The top performer replied, “It’s more a matter of integrity”.
Of course, he’s right – avoid the truth, or alter the price to win the listing, and you tarnish your integrity and your reputation. So why are agents known for lying about the price, or lying by omission and avoiding price completely?
The answer is skill. It takes superior presentation ability to tell the truth in real estate and still win the business. If you intend telling the truth – and you should – you’d better be an outstanding presenter. And I mean outstanding.
But there are rewards, aside from the well-being that comes from knowing you tell the truth.
As an example, I attended an auction where the agent quoted $4.5 million to the sellers at the listing, and $3.5 million to the buyers during the open homes. He came unstuck when there was only one bidder at the auction. Now he had a $1 million gap to negotiate. Trust me when I say that he wasn’t that good a negotiator. It was passed in.
The property eventually sold for around $4 million, which was about the right money, but it could have sold months earlier had the truth been told at the beginning. And although the agent made this sale, will the sellers ever use him again? Will the buyers sell with him when the time comes? I don’t like his chances.
You see, integrity matters. You can’t be honest most of the time – it’s an all or nothing concept. Sure, it takes tact and finesse to deliver it, but the truth is an underrated sales tactic.
Why take on listings that aren’t going to sell? Why take on sellers that won’t listen to the truth, who don’t trust agents anyway, and who price so high that nobody enquires? Why take on sellers who aren’t serious, who consume your time, energy, your company’s money and your morale. When they leave to go to another agent, they don’t even sincerely thank you!
Even if you use the sellers’ money to pay for advertising, rather than your company’s money, it does your reputation no good when you take clients’ money and fail to sell the property.
Perhaps your market is so hot that properties sell anyway. But it won’t always be like this.
Agents who inflate the likely selling price with sellers in order to win the listing – who ‘buy the business’ – might get away with it during a boom market, but in a down market this horrible practice no longer works. Many agents paint themselves into a corner.
In our sales program, Winning Ways – A Smarter Sales Career, we teach real estate salespeople that when an agent quotes two figures to buyers by way of a range, the lowest price in that range becomes the de facto list price. MORE
Say an auction property is passed in with only one bidder. The sellers’ reserve is revealed to be $4.5 million but during the inspections buyers had been quoted $3.6 to $3.8 million.
The agent that quoted $4.5 million to the sellers while quoting $3.6 to $3.8 million buyers now has a negotiation gap of $700,000 at best to $900,000 at worst.
The agent has created the self-imposed problem of The Impossible Gap.
Let’s be clear: if you are not a good enough negotiator to tell the sellers the truth at the time of listing about their likely selling price, and take on the listing on a foundation of honesty, you are not good enough to negotiate a $700,000 price gap, especially in a down market.
No doubt I’ll be howled down by those who say this practice is not widespread, just a strategy used by a few ‘bad apples’. But let’s get real. In Victoria, many high-profile cases have seen agents fined hundreds of thousands of dollars for this practice. One day NSW and QLD will follow suit, if they are serious about stamping out the practice.
But integrity aside – from a salesperson’s perspective, why would you resort to tactics that create a no-win situation for you and your clients?
The truth is a wonderful sales tactic if you know how to deliver it with tact. I cannot recommend it highly enough.
Do your results fluctuate? Are they persistently low? Have you ever found yourself blaming outside forces, such as the market or difficult clients, for a run of bad luck? The good news is that this can be fixed.
In my book, Why Winners Win, I name four Success Ingredients: Attitude, Knowledge, Skill and Competent Action. MORE
With the right attitude, you will study. You will practise what you learn in the field. Through this practice you will develop skill and your actions will become more competent.
But you can still be competent and not do enough competent actions, so your results will still be low. This is why self-management is so important.
Some call this time management, but we really don’t manage time; we manage ourselves within the time we have available.
Many salespeople drift through their day without purpose because they don’t have a plan. Those with goals and plans get more done. They manage themselves and their time because they know where they are going, and why.
So… do you have a plan?
The key to skilful self-management is to know what needs to be done and to be willing to do it.
