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  1. 1. The secret formula for increasing your income is really no secret. In real estate appraisal terms, the “highest and best use” of a property is how that property would be used most efficiently or profitably. In the same way, the highest and best use of your time as a real estate professional means making the most of those events that lead most directly to income-generating activities– sales, referrals and repeat business. In other words. Spend more time with better prospects, using better presentations and proposals. Real estate’s top performers and coaches will tell you the highest and best use of your time is in personal meetings, proposals and presentations. That’s why it’s vital to have a system to make the most of every marketing proposal, open house, and buyer showing. A system that enables you to convert more pros- pects to clients may be the best marketing investment you can make. If you think you don’t have time to provide detailed neighborhood knowledge, consider the benefits. If you’re trying to sell a fixer-upper in a desirable area, it’s important to let buyers know about potential appreciation. When working with buyers, it’s a good idea to “sell the neighborhood” along with individual homes. This provides an opportunity to maintain buyer interest and loyalty even if a particular property is not available or doesn’t work out. Take back the information advantage Real estate professionals historically have held a clear information advantage. Listing and neighborhood information was locked up in 3-ring binders or dumb terminals tucked away in brick-and-mortar real estate offices. Buyers and sellers needed to work with real estate pros to get the information, or fly blind. In the 1990s, the tide began to turn – eventually into a tidal wave of real estate information across the Internet. Neighborhood demographics, sales trends and robust listing information appeared on thousands of websites. As the information advantage shifted toward consumers, some traditional realtors were caught by surprise, and many thought that advantage would never be regained. Today, agents are less frequently recognized as a valuable source of information. A 2008 study by the California Association of REALTORS® showed 10 percent of respondents found the Internet a more useful source of real estate information than agents. The percentage of respondents who found Internet information less useful than agent-provided information has declined sharply since 2004. 2
  2. 2. How can you differentiate the information and expertise you’ve built throughout your career from some- thing your clients can pull up on Google? Follow the guidelines in this special report to give your clients information they need and can’t get on their own, marking you as the true Neighborhood Expert. Too much information, too little understanding It’s no wonder homebuyers have an insatiable appetite for neighborhood information: “the neighborhood” is consistently the most important factor home buyers cite when choosing where to live. If you’re not combining property details with neighborhood knowledge, you’re giving homebuyers only part of the information they need to make the best buying decision. Neighborhood information is also useful to sellers to position their homes in the best light for a quicker sale. Here are three reasons why neighborhood information found on the Internet may hurt buyers more than help: • Homebuyers are typically overloaded with content that may or may not be relevant to them. Buyers must wade through search results, pick through pages and navigate through site menus in hopes of finding what they are looking for. • The information may not be reliable. Buyers can research area schools online to try to determine whether they are “good” or “bad,” but an anonymous parent’s opinion might not be a trustworthy source. • Online information is difficult to put in context. Buyers and sellers typically visit multiple sources to get the information they want. When they do find it, it’s hard to put it all together to paint the complete picture. 3
  3. 3. Between information overload and the subjective nature of online content, buyers can end up feeling more confused and less confident about moving ahead with buying or selling. What they really want is targeted, credible information. Real estate information overload on the Internet also presents issues for agents. It doesn’t: • Generate contacts and leads. Agents provide information on their websites, but are seldom recognized as having knowledge or being the source of the information. After some weeks of buying and selling, most people can’t remember which information came from which source. Zillow? Yahoo? Your agent website? • Build your brand or income. The ethos of doing business on the Internet is “something for something.” So why is valuable real estate data that costs millions of dollars to compile, manage and present given away every day in hopes of attracting website visitors who may possibly contact you as a result? Years ago, brokers learned that controlling access to real estate information isn’t a viable business model. Today’s brokers are learning that giving away information with no goals or measurable