WORKING WITH BUYERS TO UNLOCK THE SALES FEE

WORKING WITH BUYERS TO UNLOCK THE SALES FEE

The buyers have gone full circle

Well Priced and well Marketed Listings may be market control, but buyers are the catalyst to unlock the sale.

Only recently I was talking with some real estate practitioners who like me were selling houses 20 years ago. It all seemed so simple then. 50% of the fee for selling a house. No listing fee, no open homes and very few exclusive listings and auctions. Yes it was simpler but so inefficient. Things needed to change.

Let me explain that.

You could spend some weeks working with a contact who was contemplating selling. Eventually they would list with you and a colleague could sell it within days and your share of the fee was zero.

You could invest days with buyers who when they purchased could easily exclude you. That part hasn’t changed.

In those days the only way to earn any fee was to work buyers closely. Always searching for new listings, and then urgently getting your buyers through. Each day we were sorting through our list of buyer contacts and making a multitude of phone calls to keep in touch and see who we could get looking today. Any training in those days was about how to handle buyers and close the sale. Yes we were quick with buyers and whilst you could make plenty of sales there was inefficiency inherent in the system. You had no control and therefore no certainty of income.

Then the big changes started.

The first step was the introduction of the 90-day Sole/Exclusive Agency in the very early 1980’s. With that came the introduction of a split in the selling fee. At last the lister of the property got some reward. A selling fee of 30% and listing fee of 20% were introduced. That caused such a stir that some salespeople left these innovative companies and went to work in traditional style offices. They didn’t last long.
At last some one was responsible for managing the listing and providing the seller with some real service.

And what followed were several years of highly intensive training and strategizing to control the market by securing the most stock. This of course lead to the explosion in salespeople numbers as offices built up team numbers to enable more listings to be managed by the office. There was a saying; “If you haven’t got it listed you can’t sell it.”

With this strategy came Open Homes and buyers were delegated in importance, as control of saleable stock was the number one strategy. Buyers were asked to attend open homes and I clearly remember several sales people proudly boast that they never put buyers in their cars. Its now up to the buyers to find the homes they were marketing.
My the pendulum had certainly swung.

There is no doubt that this strategy worked handsomely whilst the market was highly active and buyers were competing for the properties. The period through the late 1980’s and the middle 1990’s suited this approach. Buyers were easy to come by and buying a home was a national hobby.

But the market changed over the last 2 or 3 years and the buyers have changed their approach.

Firstly they no longer need the agent to find out what is for sale. They have as much access to what’s for sale as the agent. Apart from the huge volume of pictorial property publications (all sorted on brand order to the frustration of the buyers), endless database mail outs and then there is the internet as a source of listings. This source enabled the buyer to sort through the available stock and to eliminate agents before even making contact with them.

Secondly as buyer numbers have reduced over the last 2 or 3 years those agents who read the change in the market made a higher level of service available to buyers. That left even less buyers for those agents who failed to read this change.
Suddenly there was again a need to have simple and effective system for managing buyers. In many cases this has required a change in attitude.
Still I hear salespeople say, “Buyers are liars”. Not only is this a terrible attitude to have in a competitive, customer focused business, it’s also a defensive move to cover poor performance. It really means, “Some Salespeople are deaf.”

If you haven’t already put the buyer back on a pedestal it’s time to introduce some systems that enable you to service them professionally and effectively, to ensure you are able to unlock the fee the listing can provide to you.

LET'S LOOK AT THAT PROSPECT FROM A SALESPERSONS PERSPECTIVE.

Some companies leave the total management of each salesperson’s buyers totally up to that salesperson. Now that’s a great strategy if that salesperson is making the office a substantial margin on its desk cost. If not, I wonder what is going to change to make that salesperson suddenly successful?

So the lowest form of buyer management is: The salesperson who continually flicks back through diary pages looking for names and phone numbers of the buyers they want to remember. These people are relying upon a mental connection to be made between the diary “clue” and the new listing or change in listing details. This is the easiest way to loose valuable contacts and miss the opportunity to present options to buyers.