Winners treat their time as a valuable asset. They guard it and give it to the right people. They don’t allow the wrong people to steal their time.
With these foundations, self-management is much simpler. No time is lost thinking about what needs to be done next – just open the plan and follow the next step. And by constantly studying and improving, little successes fuel motivation to do more. Gradually, inconsistent performance begins to turn into consistent, climbing results.
You might not be doing enough of the right actions right now, but you can fix it.
With a plan designed to lead you to goals you really want, you will find self-management easier than you first thought.
Give it a go.
“The 30–Day Rule states that the prospecting you do in this 30 day period will pay off for the next 90 days. It is a simple, yet powerful universal rule that governs sales. Ignore it at your peril. When you internalize this rule, it will drive you to never put prospecting aside for another day”
Jeb Blount – Fanatical Prospecting
Where is your next listing coming from? If you don’t know, you’re heading for a performance slump. All salespeople should have a full pipeline of prospects – warm leads that will soon germinate into listings, then into sales, then into income. MORE
Many salespeople believe that their stock levels, and the saleability of their stock, are at the mercy of the market. This thinking leads them to believe that when the market turns down, so too will their results.
Leave market-driven thinking to your competitors. Fill your pipeline with prospects and you will have a regular flow of incoming business.
Some real estate trainers appeal to the mediocre many by saying that prospecting is dead, that prospecting in the modern age is done through social media. Be careful of listening to these gurus – they will send you broke.
Social media is a marketing tool, best left to your agency to set up and maintain. If you are a salesperson, your most effective method of self-promotion over the long term is face-to-face or voice-to-voice – that is prospect at doors or prospect by telephone.
In other words…
TALK TO PEOPLE!
Prospect – 40 potential sellers every day, or 200 per week –follow up diligently and over time you will have a source of warm leads. Whenever you sell a property, prospect harder and find a listing to replace what you sold. This is a great habit to develop and will insure you against running out of stock.
In the absence of a pipeline of prospects, generated through constant prospecting in high numbers, you will always be desperate for listings. You will always be ‘looking under rocks’ for listings.
The Winner’s Creed is:
“Whenever I make a sale, I will not congratulate myself until I replace the listing I sold”.
Make it your mantra. Talk to people. Fill your pipeline with prospects. Your reward will be a high and consistent income.
In 30 years I have interviewed countless winners, and have noticed one big difference between winners and their mediocre counterparts:
Winners do the hard tasks. Winners understand that the hard tasks pay.
In truth, the ‘hard’ tasks aren’t hard at all. Simply, salespeople don’t like doing these tasks so they avoid them. In their minds, they make these tasks seem harder than they really are. They invent excuses for not doing them. When asked by their leader, “How much prospecting have you done this week?”, they reply, “I’ve been too busy”. This is nonsense, and a fundamental cause of low results. MORE
I doubt that there is an occupation where people love every task they are asked to do and this is certainly true of Sales. Salespeople do not like certain tasks, but like them or not, some tasks are important and must be done.
How much better would your results be if you did more of these important tasks?
Gone are the days when we take on sellers who say, “If I get my price, I’ll sell”. Leave those clients for desperate salespeople who don’t prospect. Choose motivated clients and give effective listing presentations. The better your listing presentation, the more saleable your listings will be.
This brings us back to prospecting – talking to people – delivering good listing presentations, better seller coaching, and working with qualified buyers. One activity links to others, and all lead to more negotiations and then to more sales.
The reward for doing the actions that most salespeople avoid is that you get results that most salespeople don’t get. The hard tasks pay!
The market often gets blamed for poor results, but it’s not the market: it’s low knowledge, low skill and low action levels that cause poor results.
I can’t control the market, but I can control me. I can study and learn. I can practise and hone my skill. I can do more of the right actions – those tasks that mediocre salespeople call ‘hard’.
And so can you!
A common complaint from leaders is that their salespeople lack focus. It has a been constant theme in my 30 years as a real estate agency profit consultant.
