Success in real estate is very much like cooking. You start with basic principles that always work (the recipe), add some personality and a variety of new ingredients, add to that your core motivating values and a coach that can help you make necessary adjustments along the way, and you’ll be headed in the right direction.

Success in today’s marketplace is not about rigidly sticking to cut-in-stone processes. It is about understanding your specific market and applying the right systems at the right time to generate the right leads. So, where do you start and how do you become the next award winner/top producer/rock star? Here are five critical ingredients to your recipe for success:

1)      It all begins with a plan, a recipe if you will, that outlines what it is you are going to accomplish this year. Without a plan—and some specific goals—you will end up just making a mess of your kitchen, or rather, your business. Begin with the end in mind.

2)      Build and work your database. The key ingredient here is a real estate-specific database management system. Your system must be able to manage people and properties, apply and create action or activity plans, manage your listings and closings, and do a great job with lead management and follow-up. There are many other things a good CRM can and should do, but without these few key ingredients it’s not worth investing your time or money.

3)      Prospect daily. Sounds simple, but this is rarely mastered. Top performers know that they are in charge of making it rain. If there are no new leads coming in constantly, they know they are losing ground. There are several ways of prospecting and this is where you get to be creative. You get to choose what activities fit your personality, your market and the specific opportunities you identified in your plan. The key here is consistency. You must block time every day for what I call MMAs – Money-Making Activities.

4)      Stop doing $15 an hour tasks. It is virtually impossible to get to a place where you are making $300.00 an hour if you spend the majority of your time doing administration-level activities. This is one of the hardest things to do, but once you realize that you cap your earning potential by being a control freak, it makes it a lot easier. I have always said: Systems first, assistants second. Set up the right systems and then get great assistants to administer them.

5)      The best of the best all have personal coaches. There is a reason for this. A coach can look at what you are doing and help you make the necessary changes to perfect your recipe to success.

Being a successful real estate agent is not rocket science. Take it from Chef Verl, you just have to have the right recipe or plan – and then you have to execute on it!

By Verl Workman, Pinnacle Quest Consulting © 2011

In my speaking business, I have definitely noticed a difference in how busy I am. I’ve been blessed with a lot of speaking events so far this year, but what I am hearing from the agents out there still concerns me. As I speak to agents I find that while most admit that things are improving, they are still really struggling with what to do to take advantage of the business that is definitely out there.

From time to time I just think we have to ask ourselves the hard question whether what we are currently doing is really working? I know I’ve had to really buckle down with my real estate business and put some new practices – along with several old ones – into place in order to keep my real estate practice successfully growing.

Lately, I’ve been speaking on a new topic that everyone, brokers and agents alike, seem to really enjoy. (When that happens I call it a “Hot Topic!”) Earlier this year I launched my first of several events titled, “Get Your Head In the Cloud and Make it Rain!” It’s definitely been a Hot Topic! It is cutting-edge and I share web sites, free downloads, cool tools and systems that really get your creative juices flowing.

This has been my most popular topic this year and I love delivering it because it is fresh, new, exciting and makes agents really want to be in this business. I can tell from the comments I am getting on my Facebook page that agents love it because it’s helping their businesses grow, and brokers love it because it is helping their agents!

I think it’s a killer seminar, too, and I feel like I am accomplishing my goal to Entertain, Enlighten and most importantly, Empower agents to set themselves apart from their competition and get more business right now.

My other topic that has been a lot of fun and is also getting real results is titled, “How To Become a Freaking Sales Animal.” Some real estate professionals just don’t want to admit that they are SALES PEOPLE! (Heaven forbid!) But those who do, realize that sales is a process and having the right dialog and sales systems can without a doubt create more selling opportunities.

If you have ever attended one of my seminars you may have heard me say that my unfair competitive advantage is that “I’m armed to the teeth with technology” and that “I’m a Freaking Sales Animal!” I’ve still got a lot to learn, too, but I really believe that if more agents had that kind of fire and enthusiasm about what they do, they would definitely be more successful.

I’d love to speak at an event with your company and share either one of these topics. Whether you’re an agent or a broker, I promise you’ll come away with some new ideas to make being in real estate the best profession ever. You can find out more at my web site www.VerlWorkman.com.

If you let a domain expire, the registrar will charge you a minimum of $80 to renew it.  What a scam but, we have to deal with it.  Just know the reality and stay on top of it better than I did dang it…..

Now, all my domains (except the important ones) are gone…..  gone….. Please, don’t let this happen to you.  Know your login and password to your domain provider and make sure you are not expired or ready to expire.  This is your responsibility no matter who set up you website or email.  If your web provider bought your domain under their account, ask them to release it to you.  You need to ”own” your web address and have control and login information for this. 

I see so many real estate agent website search results that end up on “site cannot be found” status.  Google and other search engines will reveal the truth about who is “really” online.  You should be there or make sure what is googled doesn’t turn up nada like mine did.  I am humbled.

