Luxury Insights

7 Characteristics of Successful Agents

Here are seven things that most successful agents do: 

1. Look and act successful (project confidence and competence)
2. Demonstrate professionalism and competence
3. Be unintimidated by money, power and celebrity
4. Be memorable - do business with style
5. Use quality marketing materials
6. Network with other luxury agents
7. Always be ethical

Quality service begins with understanding your customer

The aim of marketing is to know and understand the customer so well the product or service fits him and sells itself.

-Peter Drucker

In real estate as in all business, success comes from understanding and meeting the needs of your clients and customers. 

It is all about "fit" and there are a number of challenges implicit in this.

• Accurately understanding the wants and needs that your targeted clients will use in their purchase decision and evaluation of service.
• Crafting an offering--your mix services and how they are presented--that aligns with the client's needs.
•  Positioning yourself and your services in a way that makes the "fit" clear to the clients AND in a way that clearly differentiates you from your competition.
• Execution.  Actually delivering on the expectations that you have created in the minds of your clients.

Remember that the buying and selling process doesn't really differ much by price point.  However, the luxury market demands more of your professionalism, expertise, communications skills, and ability to get the job done.  The most successful agents deliver on this and then some!

"There are reasons some businesses are hugely successful, others “get by” and the less fortunate fail. From a marketing perspective it seems quite simple: You must know your customers and what it takes to make them happy."

- Bruce Johnson

Some of the ingredients for success:

• Unique knowledge and abilities
• Defined target markets
• Ability to understand your clients needs and to create value
• Outstanding service
• That extra step - surprise and wow customers

Know Your Competition

Whether you are a new agent wanting to break into the luxury market, or an experienced and successful luxury agent, it can be useful to identify your current competition and evaluate their strengths, weaknesses, and positioning relative to your own. 

Not only is this useful in establishing your competitive advantage and positioning, it can also be a good way to identify what tools and tactics are working in today's market, and the agents with whom you need to be networking. 

To identify your competitors, pull the listing and sales in the top price ranges for your market area(s) and see which brokerage firms and agents are most active.  This will give you sense of the key players in the market as well as their relative market share. Calculating market share both by transactions sides and dollar volume can be useful too.

Knowing who your competition is isn't enough.  You need to know what they are offering.  Here are some questions to consider as you evaluate your competition: 

• Is their market share increasing or decreasing?  
• Are they targeting a particular niche? 
• Do they have a clear strategy?
• What is their positioning? 
• If they had a tagline or motto, what would it be? 
• What three words best describe them?
• What are their strengths and weaknesses? 
• What are doing well? 
• What are they doing poorly (and does it matter)? 
• What marketing tools and tactics are they using and what is most effective for them?
• What do their websites and marketing materials look like?

Of course you will also want to evaluate your own competitive positioning on a regular basis. 

What Nobody Teaches Realtors: Why Some Ads Work and Others Fail

Read the full article on Broker Agent Social

Analyzing and Understanding your Market: Real Buyers

In the previous post in this series we looked at Days on Market.  In this post, we'll be looking at the Number of Closed Transactions, which we like to call the Number of Real Buyers.

The number of sales (Closed Transactions) in each price range is the same as the number of buyers who actually purchased homes and closed on them.  When it comes to psychology and communicating effectively with clients, the term "Real Buyers" is more powerful. 

Here are some quick tips on how you can use this important measure in your communications and negotiations:

1. Creating Realistic Expectations with Number of Real Buyers:  If you list a $750,000 house does your seller believe that there are buyers on every corner?  Usually the seller overestimates the demand in the market. If you will track this statistic and make a simple change in terminology, it may help your seller recognize that buyers for high-priced homes may not be waiting on every corner.
   
   Be sure to talk about REAL BUYERS as opposed to closed transactions or homes sold. Using number of real buyers instead of number of sales with your sellers can be a dose of reality. “In the last 90 days, in the price range where you want to list your home, there have been six real buyers or two per month. And it has taken an average of 175 days of marketing to find each of those buyers.” That’s powerful information!
2. Negotiating List Price with Number of Real Buyers: Let’s assume you have a seller who wants to list at just over $750,000 and you think the list price needs to be a bit under $750,000. You can say to that seller, “In the last six months, in the price range where you would like to list your property, there has been one real buyer per month. However, if we keep it under $750,000 we are in a price range where there have been two buyers per month. We’re doubling the odds of selling your home by listing it under $750,000.”  When you can justify WHY you are recommending a particular list price and show the seller specific statistics regarding the alternate price ranges, you are educating your seller to the reality of the market. You are also more likely to receive a properly priced listing.
3. Negotiating for Your Buyer with Number of Real Buyers: You can also use this tool when you represent the buyer. It’s very effective when presenting a contract to be able to show the listing agent and/or seller that, “There were only ten real buyers in this price range in the last month. My buyer is qualified, likes the house, and is ready to purchase. With so few buyers out there, doesn’t it make sense to do this deal?”