The great danger for these salespeople is that unless they move with great urgency and make the mental connection necessary they will be beaten to the draw.
They are beaten by the salespeople who don’t just possess the urgency and passion for the business, but by those that have a simple system for tracking and managing their buyer contacts. That may be a simple card system, an alpha/price index in the back of their diary or a simple computer database that logs all the buyer details and activity.
At the top end this may be a “Palm” device with a direct daily link to a database such as MS Outlook. This can be maintained by the salesperson, their PA or the office administrator and updated daily. It is then simply having the mindset to continually refer to this database and make the mental connections between the properties and these buyer contacts.

Your own database of contacts should contain your buyers as well. Get this database big enough and buyers will come your way simply from your regular mail outs. Especially if you can start to fund colour brochure mail outs in a non-targeted way. I guess this is a time issue as sorting at this point can be slow. It will get better as your use of technology improves.
Another version still being used successfully is a simple Buyer log, usually an A5 pad with a carbon copy for the office system. Buyer details and record of inspections are entered, the top copy to the salespersons “Buyer folder” and the carbon copy into the office database for mailing labels, e-mails, brochure mailing lists and management tracking of the salespersons activity and effectiveness. Such systems have been around for years but are rarely used because of the debate in some companies about the ownership and confidentiality of the information. Those that have conquered this situation and got an office system that backs up the salespeople are generally gaining an edge over those that haven’t.
The uppermost level is the salesperson that has not waited for their management and who has gone ahead with major Internet promotion. This enables them to “capture” buyers who log in and add them to a reactive database. In other words, a buyer can visit your site and request further updates by leaving their e-mail address. Cost effective and simple this enables these sales people to quickly inform a huge pool of prospects of new listings, price changes and potential competing interest.

AND FROM THE OFFICES POINT OF VIEW?

In its simplest form the great manager has a weekly task of reviewing with each of their team their pool of buyers and the actions being taken to close a sale.
This is made so easy if the salespeople provide to the office a copy of each buyer’s details. Somewhat labour intensive you might say. Well yes there are easier ways, but without the latest technological developments you will find this will boost sales simply because you find out what is and isn’t happening to the clients your business has generated.

Imagine having all salespeople put all their buyer contacts into a central office database. It might mean a degree of buyer ownership has to go with it as salespeople may feel their business is at risk if their competing colleagues have access to “their contacts.” There may be a greater benefit to the company and the team by knowing and tracking all contacts than living in the environment of distrust and secrecy so often found.

Now put all these contacts and the listings database into the one pool. What can happen, if managed correctly, is that this database will do its own sorting and either communicate with the buyer directly or advise the salesperson to make the connection. And give management a list so they can follow up.

There is however some other obvious methods to operate now without waiting for the above technologies to arrive in your office (And they will).

Make sure that all the buyers your salespeople are dealing with are communicated with regularly and kept up to date with listing details.
1. Mail your weekly list of open homes to current active buyers.
2. Mail brochures on selected new properties to the matching buyers
3. Institute a total database of all buyers in the property listing system and run a match every time a new listing comes in. Then make it an office function to ring all the matches on behalf of their registering salesperson. No attempt is made to capture this buyer away from their registering salesperson but if there is any interest in an inspection then the salesperson is advised to call and make an appointment. This prevents “Buyer Slippage”. This occurs when the salesperson handling the buyer fails to make the mental connection between the buyer and the new property or the price adjustment.

So why is it that many companies have no buyer management or tracking programme?
Is it because they have taken the view that buyers are no one’s property? This lack of buyer ownership (Or protection you might say) has maybe contributed to a lack of commitment to manage the buyers better. Look at the effort, which goes into managing the listings! That’s as it should be, but we see so much effort go into listings that will never sell. Why not be more selective with these and use the spare effort to provide a greater level of service to those buyers who are currently surfing the market.

Spend some time too up skilling our teams on how to qualify buyers, the art of showing a home and the skills in closing the sale. So much of the industry’s, and its vendors money, is spent on marketing, the very least we can do is to make sure that the responses to that marketing are managed with skill and urgency. The contacts we make and manage correctly can not only make us a sale one day, but if the relationship is developed professionally can provide us with those precious referrals that make the difference between an average or great career in real estate.

So get your buyers flying business class again. Or is it time to create a “Client” who deserves the very best in service whether they are seller or buyer.

IAN KEIGHTLEY