One leader said his salespeople had the attention span of a gnat.
A short attention span is not a problem for most people. Watch people doing leisure activities – things they love to do. They have no trouble giving these activities their full attention. MORE
When they watch a film at the cinema, they’re not fidgeting or walking in and out. If the film is interesting, it gets their full attention.
When the activity is interesting, it has no trouble garnering focus. Salespeople who aren’t focused on the job have managed to turn selling into a chore. Simply, they don’t find the work interesting.
Most salespeople love to do listing presentations and put sales together – who doesn’t? – but won’t do the more mundane tasks that increase the likelihood of them getting to the interesting tasks. Prospecting is a classic example.
Because they avoid prospecting, they do fewer listing presentations. And so they hop from task to task, working on the easier, less productive tasks.
Jeb Blount said in his excellent book, Fanatical Prospecting, that the number one reason for failure in sales is an empty pipeline, and the root cause of an empty pipeline is failure to constantly prospect.
Salespeople who have clear goals and written plans seldom lack focus. They have fun at work, and they get results.
They might find some tasks more interesting and enjoyable than others, but they do the tough tasks because they are working toward something bigger: they are working toward meaningful goals, something they WANT.
With a bigger picture to focus on, they understand that by working on the right tasks they will not only achieve their goals, but also derive huge satisfaction from the process of getting there.
Goal setters know what I am talking about.
Studies have shown that when somebody sets a goal – a goal that they have a 50/50 chance of achieving – they immediately feel happier. They are then happy to do tasks that would be otherwise judged arduous or mundane.
Short attention span? That is for goalless drifters.
Professional sales is not a lottery. It is not a matter of luck. You can control your results. You can achieve meaningful goals. And you can focus, over the long term.
Below are snippets are from surveys conducted by Roy Morgan over a 17-year period. I have been following these surveys for 25 years and note the position of our industry moves very little in the list of most trusted professions.
Most Respected Professions: Nurses, Pharmacists and Doctors
Least Respected: Car Salesmen, Journalists and Real Estate Agents.
Roy Morgan 2000 MORE
Directors of Public Companies on 25% (down 1%) and Business Executives on 18% (down 2%) are both mid-ranged in the overall result, but well ahead of Real Estate Agents who have equalled their record low rating of 7% (down 3%) and perennial cellar-dwellers Car Salesmen on 4% (unchanged).
Roy Morgan 2017
Yet over the past 30 years I have met many thoroughly decent real estate people, far more than the ‘other type’.
So why does our industry have such a poor reputation? We know the answer:
You can argue as much as you like about whether this happens, but a recent spate of $800,000 fines on some Victorian agents for over or underquoting should be ample evidence that this practice is alive and well. And I wouldn’t suggest it stops at the border into NSW, Queensland or South Australia.
Character issues aside, let’s think about why it happens. One reason alone:
Salespeople do not know how to handle PRICE.
Salespeople know that regardless of the market – boom or down-turning – sellers almost always expect more for their properties than they are worth. Honest agents who give honest price appraisals risk sellers’ displeasure and risk losing listings. So, the weaker and/or less ethical adopt the attitude, “If you can’t beat them, join them”, and quote high because “that’s the way it’s done”.
But now they paint themselves into a corner. They have begun the relationship on a foundation of dishonesty. By allowing sellers to believe that their unrealistic expectations are achievable, salespeople now must use techniques to persuade sellers to retreat from their high prices. Enter buyers.
Salespeople lure buyers with low price ranges – “Offers above $x” – their argument being that they will get buyers to their open inspections and, once they get offers, they “can negotiate the offers upwards”.
The fault with this thinking is that if you quote low you will get low offers. And when you negotiate from a low base, you will always get a lower price than you’d get had you started high. Any negotiation expert will tell you that.
Agents then present these low offers to sellers saying things such as, “Market feedback is lower than we expected”. It used to be called ‘Conditioning’. Now it’s called ‘Educating’. The technique is the same – deliver good news during the listing and bad news during the marketing campaign, with the hope of getting sellers to reduce.
