Before we start getting into the details of my listing approach — what I’ve named the Traffic Approach — it is important to give you some background. The reason this approach is so different is that it didn’t come through one of the usual sources. I didn’t learn it at the feet of a guru, or coach, or trainer, and I didn’t steal it up from another book or seminar and put my own spin on it.
The truth is, I discovered it by accident almost ten years before I ever came into the real estate business — back when I was a seller. A desperate seller. And it worked so well that I filed it away until the next time I needed to sell a home. Little did I know at the time that a decade later I would be selling homes for clients and using this very same method to do it. Here is the story of how I discovered it:
In the spring of 1994 I found myself in a tough spot. I had purchased my dream home just a year earlier — the perfect home in the perfect location. It was a beautiful 2,500 square foot ranch house, on the 11th fairway of one of our area’s finest golf courses. The floor plan was perfect for entertaining, the paint was like new, as were the hardwoods and carpet. The kitchen was magnificent.
Looking out the back windows of the house was like browsing through a golf magazine. Sitting on the rear deck as the sun came over the fairway, I had views of three ponds, complete with ducks, geese, turtles and frogs all making their morning sounds. It was unbelievably beautiful. The landscaping was impeccable in every direction and best of all, I didn’t have to maintain it! Sounds perfect, right?
Well, nearly perfect. There was one small problem. Being 12 miles outside of town, it was 20-30 minutes from everything, and for my wife, my dream house turned out to be a nightmare. Her days found her at the wheel of the minivan for hours at a time, taking children to private school, lessons, practices, shopping and errands. And after trying hard for about a year she was ready to move from our beautiful home back to the center of town.
There is an old saying: “Happy wife, happy life.” I’m not sure who first coined that expression, but it’s certainly true. Well, my wife was unhappy in paradise and being the wise man that I am, we began looking for a new home more centrally located than our golf home twenty minutes from town. Before long we found just the home we wanted, we made a full offer, and bought it.
Like many sellers, I got it backwards. We started looking for the replacement home before ever thinking about selling our existing home. It was only after moving in and getting settled into the new home, that we began thoroughly cleaning, doing minor repairs, and touching up the paint on the old dream home, until it was like new. Because it was like a new home, in a pristine setting, I assumed it would sell quickly.
I called up a Realtor® friend and asked him to meet to discuss his helping me put my house on the market. I didn’t know any better, so I had the home pre-appraised, and with that appraisal in hand I sat down to meet with my friend Jack. I needed to sell it as quickly as possible because I was facing two mortgage payments every month until it sold.
Jack was a Re/Max agent and was, as he was quick to point out, one of the top-producing agents in our community. Needless to say, I was relieved when he assured me that the market was “hot” and that he felt he could sell the home quickly… possibly in only a week or two. I thought, “Well that’s good — I’m certainly not too excited by the thought of making two mortgage payments.”
He brought out a stack of paper that I later learned was what agents call a CMA. In it he had compared my home with several other homes that had recently sold and he had also arrived at a an “asking price” of $165,000. He was taken back a bit when I told him that it had just had it appraised for $170,000, but he dismissed the appraisal and assured me that he was on top of the very latest market data and that his number was no doubt more accurate than the appraisal.
Well, because Jack was a top-producing Re/Max agent, and because I had bought the home a year earlier for only $135,000, I reluctantly agreed to list the house at his number.. After all, he was the expert, and I wasn’t, and he was my friend and I knew he wouldn’t steer me wrong. So I put the listing in his capable hands and forgot about it. I assumed I would be closing the sale in a matter of days, or at the most, a few weeks.
A month later as I was paying my bills and writing out two mortgage checks, I thought about my sale and decided to give Jack a call. It was a rather odd call, in hindsight. I was simply calling to check on our progress, but he seemed kind of defensive. He told me that the market had cooled off quite a bit since last month but that he still felt certain we’d sell it soon.
Then he told me that he had looked at the latest market data and he felt like we were a little overpriced. He suggested that we lower the price down to $162,000 to try and attract a buyer. I reminded him that the appraisal said the home was worth $170,000, and he reminded me that he was in the market every day and that we really needed to reduce the price. Fair enough.
I thought about the prospects of making the next two payments and thought, what’s the difference. If I could sell it immediately at $162,000 it would be no different than if it sat on the market for two more months and sold it for $165,000, having by that time spent $3,000 on two more mortgage payments. More importantly, I had to think about what if it didn’t sell in two months or at that price? So I went ahead and agreed to reduce the price.
A month later, when I was writing my mortgage check, I called Jack again. I was starting to get worried. His response was that “the market had spoken” and that we were still over-priced. I particularly remember him telling me that WE were overpriced and that WE needed to reduce the price even further, and I thought, “WE aren’t reducing anything — I am!” His new suggestion was $160,000, only this time I balked and I balked hard.
I asked him how many people had actually viewed the house. He said, “None, the price is too high.” I said, “How do we know the price is too high? Nobody has even seen it yet!” Being my friend, Jack was very direct with me as I was with him, and I still remember his response nearly twenty years later. He said, “Okay, well if you’re so smart, what do you think we should do to sell it?”