Robyn

In the previous chapters we’ve discussed all the various elements or components of what I believe to be the best listing presentation you’ll find anywhere. I’ve determined not to give you just the listing “pitch”, but rather to give you the entire presentation — from the initial preparations you must make, to the underlying theory, to the preparation required to become the top listing agent, to my actual presentation itself: the actual what-to-say and how-to-say-it.

In this and the final chapter I will help you assemble all the pieces. I admit that I’ve given you a lot to chew on already. Not a day goes by that we don’t get emails from agents asking us to explain some of the mathematics or to discuss how the approach might work in their market. If you’re a bit overwhelmed, don’t feel like the Lone Ranger! I hear those questions a lot. But remember: nothing worth having is easy to get.

If this listing approach were really easy to learn, everyone would be doing it. However, the fact is that it’s not. While the concept itself is the very picture of simplicity, putting it all together takes a commitment from you the agent, probably unlike anything you’ve ever been taught. But again, I promise you that, if you’ll take the time to put it all together, you’ll be listing at a premium every single time. You’ll be the top listing agent in your market — maybe even in the state or country.

My approach really comes down to two parts: the technology element (assembling the right tools) and the human element (having the knowledge and the philosophical base). If you have the technology element and yet lack the knowledge and underlying values, you won’t become a master listing agent.

By the same token, if you have all the education in the world and yet fail to acquire the technology tools critical to compete in this new age of real estate, you can never become the dominant agent in your market, and you may find yourself struggling just to survive. Becoming a master listing agent requires balance.

The Technology Element.

In the earlier chapters, we discussed how the Internet is rapidly becoming the predominant method for home searches today. From only a small percentage of searches a few years ago, as many as 94% of buyers and sellers today are turning to the Internet like never before.

Now more than ever, it’s critical for any agent to develop a comprehensive web-marketing strategy. After all, if the Internet is where the customers are looking for real estate, then the web should be where you focus your marketing efforts. Right? Right.

We already covered how developing a comprehensive Internet marketing strategy, doesn’t require spending a lot of money. Instead, it’s important that you invest in the proper pieces. Many agents adopt a marketing policy of “ready, fire, aim,” rather than “ready, aim, fire.” The result of such a policy is frustration.

Frustration from spending a lot of money and receiving little, if any, return on your investment. Frustration from wasting a lot of time trying to do what all the “experts” advise, only to figure out too late that those so-called experts haven’t got a clue about online marketing. Frustration from making a good-faith investment of time and money, only to be let down again.

For less than the cost of running an ad in a homes magazine for a single month, you can put together a marketing solution that will return as many as 100 new inbound real estate customers! For most agents, that same money spent on a magazine ad will return 8-10 leads.

What’s even better is that, by using technology to capture the leads, not only do you get more information, but you can also get your leads 24 hours a day and not only when you happen to be able to answer your phone.

For the first time ever, instead of having to go to multiple vendors and piece together the tools you need to be successful in today’s real estate climate, you can get it all in one place. Our company has it all in one place.

Our technology called an LCM Gateway® is available as a stand-alone tool through our website http://LCMsuccess.com. For less than the price of your morning coffee each day, you can have state-of-the-art LCM Gateway lead capture technology and best of all, for the first time ever there is no long term contract and no activation fee. It is really a no-brainer, and it pays for itself with the first lead you generate.

But if you have a large team or brokerage and need an enterprise application with all the essential technologies, we have that too. Pipeline-i® — Intelligent Technology — the ultimate Virtual Office technology package for today’s working agent. Check it out.

Now, in one application you’ll get our LCM Gateway®, state-of-the-art lead capture technologies for both web and telephone, our Agent SimpleSite®, a customer-centric personal website, our Client Management software, and our mobile Virtual Assistant® application for your smart phone.

Pipeline-i is the single most powerful Virtual Office real estate platform available today, at any price, and is complete with hundreds of training articles, videos, calculators, business planning modules and much, much more.

And instead of having to piece it together, Pipeline-i gives you a seamless and perfectly integrated Virtual Office, allowing you to operate your real estate practice wherever you have your computer and an Internet connection, whether that’s a coffee shop, your home office, or your car.

Now you can communicate with other team members, share leads, track your progress, write a business plan, generate new customer leads, refer business, log client communications, take online training, and schedule activities for yourself or team members, all from one command center.

Powered by our Pipeline-i Virtual Office technology, you’ll go weeks without ever coming by the office. Why? Because your real estate office is virtual. And that makes you more productive at what you do best — working with clients.

Either way, you really owe it to yourself to check out our technologies. Don’t worry, nobody will try to sell you anything. We don’t even have a sales force. But our technology really is that good, and it could literally change your practice forever! It has for many other agents before you.

There really is no excuse not to have all the customers you can possibly service. You can generate your own fresh, inbound leads for only pennies per lead. No kidding! Here is what I mean:

Our typical agent, nationwide, spends only about $250 for advertising. That’s all! The result is an average of 92 leads, nationwide, for a marketing cost of only $2.71 per lead. And for that tiny investment, our agents not only spend less money on marketing than their competition does, but they generate more business than they can personally handle, allowing them the freedom to grow a team or to refer business to other agents for a fee.

