"Dumb Luck!"

 

NOTE:  September 15, 2023, The following Nugget was written in May of 2007 and was written when I was the Broker for Keller Williams Realty® therefore, there are references to Keller Williams Realty® within this Nugget.  The lesson of this Nugget not only applies to real estate sales, it applies to sales of all types and companies of all type including other real estate companies. IT ALSO APPLIES TO ALL HOMEOWNERS OR HOMEBUYERS! Don’t discount the lesson because of my affiliation with Keller Williams Realty® because of where I was at the time I wrote this Nugget.  True life lessons are timeless and apply to everyone!

 

“Dumb Luck” is not an effective strategy!
Article by: Jim “Gymbeaux” Brown, May 5, 2007

I do not believe in coincidences!  Things happen for a reason.  Yesterday I was watching the NASCAR race at Talladega, Alabama.  I was not really paying attention but I definitely heard someone, I think it was Daryl Waltrup, say, “Second place is the first loser!”  Wow, did that hit home.  Then as if on cue, I read chapter 10 of List More Sell More by Jerry Besser and what does he write about; the analogy of the Indianapolis 500 and selling real estate.  Two race situations within 24 hours is not a coincidence – there is a lesson.

Besser described the Indy Car as a machine with thousands of parts that have to work precisely otherwise the driver could lose valuable seconds and when you lose seconds, you lose the race.  He went on to say that listing a home is no different than winning the Indy 500. 

The seller is the car owner.  The driver is the listing agent.  Everything else involved are the parts and team.  If you want to open your seller’s eyes, ask the seller to imagine that he or she is the owner of a Keller Williams Red top-of-the-line Indy Car.  Then ask the seller if he or she wants to win the 2007 Indianapolis 500.  If the answer is yes, point out that in order to do so he or she would have to first have a car, hire a first-class driver, crew chief, fuel man, tire changers, etc.  Shortchanging the selection of these items and people would result in not winning the race.  Then everyone on the team would have to practice and practice and practice.  Like the GMC commercial states, “amateurs practice until they get it right; professionals practice until they can’t get it wrong!”  Just putting the car on the track would rely on “dumb luck” to win and dumb luck is not an effective strategy!  It is no better than the “three P’s” of real estate”; overpricing a property, Putting it in the MLS, Putting a sign in the yard and then Praying that it sells. 

There is no difference in listing a home.  Does the owner want to win?  Remember, second place is the first loser.  In order for the owner to win there must be an effective strategy in play.  They made the first correct choice in interviewing you (the driver).  But what else must be in play to win the race and not finish second, third or worst, last?  As Besser pointed out in Chapter 10, everything has to be as close to perfect as possible to finish first and that includes but is not limited to: 

• The property condition MUST reflect the price
• The property condition MUST be in its best condition BEFORE the first buyer sees it
• The property MUST be priced to sell and in a buyer’s market that means lower than the seller thinks it should be
• The front of the home and the yard MUST be impeccable and inviting
• When buyers leave the property, you want them to remember good things about the home not the items needing repairs, “That home smelled like fresh baked apple pie.”  Much better than, “That was the home that had the rotted out front doorway.”
• Every one sells the features; you want to sell the benefits.
• You want to assume that the showing agents does not know what he or she is doing and so you create a display at every feature and benefit by using “benefit cards” large enough to be seen.  If the showing agent is unfamiliar with the property the best features and benefits will go undetected – create attractions for the buyer to self-discover them
• Here is a Big AHA from Chapter 10 of Besser’s book, create feature and benefit sheets without your company logo and name all over them.  Why would a showing agent from another company want to give your feature sheets to their buyers if your name and company and contact numbers are all over them?  Would you?
• Did I say the property must be priced right?
• The property NEEDS a Home Warranty Program (if the seller does not want to pay for one, you should consider paying for one for the buyer from the closing proceeds.)
• If the home inspection is the number one reason a purchase agreement fails to close and it is, then why would a seller not want to get the home inspected BEFORE the buyers see it and then either fix the discrepancies or price it accordingly?
• Offer more commissions to a coop agent than the competition.  A buyer’s market is NOT the time to reduce your commission; on the contrary.  You must offer even MORE commission to coop agents to attract them and their buyers to YOUR listings.
• If you believe in the 80/20 rule, then only 20 percent of the board’s membership would be considered as “sellers of real estate” at a high level.  In a board of 600 agents, that means only 120 are probably working with buyers.  Do you know who they are?  Do you market your properly priced listings with great terms and better than average coop commissions to them?   If not, why not?  They most likely have buyers!  You should know who (REALTORS) in your market area are the ones that consistently sell real estate!
• Most agents will not talk to sellers about properly pricing their property (that obviously does not apply to you) but in most cases they would prefer to take the overpriced listing than lose the listing.  Then week after week they become reluctant to call the seller to explain why the property is not being shown or sold.  Why is the property not being shown or sold; surprise – it is because of the agent who failed to take the initiative to tell the seller the truth and then back up what they say with facts.  “Do you want me to tell you the truth or do you want me to tell you what you want to hear?”
• Think outside the box, be creative.  You cannot sell a property if no one sees it.  How do you get agents and buyers into your listings?  Remember, “Dumb luck” is not an effective strategy.  Have a plan! 

