SALEABLE LISTINGS

OBTAINING & SERVICING SALEABLE LISTINGS

Now that youíve learned where to prospect for good listings and how to use proven sales techniques in securing the interest and attention of potential sellers of property, youíre ready to begin listing homes. In this section weíll talk about the steps to be taken in preparing for a professional listing presentation and emphasize the importance of conditioning owners to the facts of real estate selling in order to assure results. It is not enough to list property.

To be profitable for you and beneficial to the sellers these listings must attract the interest of other salespeople and buyers. You have to produce marketable listings to keep your seller, your broker, and yourself happy. There are few things which are more detrimental to this business than the damage inflicted by careless, non professional real estate sales people who will take any listing at any price hoping someone will wave a magic wand and sell the property for them, or take it knowing it will never sell for that price thinking they will be able to ďwhittleĒ the seller down. When you donít do your job right, your image and the image of our profession suffers, not to mention the amount of lost hours.

The existence of real estate markets in which there are a number of FSBOís, attempting to solve their own real estate problems can be directly charged to those brokers and salespeople who violate the basic principles and professional knowledge needed in listing and selling real property. If the seller believes he can do a better job than we can, it is because we have either failed him in the past or have not convinced him we are worth the price he pays for professional service. Now, off the bandwagon, letís get ready for the listing appointment!

We will assume we have obtained through our prospecting efforts an appointment with Mr. and Mr. Seller. They are buying a new home and need to sell their present home in order to qualify and buy the new one. You have made the appointment for 7:00 this evening. This allows them time to have their evening meal and get relaxed after their dayís work. This also allows you several hours to gather facts about the property, which should include a pre- inspection trip to the property, and doing your comparative market analysis (CMA).

You know that it is very important to have the sellers together when you make your sales presentation. They both own the property, it takes their mutual consent and you must win both of them over. Husband and wife must agree on price, terms, occupancy, and other vital matters affecting this proposed sale.

You have set aside three hours this afternoon to make your first inspection and to gather the facts needed for your presentation this evening. The nice thing about using the two visit approach is to give yourself an opportunity to inspect the property in an unhurried way and to gather the facts about the parcel so you can return to the privacy of your office and digest what you have uncovered before reaching any conclusions.

The second important reason is that you want the seller to realize you are a professional and that your decisions are based on sound facts, not snap judgments. I realize that it is possible for you to know property values reasonably well. You may be able to walk in the front door of a home and quickly decide the approximate price range. However, the seller canít appreciate such hasty reactions and since your prime task is to win the confidence of the seller, so he will accept your recommendations concerning price, terms and the other important matters pertaining to your listing service, you need to establish a foundation of trust on which your relationship with the seller can be soundly constructed.

There will be some situations when you must take the listing on a single call, and on these occasions you will have to consolidate the steps we are covering in this section to accomplish your objectives. Do what works best for you and the seller, just be sure to be thorough and do it right. If you are going to do one step listings make sure you allow two to three hours to do a complete listing. You want to be sure it is priced right and that you have spent sufficient time to develop the good client relationships needed for later negotiation and follow up contact. Even more important is the ultimate objective of every professional salesman to build a solid referral business for future success. This can only be done if proper time and attention is taken at the beginning of business relationships.


PREPARATION BEFORE YOU LEAVE THE OFFICE

We have available in our offices a complete sellerís packet. Be sure you are familiar with the entire packet, it includes:

  • Real estate brokerage relationships brochure
  • Benefits of listing with your company name.
  • Exclusive right to sell listing agreement.
  • Information needed to run CMA
  • Home warranty plan brochures if your office offers one.
  • Property inspection guidelines for buyers and sellers
  • Sellerís property disclosure statement (to be completed by seller)
  • Lead based paint disclosure
  • Residential data form for MLS or your listing book.
  • Estimated net to seller (should be completed at time of listing)
  • Sample contract for purchase and sale of real estate
  • Open house ad copy, real estate book ad form, and photo ad form
  • Loan evaluation brochures & forms for water well & on-site waste disposal systems
  • Information sheet on services we can offer when they are relocating to another area.

