Perfect Pricing

“Price is what you pay; value is what you get.”

--Warren Buffett

Recently in a coaching session with one of our agents, we reviewed their stats for the last year.  The agent had been on fire and had closed a volume considerably higher than any previous year.  Their average side was far above market and their sold listing DOM was well below it.  All great news!

Then we looked at the average commission rate per side and found it was just a touch over 2.5% instead of their targeted 3.0% average.  The agent had done a few relo transactions with their lower fee in return for a near guarantee of a closing, but overall, based on their average sale price, that 2.5% was on the low side.  In fact, when we looked at the numbers, the agent could have added another $25,000 to their bottom line if they could have kept the average rate at 3%.  That’s some real money!

We talked about many of the market pressures on our pricing and yet the agent realized they could take a more proactive approach to their goals.  That’s when I heard Uncle Warren’s voice whispering in my ear:  “Price is what you pay; value is what you get.”  Wise words, since all too often we allow ourselves to be dragged into discussing price instead of value.

In his excellent work, Book Yourself Solid, Michael Port talks about Perfect Pricing and he focuses on value versus price.  He encourages us to think always about the value our services provide and to ask ourselves—and the client—some questions:

How much financial benefit will our service create/provide?

How much pain will our service relieve?

How much pleasure will our service create?

How will our service create substantial peace of mind?

While some of these may sound like “soft” benefits, they’re what really separate excellent service from the mediocre.  And just as importantly, we have to ask how we value ourselves.  Remember, as Port says, people rarely buy professional services based solely on price.  They actually express their own values through what they buy!  So let them!

At the very least, most people love to feel they’ve gotten a deal, so when we believe it necessary or appropriate to discount our fees—yes, we need to consider it as such—we should be sure to help them feel how successful they’ve been in their negotiation and how much we’re giving them.  If we don’t think there’s value in what we’re giving away, why would our clients?

Of course, a discount with a client should produce or strengthen a referral source that brings us more clients and more revenue, so we can sometimes view such discounts as an investment in marketing.  Just make sure that when we make such an investment, the prospects of the return are high!

Remember, “price is what you pay; value is what you get.”

David M. Hassler

Director of Business Development

Less IS More!!

A recent article in Inman News reminded me of something I regularly say when teaching fiction writing: Less is more! In that instance, I mean that “fewer words” accomplishing the same goal is usually more effective than “more words,” but the point is the same: evoking something rather than mimicking it!

The Inman article focused its minimalism on the number of photos we show on our Board’s listing service as well as our own website, Facebook, or other portals. The writer made the excellent point that, just because your MLS allows 24—or 36, or a million—photos, don’t put in poor shots or ugly rooms just to fill up all those slots! Given that so many folks these days search for homes online and do a good bit of decision making on what to go out and see based on those lovely pictures, the writer made the point that we have to put our best foot—or, in this case, maybe a bathroom or family room—forward to keep our listing on the “let’s go see this one” list.

Her point focused on only including photos of the home’s best features and rooms and specifically NOT including that basement bathroom that looks like something from a Steven King movie. Makes sense, since our goal is to attract buyers to come out and see the home. So, remember to evoke the best about your listing and don’t dilute those great features with unneeded shots of boring—or worse—elements. Remember, the writer tells us, our goal is to market the house, not create a detailed Wikipedia entry showing every possible room and/or angle.

And speaking of marketing, I always encourage agents to use a professional photographer or service so your listings will look the very best they can. While it may not make financial sense in some cases, I suggest for any listing at or above the market average in your area, to offer professional photography as part of your listing presentation. If your competition isn’t offering it, maybe it will win you the listing—not bad for around a hundred bucks! And the results are startling—everyone can tell the difference, and those great photos of the great features should help bring more buyers out to the house, all else being equal of course.

Finally, in order to not only enhance the photos of the home, but to really optimize that emotional appeal to grab the buyers when they walk in the door, don’t forget the value of a professional stager! Yep, another hundred bucks out of your pocket, so it won’t be appropriate at certain price ranges and in certain circumstances, but a pro will frankly have a better eye for this than 99% of us, and they can also say things more directly than we can! Again, in your listing presentation, if you offer this and the competition doesn’t, then boom, maybe that and the pro photographer nets you the listing. Even using the new math, I think COMMISSION CHECK minus $200 still equals more than NO COMMISSION CHECK! Remember, the goal of a stager—and those wonderful photos—is to evoke a certain feeling of the home, and that always mean fewer décor items and clutter!

Less can indeed mean more: more commission income and more happy clients!