How often have we seen buyers who have been given low price estimates pay for pest and building reports and then attend the auction, but never get an opportunity to bid because the price has galloped beyond the lower price estimate given to them by an agent?
These are disgraceful practices and agents who indulge in them should be struck off for life, not merely fined.
Foundation of Honesty
The smarter approach is to lay client relationships on a foundation of honesty. Tell sellers the truth about the likely sale price of their property. I realise that this is easier said than done: it takes skill.
I have often said, “To tell the truth in real estate and still win the business, you had better be an outstanding presenter”. There are techniques that will allow you to handle price honestly, with both buyers and sellers.
Learn these techniques and you will make sales and keep your integrity intact. You will enjoy a successful real estate career.
Don’t let anybody tell you that it cannot be done. Handling price and laying foundations of honesty make for a rewarding and prosperous career, and meaningful client relationships.
Many agents do business this way and you can too.
Let’s give some thought to how we can make more sales despite the gloom and doom about the current state of the real estate market in many regions.
The market is your reality. As professionals, we must learn to thrive in all markets, whether booming, static, or down-turning. If you don’t like the reality of this market, ask yourself, “Can I change this?” MORE
You know the answer. So you only have two options: 1. Handle it; 2. Leave the industry.
Our beliefs determine our reality. If you believe you can make sales, you will make sales, provided you do the right actions.
Don’t listen to people who call it a ‘tough market’. Are sales being made in your area? If so, why aren’t you getting a share of those? Think: what must you do to make sales?
There are sellers in your area who want to sell or need to sell. Find them. Talk with them about pricing their properties so that they sell. The longer they wait in a falling market, the lower the price they will receive. Help them to get moving. Instil a sense of urgency into them. Believe that there are plenty of sellers like this just waiting for you to find them, and then go looking!
Have you heard any good news about the real estate market lately? Have you heard anything about the market that you didn’t already know? So why are you listening, reading or viewing this drivel?
The only purpose served by negative market news is to inform sellers so that they understand the importance of pricing their properties to sell quickly. Beyond that, this negativity will eat at your morale.
Turn off the news.
Have a plan. Take positive action and have a plan that will lead you to your goals.
You must know where your business will come from. Examine all the possible listing sources (for example For Sale By Owners – FSBO) and for each source ask yourself, “If I spoke to 50 [FSBOs], how many listings would I get?”
Your knowledge of your ratios is crucial, too. How many potential sellers do you need to speak with from each listing source to get one listing?
If you spoke to 40 people per day for 5 working days, for 20 days a month, that’s 800 people spoken to in the month. How many listings would that give you?
A lot more than you’d get if you didn’t speak to 800 people.
Positive action will give you a feeling of being in control. Try it.
Change Your Tactics
What worked in a boom doesn’t work in a down-turning market. Conversations with sellers in booms are different to conversations with sellers in down-turning markets.
The key to making sales when the market changes is to adapt.
A popular definition of insanity is repeating the same actions while expecting a different result. If what you’re doing now isn’t working, change tactics.
What book are you reading now? When was the last time you attended a sales seminar? What audio or video on sales have you viewed in the past month?
And I don’t mean YouTube and Ted Talks. Professionals use the ‘free stuff’ as a secondary training source, not their primary training source or their only training source.
YouTube and blogs like this are good for topping up knowledge and for getting you thinking, but they are not organised into cohesive training systems, such as Pittard’s Winning Ways – A Smarter Sales Career. Get more of the training you need, not ‘fast food’ snippets from blogs, short videos and podcasts.
In my book, Why Winners Win, I say that acquiring knowledge isn’t enough. We must practise what we learn in the field and keep practising until we get it right. In that way, knowledge turns into skill, and skill is what you need in challenging markets.
Knowledge + Practice = Skill
Add to this Competent Action and results are inevitable.
A swear word for some, but winners work – they work smart and hard. Prospect more – put yourself in front of more potential prospects. Business is out there. Believe it. Go looking for it!