Start by getting one of these packets. Fill out the information needed to run CMA form. This will cover the properties comparable to this one that are available, sold, pending, expired or withdrawn. What you need to do is be sure you can compile a fairly accurate picture of the market situation in the neighborhood surrounding the residence you are going to list. This is one of the most important pieces of information you need to have with you. You must be able to price the home right.

When you are talking to sellers remember sellers understand competition, like other homes for sale that are in competition with theirs for buyers. They may not understand comparables. Nothing is really comparable to my property. I have certain amenities my neighborsí homes do not possess. I do realize there are only so many buyers for the total number of homes on the market in my neighborhood and that some of them will sell while others will not.

This is important to get them to acknowledge this so that they will let you price their home competitively. Donít go in and try to tell the seller this information without a presentation folder ready for them. When you produce printed and written facts and present them in a confident and authoritative fashion, you remove the doubts of whether or not you are a professional. You then open paths to a successful understanding with the owners.

After having all the paper work in order, you should inspect the neighborhood surrounding your proposed listing. Remember that there is a great deal of importance in neighborhood influence on real estate values. The only thing permanent in real estate in change. Every piece of property is affected by the conditions in the area in which it is located, as well as by the immediate influence of adjacent parcels. When you sell a property you are not selling just a single piece of property, but rather a neighborhood, an environment, and a way of life. Prospective buyers will be observing the homes, lawns, yards, and people who live in the area where you propose to place them. You then must also be aware of these factors when you list the property.

So while you check out the area check out the following:

  • New for sale signs that you were not aware of before. Make sure you write down addresses and phone numbers so you can call when you get back to the office. Or check MLS if you have it available to you.
  • The exterior appearance and condition of the properties listed on your CMA, note observations about the relative differences involved. Pay special attention to those that are currently on the market, they are your sellers competition. When possible preview these listings as well.
  • Observe the condition of the neighborhood as to maintenance, pride of ownership, and general appearance. Are there any freeway constructions nearby, deteriorated properties, vacant homes, etc.?
  • If there are new subdivisions in the near vicinity, check these out and note price ranges, values, and terms, as this will also affect the resale market.

While determining a value for your new listing, be aware of the depreciation factors. Not only physical deterioration but functional obsolescence as well as economic obsolescence. We are now at the home, for the first visit. When you arrive make sure you are on time. Nothing is more aggravating to a seller than the frustration of waiting for a real estate salesperson past their appointment time. They may have other plans, and the relationship you want to create may go right out the window before you even arrive if you do not exercise common courtesy about keeping appointments. If you MUST be late, for any reason, you should call and advise the owner about the delay. Being punctual is part of being professional.

As you approach the front door, notice the lawns, are they neatly edged and trimmed, and does the home have gutters. Check the windowsills, hardware on the front door, door mats all exterior items the buyers will notice when they first approach the home. Part of your job is to advise the seller about these items.

When the owner answers the door, be sure to be cordial and introduce yourself, explain this is the first visit and is to obtain the basic facts about the home so you can review intelligently the findings before you return for their appointment this evening. At this point ask the seller if she will please locate the following documents pertaining to the property. Explain that you would like to take them to your office and make copies for the file, and that you will return them when you come for your appointment later this evening.

  • The deed or other documents establishing ownership and legal description.
  • The payment books for any mortgages on the property
  • Their title insurance policy from when they bought the property
  • Their homeownerís policy
  • The real estate tax statements
  • Any other papers they may possess which affect the status of title

While the owner is gathering these items, you may begin by doing a complete walk around the exterior of the house. Make notes, donít try to remember. Return to the interior and ask if the owner would mind if you look through the rest of the house. As you tour the home, do the following things:

  • Measure the rooms.
  • Check closet sizes making a note.
  • Check the bathrooms, again noting condition and size.
  • Observe the condition of paint, trim, color, and neatness of home; they might affect the buyer.
  • Study the decor and furnishings of the home and their effect on marketability.
  • List the personal property items to be included by the owner in the price.
  • Study the floor plan and relate its acceptability to similar priced homes in the area.
  • In general, note all items that detract from value as well as those that add to value.

