Success as a Real Estate Agent FOR DUMmIES ‰ by Dirk Zeller 01_799556 ffirs.qxp 5/31/06 7:23 PM Page i Success as a Real Estate Agent For Dummies ® Published by Wiley Publishing, Inc. 111 River St. Hoboken, NJ 07030-5774 www.wiley.com Copyright © 2006 by Wiley Publishing, Inc., Indianapolis, Indiana Published simultaneously in Canada No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, scanning, or otherwise, except as per- mitted under Sections 107 or 108 of the 1976 United States Copyright Act, without either the prior written permission of the Publisher, or authorization through payment of the appropriate per-copy fee to the Copyright Clearance Center, 222 Rosewood Drive, Danvers, MA 01923, 978-750-8400, fax 978-646-8600. 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Library of Congress Control Number: 2006923950 ISBN-13: 978-0-471-79955-9 ISBN-10: 0-471-79955-6 Manufactured in the United States of America 10 9 8 7 6 5 4 3 2 1 1O/RZ/QW/QW/IN 01_799556 ffirs.qxp 5/31/06 7:23 PM Page ii About the Author Dirk Zeller, who as an agent rose to the top of the real estate field quickly, has been on a meteoric rise since he began his career in 1990. Throughout his sales career, Dirk was recognized numerous times as one of the leading agents in North America. He has been described by industry insiders as the most successful agent in terms of high production with life balance. His ability to sell more than 150 homes annually, while only working Monday through Thursday and taking Friday, Saturday, and Sunday off weekly, is legendary in the real estate field. Dirk turned his selling success into coaching significance through founding Real Estate Champions. Real Estate Champions is the premier coaching com- pany in the real estate industry with clients worldwide. Dirk’s clients average more than a $200,000 increase in their income annually. Dirk has created such revolutionary programs as “Protect Your Commission,” “Stewardship Selling,” “The Champion Listing Agent,” and “Positioning Yourself as the Expert.” These programs and others like them have changed the lives of hundreds of thousands of real estate agents worldwide. Dirk is one of the most published authors in the areas of success, life balance, sales training, and business development in the real estate field. He has more than 250 published articles to his credit. His weekly Coaches Corner newslet- ter is read by over 200,000 subscribers each week. His book Your First Year in Real Estate (Prima Publishing) has sold just shy of 100,000 copies in just a few years. Dirk is also one of the most sought-after speakers in the real estate arena. He has spoken to agents and managers at the local, regional, national, and international level for most of the large real estate brands, such as Coldwell Banker, RE/MAX, Century 21, ERA, and Prudential. He has shared the stage with such notable speakers as Zig Ziglar, Brian Tracy, and Les Brown. Besides contributing to the real estate agent community, Dirk and his wife of 16 years, Joan, are very active in their church. They live with their 4-year-old son, Wesley, and 8-month-old daughter, Annabelle, in Bend, Oregon. 01_799556 ffirs.qxp 5/31/06 7:23 PM Page iii Dedication So many people have contributed to my success in life, from my parents to my two brothers, my mentors and coaches, and now my two children, Wesley and Annabelle. No one, however, has contributed to my success in the real estate field more than my wife, Joan. I dedicate this book to her: my supporter, encourager, coach, role play partner, accountability partner, and best friend. The success that has been achieved in real estate sales, writing, speaking, training, and coaching was achieved only through our partnership. We did it together! Some 16 years later, I’m still amazed at God’s grace in giving me a wife without compare. Author’s Acknowledgments Just as a successful business is always a collaborative effort, so is a book. While I receive the unfair lion’s share of the credit, countless others are behind the scenes making me look good. To Barbara Schenck, who took my experiences, strategies, thoughts, and techniques and put them into the Dummies format you enjoy, thank you. This book would not exist without your enduring effort and patience. To the team at Real Estate Champions, an incredible group of people who change people’s lives each day, you are the best. Thank you to our support staff of Judy Cox and Julie Porfirio whose loyalty all these years means so much to me and to Luci Hamilton and Mary Stewart whose passion to serve others is unparalleled. A special thanks to Rachelle Cotton who arduously read every unreadable handwritten word and typed, corrected, and revised the whole manuscript while enduring every last-minute induced deadline . . . Thanks. To our coaches and salespeople who really change the lives of everyone they touch; to our marketing staff of Dan Matejsek and Shaylor Murray; everyone at Real Estate Champions had a hand in this book. I also need to thank the team at Wiley. Tracy Boggier, acquisition editor, Chrissy Guthrie, project editor, Jessica Smith, copy editor, and the Composi- tion Department. You are truly pros at what you do. I also want to thank Ken Edwards, technical reviewer, as well as my literary agent, Barry Neville, of The Neville Agency. Lastly, I must thank my personal clients and our Real Estate Champions clients. With you constantly challenging us and wanting passionately to improve, you drive us to work so hard to stay ahead. It would be easy to become complacent, but you don’t let us. Thanks! 