strategy in hopes of attracting clients isn’t effective either. But there is a middle ground. Here are a few ideas on how real estate pros can take back the information advantage while building their brands and delivering the first-rate service buyers and sellers should expect from a top-flight real estate professional. Deliver knowledge, not data Full service real estate pros know how to compete with information overload and are comfortable stepping in to supply information where the Internet leaves off. Buyers and sellers need a trusted guide to transform overwhelming information into valuable knowledge. Real estate pros who know the difference between data, information and knowledge will be a step ahead. Real estate information overload on the Internet also presents issues for agents. It doesn’t: Data is unstructured, individual bits of information, such as MLS data some agents give their customers. Information can be defined as data displayed graphically in maps, graphs or charts that can help buyers quickly understand the details of homes, schools and neighborhoods. Knowledge is information that can be applied to a specific client’s circumstances to make better buy- ing and selling decisions. Real estate knowledge that answers practical questions – Is this neighborhood more or less expensive than my current neighborhood? – will help you win business. 4
  4. 4. Data Information Knowledge Unstructured, Structured and organized Information that can be individual facts data-graphs or charts for applied to make better and figures comparison purposes buying and selling decisions Make information overload work for you. Too much information will raise concerns about choosing the wrong house, the wrong neighborhood, wrong school or wrong financing. The key is listening to your buyers and to anticipate the information they really need. If you can cull out the misinformation and non- relevant information, buyers will appreciate your service. In addition to helping you win business, real estate information can help real estate pros avoid steering issues. Agents can’t say whether a school is good or bad. But they can deliver a report comparing SAT scores, graduation rates, student-to-faculty ratios and other information that can help their clients decide. It’s your role to package, personalize and interpret information for your prospects, buyers and sellers. And the best way to make complex information quick and easy-to-understand is to make it graphic. Realize that telling isn’t selling! Many of us have attended a sales training course and heard this familiar refrain. It’s not enough to tell your prospects about features and benefits – you must also SHOW them. That’s why the best way to pres- ent real estate knowledge is visually. Buyers want photos, video, virtual tours, and 3D maps to help them understand properties and neighborhoods quickly and easily. It’s also important to recognize that this trend is accelerating. Younger buyers who grew up on blockbust- er movies with special effects and playing 3D computer games are not going to be happy with columns and rows of data. 5
  5. 5. Here’s an example of how you can use graphics to showcase your real estate knowledge to help your clients make better decisions and avoid mistakes – in this case, overpricing their homes. It may take a long time to talk to them about why accurate pricing is the key to a successful sale, but with a graphic, the message is communicated instantly. After all, a picture can save a thousand words. The chart on the right shows that when you list your home, you are also likely to have the most responses within the first three weeks. If you overprice, you’ll miss that initial period of activity that new listings generate. It clearly shows your sellers why you shouldn’t start out overpricing your home just to “see what happens” – you will only reach 10 percent of available buyers. The best way to make complex information easy to understand is to make it visual. It enables you to show the relationships and comparisons that can make buying and selling decisions easier. Make it personal Real estate information from the Internet is mass-marketing that provides some value. But real estate knowledge that’s personalized to individual buyers and sellers provides outstanding value, and it’s one of the best ways for you to differentiate yourself and build your brand. A message that’s personalized comes from a specific person and goes to a specific person, and it’s powerful because it lets clients know that you see them as unique individuals with particular needs. Realtors know that relationships must be built before transactions can happen. Personalization helps turn the focus to the relationship at the outset and can make each subsequent meeting and contact more pro- ductive and profitable. Make it personal to help build trust and ongoing relationships. 6
