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Making the Right Connections: Who to Call in Your Prospecting Efforts

Good morning and welcome back to Mike Ferry TV. It’s the week of March 4th. We have two months down. Ten great months to go for all of us in Real Estate. I’m going to talk a little bit again about the inventory shortage, which is an ongoing conversation in our industry. And it’s a problem that is very solvable. The reason why we’re having a hard time with it is that the majority of agents in Real Estate today work with buyers versus sellers. I think I’ve probably shared in the past that in the 60s and 70s, if an agent did 20-30 transactions, half were listing sold, half were buyer-controlled sales. That has changed dramatically.

We don’t have enough houses to show the buyers to keep them happy and keep them buying.

Today, for some reason, it seems that most agents feel that working with buyers is a much easier process to follow. And of course, it is an easier process because in most cases they either like the house or they don’t. And that decision is made very quickly and you move on to the next house. But the problem today, we don’t have enough houses to show the buyers to keep them happy and keep them buying. And with interest rates changing as much as they have over the last 12-14 months, that also has slowed down the buyer side. So the truth is, we’ve really lost a lot of buyers. We’re not looking for sellers and we have a challenge that we’re facing.

But on the positive side, if we do sell a home, the average commission check has gone so much bigger, become so much bigger that we can live on less transactions and in many cases actually make more money. So we’re in a very interesting state of probably confusion as to what do we do in the Real Estate business.

So my belief has always been the same and I’ve been criticized, condemned, complained about. I’ve been told I’m not allowed to speak to people because I am always going to talk about the word prospecting. You know, I’ve done seminars for insurance companies, for stock brokerage firms. I’ve done seminars for – I got hired to speak to the Building and Rock Association years ago, and these were all leaders of companies, and they wanted me to speak on selling. So I talked about prospecting, and they’re taking notes left and right. And then I speak to a great group of realtors and I say “prospecting.” And, you know, “Aw boo Mike Ferry!” I’d rather be on social media. I’d rather be on technology. You know, I’d rather be holding open house where hopefully nobody shows up and I don’t have to do anything.

We have to prospect, find somebody to buy or sell.

So if we look at the basics of selling anything, there are three steps we have to follow. We have to prospect, find somebody to buy or sell. We have to present to them in a fashion that will cause them to want to list and or buy from us, and we have to ask them to sign a contract, which of course is part of the process.

So it’s been so interesting to me, because the problem with prospecting usually revolves around the fact that our industry hires a tremendous number of people that have no direct sales experience, and without direct sales experience, you don’t understand the concept of prospecting. So now we take a 30, 40, 50, 60, 70-year-old man or woman that has no experience in selling whatsoever. And we say to them, “You have to go out and talk to the public every single day. And the more people you talk to, the better chance you have.” Well, they don’t have scripts and dialogs. They don’t know what to say. They feel uncomfortable. They feel embarrassed. These are all normal responses. So we try to teach them what to say and what to do. So they have the confidence to go and do it. But many of them won’t attend seminars, they don’t attend training, and the turnover among new licensees is probably the highest we’ve ever seen.

They’re not going to call you. You’re not going to call them. You’re even.

So let me ask you a question. You’re sitting here watching Mike Ferry TV, either by yourself or with the group from your office. Will anybody in your community, let’s say within five miles of your office, list their home for sale today? And the answer is, in every case, yes. So then I always look at the audience and say, “Is that potential seller going to call you?” And they say, “Well, of course not. Why would they?” And I said, “Well, now let’s think about this. They’re not going to call you. You’re not going to call them. You’re even. You don’t get a listing – they don’t get a great agent.” So therefore pick up the phone and start calling people.

And of course, then I get asked all the time, “Well, who do I call?” And I wrote down, “How about for sale by owners?” Their advertising to try to find a good agent. The biggest thing about for sale by owners and NAR states that on their website. 94% of all for sale by owners list with an agent or pay a commission. 94%! So if there are ten a month in your community, nine of them are going to list their home for sale. Who do they list with the agent that talks to them, the agent that converses with them, the agent that shows them what they can do to get their home sold?

Expired listings. We had a period of time post-COVID where expireds did not exist. Well, expireds are back. Why are Expireds back? Because we don’t have enough buyers in the market at the interest rates that are being charged today to fulfill, and therefore listings are going to expire and agents that are taking listings because of inflation and rising prices kept listing about higher and higher prices. And at 6%-7% interest, these mortgages just don’t tune out right. And as a result, the buyers don’t buy. So we have expired listings that need to sell their home. And they need an agent that will tell them the truth and be honest about the price. And they’re going to argue. They’re going to scream and holler. They’re going to yell. But if they want to get it sold, they got a list with a good agent like you.

But then I wrote down doing just listed just sold phone calls and doors, because the best advertising we can do is to talk to the people around a transaction that we’ve already had and tell them what is taking place in their neighborhood.

In addition to that, all your existing leads, because everybody has leads, whether you bought them off the internet or somebody stopped by the office, or you got a referral from a past client.

Open your mind to the fact that we can do transactions on a regular basis if we talk to people.

Which leads us to past clients and centers of influence. So there’s an abundance of things we can do, and there’s an abundance of people that we can talk to. So I recommend 20 contacts per day, 5 days a week, 100 contacts a month is going to get you, in most cases, if you followed the advice I just gave, two or three reasonable leads per month. And on two or three reasonable leads per month. If you do the proper follow-up, you’re going to make presentations to get contracts signed. So what’s the key to success? Open your mind to the fact that we can do transactions on a regular basis if we talk to people. And I know it’s a hard thing for a lot of people to accept in Real Estate, but the people that are listing and selling homes and high volume today and yesterday and last year and the year before and the last 20, 30, 40, 50 years have always been in the habit of talking to people daily. Create that habit, create better production, create a higher profit, create better business for yourself. Talk to you next week.

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