Next: List-to-Sales Price

Analyzing and Understanding your Market: Days on Market

In Part 1 of this series, we covered the basics of segmenting your market by price and the important metric or measure that you will want to look at for each price segment.  In this post we'll be looking briefly at the Days on Market measure in a bit more detail.

It is generally true that more expensive homes take longer to sell.  That said the dynamics of your local market may be unique and it is important that you know them.  Keep in mind that markets change over time.  You need to keep on top of these changes--identifying and understanding these changes when others don't can be profitable for your and your clients!

Here is a sample chart showing Days on Market for a few segments of an imaginary market.

Two of the most obvious ways to use Days on Market are in negotiating PRICE and LISTING TERM. 

In the imaginary market above homes in the $700k-$799 price segments are taking almost twice as long to sell as homes in the $600-$699 price range.  If you have a home that you think should be priced in the upper $600's but the seller thinks the low $700's these average time on market numbers might be powerful in your pricing negotiations, especially when paired with the Number of Closed Transactions (aka Real Buyers) for each price range, and when the owner considers the property's carrying costs.  

Also, knowing that properties in the $800k-$899k price range typically take about 178 days to sell, you can be sure that if I am listing a $875k home I am going to want to negotiate at least a six month (180 day) listing term to give myself a fair shot at getting it sold under these market conditions. 

Next: Number of Closed Transactions (aka Real Buyers)

Analyzing and Understanding your Market: Intro

Competent agents understand their markets.  For the best and most successful agents this market expertise leads to competitive advantage.  This is especially true in the luxury market where clients are often analytical folks like corporate executives, entrepreneurs, and independent professionals.   

Here are a few basic tips on analyzing your local market:

1. Define the geographic area(s) that YOU serve.
2. Pull the top ten percent (by sales price) of properties sold in the past 12 months.
3. Segment this list by price.  Break the properties sold into logical price bands.  You should have an intuitive sense of where the natural price segments are in your market.  It might look something like this:
4. 1. $500k-$749k
   2. $750-$999
   3. $1M-$1.49M
   4. $1.5-$1.9M
   5. $2-$2.49M
   6. $2.5M+
5. Look at the following metrics for each price band:
6. 1. Sales to Expiration (percent that actually sell vs. expiring)
   2. Average Days on Market
   3. List-to-Sales Ratio (sales price is what % of list price)
   4. Approximate % of new vs resale.  This may not be available in your MLS, but give it your best estimate.
   5. Number of Closed Transactions (these are what we call REAL BUYERS)
   6. Listed vs. Sold (aka the Odds of Selling a Property)
   7. Listing Term that your competition is getting in each price band.  Again, this will require you to make your best estimate as to an average.

You probably already know these stats for the market as a whole from your standard MLS reports. That's great as it will give you an immediate sense of how each price segment at the top of the market differs from the overall market.  Since most reports, especially those you see on TV and read in the press, tend to look only at aggregate market trends across all price points, you and your clients might be surprised how different conditions are in the various price tiers at the top of the market. 

This can give you very important information and competitive advantage as you are:

• Deciding which segments to target
• Positioning yourself in the marketplace
• Establishing client confidence
  
• Setting the expectations of buyers and sellers
• Negotiating a listing term
• Pricing the property
• Negotiating a purchase offer

More on the individual metrics for each price band in upcoming posts...

Terminology Tip: It’s not a “Listing Presentation,” at least I hope not!

Sometimes we do ourselves a real disservice with the words we use.  For example, many sellers believe that a real estate agent is a commodity product and that all we really do is list their homes in MLS, fall to our knees and pray that they sell.  This certainly isn’t the case.  Yet we reinforce this opinion by talking about a “Listing Presentation” as if all we are going to do is list the home. 

What if you have a “Marketing Consultation Appointment,”  rather than a “Listing Presentation?”  After all, your presentation involves (or should) a discussion of the market, a consultation about pricing, and presentation of a recommended marketing plan.  Why not use terminology that describes what it is you really do – consult about the marketing of the home.

Differentiate yourself from others who may call to set up “Listing Presentations” by calling instead to schedule “Your Marketing Consultation.”  Sellers are likely to think, “Wow!  Here’s a real estate professional who sounds like she may actually market my home.”  A small change in terminology may help you secure the listing.  Just be sure you deliver on the implied promise to offer an excellent marketing plan.