  6. 6. The good news is, personalization builds on a core strength of top agents – listening. It’s said that the most successful salespeople in real estate listen twice as much as they speak. What better way to show prospects and clients you’re listening? Once you’ve zeroed in on your client’s interests, you can match them to those neighborhood traits you know will be relevant to her. Personalizing your presentations for clients can be as easy as ‘commenting’ a map to show where the soccer fields are, noting school bus stops, or listing ladies-only gyms. And personalization is just as much about what you leave out, saving your client’s time by filtering out unnecessary information. Personalization makes it unique. There is no way your clients or prospects can find more relevant information on the Internet or anyplace else. It’s your opportunity to deliver unique information and values. In the example below, an added comment makes a map personal and shows a potential buyer you’re tuned in to his needs. Mass marketing no longer works It’s because the mass – homebuyer demographic subgroups – is diversifying and changing so quickly. By the year 2040, the makeup of the U.S. population will be 53 percent Anglo and 47 percent non-Anglo, according to the U.S. Census Bureau. Home ownership is expected to rise dramatically for African-Americans, Hispanics, and Asians. Hispanics, the fastest growing minority group, are growing at four times the rate of the general population. There’s no single marketing message that’s likely to resonate with such a diverse audience. Personalization is one way to make sure your message is on target. 7
  7. 7. Go to bat for buyers Brett Woolley, eNeighborhoods national speaker, often tells his training classes that Home buyers don’t need a chauffeur – they need a neighborhood expert He makes light of the situation, but it’s true that many agents simply drive buyers around and open doors to local homes for sale (many of which the buyers themselves have found!). Woolley says that to add value for home buyers, it’s important to create a dialog that enables you to learn about their goals and requirements for buying a home. At the same time, you should be delivering knowl- edge that builds your reputation as a local expert. A major obstacle in getting transactions done is an information imbalance that favors sellers over buyers. Agents often crunch MLS data and prepare extensive marketing presentations with CMAs for sellers, while buyers proceed with listing information and whatever neighborhood information they can gather on the Internet. He suggests that real estate pros level the playing field with sellers for better loyalty and better results. • Sales guru Brian Tracy says that organized presentations are 20 times more effective than random presentations. Yet, many agents simply wing it when showing homes, rather than creating presentations that help buyers organize their thoughts and make better buying decisions. Products like the eNeighborhoods BuyerTour make it easy to create a personalized report that features active MLS listings, maps and neighborhood demographics. You can also provide custom loan scenarios, neighborhood statistics and school information for each client. • After looking at several homes, buyers can get confused as to which home had the features they liked or disliked. To help buyers decide, you can add a comments section to each listing that enables buyers to make notes on individual properties. They can then refer to the notes they’ve taken on their Buyer Tour and tell you which properties they prefer. Provide an area for notes and encourage your buyers to use it! • To truly stand out from the crowd, help buyers put together an offer on the home they decide to pur chase. With some analysis of for-sale properties, pending sales and recent sales, you can create an offer that shows sellers they are dealing with a serious buyer. A more serious initial offer can also shorten your total transaction time by minimizing the rounds of offers and counter-offers that happen when buyers and sellers are far apart on price. 8
  8. 8. Prepare for the rise of the X’s and Y’s Regardless of the content of your customer communications, make sure you’re using the right channels. Today, those channels are not just inquiries from your website. They are likely to be email, cell phones and instant messaging. If you’re not set up to respond quickly to questions and inquiries, you’re probably losing business. For real estate pros, figuring out how to allocate your ad budget is difficult, but the goal is simple: get the most relevance for your money. Relevance comes down to getting three things right: the right message in front of the right people at the right time. This is an easy concept that can be very challenging to execute. If your audience is upscale retirees, you can’t ignore the power of print. Print can be very effective in reaching local niche markets. If you’re after younger, first-time homebuyers, you’ll want to devote more of your ad spend online. Your best marketing mix will depend on characteristics of your local market and the audience you’re trying to reach. Generation X and real estate • Born approximately between 1965 and 1980 • Half of Gen X already own homes • Want school, neighborhood, crime reports • Expect flexibility, buyer representation, personalized communications If your real estate practice includes both Baby Boomers, born between 1946 and 1965, and Gen-Xers, one of the biggest differences you probably notice is Gen X people are more inquisitive and interactive. They ask questions and don’t really have much interest in the conventions