Imagine what it would be like for your own business to have twenty new leads every week — and each for less than the cost of a cup of Starbucks! Would that change your business? Would it take the pressure off? Would it allow you to be a little choosier about which customers you work with? Would it give you enough “breathing room” to begin to expand your business? Could you see how simply having a steady inbound stream of customers would allow you to run your practice more like a business?

If you answered “yes” to any of those questions, you truly owe it to yourself to look into getting the right technology. You don’t have to spend a lot of money to have state-of-the-art lead capture and client management technology. And having the right technology will set you up for being the top listing agent in your market because you will have more opportunities than anyone else.

Matt Jones is the founder and CEO of FavoriteAgent.com and nationally syndicated author of LCM: The Secret to Success in the New Age of Real Estate, The Ultimate Listing Presentation, Traffic: How to Sell Fast and Net More, Becoming a Mega-Producer, and 20 Questions: Everything You Always Wanted to Know about Real Estate but Were Afraid to Ask. Jones’ North Carolina-based company has been profiled by major media outlets as an innovator and a pioneer in the industry, and CNN’s Pulse on America claimed FavoriteAgent.com is “changing the way real estate is being done in America.” This content is cross-posted in the following locations: BlogMattBlog.com, RealBlogging.com, NewsGeni.us, TheCommissionCheck.com, and now Amazon Kindle.

If you recall from the last chapter, we were in the middle of making our presentation to a seller. We’ve discussed the two approaches — the traditional or price approach and the traffic approach. We’ve helped him understand why the traffic approach works and why it sells houses in half the time while netting more money.

Next I tell the seller that if he’s like most of my clients, he’ll want to know how I intend to market his property and what the current market conditions look like. I’ve had sellers tell me that they wanted to wait until spring (or some other time) to put their homes on the market because they had been told that the market was slow and few buyers were out shopping. I love it when this happens.

I ask my seller if he has a computer handy. We go to his computer, and we log onto the Internet. I then take him to my LCM Gateway, and we go through the process of registering to see properties online. We receive our user name and password and log into the website to view the MLS.

Just about the time we get to the search (IDX) page, I get a text message on my phone. I show the seller that my registration has just come in within seconds. I explain that if this were an ordinary inquiry, I would immediately call the shopper back and introduce myself, see if I could help him find what he was looking for, and offer to send him new listings by email.

Next I would tell my seller that today’s customers want instant information, and because of the technology I use I can actually provide that help when the home-shopper needs it — right now! Then I pull out my secret weapon: my home-buyer notebook.

In it I have the names of all the Internet customers who have come through my LCM Gateway in the past three months. Each customer is neatly printed on a page by himself, complete with his name, phone numbers, his email address, and any notes I’ve written. Each page is literally a resume for that buyer, and it’s very impressive.

Imagine the reaction of your listing client when you show him — when you actually put into his hands — the names and phone numbers of hundreds, maybe thousands of home-buyers with whom your team is currently working.

Imagine what goes through his mind when he is holding your notebook that is four inches thick, and it’s page after page of real people who are actually looking for homes in your market!! It’s easy to convince the seller that, while the process may be slow for some agents, it’s anything but slow for your team!

How do you think your customer will react? I’ll tell you how: he’ll stand there looking at your home-buyer notebook in disbelief, except for the fact that he just saw your system work! In his heart he knows it works, and he knows instantly that nobody can do a better job selling his home. All he says is, “Where do I sign?”

Finally, I’d tell the seller about some cases where I’ve used the traffic approach and had great results. Remember: Jesus taught in parables. Why? Because people love stories. A story can take the vaguest idea and make it imaginable by making it real. Here are a few of my favorite stories that I’ve used countless times in the past.

Through my website, a client who was a licensed broker in Boone, North Carolina, approached me one day last year. His parents had passed away, and because of his real estate experience, his siblings had chosen him to help sell the family home. So he called the largest company in our market, which happened to be Coldwell Banker, and listed the home for $64,900.

Over the course of two years, Coldwell systematically reduced the price to $59,900. But even though it was a very nice little house, the seller hadn’t received a single offer on it during the course of the listing contracts.

When I explained my idea to the broker, I could see the light come on in his mind! As an agent, he intuitively knew that this approach would work, so at my suggestion we raised the price to $70,000 and the commission from 6% to 8%. (The co-op was half.) Well, within a month we had received three offers! The first two we turned down, but the third was a full offer, and we accepted it.

Still, we had one more hurdle to get past: the appraisal had to support the sale price. As it turned out, the appraisal came in short, and my client had to sell the home for $69,500 and do some minor repairs that amounted to less than $600 (and probably would’ve had to be done with any sale at any price).

So after raising the price $10,100 and then paying an extra $1,390 (the 2% extra commission), my client netted $8,210 more money and got the absolute top dollar for his childhood home. Even more importantly, we accomplished in under ninety days what he’d failed to do in two full years: we got offers and were able to command the maximum price because of the traffic generated by the higher commission. Was he happy? He was ecstatic! And so was I.