A Better Alternative
In challenging markets, it can be easy to wallow in misery, to blame the market, or some external force that’s preventing you from making sales. That thinking and lack of action can send you broke. Even worse, it can drive you out of the industry feeling like a failure.
A better alternative is to take charge. You can’t control the market, but you can control YOU.
You can find sellers who want or need to sell. You can make sales. You can win.
This market could be the best thing that ever happened to you. It’s all a matter of perspective, and of attitude and action.
A change in the market has exposed many of those who looked like winners during the boom. Back then, it was easy to look like a hero – if you could get the listings and held onto them long enough, prices would rise to the sellers’ enthusiastic expectations and you’d make a sale.
Times have changed. Now skill is required to make sales.
In the down-turning markets of Sydney and Melbourne I have noticed the emergence of two distinct types of salesperson: MORE
I recently visited a real estate office and spoke with a salesperson who last financial year earned $160,000. In this current financial year, he admitted that he’d be lucky to make $60,000. He said that he’d given up on his goals.
But did he really have goals? I suggested that if he had goals, he would have adjusted to suit the changing market, increased the actions necessary to achieve his targets, and got back on track to achieving his goals.
I asked him to show me his goal calculations and the plan he put together to show how he was going to achieve his goals. He didn’t have any plans. He hadn’t calculated his goals.
And in the absence of a clear reason to achieve, and to do the actions necessary to achieve, his results drifted downwards, helped along by the challenging market.
His leader asked me to talk to the team and suggest some actions. He didn’t like my reply.
The leader thought I was going to read the riot act to the team, tell them that they’re a bunch of lazy so-and-so’s… but instead I said that I didn’t blame them for not doing the right actions – I said…
“Nobody around here has a ‘Why’.”
Nobody had goals. Nobody had a reason to do the actions.
The result? They had become salespeople in group 2: they had become salespeople who can’t sell.
They can fix this, but not by doing the same things they’ve been doing.
It’s an old chestnut, but goals work. They inspire us to do the actions necessary to achieve them.
Sure, a downturn in the market might be a setback, but with a goals-focus, a market change is but a blip on the horizon – winners adjust and get back to work on the right actions.
After all, they have a good reason to do so!
A lot of leaders and salespeople are complaining about the ‘tough market’. But is the market really the whole problem?
The advice I’ve been giving to Pittard clients is that we can’t change the market – it’s the hand we’ve been dealt – and so instead let’s concentrate on what we can control. MORE
My friend, Peter O’Malley, author of Inside Real Estate, said:
“When markets change, salespeople need to re-skill.”
Techniques that worked during the boom, no longer work. Conversations at the listing presentation are different to boom-time conversations. Price must be discussed carefully, and sellers must understand that the longer they wait, the lower the price they will eventually get.
Do you know how to make listings saleable in down-turning markets? If not, it’s time to re-skill.
You must be choosey with the clients you take on in challenging markets. List sellers who aren’t serious about selling and they will consume masses of your time and office resources for no result.
Even worse, they can shatter your confidence and morale.
Sometimes it is better to be the second agent that takes on a listing and not the first. And it is never a good idea to take on those sellers who say things like, “If I get my price I’ll sell”.
You can wallow in the difficulty of this market, or you can rise to it. It’s your choice.
It follows that if you intend being selective with the clients you take on, you had better be prepared to do a lot of prospecting. This will increase your opportunities of finding sellers who are serious about selling.
If you have not set clear goals, calculated the income you need to achieve and designed a plan to achieve that income, you are probably drifting downwards with the market.
Goals and targets give you focus – and in a challenging market you need focus. You must know how many people you will speak with each day. Thanks to the goals that you want so badly, your actions will be focused. Results are just a matter of time.
You Are Better Than the Market
Before you are tempted to blame the market for poor performance, remind yourself that this thinking can send you broke.
Look to your skill, focus and client selection.
What are you reading right now? What audio or video programs have you studied recently? Are you learning material that will help your career?
Your results will improve when YOU do.
You are better than the market. Now go and prove this to yourself.