You may make subtle comments about the amenities of the new home they are buying to condition them for a reasonable sales price on the present home. Some of the questions you might ask during the initial interview would be:

  • Questions to determine urgency
    • When will your new home be ready for occupancy?
    • When would you like to make the move?
    • If we found a buyer immediately, how soon could you give possession?
  • Questions to determine experience:
    • Have you owned other homes besides this one?
    • Do you own other real estate?
    • Before you decided to use our services, did you think about selling the home yourselves?
    • How long have you lived here?
  • Questions to arrive at an ownerís idea of value:
    • What improvements have you made since acquiring the home?
    • Have you ever had your home appraised?
    • What features are you looking for in your next home that this one doesnít have?
    • How much insurance do you carry on the home?
  • Questions to uncover new business in area:
    • Do your neighbors know that you are planning to sell?
    • I imagine you will be leaving behind a number of friends after living here for __ years, right?
    • Do you know of others nearby who may be marketing their homes?
    • Have any of your friends expressed interest in your home?
  • Questions to uncover neighborhood benefits:
    • Is this a quiet neighborhood?
    • Who lives in the lovely home next door?
    • Are there many children in the block?
    • What school do your children attend?
    • Do you attend a church nearby? Who is your pastor?

Many of these questions may not need asking if you already know the answers, but this general line of inquiry should be pursued in order to uncover the sellerís personal reactions to these questions. You are looking for the motivations of this seller as well as reasons why new buyers might be interested in purchasing the home. After asking a question, be quiet. LISTEN!

Master salespeople know the importance of asking the right question and listening carefully for the full response to that question. Sometimes it is what the client or customer does not say that provides the clue to motivations and facts about the proposed move. There is one more question I would always recommend asking. ďDo you have any prospects from your own contacts who might be interested in purchasing your home?Ē

This question can be very important. Many times a seller has a buyer who expressed an interest in the property but the seller was unable to close a sale without professional help. Some of these friends, relatives, or prospects may need professional service to locate other property. Always pursue any line of questioning which can lead to additional business since prospecting is a continual objective of the alert real estate salesperson.


KEEP YOUR OBJECTIVES IN MIND

By now you may be concluding that this is a lot of trouble to get just one listing! It may be, but every bit of effort expended at this time will generally save you time and money later. If there is any short cut to a sale, it is in doing a good competent and professional job when first listing the property. It is essential to remember that you are doing more than just listing a piece of real estate! You are also listing the people who own that real property. Every question and answer helps you lay the foundation for the closing session a few days or weeks from now when you must sit with these owners and review an offer to purchase from a prospective buyer. If you have really absorbed the facts, uncovered the motivations, and won the confidence of your owners you will find closing the sale much easier. Learn to be thorough and persistent in your real estate selling. Make sure you look the house over real thoroughly, sellers want you to demonstrate sincere and complete interest in their properties before they entrust them to you. Remember they are going to be asked to pay a sizable fee for your services, likely the largest single fee they will ever expend for any service ordered. They want their moneyís worth. From the information you have gathered you should be able to answer the following questions:

  • Date the home was originally purchased by the owners. This can usually be found on the deed or title policy.
  • The approximate amount paid for the home by the sellers. Again this may be found on the title policy or other papers they let you view.
  • The legal description of the property. This is always on the deed, and should also be on the title policy.
  • The mortgage indebtedness of the owners. This is vital information and should be carefully pinpointed. You need to know what kind of loan the lender name, loan number, if there is a prepayment penalty, etc.


A WORD OF CAUTION ABOUT PRICE

Most sellers want to know immediately about the price you believe would be asked for their home. This is, many times, before you have even finished gathering the information and analyzing the facts. Donít commit yourself even in general terms on this subject until you can present your story completely and at the right time. It can be fatal to your listing presentation to state your opinion before you have completed your data finding and laid the necessary groundwork to substantiate your viewpoint. Remember that we want to be perceived as professional.

It is most definitely beneficial to know what the sellers are thinking in terms of price, as this can be a stumbling block to later negotiations. No one likes to back down after he has taken a firm position, and sellers are tempted to support unrealistic prices they have quoted simply to justify their own egos and pride. You can determine possible price ranges acceptable to the seller by comparing original purchase price with time periods involved and the balance of present mortgages, as well as by the sellerís reactions to your questions. It is best to avoid direct questions on this subject until you have made your full listing presentation to both ownersí. Remember that you are working for the seller, you want to get him the best possible price!

