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Posts from the ‘Mastermind’ Category

7
Jan

Selling Houses to People Who Aren’t In The Market.

thinkingHappy New Year and welcome to another year of Mastermind. We kicked off the year with a bang, talking about our hopes and dreams and aspirations for the new year, oil and interest rates, the power of Facebook ads and their new policies and we talked about billboard and bus shelter ads. All good stuff.
But the one topic that garnered the most interest was a round the room discussion about where the agents find their clients. Naturally you would expect answers like Facebook, socializing, friends and family, door knocking and open houses but one agent talked about her unique approach. She looks at a lot of houses and condos. She goes out all the time, often with a buddy. They look at everything, all over the central core. Some of the time she is looking for her buyer clients but sometimes she walks into a house and thinks “oh, I know who would love this house…”. Then she calls her friends and tells them to drop everything and come and see this house. You would be surprised at her success rate. Now, she has one of the largest social circles of anyone I know and she is a trusted and likeable person so when she tells people to drop everything…they often do.
This approach goes beyond just touching base with your past clients, because she does that too. This is as targeted an approach as I’ve ever heard. A lot of the time the clients aren’t ready to pull the trigger on such short notice, but if they are she negotiates the transaction and then gracefully coordinates the sale of their home. The process is so seamless that often the clients don’t know what hit them. It’s like they jumped ahead two months and woke up in a different house.
I loved this approach. It goes to re-iterate the point that buyers, and for that matter sellers, can come from anywhere. They can even be people you never thought were even in the market. So next time you are out visiting open houses and see something that would be perfect for (insert name here) give them a call right away. At the very least, you have made a connection or sparked an idea.

Happy Selling!

mark mclean is the Broker/Manager at the Bosley Real Estate Queen St W office and President-Elect for the Toronto Real Estate Board. The opinions expressed here do not reflect the opinions of TREB or Bosley RE.

27
Nov

Mastermind for November 26th. Do Incentives Really Work?

incentives We had a rather interesting debate during our Mastermind yesterday about offering a buyer agent incentive as a way of generating more activity to a listing. We had a pretty big crowd and I was surprised to see that there was no general consensus on the matter. In fact opinion was split right down the middle, 50-50. So, looking for some more input on the matter (read tie-breaker) I did what any manager would do, I consulted the great oracle itself…Facebook. More specifically one of the several groups I belong to. While I got some great stories there, I didn’t find the tie-breaker either.

One side of the argument seems pretty clear. Price the property well, work hard, don’t leave any marketing stone unturned and generate exposure. It’s a simple theory…as long as the property is “saleable” you don’t need to offer any incentives to the buyer agent. This side of the discussion felt that incentives might add fuel to the consumer’s potential belief that agents are greedy or that offering more commission only generated interest from the buyer agent and not the buyer.

The other side argued that offering a higher commission got their properties more showings. More showings meant more competition which lead to a better price to the seller and a faster sale. One agent said that it worked particularly well when there were a number of comparable properties in the area or in situations where the property had some serious disadvantages, like deficiencies in the reserve fund. I can remember a condo building downtown that had an unusually high special assessment on all the suites. Sellers would agree to pre-pay the fee down in order to make their properties more attractive. Much like buyer incentives for a new condominium project, this is somewhat different as it is not an advantage geared toward the buyer agent, more just a marketing tool.

I especially loved some of the stories from the naysayers who told of sellers throwing in fast cars, cash bonuses, and even a free massage (but I think they might have been kidding about that one). Now, when we sign a Buyer Representation Agreement (BRA) we specify the commission that we would like to receive so if the offering is more than that amount, are we duty bound to return the difference to the buyer? The short answer is that it depends. One agent fills out the commission portion like this…”X% or as offered by the MLS Agreement, whichever is greater” while another credited the extra commission back to the Buyer.

Finally, I would caution everyone to remember their fiduciary duties to their Buyer clients. When in doubt….disclose!

mark mclean is the Broker/Manager at the Bosley Real Estate Queen St W office and President-Elect for the Toronto Real Estate Board. The opinions expressed here do not reflect the opinions of TREB or Bosley RE.

4
Nov

Transparency at the Offer Table. Not Just a Pipe Dream

transparency blogAt a recent mastermind session our group talked about the frustrations we often feel when we are at the offer table. There are many opportunities for the evening to go wrong because the process is secretive and often skewed to favour the listing agent and there is always a chance that we, acting as a buying agent, will have to go back to the buyer and let them know that they didn’t get the house. Sure, it could be as simple as price, but as you know, there are many chances for error, incompetence or fraud.
So in our meeting, we wondered if there were a way to sell a home with complete transparency. Could we make the process so fair that everyone who offered and lost could walk away knowing they were given every opportunity to buy the house? We worked through several possibilities, talked through potential land mines, and played devil’s advocate on a number of different scenarios.
One of our solutions could be best demonstrated by this example. You’ve listed a property for $699k and have received 5 offers. You’ve told all the participating agents that you will be running the process as follows…after everyone presents you are going to meet with the agents collectively and disclose only the price of the highest bid. At that point you will give the agents 1/2 hour to speak to their clients and return, if they so wish, to participate in the second round. Four agents return for the second round and present their offers again and once more you meet with them and announce the winning bid. This process continues until there is only one agent standing. In many ways it mirrors an auction process but requires the skill of a buyer agent in negotiating fairly with the seller and the seller agent. All agents are present and counted for so there is no chance that there are phantom offers. At no time is it made clear which agent has the leading bid, nor does that agent know how close the other offers are. The winning offer is successful based on its merit (and or price) and there is no opportunity for shenanigans. In the event of an offer from the listing agent, the manager or someone else from the office manages the process and the listing agent is unaware of the other offers.
From the surface the idea seems to have merit until you dive into REBBA 2002, which is the Act that we must follow (in essence, our play book). In it, there is expressed direction that an agent does not have the right to disclose any terms of an offer even if directed to by the client seller. So if you liked the idea of a completely transparent offer night, don’t hold your breath.
It occurred to me that rules and regulations are brought about to govern the way business is conducted TODAY. When the way business is conducted changes, the rules (or laws) get updated. We see that happening today with the Condominium Act which was first enacted in 1998. Certainly a lot has happened in that world over the past 16 years and even with tweets and updates, one wonders if an act that old holds the answers to an ever-growing segment of the real estate market. Like the Condominium Act, I wonder if, when first established, REBBA 2002 could have ever imagined a market as strong and unrelenting, or something as strange (back then) as bully offers.
At the end of the day, the only answer is hard work. As the listing agent, our job is to run offer night in the most professional way which, among other things, means refusing to represent your own buyer. We need to keep the lines of communication open with every agent bringing an offer, explain the process that will steer the presentations and stick to them religiously, and above all be fair and honest to everyone involved in the transaction. For buyer agents, come prepared with your best offer, have a good deposit, and make sure your buyers are nearby. Keeping simple rules will make the transaction go smoothly, eliminate confusion, and keep everyone out of court.

mark mclean is the Broker/Manager at the Bosley Real Estate Queen St W office and President-Elect for the Toronto Real Estate Board. The opinions expressed here do not reflect the opinions of TREB or Bosley RE.

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