Let me introduce you to Joan Carter, who retired on 30 June 2018, ending a successful twenty-four year career in real estate sales.
Before real estate, Joan was a school teacher. Throughout her career, she was often in the Top Ten Salespeople in the Pittard rankings. She was part of a very impressive pool of winners whose results far exceed typical industry averages. Joan was often in the top three. MORE
Throughout her long career, Joan set a standard to which many people would never have the guts to aspire. She was a shining example of everything a real estate salesperson should be – a person of character who’d never lie or stretch the truth to make a sale. She was a winner who wrote high figures consistently from the beginning to the end of her career. Joan was no ‘one-hit wonder’.
I’ve heard salespeople say things like, “I’ve been in real estate for thirty years” as though it’s supposed to mean something. What does it matter if you’ve been in real estate that long if your results are poor?
These people will say, “I don’t need to prospect – I get plenty of referrals”. But they have seldom nurtured their networks and the truth is they don’t get that many referrals. Some of these self-appointed superstars write little over $130,000 in fees per annum.
Competence doesn’t just happen. Time in the industry is no guarantee of competence or high results. Nor is it a guarantee that you have joined the ranks of true professionals.
Champion cyclist, Anna Meares once said, “True success is measured in longevity”.This certainly sums up Joan Carter, who enjoyed a long career with high results and happy clients.
Not a person to cruise toward retirement, Joan decided to finish with a bang. In her last year in real estate, she produced $815,327 in fees, all in a country town with a population of 3,800 people – that’s people, not properties. In her last quarter she produced $188,446 in fees.
Now that’s a winner!
Ask Joan the secret of her longevity and success and she will tell you that she is a product of consistent training, dedicated practice and large amounts of competent action. Joan was never too busy to attend training and never once uttered the famous loser line, “Been there, done that” when referring to training.
The reward for competence is high levels of client satisfaction, trust, and a high income.
It’s worth working for – competence doesn’t just happen.
During the boom, I heard many salespeople talk up their results. Many of them are quiet now that the market has turned. Now I see many leaders and salespeople in a state of panic. They’re not making sales and they’re blaming the buyers.
It’s time to get out of panic mode and get to work.
Do you have listings? How many are you personally managing? If you have stock, you can talk to the owners about the state of the market. If they want to sell, they must understand that their properties are commodities on a market. Overpriced properties don’t sell. MORE
Are you prepared to recommend that people withdraw their property from the market if they won’t reduce to a price that sells? What good is overpriced stock and stubborn clients? They demotivate you and give you false hope. Some sellers need to be politely ‘fired’.
Are you prepared to prospect to increase your chances of having motivated sellers to work with? Inaction has consequences. So does action.
Don’t blame buyers. They will buy properties that are priced fairly for TODAY’S MARKET. You are not paid to get yesterday’s prices.
If you want to motivate your buyers, motivate your sellers first!
Properties that are priced right sell.
The days of “If we get our price, we’ll sell” are over! This is not the market to ‘try’. This is print-age mentality. In the days of print, about 1 in 30 used to buy the properties they enquired about. In the age of digital advertising, it’s more like 1 in 6. Sellers who sit on the market overpriced, burn good buyers.
Consider the Digital Footprint – if buyers see an overpriced property sitting on the market, they begin to wonder either of two things: What is wrong with the property, or
What is wrong with the owner?
They think that something is wrong with the house, or that the owner doesn’t want to sell. Either is not a good reputation for sellers to have, about themselves or their property.
In the days of print, sellers could sometimes find a naïve buyer who would pay over the market value. They don’t exist anymore. Buyers do their research online and know current market prices as well as agents. Holding out for a price is an outdated strategy, especially in a falling market where the longer you wait, the lower the price you will receive.
The skills you needed during the boom are different to the skills you need when a market turns. Now you must have those tough conversations with you sellers. Put price on the table and address it head on. Avoid those conversations and you’re sure to fail.
Sales success still comes back to this one question:
“If your listings were half price, would they sell?”
A good question to ask your sellers, too.