REVISED EDITION Breakthrough to Mastery An Agent’s Guide to Creating Urgency to Buyers’ Market = Right Time to Buy
An Agent’s Guide to Creating Urgency to Buy Main Ideas 1. 2. 3. 4. 5. 6. Perspective on Buyer Urgency Prequalify Buyers: Are they Able, Ready, and Willing? Become the Local Economist of Choice Help Buyers Tap Into Their Why Address Buyer Reluctance The Bottom Line 2
An Agent’s Guide to Creating Urgency to Buy 3 Perspective on Buyer Urgency The Challenge » The media creates misconceptions about buying homes today. » Buyers fear paying too much. » Buyers don’t have any sense of urgency. » Many agents think it is not a good time to buy. Page 7
An Agent’s Guide to Creating Urgency to Buy 4 Perspective on Buyer Urgency (continued) The Truth » People are buying and selling homes in this market. » No one can truly “time the market. ” Page 8
An Agent’s Guide to Creating Urgency to Buy 5 Perspective on Buyer Urgency (continued) The Solution » Prequalify buyers » Work with buyers who are able, ready, and willing » Become the local economist of choice » Help buyers tap into their why » Address buyer reluctance Page 12
An Agent’s Guide to Creating Urgency to Buy 6 Prequalify Buyers Able—do they qualify for a loan? § Ready—what are their reasons for buying? § Willing—what are the market expectations? § Page 13
An Agent’s Guide to Creating Urgency to Buy 7 Prequalify Buyers (continued) § Common Reasons for Buying » Relocation » Dissatisfaction » Life changes » Second home » Home sold » Lease ending » Investment Page 15
An Agent’s Guide to Creating Urgency to Buy 8 Prequalify Buyers (continued) § Ask and Listen » Dig deeper with great questions » Listen carefully » Take notes Page 16
An Agent’s Guide to Creating Urgency to Buy 9 Prequalify Buyers (continued) § Determine Willingness » Ask … “Do you want to risk missing a house that is perfect for you because you’re waiting for a sliver of savings that may or may not be there? ” Page 17
An Agent’s Guide to Creating Urgency to Buy 10 Prequalify Buyers (continued) § Impact Their Urgency » Three Tactics 1. Become the local economist of choice 2. Help buyers tap into their why 3. Address buyer reluctance Page 17
An Agent’s Guide to Creating Urgency to Buy 11 Prequalify Buyers (continued) § Able, Ready, and Willing? What questions will you ask to determine if your buyer is able, ready, and willing? Page 18
An Agent’s Guide to Creating Urgency to Buy 12 Be the Local Economist of Choice Invest Time in Research Top Dollar-Productive Activities 1. Lead Generation 2. Lead Follow-Up 3. Appointments with Prospects 4. Negotiating Contracts 5. Market Research Page 19
An Agent’s Guide to Creating Urgency to Buy 13 Be the Local Economist of Choice (cont) The Tale of Two Markets Price vs. Comps Above Out of the Market In the Market Below Great Poor Condition vs. Comps Page 20
An Agent’s Guide to Creating Urgency to Buy 14 Be the Local Economist of Choice (cont) The Tale of Two Markets: Sellers’ Market Above Price vs. Comps Out of the Market In the Market Below Great Poor Condition vs. Comps Page 21
An Agent’s Guide to Creating Urgency to Buy 15 Be the Local Economist of Choice (cont) The Tale of Two Markets: Buyers’ Market Price vs. Comps Above Out of the Market Below In the Market Great Poor Condition vs. Comps Page 22
An Agent’s Guide to Creating Urgency to Buy 16 Be the Local Economist of Choice (cont) Good Time to Buy Reasons to Buy Now 1. Mortgage interest rates are low and stable 2. Home prices have become more affordable 3. Inventory is high 4. Strong economy 5. Low unemployment Page 24
An Agent’s Guide to Creating Urgency to Buy 17 Be the Local Economist of Choice (cont) Mortgage interest rates are low and stable. Mortgage Interest Rates 1971 – 2007 30 Year, Fixed-Rate Mortgage Source: Freddie Mac Page 26
An Agent’s Guide to Creating Urgency to Buy 18 Be the Local Economist of Choice (cont) Home prices have become more affordable. U. S. Home Price Index 1976 – 2007 Year-to-Year Change Source: OFHEO Page 27
An Agent’s Guide to Creating Urgency to Buy 19 Be the Local Economist of Choice (cont) Inventory is high. Supply and Demand Shifts 1989 – 2007 Buyers Market Sellers Market Millions Months Existing Home Sales Housing Inventory Source: National Association of Realtors Page 28
An Agent’s Guide to Creating Urgency to Buy 20 Be the Local Economist of Choice (cont) § Becoming the Expert What tools do you use to communicate your knowledge of the economy and local market? Where can you get reference information you need? Page 30
An Agent’s Guide to Creating Urgency to Buy 21 Help Buyers Tap Into Their Why § Features vs. Benefits » Features—amenities • Fireplace • Pool • Large master bedroom » Benefits—affect emotions • Quiet • Cozy • Spacious Pages 31 -
An Agent’s Guide to Creating Urgency to Buy 22 Help Buyers Tap Into Their Why (cont) § Advantages of Home Ownership » Build equity » Tax break » Investment Page 32
An Agent’s Guide to Creating Urgency to Buy 23 Help Buyers Tap Into Their Why (cont) § Cost of Waiting to Buy » Delay of tax benefit » Delay of building equity in new home » Need to view more homes » Selection of best homes is limited » Market will shift and great buys will be gone Page 33