Now, go back to the office and compile information. You should now be able to come up with a fair market value of the property. You should know how soon the sellers need to sell. You can do a closing cost estimate for the seller showing them what they will net from the sale at the suggested price.

Be sure and explain the different types of mortgages that will be best for the sale of their property, and what the differences in cost in both money and time to them will be. Be prepared to explain to the sellers demand and availability of similar type properties has to come into play when determining a price. Buyers are also going to look at the loans offered on other properties in the area. There is no magic in pricing real estate. The actual price realized for any given property is what the buyer is willing to pay. To some buyers the same property will have a higher value than to others. One manís castle can be another manís white elephant! There is always the fluctuation of individual opinion and no real estate salesperson can be expected to be so exact in his pricing that he can pinpoint the market every time he lists property. In fact, donít overlook the emotional factors that influence buyers, as they do play a major part in home selling. The tall trees in the back yard, an oriental garden, an incomparable view are difficult amenities to price!

You need to caution the seller that what we are looking for is the average buyer. To locate the unusual buyer who will pay more than anyone else can be expensive, time consuming, and difficult, sometimes impossible. Also explain to the seller that you have evaluated the marketability of their property by determining the following:

  • The price and terms offered in contrast to other comparable properties
  • The urgency of the seller
  • The demand for this type of property
  • The competition of similar properties

If you have all four of these variables, you have a ďhot listingĒ. If you have only one, it had best be the ďright price and terms.Ē If there is nothing else to motivate a sale, this is generally the only available drawing card.

One more item about price! It is always best to price a listing right with good terms from the beginning. It most certainly increases the chances of selling the listing and of serving the best interests of the seller. However, do not turn down a good listing just because the price is not exactly where you would want it to be! It is possible to sell over priced listings, providing you are willing to expend the extra effort to condition and negotiate the properties. If a listing has any two of the four items above, it is probably well worth taking and working to bring into line before sold. Especially when the urgency of the seller is one of the factors involved, since this acts as a lever on price as the impending time period calls for action.

Again, every effort should be made from the beginning to establish the best price and terms for your listing. But if you fail to do so, weigh the other factors before you reject the listing. If the seller is not motivated, has no urgency and is unrealistic about his price, it is wise to forego the listing rather than waste time, money, and energy trying to sell it.

On the other hand, if there is a reason to sell and a demand for the type of property offered, it is often well worth the extra effort to condition the seller during the listing period rather than reject the opportunity to serve the client and lose the resulting commission. Just remember that any over-priced listing is expensive to handle and carries with it a higher risk of expiring unsold, so you should make every effort to do the job right. Some agents will list a property at a slightly higher price but tell the seller right then that they want to get with them in 30 days to analyze the progress and make a price adjustment if need be. Make sure you constantly advise the seller of comments from other agents that have shown the property. Many times, this will help bring the seller in line with a true value.


THE LISTING PRESENTATION

The time has arrived. Itís 7:00 and youíre at the sellerís home. Take time to visit with both husband and wife. Gain their friendship and goodwill before you present your story. Talk about his job, hobbies, where they are moving, the children, and compliment them! Use some basic human relation techniques.

After your brief introductory exchange, tell them you would like to sit at the kitchen table where there is good light and where you have room to spread out your papers. Psychologically, it is helpful to be physically close to your clients in the closing stage of any transaction. When selecting a seat, try to locate yourself opposite both the husband and wife where you can control the interview and watch their expressions. If you sit between them, you will soon feel like an observer at a ball game, turning your head first one way and the then the other. Always start your listing presentation by making some complimentary observations about the sellerís property.

A good idea is to sandwich any criticism between compliments. Explain to the sellerís that you are not actually critical of the property, it is just part of your job to point out things that need attention, and wouldnít they rather you did everything possible to make their home the most attractive to prospective buyers. Do comment on the good points of the home, housekeeping, landscaping, paint, etc.