01_799556 ffirs.qxp 5/31/06 7:23 PM Page v Publisher’s Acknowledgments We’re proud of this book; please send us your comments through our Dummies online registration form located at www.dummies.com/register/. Some of the people who helped bring this book to market include the following: Acquisitions, Editorial, and Media Development Project Editor: Christina Guthrie Acquisitions Editor: Tracy Boggier Copy Editors: Sarah Faulkner, Jessica Smith Editorial Program Coordinator: Hanna K. Scott Technical Editor: Dr. Kenneth W. Edwards Editorial Manager: Christine Meloy Beck Editorial Assistant: Erin Calligan, Nadine Bell, David Lutton Cover Photos: © Jeff Cadge/Getty Images Cartoons: Rich Tennant (www.the5thwave.com) Composition Services Project Coordinator: Jennifer Theriot Layout and Graphics: Claudia Bell, Karl Brandt, Carl Byers, Stephanie D. Jumper, Barbara Moore, Barry Offringa, Alicia B. South Proofreaders: John Greenough, Jessica Kramer, Christy Pingleton, Techbooks Indexer: Techbooks Special Help Elizabeth Rea Publishing and Editorial for Consumer Dummies Diane Graves Steele, Vice President and Publisher, Consumer Dummies Joyce Pepple, Acquisitions Director, Consumer Dummies Kristin A. Cocks, Product Development Director, Consumer Dummies Michael Spring, Vice President and Publisher, Travel Kelly Regan, Editorial Director, Travel Publishing for Technology Dummies Andy Cummings, Vice President and Publisher, Dummies Technology/General User Composition Services Gerry Fahey, Vice President of Production Services Debbie Stailey, Director of Composition Services 01_799556 ffirs.qxp 5/31/06 7:23 PM Page vi Contents at a Glance Introduction 1 Part I: Acquiring the Keys to Real Estate Success 7 Chapter 1: Discovering the Skills of a Successful Agent 9 Chapter 2: Residential versus Commercial: Deciding Which Type of Real Estate Is Right for You 21 Chapter 3: Pairing with the Right Agency 41 Chapter 4: Researching and Understanding Your Marketplace 61 Part II: Prospecting for Buyers and Sellers 73 Chapter 5: Prospecting Your Way to Listings and Sales 75 Chapter 6: Mining Gold from Referrals 95 Chapter 7: Winning Business from Expired and FSBO Listings 115 Chapter 8: A Time-Tested Prospecting Tool: Planning and Hosting a Successful Open House 139 Chapter 9: Presenting and Closing Listing Contracts 157 Part III: Developing a Winning Sales Strategy 183 Chapter 10: Determining a Home’s Ideal List Price 185 Chapter 11: Getting the House Ready for Showing 203 Chapter 12: Marketing Yourself and Your Properties Online and in Print 221 Chapter 13: Negotiating the Contract and Closing the Deal 245 Part IV: Running a Successful Real Estate Business 261 Chapter 14: Staking Your Competitive Position 263 Chapter 15: Keeping Clients for Life 281 Chapter 16: Maximizing Your Time 305 Part V: The Part of Tens 327 Chapter 17: Ten Must-Haves for a Successful Real Estate Agent 329 Chapter 18: Ten Tips for Working with Buyers 335 Chapter 19: Ten Biggest Mistakes and How to Avoid Them 341 Chapter 20: Ten Web Sites for Real Estate Agents 347 Index 351 02_799556 ftoc.qxp 5/31/06 7:23 PM Page vii Table of Contents Introduction 1 About This Book 1 Conventions Used in This Book 2 What You’re Not to Read 3 Foolish Assumptions 3 How This Book Is Organized 3 Part I: Acquiring the Keys to Real Estate Success 4 Part II: Prospecting For Buyers and Sellers 4 Part III: Developing a Winning Sales Strategy 4 Part IV: Running a Successful Real Estate Business 5 Part V: The Part of Tens 5 Icons Used in This Book 5 Where to Go from Here 6 Part I: Acquiring the Keys to Real Estate Success 7 Chapter 1: Discovering the Skills of a Successful Agent . . . . . . . . . . .9 Having a Financial Goal 10 Acting and Working Like a Top-Level Professional 11 Serving as a fiduciary representative 11 Guiding financial decisions 13 Avoiding the role of a home inventory access provider 13 Winning Customers 14 Understanding the importance of customer creation over customer service 14 Developing sales ability to win customers 15 Gaining customers no matter the market conditions 16 Becoming a Listing Agent 17 Pathways to Success: Which Will You Take? 18 Chapter 2: Residential versus Commercial: Deciding Which Type of Real Estate Is Right for You . . . . . . . . . . . . . . . . . . . . . . .21 Sizing Up the Differences between Residential and Commercial Agents 21 Comparing commercial and residential real estate: It’s apples to oranges 22 Weighing advantages and disadvantages 24 Selecting Your Specialty 38 Evaluating your risk tolerance 38 Taking the 7-question litmus test 39 02_799556 ftoc.qxp 5/31/06 7:23 PM Page ix Chapter 3: Pairing with the Right Agency . . . . . . . . . . . . . . . . . . . . . . . .41 Weighing Your Agency Options 41 Enthusiasm, coffee, and doughnuts: What makes a good office? 