Second Consult
The prospect is a senior (still working) who is moving from Sunny SC back to his roots in snowy rockford Illonios. He was a FSBO I approached 4 months ago, gave him a free virtual tour and one page web site.
Pre-Approach
gather data om actives and solds and FSBO's and market conditions.
printed off tallies on web hits to his virtual tour and one.
printed off tallies for my tours, realtor.com hits.\
printed off a diagram of teh entire home sell process
used three pags from my listing presntation-Price, Timing, How Homes Are Sold--These I would use to get his attention.
prepared a Consultants Worksheet for gathering data from client
developed a powerpoint to cover the consulting model vs conventional real estate model
Approach
Clients will steer you off course if you let them. They may want to get right down to business.They' may start with what's it going to cost or are you going to reduce your commission--
I started to get pulled off track almost immediately!
The plan was to show him the hits his show had received and compare it to the hits my a listing received--just a "startling" get attention, smack him upside the head, kind of thing to get his attention.
I finally got to do that. Then, i explained the route we'd take--the reason I was there was to
(a) discover his needs--(wife is now in Rockford and he is "baching it" )
(b) tell him a bit about myself and my service
(c) explain the difference between my model and conventional real estate services
Second startler--what it really takes to sell a home--a diagram of all of the elements involved from soup to nuts--(I have a special report which is almost done and I will use in the future to send to prospect--which could also become an ebook.)
Prior to meeting, I did some preliminary research and pulled actives and solds (kept to myself but it indicated his price was out of line--in our very first meeting he was adamant about getting his price--To cut to the chance---he saw that he would have to adjust and would "have to bite the bullet" and that he was being unrealistic...I also found FSBO's (3 of them at lower prices than his)
Situation analysis (Asking questions)
My plan was to go down a list of questions which addressed his comfort level, concerns
about each element in the process of selling a home--that didn't happen...
I only got to agreement on what his objectives were. He kept interrupting with questions--particularly about fees, commissions. (discuss with wife reduction of price, consider paying for CMA, bitig the bullet and "moving on with their lives")
The prospect has bought and sold two homes without an agent. He wrote a wonderful
description of his home--His current home is above average in terms of neatness, there are some redesing issues (color) but this is minor. He has a killer lot
What I also found is that he really didn't know the reality of how things are, how real estate industry works--when an agent who is after a listing walks into a prospects home in give them a "core dump" they (we, me) don't realize how little the public knows!!!) and we' spent time on that (also covered in my power point.)
I then took him through my consulting presentation which I have been working on
and still needs tweaking--I showed him Mollie's seller analysis and gave him homework. (he is going to review and go thru with his wife who he'll see next week and he will call me so we can get together again or to tell me to bug off.
I showed him SMART PLAN and showed him how we' could arrive at a plan for selling his
home and that with a simple check mark, he could eliminate what he wanted and add what he wanted (he asked who developed this--I said, there is a man who flies in a UFO whose name is Merlin (Skunkworks Commander)...seen from time to time, soaring in the skies and dropping in on occassion)
He came to the conclusion that he's going to have to get real with his price. On both my first consult and this one, I also encouraged my prospect to call in a couple of realtors-- to compare notes, check what I've told him about everything (market, how they do biz, what they'll do,etc.)--against what they say.
But, there is something more to tell here...the prospect wants a proposal--I can use smart plan to craft a very unique program that could include coaching--coach him thru some elements--because he has experience selling homes on his own and because at every turn he was asking about the money--realizing he is going to net less, he is scared and disappointed.
(I need to hear back on this and whether or not you think it's too risky or not appropriate
--some negative thoughts--"I don't know about this--or maybe I should just walk away from this one...coaching and liabilities...e&o insurance...YIKES")
So a proposal might include, Fixed rate for a CMA, DIY staging (minimal required) with coaching, I review contracts and offers, I give him my system and he makes the calls, etc.--I do "Virtual Assistant-Coaching" for the transaction management-- these are just some ideas.
And I'd appreciate your wisdom and feedback..,
I think using SMART plan straight out of the box with homes that are priced above $300,000 makes the most economic sense for homeowners, below that
SMART PLAN can aid in developing packages for homes below that (my home seller is asking $219000) (Thoughts please, Merlin)
I can put into SMART PLAN the COACHING option, adjust hourly rate, charge fixed etc.but I'd like feedback on what you think of this coaching option--I already have the systems in place it would just be him doing it instead of me.
He also asked me about exclusive agency as opposed to exclusive right to sell--what do you all think of that?
So, again, there seems to be a two-stage deal--I am the "pre-listing package" Now I go back with a plan.Do I have a lot more credibility in the eyes of the prospect? I don't know. Is it more time and trouble--it would be expensive to mail me. I think it's worth it to get face to face in this discovery process--it is all about building trust.
His parting words were, I appreciate your professional approach--that made the whole hour and a half worth it
There's a lot of stuff here and I could write more...but, that would be like eating too many pancakes with syrup--I don't want to make your eyes glaze over just before you're about to throw up.(Gross!) Thanks. I am done.