In a buyer’s market where there are far more sellers than qualified buyers, why would YOU want to hire an agent who has so little belief in self that they are so willing to cut their commissions in order to take a listing?  Think about the Indy 500.  Why would a car owner take on a driver who could not navigate the oval without keeping his or her foot to the floor on the accelerator?  They would not, so why would you if you were the seller?  Are you a winner or are you an also ran (second place or worse)?  There were 43 cars that started the race in Talladega but only one winner.  There were 42 also rans!  But as Besser states in his book, you do not have to beat 42 other cars, you only have to beat the car that comes in second or as DW said, “The first loser!” 

Okay race fans, think about this.  At Talladega 43 cars started, 1 finished first.  In our market in East ST. Tammany Parish, there are currently 732 residential listings on the market.  During the month of April 2007, there were 118 closed sales.  Let’s assume there are 600 licensed agents in Eastern St. Tammany Parish.  Let’s say for argument purposes that no one closed more than one sale.  That means that 482 failed to close a sale in April.  Do you not find it strange that if there are 600 agents and there are 118 sales that the 118 sales represent almost exactly 20% of the Board Membership?  Does 80/20 mean anything to anyone?  That means that only 16% of the listings sold in April.  What does that tell you?  It tells me that if you want your sellers to be one of the 16%, they have to be realistic in regards to pricing their property.  Again, “dumb luck” is not an effective strategy! 

Most agents (not you of course) would not think twice about declining to get into the seat of an Indy Car that did not have seat belts and other safety gear – it would be suicide.  Yet they would take a listing that is not market ready and then hope that it sells.  Dr. John Maxwell said, “Hope is not an effective strategy.”  

Tony DiCello said, “you cannot grow your business in a seller’s market; you can only grow your business in a buyer’s market.”  Why?  Because in a seller’s market everyone is in the real estate business and listings and sales come your way whether you want them or not.  But in a buyer’s market, more people typically get out of the business and the discounters fade into non-existence.  It is the agents who focus on the basics of the business that grows their business.  Then when the market shifts as it most assuredly will, those agents are positioned to soar with the eagles.  As Gary Keller said, “You don’t see eagles swimming in a duck pond.” (Or something like that.) 

If your sellers fail to be realistic regarding placing their property on the market, I am suggesting that you would be better off declining the listing and moving on to sellers who want to sell their properties and do whatever is necessary to get them into “selling condition.”  If you are not being honest with your sellers, I would suggest that you are not upholding your fiduciary responsibilities to them.  If you over price the listing you KNOW it will not sell – is that being honest with your sellers?  If you offer less than a competitive coop commission, you KNOW other agents will show other properties first.  Is that being honest with your sellers?  If you don’t make suggestions to get the property into its best “selling condition”, are you being honest with your sellers?  Are you telling your sellers what they want to hear or are you being honest?  One only need remember the Keller Williams Realty WI4C2TS where the “T” means: Trust starts with honesty!  Do you want me to tell you what you want to hear, or do you want me to tell you the truth?  That one sentence should be your NORTH like the NORTH on a compass of life.