Now you should be sure and sell your company. and yourself. First thing you should do if you havenít already is present the Real Estate Brokerage Relationships Brochure to them. Explain that you will list their property as a designated sellerís agent. That you will be their agent. They should be very up front with you and you will be with them. That your job is to help them. Go over the entire CMA packet. Go over The Preparing Your Home For Showing page; talk to them about your marketing plan; talk to them about the market analysis. Explain that some of the properties sold, some failed to sell, and some are still for sale in the area. Go over each one and give them all the information you have about it. Note which ones are larger, with more bedrooms, etc. and what kind of a price adjustment you have made for that difference. About this time the sellers may interject, look at the time and effort that went into the landscaping, building the patio, and planting the expensive flowers in the yard. Certainly these must add value to our home.

You might reply, yes Mr. and Mrs. Seller, these items do ad to the value of the home and help you to compete more favorable with other properties, but they do not always add substantially to the actual price of the home. Explain that many times something that makes a home look better or makes it more appealing is not worth a lot more in the price of the property, but, it can be worth a lot in the time it will save finding a buyer.

After you have determined a price. Explain the net to seller page. Tell them this is only an estimate. You will provide them with another one at the time of an offer, and they will get an exact one to look over prior to closing. While you are completing the listing agreement, ask them to fill out the sellerís property disclosure statement. Explain that it is beneficial for them and you as well, for them to fill this out, and why. Go over our commitment to you page! Make sure you talk to them about different mortgage programs and how they will benefit from them. Tell them about the tour of Realtors and that you would like to schedule it so all the other agents in your office can tour the home. Prepare them for the selling process. Ask if there are particular times when they prefer the property not be shown. How much notice do they need? Tell them that the job has just begun. They must know what to expect so they can assist you in the weeks ahead until a sale is consummated. Go over the things that will happen.

  • The repairs and improvements needed to assure a proper sale, if you have made any recommendations. Be very honest, if you notice things that need attention. This is your job!
  • The FOR SALE sign will go up; you need a key for the lock box. Explain what the lock box is and how it works.
  • Enlist their help in having the property ready to show. Turn the lights on, turn soft music on low, put the pets outside, make sure the kitchen and bathrooms are especially clean and neat.
  • Please Mr. and Mrs. Seller leave the house when it is being shown! Many times, buyers are hesitant to enter someone elseís home, and even more afraid to speak up in the presence of the owners. Also, you donít want to be put at a disadvantage. Thatís what you hired me for!
  • Talk about what will happen from the time of contract on. Make sure they understand that they will get their money after all the closing papers have been signed at the title company and the sale is finalized. Assure them you will be at closing with them.
  • Go over the listing worksheet of MLS input sheet with them to make sure you havenít missed anything.

Each time you get them to commit an answer to one of your questions you are closer to getting them to commit to listing the property with you. Explain, explain, and explain. Take the time necessary so they donít feel rushed. They are your only concern.

Show them the listing contract. Ask for their signatures and initials in the appropriate places. Assure them you are going to work hard to get their property sold. After all, you donít get paid for your effort until you bring them a ready willing and able buyer.

Gain their trust, and you will get the listing. Now, go to work. Take the listing package back to the office and make sure everything is right. After it has been entered into MLS check the print out carefully and make sure the information is all there and correct. You will find a list in your office. Go over it item-by-item and make sure you do your job completly. The better you do now, the less there will be to do later. Donít forget to send the seller a ďThank YouĒ! Keep in touch. Donít ignore them.


SUMMARY

A good listing worth taking requires effort and deserves attention. Sellers are the key to the real estate business and as a real estate salesperson, who wants to grow in this industry, you should concentrate your efforts on solving the problems of sellers. You will seldom spend more profitable time than that which you invest with sellers. Remember, when you accept a listing you accept a responsibility on the ownerís behalf and failure to realize the obligations of such assignments will lead to many painful problems and lost commissions. You have gained the respect of the sellers, protect it. Be proud of your craft as a real estate counselor. You are a specialist just like a doctor, attorney, or any other specialist.

You should never resort to dishonesty or untruthfulness in order to render assistance to property owners. There is never an excuse for falsehoods or insincerity when you are performing genuine service to people.