42 Considering the rules you’ll be playing by 44 Does size really matter? 46 Prioritizing your values and expectations 47 Narrowing Your Agency Short List 48 Do your homework 48 12 questions to ask each broker 50 Making agency comparisons 53 And the winner is . . . 53 Joining Your New Agency Team 54 Building a relationship with your manager 54 Forming partnerships 56 Chapter 4: Researching and Understanding Your Marketplace . . . . .61 Three Truths that Rule Every Real Estate Market 62 Acquiring Knowledge about Your Marketplace 63 Collecting marketplace information from key sources 63 Analyzing the facts and figures 66 Compiling a marketplace analysis 69 Projecting trends on the horizon 70 Putting Your Findings to Work 71 Sharing your market research to build prospect relationships 72 Distributing your findings to gain publicity 72 Part II: Prospecting for Buyers and Sellers 73 Chapter 5: Prospecting Your Way to Listings and Sales . . . . . . . . . . .75 What Prospecting Is — and Isn’t 75 Prospecting for Listings versus Buyers 77 Prospecting for listings 77 Prospecting for buyers 78 The Four Pillars of Prospecting 79 1. Set a daily time and place for prospecting 79 2. Fight off distractions 79 3. Follow the plan 80 4. Be faithful to yourself and finish what you start 81 Putting Prospecting to Work for You 82 Targeting prospects 82 Setting and achieving prospecting goals 83 Shattering the myths 85 Finding Safety and Success in Numbers 88 The law of accumulation 88 The power of consistency 89 Success as a Real Estate Agent For Dummies x 02_799556 ftoc.qxp 5/31/06 7:23 PM Page x The never-ending prospecting cycle 89 Tracking daily goals and results 90 Managing contacts 91 Message in a Bottle: Staying in Touch 92 Chapter 6: Mining Gold from Referrals . . . . . . . . . . . . . . . . . . . . . . . . . .95 Referral Truths and Consequences 95 Building a Referral-Based Clientele 96 Sources of referrals 96 Constructing a referral database 99 Three golden rules for cultivating referrals 99 Developing Your Referral Strategy 105 Helping people send you the type of referrals you seek 106 Setting your goal 107 Approaching your referral sources 108 Asking the right questions at the right time 110 Handling the referrals you receive 111 Developing Referral Relationships 112 Making first-time contact 112 Converting referrals into clients or referral sources 113 Chapter 7: Winning Business from Expired and FSBO Listings . . . .115 Three Reasons to Work Expired and FSBO Listings 116 Turning Bad Listings to Good Business: The ABCs of Expired Listings 117 Finding expired listings 117 Treating expired listings as high-probability leads 118 Engaging an expired listing 119 Qualifying expired listings 122 Calling the seller: What to say and how to say it 123 Entering the For-Sale-By-Owner World 127 Why bother with FSBOs? 127 Finding FSBO listings 128 Converting FSBO listings: The successful agent’s approach 129 Playing the game of lead follow-up 135 Chapter 8: A Time-Tested Prospecting Tool: Planning and Hosting a Successful Open House . . . . . . . . . . . . . . . . . . . . . . . . . . . . .139 Why Host an Open House? 140 A chance to meet potential clients face to face 140 A way to meet the needs of dual-income families 142 A means of catering to the do-it-yourselfer’s home-buying needs 142 A high-touch opportunity in a high-tech world 143 Setting and Achieving Your Open House Objectives 144 Planning Your Open Houses to Gain Maximum Exposure 145 Featuring a high-appeal home 146 Looking good: Leveraging the power of curb appeal 146 xi Table of Contents 02_799556 ftoc.qxp 5/31/06 7:23 PM Page xi Inviting the neighbors 148 Don’t skimp: Feature a home in the upper-middle price range 148 Showing the way: Leading prospects to the open house 149 Being the Host with the Most: Effectively Managing the Open House 150 Doing your homework before prospects arrive 150 Wallflower or social butterfly: Meeting and greeting during the open house 153 Securing the deal by following up after the open house 155 Chapter 9: Presenting and Closing Listing Contracts . . . . . . . . . . . . .157 Qualifying Your Prospects 158 Why and how to qualify prospects 158 Checking your prospect’s “DNA” 161 Fundamentals for Presenting Listings to Qualified Prospects 164 Know the purpose of your presentation 164 Make your presentation useful and interesting 165 Keep it short and sweet 166 Focus on four keys to a great delivery 167 Stay in control 170 Giving a Quality Presentation: A Four-Phase Formula 171 Getting off to a good start 171 Setting yourself apart from the real estate agent pack 172 Presenting prices 176 Going for the close 178 Dealing with Sales Objections 178 Delaying objections 178 Handling objections in four easy steps 179 Asking for the Order 181 Bringing the Presentation to a Natural Conclusion 181 Part III: Developing a Winning Sales Strategy 183 Chapter 10: Determining a Home’s Ideal List Price . . . . . . . . . . . . . . .185 Examining Pricing Approaches 185 The ABCs of CMAs 186 Staying current 188 Factors that contribute to a CMA 188 Creating a CMA 190 CMA mistakes to avoid 192 Taking CMA results with a grain of salt 193 Developing Your Pricing Philosophy 194 Avoiding overpricing just to please the buyer 195 Steering clear of starting high and reducing later 196 Coming in on-the-button 197 Troubleshooting Advice for Pricing Problems 198 Reducing prices: A five-step formula 198 Accepting over-priced listings 201 Success as a Real Estate Agent For Dummies xii 02_799556 ftoc.qxp 5/31/06 7:23 PM Page xii [...]