David M. Hassler

Director of Business Development

Creating Your Roadmap--or Do You Know the Way to . . . Detroit?

Hooray, it’s my favorite time of year again! No, not just football or Thanksgiving approaching in a few weeks, but it’s ANNUAL BUSINESS PLANNING SEASON! Yet, I’m always reminded of how that holiday and some good planning fit together.

Some years ago when my daughters were both in school down in Bloomington, our extended family decided to celebrate Thanksgiving in Detroit instead of the usual family homestead in Columbus, Ohio.  The girls decided to drive separately from my wife and me so they could bring boyfriends.  Since they’d never driven to Detroit, but they knew the family branch in Detroit often drove down to Columbus for gatherings, they figured the best way to Detroit was…yep, through Columbus, Ohio!  Unfortunately, none of the eager collegians thought to bring a roadmap—and this was in the dark ages before they had cell phones, let alone smartphones with GPS—so their trip took nearly twice as long as it should have, and it produced a ton of anxiety for them and for my wife and me, waiting for them in Detroit on a cold, rainy, windy night, hours after they were expected!  So, while they did finally make it to their goal, the journey was unnecessarily stressful and tiring. 

Maybe they should have done a little advance planning and used a good roadmap instead of just setting the final destination!

Yet, since we’re all in business for ourselves in real estate, you may be used to simply setting a final destination of improving sales volume by, say ten percent over the prior year.  But how will you get there with the least stress and anxiety if you don’t know the best route to follow?  Just like getting to Detroit, you can make your journey a lot easier—and probably more profitable—with a good roadmap in the form of a solid annual business plan.

So what do we need in our business plans?  Once you’ve “Mastered your Stats” for 2014 and earlier, you should review your Target Market and see if any adjustments are warranted.  From there, you can begin to develop your goals, working backward from that ten percent volume increase through the number of sides that will take based on your own average transaction value; through the number of listings taken and presentations needed; and on down to the details of each day and each hour of the time you want to commit to your business to achieve your goals.  You can then wrap all this planning into a detailed business plan covering everything from your market budget to managing your time.  By keeping your detailed goals in mind weekly, daily, and hourly, and how they lead to achieving your larger goals, you’ll be able to manage your time more efficiently and thus be more effective each and every day!

Bottom line, if you put in the time and focus this fall to develop your plans and put them into a clear roadmap, your 2015 should be more enjoyable and profitable. The BHHS Resource Center has a great tool for working on your annual business planning that makes it a snap to put together. We’ll send that file around to all the offices for distribution, so take some time as the weather continues to chill, and put together your own roadmap to success so your journey is as direct as possible.

David M. Hassler

Director of Business Development

First Things First

Recently, I chatted with an agent who asked for ideas on dealing with the barrage of emails and phone calls from clients and others and how that wreaks havoc with their schedule.  We talked about time blocking—I prefer the term task blocking as it focuses more on WHAT versus WHEN—which, in our business, can be tough to stick with, and other approaches to controlling our daily agendas, given that we’re especially prone to interruptions and lack of structure.  All too often, we may find ourselves in a stressful situation and under pressure to respond to a crisis. 

Instead of trying to fit too much structure onto such a slippery environment, we figured the better approach is simply to do our best to remember—and focus—weekly, daily, and hourly, our priorities. (And to implement the Getting Things Doneapproach from David Allen’s book as we’ve discussed in other Playbooks!)

Stephen R. Covey, in his The 7 Habits of Highly Effective People, talks about “Putting First Things First” as one of those seven habits, that of effective self-management.  Of course the place to start is with a business plan that includes distinct goals that in turn can be broken down into activities that can be prioritized.  All well and good from a planning standpoint, but what happens when things start hitting the fan in the midst of the busy selling season?

Covey goes on to set up an approach to defining our activities so we can better understand where we should spend our time—and where not to.  All our activities can be viewed as either Important—meaning they produce results—or Not Important, and also as either Urgent or Not Urgent.  If we look at those two factors we can put them into four quadrants:

I           Important/Urgent—finalizing that listing presentation for an unexpected opportunity

II         Important/Not Urgent—fine-tuning your listing presentation so it’s always ready

III        Not Important/Urgent—responding to emails and texts from friends or answering the phone every time it rings

IV        Not Important/Not Urgent—improving your score in Angry Birds. 

