Thursday, July 21, 2011

What is the Inventory Like

A grocer who has too many pounds of beans on the shelf lowers the price of beans in order to move the inventory.  The grocer will analyze how many pounds of beans are selling each week and compare that number to how many pounds of beans are in stock.  Based on the rate of sales if he estimates that the beans will reach their expiration date before they are all sold, the grocer will lower the price of beans to move them more quickly.

While houses don't have expiration dates excess inventory still poses a problem for the market.  If real estate agents allow the excess inventory to sit on the market for too long it becomes like a weight that pulls the prices down even deeper.  Buying consumers begin to lose confidence in buying when they see too many real estate for sale signs or, worse yet, when they see too many "price reduced" signs.  When buying consumers lose confidence they don't buy, and the problem gets worse.

If you have a market that has more than 10 months of inventory, in general, prices need to come down by 10% or more.  Inventory levels of 15 months or more may require more dramatic adjustments in price.

Be aware of your market's inventory levels and make recommendations to your sellers accordingly.

Friday, July 8, 2011

What’s an Elevator Speech? Why Do I Need One?

Real estate sales professionals often don’t like to think of themselves as sales people.  Sometimes they even go so far as to invent titles for their business cards to avoid being considered sales people.  You’ve probably seen some of these titles:  Real Estate Consulting, Marketing Specialist, Real Estate Negotiator, Real Estate Advisor.

The reality is, however, anyone, no matter what industry, who is in business for themselves, is a sales person.  The funny thing is no money can be made in any business unless and until something is sold.

The act of selling requires persuasion.  A sales person’s job is to help convince someone to choose one thing out of a variety of options.  The job is to present facts that support the case, to appeal to the emotions, and to encourage the prospective purchaser to act on the sales person’s offer.

Therefore, since real estate agents are in business for themselves, and they want the people that they meet to choose them for their real estate agent, then they must persuade, they must sell themselves.

An elevator speech is a persuasive speech, a short one.  It gets its name from the idea that you meet someone, a key contact, in an elevator, and you have a sixty-second elevator ride to introduce yourself and give your sales pitch.  You have one brief chance to make a good first impression, and perhaps, persuade the passenger to want to meet with you again to learn more about your product or service.

Very often we meet people at social or business networking events and we are asked a simple question:  “so what do you do?”  This is our moment, our elevator ride.  We have this one chance to make a good first impression.  The person we are talking to may need to buy or sell real estate.  If they don’t, there is a really good chance that they know someone who does.  What do you say?

The ill-prepared real estate agent usually has an unimpressive answer, something like:  “I sell homes.”  That is like paying for a sixty-second commercial during the Super Bowl and only using five seconds.  When someone asks you a question like, “what do you do?” they certainly don’t want to listen to a long, drawn out explanation, but they are willing to give you more than five or ten seconds.  Take advantage of the opportunity and be persuasive.  Give them a compelling reason or two to consider you as their go-to person for real estate.

Those couple of compelling reasons should be your points of differentiation between you and the rest of the real estate industry.  Try to avoid cliché selling points.  Create something original and your speech, and you, will be memorable.  Make your speech sincere or your prospect will see right through you.

Write and re-write your speech.  Set it aside.  Edit it.  Change some words to make it stronger and more effective.  Practice your speech on people you know.  Revise it again.

Once you have an effective speech commit it to memory.  At first it will sound memorized, perhaps even a bit fake.  A well-prepared and well-rehearsed speech will eventually sound very natural.  Your subconscious mind will absorb the speech and make it part of you and your personality.

An effectively-delivered, well-crafted elevator speech can, in fact, create opportunities for the real estate advisor/consultant/negotiator/marketing guru to do their work for new clients.  It can generate new business.