Now I was on the spot. I started thinking fast and forming a plan as I spoke. I said, “Jack, we don’t have a price problem, we have a traffic problem. And we’re trying to solve a traffic problem with a price decrease. The walls could be made of pure gold and yet nobody has bought the house because nobody has seen it! If anyone would see it, I have no doubt they’d buy it.” I was frustrated.
And then it came to me. I said, “Here’s what I want to do, Jack: I want to raise the price to $170,000 and I want to put a copy of the appraisal on the kitchen counter for everyone to see. Then they can’t argue it’s not worth my price. Next, I want to raise the commission from 6% to 8% so we can bribe some agents to bring their buyers out to see my house. I know that if they see it, they will buy it.”
Jack immediately said, “It’ll never work.” I told him, “Well humor me, since we tried it your way for nearly three months, and that way certainly isn’t working.” He said, “Fine,” in that same tone that you’ve no doubt heard from a frustrated spouse when you knew it was anything but fine. And that was our new marketing plan. Now it was time to wait and see.
Seven days later, Jack called me to tell me we had received a full offer. I accepted the offer and we waited on a new appraisal. Sure enough, it appraised for $170,000 again, and we closed a few weeks later. I thought, if I ever needed to sell a house again, I knew exactly what I would do. Little did I know at the time that I would become a Realtor® eight years later.
Well, when I became an agent in 2002, I immediately wanted a USP or Unique Selling Proposition for my practice — something that would make me stand out from over a thousand other agents. I thought about my method of selling houses by effectively “bribing agents” and decided it was perfect. I became a listing agent and this same approach worked so well that I went on to list 119 homes my first year in the business, and all but two at 8% or more in a market of 6% or less. The other two were at 7%.
Did they all sell? Of course not. But a lot more of my listings sold than the national average, and they sold in about half (55%) of the average days on market. But just as important as selling quickly, they sold for a higher price, which, in turn, netted my clients more money in the process. By using this approach I was able to get my clients top dollar for their homes, even though it was a buyers’ market.
How much more were we able to sell for? I don’t know for sure. My best estimate is that my clients netted 7-8% more money when it was all said and done. Here is what I can prove. The average markdown (the discount when applying the list/sale ratio) for our community was 5.4% while my clients’ average discount was only 2.7%. That is a minimum of a 2.7% higher net, but what that fails to take into account is that it’s a discount off a higher starting price — often as much as 10% higher starting price.
And trust me, netting more money in half the time makes for happy clients. Very happy clients. More importantly, it pays you more money, gets you paid quicker, and increases the likelihood of your even getting paid at all on your listings. That makes my approach the ultimate win-win listing approach. The seller nets more money, and I do too.
So now you know the basic concept. Simple enough, right? But presenting it in a compelling way is not quite so easy. After taking hundreds of listings and talking to hundreds of sellers, I’ve eventually figured out what works — exactly what to say and how to say it. In the early days, I’ll admit that a few of my presentations were a little rough, but as I learned what worked and what didn’t, I eventually refined it to the point where I won the listing nearly every single time.
My listing presentation has evolved. It’s evolved from using the traditional CMA to a much better CMA. It’s evolved from sitting at the client’s kitchen table, to the living room, to over the phone anywhere that I’m comfortable. It has gone from spending the bulk of my time simply hustling potential sellers, to now having more sellers than I can possibly service automatically coming to me. It has gone from a low-tech, in person, paper presentation to a high-tech, electronic, over the phone presentation.
As you begin to learn my approach I believe you’ll concede that it is a truly unique approach, and one that is almost too easy to use. In fact, agents from all over the country who’ve tried it have told me as much. Agents in good markets and bad markets. In small markets and large markets. In buyers’ markets and in sellers’ markets. Everywhere it has been tried, it’s had the same results. Here is a letter I received from one agent:
I wanted to send you the listings that I have obtained in the past 2 months at 8% commission. It has been very exciting to obtain the listings because I have not had one commission objection!
- $ 59,000 @ 8%
- $ 79,000 @ 7%
- $ 432,000 @ 8%
- $ 349,000 @ 8%
- $ 341,000 @ 8%
- $ 525,000 @ 8%
- $ 489,000 @ 8%
- $ 169,000 @ 7%
- $ 375,000 @ 8%
Total listings $ 3,497,000 and total commission $ 277,280 — wow!!! Now, what I want to do is to get more listings at 8%! You say it is a numbers game so I know that some of this is going to close and I want to maximize the numbers. Just for your information, of my last 8 listing presentations I have closed 7 of them. So interesting because I have no commission objections! More to come. This is just the start of something HUGE!!!
Sutton Group Lakefront Realty
So how would you like to be the next agent sending me that letter or one just like it? You can be. My approach is easy to learn, and I will guarantee you that if you take the time to learn it you will have something truly different to offer your clients. Something that will make you stand out in a sea of sameness. But best of all, using my Traffic approach as your listing presentation, you’ll make more money and at the same time do an even better job serving your clients. Now how cool is that?!