Unfortunately, we frequently find ourselves spending far too much time in quadrant I dealing with Important and Urgent items in a crisis—that inspection response deadline, the demand to show a home on short notice—and that’s what can add to our stress level.  The key, of course, is to not only minimize the time we spend on items that are Not Important, but to focus our time and planning and execution in quadrant II, those actions that are Important but not Urgent . . . yet!  The more time we spend in quadrant II, the less we’ll need to spend in that stressful quadrant I, and the more successful our business should be.

Easier said than done, of course! Yet, if you keep these ideas in mind as you approach your daily work, you’ll find yourself headed in the right direction.

Your coach will be there to help you as you assess your own activities and focus on those that are Important, but not Urgent, helping you achieve greater results with less stress.

David M. Hassler

Director of Business Development

Real Estate Advice from the BHHS REThink Council: How to Handle Stress!

We’ve mentioned that Warren Buffet is a huge advocate of listening to the ideas of the younger generation of professionals and that has led to the creation of the BHHS REtink council, comprised of top young BHHS agents under 35 around the country. You can follow and comment on the some of the thoughts of the bright young folks in our organization at the blog, Rethink Report, at

http://rethinkreport.com/

And here’s a recent post by Kim Gellatly that we can all keep in mind in this often stressful business:

How to Handle Stress

By Kim Gellatly

With rising sales prices and very low inventory here in Portland, Oregon, I have been noticing a trend over the past several months of buyers and sellers who are carrying a lot of stress about the sale or purchase of their home. More transactions seem to be falling apart over buyer and seller differences, and more tense interactions seem to be occurring among real estate agents as they negotiate deals. It makes sense: Stressful clients can easily make for a stressed-out agent. So, if you’re feeling the pressure of your local market, here are some tips and tactics I have used during some of my recent stressful sales to help ensure a smooth transaction for all parties involved:

1) Give people the benefit of the doubt and listen to their concerns. When a buyer or seller is stressed, it often materializes in a late night angry call or a lengthy email. If you’re on the receiving end of these stress-induced communications, please remember what it’s like to be in your clients’ shoes. While we are juggling multiple home sales at once, this is their only home and it is everything that consumes their thoughts. This home is where they have built their memories and a lot of times grown a family, so it is a very personal experience for them. Most of the time our clients just want someone to listen to their challenges and empathize with them.

2) Remember that for an agent, stress plays out in many ways. When an agent gets defensive in a transaction, please remember that many times this reaction could be triggered by something unrelated to the transaction itself. Maybe this agent is going through personal issues or had an argument with their spouse that morning or is dealing with stressed-out clients as well. More often than not, when my interaction with an agent is stressful, it has little to do with me. Be sensitive to the fact that their frustration isn’t a reflection of your abilities as a real estate professional.

3) Always keep in mind that we are representing our clients’ desires, not our own. We may want to go to bat and fight with another agent over the giant repair addendum they just sent over, but if our clients want to move forward, then we need to humble ourselves and remember that we are working for their wants, not ours.

4) Admit when you’re wrong. If an issue arises where you have fault, quickly admit it and don’t blame others for what happened. Honesty, integrity and humility are characteristics that are seemingly rare in our industry and incredibly needed. You’ll gain respect by owning up to your own faults.

5) Stop and take a deep breath. Before you make a difficult call or begin a tough negotiation, stop to breathe first. Don’t react immediately; respond after taking time to remember what is most important in the situation. When we give knee-jerk reactions, we tend to grow the problem, not the solution. Thoughtful answers can are more easily found when you allow time to gather your thoughts.

6) Take time for YOU! Get that massage once a week, go out with friends for some down-time, turn off your phone and have dinner with your family instead of immediately calling your client back. By filling your own tank, you are able to then fill others. When you are running on empty as an agent, you are no good to yourself or your clients. Relaxing and recharging will help you improve and grow.

I hope these tips have been helpful and you’re feeling ready to stay calm, cool, collected and the very best for your clients!

Kim Gellatly

Wise words for us all. Thanks, Kim.

David M. Hassler

Director of Business Development

Listing Tips from The Paperless Agent

The other day, we took part in a Webinar with the folks at The Paperless Agent in Austin, Texas, and wanted to pass along some of their concise tips, starting with a couple of those we often forget when looking to secure a new listing.  Listen up and remember to put these into your toolkit!

The Paperless Agent’s Tips on Securing a Listing

A listing appointment is just as prone to client objections as any other sales conversation - in particular, the objections come with pricing, and the potential of interviewing other agents who all want to get that listing.

Client Objection 1:
 The Decision to Select Another Agent

OBJECTION: What if your potential seller slows you down because they are interviewing other agents to sell their home?

Part 1: During The Phone Consultation

AGENT: Are you interviewing other agents to sell your home?