I lied. I am not done--P.S. my daughter got engaged! annouced via SKYPE last nite! ain't technology wonderful? I really like my future son-in-law too.
PPS-There are fewer typos in this then there were yesterday's post--not sure about grammar...
John,
There are a lot of questions that need more background info to answer succinctly. But, here is my first take...
1) I would not do exclusive agency. He needs to be committed to you because he sees the value in your approach.
2) If you can get to a listing agreement, include the SmartPlan as part of the agreement. The very nature of the plan documents the services to be provided and those not provided and he signs it. That's the protection. If needed, create a MOU that documents other conditions not reflected in the plan, client must sign and it needs to be incorporated into the listing agreement.
3) Go ahead and create a plan you believe that will assist him in meeting his objectives. You are the expert. I rarely (if ever) let a client pick and choose services. The reason: my name is on the listing and if a client cannot or does not meet my professional standards, it is my reputation at stake.
4) I go over a SmartPlan with a client but never give them a copy unless they sign a listing agreement. Then and only then do they get a copy because it becomes part of the agreement.
5) This may be an instance where a simple hourly rate for advice and counsel (consulting) is more appropriate. Get a retainer and bill monthly for your services. Be sure to document the understanding.
6) The SmartPlan can work at all price points. Remember, the objective is to be competitive, not cheap. A client's recognition of the value is key.
I typically offer SmartPlan users a short followup consultation to review your approach for the "first time out." I would be happy to go over your strategies with you off the exchange. Just send me an email to schedule (today is fine).
Merv
Hi Everyone,
Here's a newbies unsolicited advise. When is the wife going to be back in town, or is she? As long as she is not part of the process he will always have a way out.
Also, I would ask him if he is buying into any of this or are we just wasting our time. If he says he isn't - it's over. Don't waste any more time. He he says yes on some parts and no on others, you at least know what to work on and where you stand.
Without knowing very many details, my gut says this is a time waster. Given he has already sold two homes himself; giving him advice on price, staging, comps, etc. before getting him "on board" with the process is what I call "Spilling your candy in the lobby".
Just my two cents - you get what you pay for.
I DEFINITELY did not want to say anything until Merv responded...our Expert SmartPlanner.
I do have one more question, Merv...."create a MOU"???? What in the world is that???
I'd also have to agree with Merv's comment about an Exclusive Agency agreement. I don't do them for the simple reason that you and the seller are in direct competition with one another for that buyer (who may see the property with another agent, then, realizing the seller is also "by owner" contacts the seller to squeeze out the brokers). Frankly, my "impression" of this seller is that he might also be so inclined. And unless you have a system of recording every buyer who views the property and who they came with, you leave yourself open to discovering too late that a commission is owed a cooperating agent. When you put the listing in MLS, YOU are offering the compensation, not the seller. If he's paid you for "services", but not an amount that assumes a coop fee, you could be on the hook. It's just not worth it.
I'll also be curious as to how he completes the "needs analysis". Particularly since he's sold by owner before (btw....did he happen to say WHEN he did that? How was the market at those times). This guy is definitely predisposed to believe he "knows what he's doing". Maybe he knows more than the average guy, maybe he's just been very lucky with his two priors. But hopefully he understands that THIS IS NOT THOSE TIMES.
Couple of thoughts come to mind:
*** What are agency laws are now vs when he's sold in the past (ie, here in Illinois, if he'd sold his last home in the early 90s, we were, like virtually everyone else, a sub-agency state; now we're designated agency; his buyer may have their own representation
*** Is he planning to cooperate/compensate an agent who brings a qualified buyer to his home (I think we shoot ourselves in the foot all the time when when discussing commissions with sellers because we begin by quoting a 2 sided fee with the assumption of what we will be paying the other side. Particularly with By Owner sellers, many, if not MOST sellers are willing to pay a buyer's agent. My experience has nearly always been that they will pay me what I'm likely to be paid if I sold an MLS listed property...rarely do they balk at that.
If he IS willing to pay a buyer's agent, then you're now discussion the advantages of full service/full representation (if that's what's being considered) for X%/2 rather than X%. And if he is insisting he won't pay a buyer's agent, he's got other big hurdles...
*** With over 80% of buyers doing home searches on the web, it is very likely any buyer knocking on his door will be MUCH BETTER ARMED with info about his area, about recent sales, about pricing than they have been in the past. In other words, it's much more difficult for a seller to "pull the wool over their eyes" now than it would have been in the past
*** The vast majority of the QUALIFIED buyers ARE WORKING WITH AGENTS and want their "representation". If he's planning "not" to cooperate, he risks losing the best qualified purchasers, NOT TO MENTION WHAT WOULD LIKELY BE A SMOOTHER TRANSACTION because a Pro would be handling the troubleshooting.