Here’s another story you’ll love. Again, I had a client approach me through my website. (Are you noticing a trend here?) This fellow was very frustrated because he’d bought a brand new home, closed on it, and was having to make two house payments every month. He’d tried to sell the home FSBO; and although he’d shown it a lot, no offers had materialized. Then he listed it with a local brokerage, but still no offers and only a few showings.

After the listing expired, I went to see him and I showed him my approach. He decided to try it. We raised the price from $79,900 to $86,000, and immediately had a surge of showing traffic. Exactly seven days later he sold the home for the full asking price of $86,000.

Just like in the previous story, we anxiously waited for the appraisal, but this time it went through without a hitch. To this day, my client thinks that I’m a genius and he sends me business every chance he gets.

Now let’s do the math on this one: the additional commission cost the seller $1,720, but the additional price he was able to command was $6,100, so his net benefit was $4,380. That’s over 5% more money than using the traditional approach. Best of all, the house sold almost immediately!

I could go on and on with these stories, but I’ll share just one more. This client was one of those know-it-all people. As usual, I shared both approaches with him. His initial reaction was that he’d never heard of the traffic approach and was skeptical because he had a problem with the high commission.

No problem. He decided to split the difference and list the home at 7%. (Let me remind you that we’re in a 6%-or-less market.) We waited. Because we had listed at 7% we had a slightly-better-than-average number of showings, but nothing outstanding and no offers for about four months.

Eventually, the client began to get frustrated (not a new thing to many of you listing agents, I’m sure) and he called me to ask what I thought he should do. He was in a hurry to sell the home and he had a lot of equity, so we’d listed it for $146,000. I asked him if he remembered what I’d suggested when we first listed the house, and he said, “Not really.”

I suggested that we raise the price to $156,000 and the commission to 8%. He’d been considering reducing the price and was naturally stunned when I told him to raise it.

Well, to make a long story short, we closed not long afterward! He was very thankful for my getting him top dollar, and I can promise you that he’ll never sell another home the traditional way. He realizes that bribery works!

Quickly looking at the math, you can see that we raised the commission 1%, or $1,560, and we commanded $10,000 more for the home and sold it almost immediately. Hmmm. Coincidence? I don’t think so!

Now, did I do anything differently in any of those cases? Absolutely not! I advertise all of my listings exactly the same. I don’t show any preferential treatment, regardless of price, commission rate, or pressure from the client. What sold those homes and many more just like them was the commission.

But it gets even better! What’s the first thing we’re all taught to do when a home doesn’t sell? That’s right: lower the price. But what I generally do is convince my client to raise the commission. We’ve raised the commission as high as 12% (!) to sell a home that otherwise would’ve sat vacant forever. It’s amazing what a lot of showing traffic will do for even the worst dog of a house.

So there you have the listing presentation that’s made me one of the top listing agents in the country and earned my clients and me lots of money. And now that you have the “ammo,”. Next, I’m going to give you the “gun.” In the next and final chapter, we’ll help you put it all together so that you can become the dominant listing agent in your market!

We’ll take the technology component, the advertising and marketing component, the preparation component, and the listing presentation and give you the strategy to assemble it all in a way that will make you virtually impossible to beat. Until then, work on getting your technology in place if you haven’t already done so. The first key to being the top listing agent is having lots of opportunities.

Matt Jones is the founder and CEO of FavoriteAgent.com and nationally syndicated author of LCM: The Secret to Success in the New Age of Real Estate, The Ultimate Listing Presentation, Traffic: How to Sell Fast and Net More, Becoming a Mega-Producer, and 20 Questions: Everything You Always Wanted to Know about Real Estate but Were Afraid to Ask. Jones’ North Carolina-based company has been profiled by major media outlets as an innovator and a pioneer in the industry, and CNN’s Pulse on America claimed FavoriteAgent.com is “changing the way real estate is being done in America.” This content is cross-posted in the following locations: BlogMattBlog.com, RealBlogging.com, NewsGeni.us, TheCommissionCheck.com, and now Amazon Kindle.

Having “things” is wonderful, but what do we really need to survive?  How can we help each other right now and help our clients acquire the things they need and get rid of things they don’t?   I have a few ideas for you that could help you in your  “good-will,”  marketing and leads generating adventures.

This past weekend I moved for the 4th time in 18 months.  Life changes and circumstances kept me on the move and, in the process, I accumulated a ton of stuff.  My first move I hauled a simple load of  my personal belongings and a sofa.  I was fine traveling light but; it seems, my friends felt I needed more “stuff.”   Within 6 months I had, resulting from everyone’s donations, a 2,600 sq ft totally furnished patio home.  I told them all,  “I know you love me but…. you better be ready to help me move when the time comes.”

Thankfully, when I moved out of that patio home, my eldest daughter had just bought her first home so I was able to pawn some of it off on her and, the new occupant of the patio home needed a few pieces to help her complete her home. 