SELLER: Yes, I’m interviewing a few other agents.

The answer is almost always yes.

AGENT: Great – all I ask is that you interview them first, and then I’ll come in the next day.

Asking to come in the next day after a prior agent interview can come off as a strange request, but it almost always gets granted. This way, you’re the last one in, and statistics show that the last appointment tends to get seller to sign the listing agreement.

Part 2: The Listing Appointment

If you show up to the listing appointment, and when you are ready to start signing agreements, they may let you know then that they are interviewing other agents. Begin the agreement conversation with...

AGENT: “Great, now, is there anything else we need to cover, or are we ready to get started?
SELLER: "Well, I'm interviewing someone else..."

AGENT: "What would they have to do to convince you to work with them instead of us?"

At this point, they don’t have a formulated response, or typically can’t think of one if you’ve followed The Paperless Agent’s Seller System.

AGENT: "In order to respect their time, don't you think you should call them and let them know that you already made a decision? Because, honestly, they are going to waste your time and their time by coming over here. Don't you think it's more respectful to them to let them off the hook easily?"

SELLER: "Well, yes, I suppose you're right."

AGENT: "Okay. Now, do you have any other questions or are you ready to get started?"

This is not only a great way to get over and objection, but an opportunity to see what you missed on the appointment. By asking "what would they have to do to work with them instead of me?" you have an opportunity to see what wasn't clear, or where you may have taken a misstep - it is both a learning lesson and an opening to recover control of the appointment.

Once you have covered what they need to hear, repeat - "Now, what else would they have to do or say to have you pick them?" As you cover these objections one by one, they lose the ability to justify going with someone else.

TIP: The more time you spend with the client, the more they have invested with you. Most agents are done in 30-45 minutes, but we recommend 90-120 minutes spent with the client. The time invested does not necessarily mean you are making a more lasting impression by being with them for a longer time period - it gives you the time to cultivate a strong client/agent relationship and develop a rapport. Of course, now we have the added advantage of the Berkshire Hathaway HomeServices name and can use that to our advantage as well!

What tips on overcoming objections in the listing process do you have that you can share with everyone?

David M. Hassler

Director of Business Development

80 Miles an Hour! All Aboard!

Do you hear that train whistle heading down the tracks toward us?

By now, everyone has no doubt seen the video of Warren Buffett talking about Berkshire Hathaway Home Services as the train going 80 miles an hour, and certainly our competitors can already hear—and fear—the oncoming powerhouse.  We’ve chatted previously about some of the misleading things they may tell agents and our potential clients, so we’d like to make sure you can be proactive and take full advantage of the power of that 80 mile an hour momentum!  So here is a rewind of the first of our BHHS talking points you can use, ala Dave Letterman:

10. Berkshire Hathaway was named by Barron’s last year as “the most respected business in the world.”  Above Apple.  Above Disney.  Most respected IN THE WORLD.  Confidence.  Success.  Savvy.  Quality.  Resources.  Best.  None of the competition is even on the list!  Who wouldn’t want to be associated with that level of recognition, support, and good will?  Oh, and for those who perhaps don’t read Barron’s, can anyone name the guy who provided the backing for the billion-dollar prize for a perfect NCAA bracket this year?  ’Nuff said.

9. Harris Poll EquiTrends named Berkshire Hathaway HomeServices as the top ranked Real Estate Agency Brand in the USA!!  Given that the company opened its first offices only in September, 2013, this award is a testament to the power of the Buffet Effect and the Berkshire Hathaway brand name along with the success and reputation that Home Services, the second largest independent brokerage firm in the nation, has achieved in its markets. Wow, what home seller wouldn’t want THAT name, and all that goes with it, on the sign in their yard!!  And what buyer wouldn’t feel comfortable relying on a trusted pro with that name on their business card! 

8. $200 BILLION in net worth backs up Berkshire Hathaway Home Services.  No other brand in our business comes close to that level of resources to make sure we lead the way with new technology, tools, and marketing as our business continues to evolve.

7. BHHS will be an international company.  That global reach, along with Berkshire Hathaway already being recognized as the most respected corporate name in the world, will have a huge impact on our relocation business as well as our overall reputation and name recognition.  That potential million-dollar buyer moving here from Munich or Milan or Manchester will already know our name and our reputation.

6. Berkshire Hathaway has a reputation as the smartest long-term investor in the world.  They buy companies and invest in them to hold and improve them.  They are not flippers, they’re investors. That means BHHS—and each of agent—will continue to flourish for the long term!