An Agent’s Guide to Creating Urgency to Buy 24 Help Buyers Tap Into Their Why (cont) § Buyers Who Want a Deal » Learn their definition of deal » Communicate the consequences of some “deals” Page 35
An Agent’s Guide to Creating Urgency to Buy 25 Help Buyers Tap Into Their Why (cont) Remove Fears » Fear of paying too much • CMA • Appraisal » Fear of making a commitment • Option period • Buyback guarantee Pages 36 -37
An Agent’s Guide to Creating Urgency to Buy 26 Help Buyers Tap Into Their Why (cont) Incentives and Concessions » Improvement allowances (carpet, paint) » Pay early move-out on renter’s lease » Pay mortgage on buyer’s home for a period of time » Pay buyer closing costs » Lease-purchase options » Mortgage buydowns » Seller financing » Extras (electronics, car) Page 38
An Agent’s Guide to Creating Urgency to Buy 27 Help Buyers Tap Into Their Why (cont) Close “Is this a house you want to buy? ” “Good houses sell fast in any market. ” “How would you feel if someone else bought this house tomorrow? ” “If you love this house, someone else will too. ” Page 39
An Agent’s Guide to Creating Urgency to Buy 28 Help Buyers Tap Into Their Why (cont) Helping Buyers Tap Into Their Why What will you say to remind buyers of their wants and needs? Page 40
An Agent’s Guide to Creating Urgency to Buy 29 Address Buyer Reluctance Four Strategies to Overcome Buyer Reluctance 1. Why wait? 2. Trade up 3. Less is more 4. Find a best buy Page 40
An Agent’s Guide to Creating Urgency to Buy 30 Address Buyer Reluctance (continued) 1. Why wait? —the hazards of timing the market Drop in home price is offset by increase in interest rate. Home Price Interest Rate Payment Starting Price $200, 000 5% Drop $190, 000 10% Drop $180, 000 Starting Rate. 5% Jump 6. 0% 6. 5% 1% Jump 7. 0% $1, 199 $1, 201 $1, 198 Page 41
An Agent’s Guide to Creating Urgency to Buy 31 Address Buyer Reluctance (continued) 2. Trade up—the opportunity of a down market Lower sale price is offset by greater savings. Original Home New Home Starting Price $200, 000 Starting Price $400, 000 5% Drop in Home Prices Sell at $190, 000 Loss of $10, 000 Sell at $380, 000 Savings of $20, 000 Page 43
An Agent’s Guide to Creating Urgency to Buy 32 Address Buyer Reluctance (continued) 3. Less is More—Narrowing the Field 1. Know what they need and want 2. Know the best buys in the market “If you show buyers what they want, they’ll be motivated to buy. ” Steve Cohen Boston, Massachusetts Pages 44 -
An Agent’s Guide to Creating Urgency to Buy 33 Address Buyer Reluctance (continued) § Know the Inventory Reasons to Preview Homes 1. Save yourself time and gasoline 2. Take customers directly to the best buys 3. Buyers have confidence in you when you only show houses that meet their needs and wants Page 46
An Agent’s Guide to Creating Urgency to Buy 34 Address Buyer Reluctance (continued) 4. Find a Best Buy—Get While the Getting’s Good Where to Find Best Buys 1. REOs 2. HUD Exchange 3. Foreclosure lists 4. FSBOs 5. Price reductions in the MLS 6. New homes on the market 7. Builder’s promotions Pages 48 -
An Agent’s Guide to Creating Urgency to Buy 35 Address Buyer Reluctance (continued) § Create a List » Nominate homes that you consider “best buys” » Be on the lookout for special offers from builders and other sellers » Create a short list of the best Page 49
An Agent’s Guide to Creating Urgency to Buy 36 Address Buyer Reluctance (continued) Do Your Homework Track Your Best Buys Time on market 2. List price 3. Condition 4. Selling price 1. Page 49
An Agent’s Guide to Creating Urgency to Buy 37 Address Buyer Reluctance (continued) Use Your List » » Don’t give the list out, offer access to the best buys. Show houses on the list to your customers—these are the houses that will sell fastest. Page 50
An Agent’s Guide to Creating Urgency to Buy 38 Address Buyer Reluctance (continued) What strategies will you implement to address buyer reluctance? Page 51
An Agent’s Guide to Creating Urgency to Buy 39 The Bottom Line § § § Prequalify buyers Only work with buyers who are able, ready, and willing Become the local economist of choice Help buyers tap into their why Address buyer reluctance Page 52
An Agent’s Guide to Creating Urgency to Buy 40 Productivity Boosters Consult using buyer guides § Apply action plans to stay in touch § Use mass email with hyperlinks to your website § Use an IVR number and capture each caller § Page 53
An Agent’s Guide to Creating Urgency to Buy 41 My Action Plan Don’t put away this guide without developing a plan to put what you have learned into action! § Refer to the Action Plan on pages 59 -61 of the guide to assess your strengths and areas for improvement. § Write down steps you will take to improve your skills—complete it, share it, and commit to it! § Pages 59 -
An Agent’s Guide to Creating Urgency to Buy Take the other courses in the Breakthrough to Mastery Guide series! § § § Gaining Mind over Market Upshifting Your Lead Generation Seller Pricing Strategies Seller Staging Strategies Lead Capture and Conversion Internet Lead Capture and Conversion Bulletproofing Transactions Expense Management Effective People Leverage Short Sales, Foreclosures, and REOs Financing Solutions 42
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