Sometimes big struggles can certainly pay off....but sometimes they're simply more trouble than they're worth as well. You're getting to "know" this guy. How would you "feel" dealing with him on a regular basis? Would he be an excessively "high maintenance" client if you did work with him? How much time do you think he'd sap from you? What else could you be doing with that time?
This may be one of those for whom you simply provide certain services (for a fee), and perhaps step in once he has a buyer and help him write the contract, then monitor the transaction through to close (again, for a fee). I would not want to "step in" AFTER the contract is written because he's just as likely to create an untenable contract as not.
Good luck...and regardless of the outcome, the PRACTICE he's giving you is worth its weight in gold!!! And the fact that YOU'RE SHARING THAT PRACTICE with all of us is as well!!!! So thank you for doing that!
Now, for the important matter of becoming a new IN-LAW! Congratulations! And I'm delighted to hear you really like your soon to be son-in-law!
HTH.....JudiB
Bob,
Thanks for the insight, --yes, "spilling one's candy and building submarines"--
I did free work before ACRE. I didn't do a free consult. An initial meeting can't be void of facts and every professional does his/her homework.
I did not tell em how. I asked questions about the "What" the "Why" I put more doubt and more questions in his head than he had before my visit...(very adamant about sticking to his price) I did a cursory search of activity not a CMA.
This prospect called me for this interview. He even rescheduled once.
Could be that I wind up with zero and I am still learning but it's good practice--and a numbers game--While I am still in this learning mode I do not see this as a waste of time.
thanks again, have a good one...
Wow John!
I agree, as usual, with Joeann... How much FUN! (WHAT'S THAT MEAN? It's like too much $$$, a car too fast, a girl too pretty...) lol...and yes, that is probably not in the order it should be, but you get the point ;-)
First of all a big congrats on the addition to the family, and a sad apology if your daughter wants a BIG wedding ;-) if you are following tradition and the Brides side 'PAYS' FOR IT, lol!
Secondly, I JUST couldn't stand it and have to chime in with my .02 here:
THIS guy reminds me of my buddy Bob, a client from YEARS ago. He was a CFP, thought he knew it alltoo, didn't need a REALTOR, yet called or emailed several of us for free advice.
I went in with my Consulting Armor on, and the battle began ;-) but of course - since he knew more than me, he was not going to 'pay' for anything, he was just 'using' other people to confirm or deny his price and approach. Much like people do now, because what the heck, all you need is the internet, right?
After TWO YEARS of doing fsbo, listing with discount companies, MLSOnly back to fsbo, and listing with another agent who confirmed that is price was attainable, he continued to call me for free advice, and I continued to give it to him because I wanted to see what he would do or say - he was an experiment for me unbeknowst to him, when I figured out his 'game plan, I was using him as much as he was using me, so the free advice he got was worth it for me ;-)
TWO YRS later he calls yet again, so I decided to experiment again and say something I wouldn't normally say to someone I really wanted to get business from....
I told 'my experimental 'buddy Bob' that was it was time for him to S**t or get off the pot, or stop calling me or pay me, or get another pot, rofl!! It was time to get married or stop dating, and if he wanted to get married he need to produce a BIG DIAMOND ring and get down on bended knee, and FURTHERMORE that he owed me several hours of free CFP advice ;-) and that if he kept calling me, he obviously trusted my opinion and either hire me or LOSE my number.
ROFL! WHAT FUN!!
I am happy to say, it all turned out well in the long run. He did HIRE me, he DID pay me, and I DID sell his house (IN 2 WKS).
He stayed married to his wife who was threatening (lovingly) to make him sleep in the dog house if he didn't stop trying to 'go it alone' and to this very day, we still stay in touch and laugh about this 2 yr ordeal and he has sent me many referrals. He moved about 3 hrs away from here, but comes in to town just to meet with me and have lunch every so often, so it all turned out well. I refer people to him who need CFP advice, and he refers people to me.
So, my unsolicitated .02 worth of advice is to PRACTICE on him and learn, Do or say things you might never do or say with others and see where that takes you. There is nothing to lose by practicing on him even if you never get paid because the price of education is PRICELESS.
You never know where the untaken path will lead you unless you turn that direction.
Good luck, and please let us know how this exciting story (and the wedding) turns out.
;-) Paula Bean
John,
As Sandler would say, there's nothing wrong with a no or getting the practice in (as long as there is a lesson learned). Go for it! As with Paula's comments above (she strip lined the poor defenseless guy), saying "I don't see us working together" or "I get the feeling you're just not interested in this" is not trying to end the deal, it's trying to get the deal moving either backward or forward. When the pendulum is at a stand still, that's when you are in trouble.
Way to go Paula!
remember, saying NO is also saying YES to yourself.
Thanks Robert for your support and understanding!
I've always had several philosophies:
If you want to be found...stand where the seeker seeks"
EVERTYTHING THAT GOES AROUND, COMES AROUND
AND last, but not least, be honest, tell people what they NEED to hear, not what they WANT to hear.
Hope this helps ;-)
Paula Bean
Orlando, FL
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