Next time, five more talking points for you to use.

So get ready to hop aboard as that 80 mile an hour train pulls into Indiana on October 7 and enjoy and profit from the ride of your life!

David M. Hassler

Director of Business Development

Fine Tuning Your Stats

As autumn turns the corner and the already dwindling number of new listing opportunities declines further, how can we make sure we get our fair share—or better yet, more than our fair share—of those opportunities and decorate more yards with our new BHHS Indiana Realty signs? (Well, after October 7, anyway!)

Of course, the most obvious leverage we all have is the magic of the new brand and the mystique those words Berkshire Hathaway carry in terms of professionalism and reputation as the most respected corporate name in the world—yes, not Indiana, not the USA, but most respected in the WORLD. More respected than Disney, Apple, IBM, Starbucks, name your favorite brand, and WE are more respected around the world! No other real estate company is even on the list of the top fifty. And, more recently, just this past March, the Harris Poll EquiTrend survey named Berkshire Hathaway HomeServices the Real Estate Agency Brand of the Year for 2014. Given that the first BHHS office opened just six months before that survey, that award—voted on by 55,000 folks around the country—shows again how powerful that corporate name can be when we take advantage of it.

Yet, we also know that, while our company name, our leadership, our training and coaching, and our systems and tools, provide each agent with a solid, professional platform on which we can stand, it’s that personal/professional connection we make with each potential client that finally wins us the business. Our individual personality and style are of course highly important in making that connection, but we can also raise our own platform by making sure we leverage not only our brand and personality but our own individual statistics where we can.

Some obvious stats might include our years in the business and our career sales volume, but we can focus on more specifics and gain even more power from our numbers. Consider these numbers:

DOM: most sellers want to move on with their plans and an agent with an average DOM that is below the market average—in total or for a zip code or even a neighborhood, depending on our volume—should be highly attractive!

SP/LP Ratio: again, most sellers would be fools to NOT engage the agent who has a track record of getting more for listings than the competition, so how do your stats rank in total, in a zip code, or a neighborhood?

Pending to Closing rate: we all know that not all pendings make it to the closing table but often sellers don’t. Take a look and rate your own percentage of contracts that close versus other agents and let that prospective client know they can count on you to get it done.

Average Sale Price: this one probably has more relevance in comparing to the average market sale price and for a smaller area rather than in general, but this one could be another strong factor in winning the client.

So, hop up on our new Berkshire Hathaway HS Indiana Realty platform and dig into your stats so you can win more than your share of those new listing through the cooler—and colder—weather to come!

Good to know!

David M. Hassler

Director of Business Development

Leading with Questions

After the small talk to open your listing appointment, what’s the best way to make your presentation the most effective?  Whether you use paper, laptop, iPad or any other presentation form, your first few minutes are key to gaining your potential clients’ attention.  So, do you dive right in with your script?  Years ago, an IBM marketing exec made a presentation to a group of top producing brokers, and he opened by asking questions of his audience.  First, he asked one of the simplest questions, and one we rarely remember to ask:  How much time do we have?  Have you ever gotten half way through your presentation only to have the sellers look at their watch and tell you they have five minutes left and you need to wrap it up! Awkward! 

Next, the IBM guru asked what the group’s goal was for the meeting, in other words, what did they want to accomplish.  When you sit down with the seller, it can change your approach if you can learn through good questioning that they are just hoping to get an idea of their home’s value and considering maybe listing sometime in the next year or so, since if you try to close them in that situation it will likely have the opposite result.   On the other hand, if they’ve just been transferred to Topeka and have to move in sixty days, your approach can be more oriented to securing the listing then and there.

Finally, the IBM exec asked the group for specific questions they wanted to make sure he answered and he noted them on a white board.  So find out the details the seller wants to learn, and as you go through your presentation, if you refer to those questions frequently, you'll give the seller a feeling you're responding precisely to them.  Thus, if the seller is more interested in your commission rate than your qualifications or marketing plan or net proceeds or comparable sales, you know you’ll need to focus on differentiating yourself and the benefits you bring to the table to secure your goal rate and win the listing.

Of course, before the listing appointment, it’s great to ask the seller if they’re interviewing other agents—we’ve all been caught unwittingly in that situation!  And if that’s the case, since the last presenter typically has the advantage, be sure to always ask for that spot in the lineup.

Bottom line, by asking questions first, you’ll be better able to tailor your presentation to the sellers’ goals, interests, and timing, and you’ll enhance your success rate in winning those listings.

David M. Hassler

Director of Business Development