... capital letters or with an initial capital R For your information, all Realtors are real estate agents, but only those real estate agents who are members of and subscribe to the Association’s strict code of ethics are Realtors ߜ The word agency describes the relationship that a real estate agent has with members of the public, or as they’re sometimes called, clients When clients list a home for sale,... understand the business environment, weigh the most important career issues, ask the right questions, and unlock answers that get your real estate practice headed in the right direction In four fast chapters, I share tried-and-true advice for what it takes to make it as a real estate agent, how to decide between a residential or a commercial real estate specialty, how to choose the real estate company that... enter a contractual relationship with the agent who will represent their interests That agreement is called an agency relationship Every state and province has a unique set of laws stipulating how consumers and real estate agents work in an agency relationship These agency laws have been reworked and clarified over the past decade In earlier days, agents didn’t formally represent homebuyers Instead, agents... loyalty How This Book Is Organized Each of the five parts of this book deals with a different aspect of your real estate career: making fundamental career decisions, attracting clients, closing sales, building a strong business, and tapping into the best resources and advice available 3 4 Success as a Real Estate Agent For Dummies Every part of the book is a self-standing component You can scan the table... incorporated a number of style conventions, most aimed at keeping the book easy to read and a few aimed at keeping it legally accurate: ߜ Throughout this book, I use the term real estate agent rather than Realtor unless I’m talking specifically about members of the National Association of Realtors (NAR) Realtor is a registered trademark owned by the NAR, which requires that the term appear either in all capital... true! Real estate sales paved the way for me to become a millionaire at a very young age It has provided a solid income, many investment opportunities, an exciting lifestyle, and a platform from which I’ve been able to help many others achieve their own goals and dreams in life About This Book This book is about becoming a successful real estate agent, for sure It’s also about acquiring sales skills, marketing... thousands of agents Very few, even at the top echelon of earnings, have had any formalized sales training Whenever I speak to agents, I always ask the audience how many have taken any formalized sales training, and I usually see only a few hands out of the hundreds in the room The other reason I know sales skills are lacking is because I coach some of the best and highest-earning agents in the world, and... major financial transactions Advise them well and they’ll remain clients and word-of-mouth ambassadors for years to come See Chapter 15 for more information about keeping clients for life Avoiding the role of a home inventory access provider Back in the days of the early 1990s, before the advances of the Internet, the consumer’s only avenue to information about homes for sale was through a real estate. .. owner and entrepreneur, I’ve yet to find a business equal to real estate sales when it comes to income potential versus capital investment In any marketplace, a real estate agent has the opportunity to create hundreds of thousands of dollars in income (I coach many agents who earn more than one million dollars per year.) An agent s income is especially significant when viewed against the capital investment... took real work to find and create client leads In robust market conditions, leads are abundant and relatively easy to attract, especially buyer leads But when the market slows, as it inevitably will, real estate success becomes less automatic Only great sales skills guarantee that you — instead of some other agent — will win clients no matter the market conditions The best agents make more money in a . sought-after speakers in the real estate arena. He has spoken to agents and managers at the local, regional, national, and international level for most of the large real estate brands, such as Coldwell Banker,. profit than what a real estate agent can achieve in the first few years. It’s almost too good to be true! Real estate sales paved the way for me to become a millionaire at a very young age. It has. gain efficiency and career advancement 326 Part V: The Part of Tens 327 Chapter 17: Ten Must-Haves for a Successful Real Estate Agent . . .329 A Good Contact Management System 329 A Real Estate