The cool thing about all of this is that no money exchanged hands.  I am now comfortably moved into another home with all my “stuff.”  I look around and am reminded of all the people who care about me and I feel blessed.  Of course, I still pay for a storage unit, which houses all the “stuff” I couldn’t accommodate, but I have a great resolution for that.   A friend’s son just moved into his own place and needs “things” so I will happily open the storage for him to experience a “free” shopping spree.   If he wasn’t in need, I would post it all on Craigslist for FREE.  I have this thought process now that if I haven’t touched it in 6 months, I am giving it away (excluding memorabilia and formal wear).  I have even organized my closet where, when I wear something, I will hang it on the right side of the closet after wearing and in 6 months (or less) anything still hanging on the left I will give away. 

Here is my idea of a perfect way to help clients get and get rid of stuff.   Why not a Real Estate Association “Craigslist FREE THINGS” postings on the association website which brokers and agents can then post on their sites as well?   How about a monthly/quarterly “give away, drop off” parking lot party at the association or a local rotating business?   Invite all your clients and their family and friends and just give and take.  What ever is left over, can be picked up by The Salvation Army or any other charity.  It doesn’t have to be fancy.   You don’t need tables etc.  Just put it out there for people to find stuff and leave space for people to drop off what they want to donate.  The only thing you will want is to have a few people responsible for receipts for taxes.   I would have been in heaven if that was available to me over the past 18 months.   If you are able to do so, I would even suggest buying a used moving truck, having it wrapped with your branding and calling it “Helping Everyone Get What They Need and Get Rid Of What They Don’t!”

For those of you who want more marketing advantage out of this,  generate news, radio and print coverage of these events.  You can also send postcards to your farm areas and contact database, efarm your contacts and have directional signs made up saying “FREE STUFF” Brought to you by ABC Brokerage/Agent.

Invite restaurants to set up sample booths and offer table space….for FREE… to other local business owners.   Doing this in a parking lot where there is no fee involved makes all the difference.   I know some people will come and pick stuff up and then re-sell on Craigslist etc. but I do believe that the majority of humanity is honorable and trust worthy.  Take what you need and leave the rest…. keep what you need and give the rest.

If you have a program similar to this in your area, please share the details with me and the other readers.   I would love to know what is going on around the country where donations etc. are concerned.  Lord knows so many people are having to move, and in most circumstances it is a smaller dwelling.  Let’s help our clients and each other.

In the previous chapter we covered the traditional listing approach in detail. If you recall, I call it the “Price Approach” because it relies on the price to sell the home. Now allow me to introduce you to a brand new approach — the Traffic Approach.

The Traffic Approach

To understand the traffic approach, we need to turn our attention again to the “reasonable range.” Real estate is entirely different from liquid investments with absolute values. For instance, anybody can look up a share of stock and immediately see its current price. But because values are subjective in real estate, there tends to be about 10% flexibility in the price range. It’s what economists call price elasticity.

Consider a home that’s valued at $200,000. It’s not worth exactly $200,000! It’s really worth between $190,000 and $210,000. If the price drops below $190,000, nearly everyone will agree that the house is a good deal; and if the price goes above $210,000, nearly everyone will agree that the property is priced a little too high. However, within the “reasonable range” there is little price resistance.

Here’s how the traffic approach works. Instead of listing the home at the low end of the range ($190,000), you raise its price to the high end of the range ($210,000). But that creates a problem. The problem? Now there’s no compelling reason for anyone to show it or buy it.

Okay, here’s the secret weapon: you raise the commission by 2%! What you’re doing, effectively, is “bribing” agents to include your listing on their show lists. What I do is raise my commission from 6% to 8%, and then I raise the price from the low end of the range to the high end, or about 10%. The client then nets about 8% more money before any negotiations!

Sometimes, not often, the appraisal knocks the price down a bit. When that happens, it’s usually a minor adjustment, and then the seller has the option of lowering the price to match the appraisal — or else the deal, as written, falls apart. The buyer also has the option of paying, out of pocket, the shortfall in the appraisal or canceling the deal if there’s an appraisal contingency. When that happens, the client knows that he got the absolute top dollar for his home.

Now, I know that almost any Realtor® will immediately say, “I never look at the commission when I’m working for a buyer.” I’ve had many agents tell me as much. But I don’t believe that noble-sounding claim because statistics clearly indicate that it’s not true.

I don’t know any agent who would willfully sell a buyer client a home that wasn’t right for him; but if there are sixty homes in the market that generally match the client’s criteria, and if three of those homes pay higher commissions than the rest, it’s certainly not unethical to make sure that those three properties end up on every show list.

Moreover, there’s nothing wrong with hoping that your client chooses to buy one of the three. If he doesn’t, no big deal; but if he does, you just got a big bonus! Let’s not forget, we practice real estate for a living. It’s how we pay our bills. It’s how we support our families. There is nothing wrong with focusing on what pays you the best. In fact, it’s the right thing to do.

One of the questions I’m often asked is why I don’t just offer a bonus to the selling agent. Once again, the answer is simple. Every buyer’s agent knows that if he doesn’t present a full offer, the first money to come off the table will be the selling bonus. Since most homes don’t sell for full offers, the selling bonus doesn’t happen very often, so the buyer’s agent can find himself torn between not getting the bonus and not representing his client.