A Model Website

Back before the holidays Matt Dollinger, the performance coach at @properties in Chicago invited me to preview the new website they were about to launch.   It was impressive. 

There are lots of mediocre broker sites out there, so sometimes it is nice to see something good or even great.  I'd say the new @properties site qualifies. 

 

Here are some of the things that I like about the site:

• Homepage
• • Simple, clean layout. 
  • Key functions front-and-center
  • • Property Search
    • Neighborhood Search
    • Market Reports (great market reports, at a granular neighborhood level)
  • Calls to action
  • • Property search form is right there to begin your search.  No need to choose it in a menu first.  Ditto with Neighborhoods and Market Reports.
    • List with us call out links to concise but powerful benefits page with testimonials (so many sites forget about sellers)
  • Showcase of luxury properties featured prominently in scrolling band in the middle of the homepage.

The folks at @properties understand that buyers aren't just buying a house, they are buying a lifestyle.  In a big city like Chicago that often means that the neighborhood and the location are as important, sometimes more important, than the amenities of the home or apartment (you can always renovate!).  So, in addition to the typical property info they have integrated some pretty rich neighborhood information on the details page for each property.  Coming from NYC, I appreciate seeing the 6 closest restaurants listed with ratings!

• Property Details Pages feature rich neighborhood info
• • Reviews of the closest restaurants, and shopping from Yelp!
  • School reviews from Education.com
  • Neighborhood news from OutsideIn and other sources
  • Google map with the location of the property and boundaries of the neighborhood
  • Summary market statistics for that specific neighborhood (with the full neighborhood report one click away)
  • • Average Sale Price + Trend
    • Average Days on Market + Trend

We know the critical importance to affluent buyers of good market information...

There is a nice, simple layout and great functionality on the Neighborhood Search pages too:

• Big photos for the property listings (good, well-presented photos really help sell homes)
• Easy to switch between views (Gallery, Map, List)
• Clean map view that shows property locations and neighborhood boundaries, with the option to also view locations of local businesses (restaurants, schools, banks...).
• Ability to easily modify the search without have to go back
• Links to save the search or quickly set up an email alert based on the search.

Once users register, they are immediately assigned an agent who acts as a "concierge."  Users can save favorite properties and even define multiple lists (e.g. Husband's Favorites, Wife's Favorites, etc.).  Searches can be saved and automatic email updates configured.

As I understand it, the site also offers some nice functionality for agents.  Among other things agents can:

• Register existing clients on the site
• Generate property fliers
• Set up custom searches and reports for clients which update automatically and can be delivered online or via email
• • Custom property searches (multiple areas and property types)
  • Custom neighborhood updates (including new listings, solds, price changes, pendings, etc.)
  • Market reports
  • Seller reports-custom comps and market conditions,  hits, searches, views, syndication reach, etc.

All-in-all it is a really nice site that features good presentation, functionality, and usability.   If you are looking for examples of good broker sites, I recommend you check it out.

In developing the site, @properties worked with Terabitz and the brainiacs at 1000 Watt Consulting. 

In the interest of full disclosure, we have no relationship with Terabitz or 1000 Watt.  @properties has hosted our CLHMS training courses, and we have trained a number of their agents.

Terminology Tip: "Closed Transactions" aren’t always good.

While we always love to see a sale close with a happy buyer and seller, the term “closed transactions” is not necessarily the best way to describe a finalized sale.  The words “closed transactions” or “solds”are real estate expressions which we use all the time, but these terms don’t always communicate effectively with the consumer.  We understand what we mean, but these words can go in one ear and out the other of buyers and sellers.

Instead, try the term, “Real Buyers.”  For example, when talking about the number of properties sold in a particular price range, you might say, “In the last 60 days there have only been 18 “Real Buyers” in the $700,000 to $750,000 price point.  That’s just nine “Real Buyers” per month.   And by the way, I’m defining a “Real Buyer” as someone who not only contracted to purchase a home, he or she showed up at closing and walked away owning it!”  Not only is this quickly understood, it is also a quick dose of reality for prospective sellers who often think there is a buyer on every corner for their luxury homes.

The use of the term “Real Buyers” is also powerful when negotiating on behalf of a buyer.  Imagine being able to say to the party negotiating across the table, “You know in the last 60 days in this price range, there have only been 18 “Real Buyers”, or nine Real Buyers per month.  And, I’m defining a “Real Buyer” as someone who not only contracted to purchase the home, he or she showed up at closing and walked away owning it.   My buyer is qualified and offering reasonable terms and conditions, doesn’t it make sense to give serious consideration to this buyer?  Only 18 Real Buyers in the last two months, that’s not many.  Don’t let this one get away.”