of traditional real estate. They want to know how real estate transactions work, how much they cost, who is involved, and how long it will take. They want to know about the trends and economics of the local real estate markets. They want to hear less about your sales awards and success stories, and more about what’s in it for them. About half of Gen X consumers are not yet homeowners, so this is a huge opportunity for real estate pros to add value by providing relevant, current information and local market knowledge. Finally, like all real estate consumers, Gen X buyers and sellers don’t respond to well to mass market messaging. They expect your communications, materials and presentations to be tailored to their particular needs. They are impressed by use of technology, personalized service and fast response. 9
  9. 9. What’s permission marketing Permission Marketing cuts through the clutter and allows a marketer to speak to prospects as friends, not strangers. This personal, anticipated, frequent, and relevant communication has infinitely more impact than a random message displayed in a random place at a random moment. “Think about choosing a nice restaurant for dinner. If you learn about a restaurant from a cold-calling telemarketer, or from an unsolicited direct mail piece, you’re likely to ignore the recommendation. But if a trusted friend offers a restaurant recommendation, you’re likely to try it out” – Seth Godin Asking permission lets you turn strangers, who might otherwise ignore your unsolicited offer, into people willing to pay attention when your message arrives. That’s why prospects who “raise their hand” to request your newsletter or listing alert emails are more responsive than those from purchased lists. Generation Y and real estate • Born between 1981 and1995 • More than 70 million Gen Y consumers in the U.S. • They Blog, IM, consume videos, and expect quick answers to their questions • They represent $172 billion per year in purchasing power That $172 billion in purchasing power is an impressive number. In addition to their own money, this group of real estate consumers will benefit from a huge transfer of wealth from their Boomer grandparents in the coming years. Here’s a real reason to be optimistic about real estate’s recovery: About 70 million new real estate consumers are coming of age, and real estate is a priority for them, according to a 2007 survey of college students by Anderson Surveys. . Survey respondents were asked to complete this sentence: “If I could buy anything, it would be… ” The answer’s not an iPod or iPhone – but a home. Housing was the top choice for 41 percent of the men and 49 percent of the women. This is an interactive group, and the ways in which they communicate and interact may seem like new media to us. Microblogging on Twitter, posting on Facebook, instant messaging – these are everyday habits to them. This is the way they interact with each other, and they will expect to be able to communicate with their real estate professionals this way as well. Here are some ideas to stay in step with Gen X and Y: • Create a Facebook page or group to promote open house events and post new listings. • Post listings on Twitter to reach your buyers immediately with new and reduced homes on the market. • Younger buyers and sellers are more mobile and less tied to their computers. This trend will only accelerate as smartphones get smarter, data downloads faster, and prices drop. 10
  10. 10. It may sound like a foreign language, or it could be a medium through which you are already communicating with family and friends. Either way, to succeed with younger buyers, it helps to know what you’re twittering about. Learn the secret of the sales funnel Sales organizations in every industry often use funnel diagrams to depict the stages of the selling cycle. At the top are un-qualified prospects, at the bottom are closed sales. When typical salespeople see a diagram like this, they immediately recognize it as a sales funnel. The secret? What prospects see is a relationship funnel, not a sales funnel. Why? Each stage of the funnel requires a deeper, more trusting relationship. At each stage of the funnel, prospects and clients evaluate the information they have and their relationship with you to decide whether they should move forward. If you provide too little, too much or incorrect information, you’re unlikely to progress in your relationship. At every stage of the sales process, confidence – yours and your client’s – is required to move forward. Buyers and sellers aren’t looking for a salesperson or chauffeur to take them to the next step; they are looking for a trusted real estate advisor and guide. Your industry knowledge, professionalism and people skills can make the process smoother for your clients. If you have built a foundation of knowledge and trust at the prospect stage, you can expect to move on to the face-to-face meeting and contract-signing stages, all the way to repeat sales and referrals. That’s why real estate’s most successful practitioners focus on relationships, and sales and referrals naturally follow. What’s the funnel look like to you? At the end, are you after just a sale, or also a relationship that leads to future sales and referrals? 11