If the buyer’s agent advises his client to offer less than the listing price, he knows that his bonus is most likely gone. On the other hand, if he encourages the buyer to pay the listing price, he’s probably not fully representing the buyer’s interests. For that reason, the selling bonus is often a disincentive rather than a legitimate incentive.

So now you have the theory behind my listing approach. The big picture, if you will. So what’s next? In the next part, we’ll be discussing the listing presentation itself, and I believe you’ll find it to be the most powerful listing presentation you’ve ever seen! Until then, work on getting your technology in place so you have an unending supply of inbound leads. And focus on learning all your numbers and becoming the best agent for the job. There’s never going to be a better time to start than right now.

Matt Jones is the founder and CEO of FavoriteAgent.com and nationally syndicated author of LCM: The Secret to Success in the New Age of Real Estate, The Ultimate Listing Presentation, Traffic: How to Sell Fast and Net More, Becoming a Mega-Producer, and 20 Questions: Everything You Always Wanted to Know about Real Estate but Were Afraid to Ask. Jones’ North Carolina-based company has been profiled by major media outlets as an innovator and a pioneer in the industry, and CNN’s Pulse on America claimed FavoriteAgent.com is “changing the way real estate is being done in America.” This content is cross-posted in the following locations: BlogMattBlog.com, RealBlogging.com, NewsGeni.us, TheCommissionCheck.com, and now Amazon Kindle.

I want you to notice that I haven’t referred to myself as one of the smartest agents in the country because there are plenty of agents who are smarter than me. I haven’t claimed that I’m the hardest-working agent in the country because there are lots of hard-working agents.

But I do maintain that I’m one of the top listing agents because there are very, very few agents who have listed as many homes in a single year as I have, and even fewer who have listed all of their homes for 8% or more. And there are fewer yet who have netted their clients as much as 10% more money at closing while selling their homes twice as fast as most of the agents in their markets.

So how do I do it? I use a unique system that I call “the traffic approach.” In a few minutes we’ll get into this approach to listing, but first we need to examine how I go about doing a CMA (comparative market analysis).

The Ultimate CMA

Let’s be completely honest… as a listing agent using the traditional method of doing a CMA, you can make the numbers say just about anything you want. I know that’s a pretty strong statement, so let me explain.

With the traditional CMA method, the agent selects three recently sold properties that are closely comparable to the subject home (or the home being valued). In most markets, it’s easy to find three properties that sold high, three that sold low, and three that sold somewhere in the middle and still have many other comparables from which to choose.

The real problem is the sample size. In statistics there is a concept known as “margin of error”. The margin of error in any sample can be calculated with a simple formula: Margin of error equals one divided by the square root of the sample size. For example if you have a sample size of 400, the square root of 400 is 20. One divided by 20 is 1/20th or 5%. The margin of error for a sample size of 400 is 5%.

When I teach classes on doing a CMA, I typically walk the class through these calculations on several sample sizes. What if you had 100 in your sample? The margin of error would be 10%. Or a sample of 64? A 12.5% margin of error. What if you had 25? Margin of error is 20%. A sample of 16? You’ve got it… 25%.

Then I ask them what if they had a sample of just 3 comparables? Margin of error of 58%! Think about it. You are essentially saying, “Mr. Seller… your home is worth $220,000… plus or minus $129,000!” Thankfully, you aren’t really saying it, or you would never get the listing.

Do you see the problem? It’s the sample size. That’s why when the seller balks after you suggest a listing price, you immediately retreat and say, “Well, maybe I can try to find some different comparables and call you back tomorrow.” Then you go back to the office, tail between your legs, and rework the comps and voila, you manage to build a new CMA with the price the seller wants. Let’s be honest. We’ve all seen this happen, if we haven’t done it ourselves.

What we’ve traditionally been trained to do is use the least expensive set of comps for their initial CMA. This method makes the case for listing the home as inexpensively as possible and allows it to sell quickly. But there is one problem with that. As a seller’s agent, your fiduciary responsibility is to your seller. That means that you should be trying to get your client the most money for his property, not the least.

“So great, Matt,” you’re thinking, “You just destroyed the way I’ve always done CMAs. How do you do a CMA?” Good question. When I prepare a CMA, I take data from three sources: tax records (original sale price, not the assessment data), closed comparable listings in the MLS, and active comparable listings in the MLS. Remember, to get the most accurate price possible, with the lowest margin of error, I need the largest possible sample size.

First I look at the tax records to determine what I feel to be the “adjusted” current value of the home. For example, if it sold three years ago for $150,000, and there’s been an appreciation rate in that area of 25%, then I add that figure to the purchase price.

How do I find out how much the market has appreciated? Easy enough. I take the average sale price for the market (or any large subset of the market if there is enough data to give me a good sized sample) for the year the seller bought his home. Then I find the average sale price for the current year using the same sample group.

If the average sale price for my sample group for year one was $200,000 and the average sale price for this year is $250,000, then the market has appreciated 25% over that period. I then adjust the original purchase price by that amount. Using the example above, $150,000 plus 25% or $37,500 is an appreciation-adjusted valuation of $187,500. Certainly, this particular method, alone, is rather subjective. But, this is only one part of my valuation process.

Next I pull up all the closed comparables in the area or subdivision, going back a reasonable period of time, and I can usually find between ten and twenty of these. (In extremely hot markets where homes appreciate at double-digit rates, you shouldn’t go back farther than a few months or so in order to prevent the CMA from being skewed downward.) In most markets, that is not a problem.

Don’t forget that the amenities and how nice a home looks will affect the curb appeal and saleability of the property but will have very little impact on appraised value, so it’s best to use as many comparables as possible. In selecting my comps, I use the subdivision, the square footage (with a range of plus or minus 10%), and the number of bedrooms and baths. I then calculate the average sale price of the group, eliminating any outliers (e.g. homes that were foreclosures or distress sales) from my calculation.

Finally, I pull up all the active comparable listings. Again, I use the subdivision, the square footage, and the number of bedrooms and baths, but your market may be a little different in how the appraisers select comps. The point is to get as much data as possible!

Now we put it all together. Take the appreciation-adjusted value from the tax records, add the average price from the closed comps, and then add the average price from the active comps. Now take that number and divide by three, and you’ll have the true average value for the subject property.

Write down this new number somewhere, add and subtract 5% from it, and you have a “reasonable range” for the value of the home. And it’s accurate. If you use this method, you will find that you simply cannot skew the valuation up or down like you can using the Traditional CMA.

I know this is an out-of-the-box way of doing a CMA, but it will absolutely stand up under any amount of scrutiny by clients, other agents, or — most importantly — appraisers. I can tell you from experience that when you show your valuation to an appraiser or buyer’s agent, they have no issues with it. And this method will protect you from accidentally over-pricing or under-pricing a property.

Most significantly, it will reinforce in the mind of your seller the fact that you’re a market authority and know what you’re talking about. If a seller client should be harboring a suspicion that you’re trying to skew the numbers, his or her fears will quickly be allayed because you’ve considered every possible comparable in arriving at the current value of the home. Nothing except an actual appraisal could be more fair.

But now comes the fun part. Instead of having to do all that math, which is fairly time consuming, you can now use our simple calculator to build the Ultimate CMA and Proceeds Estimate in only a couple of minutes. In less than 5 minutes you can create a scientifically accurate CMA and Proceeds Estimate that will impress any seller.

Until then, work on getting your lead capture technology in place so you have an unending supply of inbound leads. And try out a few CMAs so that you are comfortable with this method. Next we’ll go into the actual presentation.

Matt Jones is the founder and CEO of FavoriteAgent.com and nationally syndicated author of LCM: The Secret to Success in the New Age of Real Estate, The Ultimate Listing Presentation, Traffic: How to Sell Fast and Net More, Becoming a Mega-Producer, and 20 Questions: Everything You Always Wanted to Know about Real Estate but Were Afraid to Ask. Jones’ North Carolina-based company has been profiled by major media outlets as an innovator and a pioneer in the industry, and CNN’s Pulse on America claimed FavoriteAgent.com is “changing the way real estate is being done in America.” This content is cross-posted in the following locations: BlogMattBlog.com, RealBlogging.com, NewsGeni.us, TheCommissionCheck.com, and now Amazon Kindle.

The final two pieces of market data I want you to learn are the average markdown (also know as the list to sale ratio), and the general market climate. We’ll cover them both in this segment, and once you’ve mastered them, you will be a real market authority and you will stand out when being compared to your fellow agents.

Average Markdown (List to Sale Ratio). Now let’s go back to the statistics that we worked on earlier. Remember my asking you to calculate the average for list price and sale price? Here’s the reason: you need to be able to advise your client as to the “typical” discount in your market. Let’s assume that the average listing price is $175,000, and the average sale price is $169,000. Now, subtract the average sale price from the average listing price, and then divide the difference by the average listing price. Here is the math: $175,000 – $169,000 = $6000; $6000 divided by $175,000 = 0.034, or 3.4% markdown.

In other words, your client should understand that it’s normal in your market to expect a markdown (or discount) of 3.4% from the listing price. Setting expectations shows him that you understand the market and that you’ll help prepare him for the offers that will be coming in.

You’ll also have an advantage in negotiating with other agents when you know that the average markdown in a certain neighborhood is only 0.5%, while they’re offering 4% below the asking price! You can tell an agent that it’s unreasonable to expect your client to accept such a figure and that he should encourage his client to make a more reasonable offer. I can’t tell you how many times this simple formula has meant thousands of dollars for my clients because I knew the market statistics, and the other agents didn’t.

Buyers in the Current Market (Buying Climate). Let’s always remember what the seller is actually looking for: to net the most money at closing and to sell the home in the least time. What this means is that sellers are acutely interested in how many buyers you’re in touch with. In fact, when I would tell a seller that I didn’t personally work with buyers, there was a perceivable concern in their minds until I quickly pointed out that I had a team of buyers’ agents who worked with all of my hundreds of buyer customers. Then I went on to demonstrate that I was very much in touch with the buying climate. Here’s how I recommend you do it.

I recommend that you maintain statistical information on how many new buyer leads you generate each week. Now, since the average home search lasts eight weeks (according to the NAR), it is easy to tell approximately how many buyers you are working with at one time. All you need to do is simply take the sum of the last eight weeks, and that’s how many buyers you are currently working with. That’s exactly how I did it, and it is very powerful when you present it to your listing clients.

I want you to imagine what the reaction of a seller was when I told him that my team was currently working with 462 homebuyers in our local market and that I had the names, phone numbers, and email addresses of all of them! And if I hadn’t had my lead capture gateway technology in place, I would’ve had only a fraction of those customers, and there would have been no simple way to track my leads.

Here’s one more little trick that I recommend for preparing your listing arsenal. I recommend printing out each lead as it arrives by email and then adding it to a home-buyers notebook that you keep on hand. In an upcoming segment I’ll show you how this homebuyers notebook can become a very powerful listing tool and how you can use it to cinch the listing.

Okay, let’s talk about credibility.

Let me show you how this statistical knowledge can influence your credibility. Imagine a potential listing client with a nice home worth roughly $500,000, and now imagine you’re going up against the top listing agent in your market. How do you feel? Are you nervous? This agent has lots of signs all over the area. Who are you? Just some new agent without very many listings?

Now imagine that the top dog is a typical agent who doesn’t know anything, really, about the local market. He’ll talk in generalities about how good he is at selling homes and how quickly he expects to sell this one. He is like many top-producing agent: full of himself — a legend in his own mind! And because your potential client has seen his signs everywhere, and possibly his ads in the various homes magazines, he is predisposed to think well of your competitor.

But, because you know the market data, you go into the listing presentation ready. You tell the seller that homes in his price tier have a DOM of 240 and that, he has an 76.8% chance of selling his home within 360 days (basically a year) if he uses the traditional approach. The other agent who’s promising to sell the house in only a few days is being dishonest or, at the least, confused (or overly optimistic!) because the probability of selling the home in less than a month is 10.1%. (If you’re having problems with the statistics, don’t hesitate to contact me, and I’ll be happy to help you.)

Then you begin to show your potential client a better way, a way that will more than double the chances of selling his home while netting him more money. Guess what? You’ve just landed a really nice listing. And why? Because you’re the best agent to sell it! And now that you’re the best, you can sell the listing with authority. You’re the best, you know it, and now the client knows it too. Most importantly, you’ve got the listing!

Summing it up.

I think you’ll agree that this is a lot of information to digest! So I suggest that you look through it a few more times until it makes perfect sense. It’s important that you master the basics before we build on them with the listing presentation. Why? Because the presentation requires that you be utterly confident in whatever approach you use. You need to become the best agent you can be. You owe this much to your clients, and you owe it to yourself.

To summarize: we’ve learned that it’s ethical to list at 8% (assuming that the listing will net your client more money and sell his home in less time); but we’ve also learned that it’s unethical not to use this approach if you know it’ll deliver better results (which it will). Your seller client is entitled to the best representation he can get. Let it be you!

So how do you start off down the path toward becoming a great listing agent? First, you need to assemble the technology and the advertising to give you more inbound business than you can possibly handle. That will give you a “take it or leave it” attitude. Believe me when I tell you that customers can tell when you’re desperate. I know from experience. I once was desperate, and my clients could tell. The only way to solve that desperation is by having an abundance of business, allowing you to pick and choose.

Next you need to be the best agent for the job. You have to know your market numbers cold. Statistics can be mind-numbing, but the few simple statistics we’ve mentioned are absolutely worth learning. When we get into the listing presentation, we’ll discuss how to take this knowledge base and convert it into premium listings.

You’ll be amazed when clients actually ask you to list their homes at 8% or even more! Not only can it happen; it will happen when you use this approach to selling houses. Do your homework! Learn your market numbers. In only a few hours you’ll have them nailed down, and then you’ll truly be the best agent for the job.

Now you’ve started taking the steps toward becoming the dominant listing agent in your market! So what’s next? In the next segment, we’ll be discussing the nuts and bolts of the listing presentation itself. Until then, work on getting your technology and advertising in place. Then nail down your numbers so that you’ll be the best agent for the job. There’s never going to be a better time to start than right now.

Matt Jones is the founder and CEO of FavoriteAgent.com and nationally syndicated author of LCM: The Secret to Success in the New Age of Real Estate, The Ultimate Listing Presentation, Traffic: How to Sell Fast and Net More, Becoming a Mega-Producer, and 20 Questions: Everything You Always Wanted to Know about Real Estate but Were Afraid to Ask. Jones’ North Carolina-based company has been profiled by major media outlets as an innovator and a pioneer in the industry, and CNN’s Pulse on America claimed FavoriteAgent.com is “changing the way real estate is being done in America.” This content is cross-posted in the following locations: BlogMattBlog.com, RealBlogging.com, NewsGeni.us, TheCommissionCheck.com, and now Amazon Kindle.