COMMISSIONSCOMMISSIONS

Tuesday June 2, 2009Tuesday June 2, 2009

COMMISSIONSCOMMISSIONS

IN THIS ECONOMY, PEOPLE ARE IN THIS ECONOMY, PEOPLE ARE LOOKING TO SAVE MONEY. LOOKING TO SAVE MONEY.

WE CAN’T REALLY BLAME THEM FOR WE CAN’T REALLY BLAME THEM FOR THAT. THAT.

WE ARE THE SAME WAY.WE ARE THE SAME WAY.

PEOPLE WANT VALUEPEOPLE WANT VALUE REGARDLESS OF THE ECONOMY, REGARDLESS OF THE ECONOMY,

CONSUMERS ALWAYS WANT VALUE.CONSUMERS ALWAYS WANT VALUE.

NO MATTER WHAT THE PRODUCT OR NO MATTER WHAT THE PRODUCT OR SERVICE IS SERVICE IS

THEY WANT TO FEEL THEY GOT THEY WANT TO FEEL THEY GOT EVERYTHING THEY NEEDED - EVERYTHING THEY NEEDED - AND AND THEN SOMETHEN SOME FOR THE MONEY THEY FOR THE MONEY THEY PAID. PAID.

VALUE REIGNS SUPREME!VALUE REIGNS SUPREME!

IF WE COMMUNICATE OUR VALUE IF WE COMMUNICATE OUR VALUE THE RIGHT WAY, WE WILL PROTECT THE RIGHT WAY, WE WILL PROTECT OUR COMMISSIONS. OUR COMMISSIONS.

IF YOU CAN DEMONSTRATE YOUR IF YOU CAN DEMONSTRATE YOUR VALUE EFFECTIVELY, YOU WILL LEAP VALUE EFFECTIVELY, YOU WILL LEAP FAR ABOVE YOUR COMPETITORS.FAR ABOVE YOUR COMPETITORS.

COMMISSION MYTH OR COMMISSION MYTH OR MISCONCEPTIONMISCONCEPTION

THERE IS A RAMPID THERE IS A RAMPID COMMISSION COMMISSION MYTH OR MISCONCEPTIONMYTH OR MISCONCEPTION AMONG AMONG TODAYS REAL ESTATE SELLERS. TODAYS REAL ESTATE SELLERS.

THAT MYTH OR MISCONCEPTION IS:THAT MYTH OR MISCONCEPTION IS:

““THAT THE LESS A SELLER PAYS IN THAT THE LESS A SELLER PAYS IN COMMISSION, THE MORE MONEY COMMISSION, THE MORE MONEY HE/SHE PUTS IN HIS POCKET.”HE/SHE PUTS IN HIS POCKET.”

UNDERSTAND THE FALSE UNDERSTAND THE FALSE ASSUMPTIONSASSUMPTIONS

IT IS IMPERATIVE THAT YOU IT IS IMPERATIVE THAT YOU UNDERSTAND THE FALSE UNDERSTAND THE FALSE ASSUMPTIONS THE COMMISSION ASSUMPTIONS THE COMMISSION MYTH IS BUILT UPON, AND THEN…. MYTH IS BUILT UPON, AND THEN….

LEARN HOW TO ARTICULATE THEM LEARN HOW TO ARTICULATE THEM WITH CONFIDENCE AND WITH CONFIDENCE AND COMPETENCE.COMPETENCE.

WHY DO YOU CHARGE WHY DO YOU CHARGE WHATEVER YOU CHARGE?WHATEVER YOU CHARGE?

MOST OF US CHARGE WHAT WE BELIEVE MOST OF US CHARGE WHAT WE BELIEVE WE ARE WORTH.WE ARE WORTH.

MANY AGENTS HAVE GUILT FEELINGS MANY AGENTS HAVE GUILT FEELINGS ABOUT CHARGING THE CONSUMER MORE.ABOUT CHARGING THE CONSUMER MORE.

SOME OF US ARE WORRIED THE SELLER SOME OF US ARE WORRIED THE SELLER CAN GET THE SAME SERVICE FOR LESS, CAN GET THE SAME SERVICE FOR LESS, AND WILL CHOOSE SOMEONE ELSE.AND WILL CHOOSE SOMEONE ELSE.

WAYS TO DEMONSTRATE WAYS TO DEMONSTRATE OUR VALUE:OUR VALUE:

OVERCOMING OBJECTIONS TO COMMISSION:OVERCOMING OBJECTIONS TO COMMISSION:

DO YOU KNOW YOUR LIST PRICE TO SALES DO YOU KNOW YOUR LIST PRICE TO SALES PRICE RATIO COMPARED TO THE BOARD, PRICE RATIO COMPARED TO THE BOARD, OR COMPARED TO YOUR COMPETITOR(S)?OR COMPARED TO YOUR COMPETITOR(S)?

WHAT IS YOUR PRICE MARKDOWN WHAT IS YOUR PRICE MARKDOWN PERCENTAGE?PERCENTAGE?

HOW DOES IT COMPARE TO THE BOARD HOW DOES IT COMPARE TO THE BOARD AVERAGE, OR YOUR COMPETITIORS AVERAGE, OR YOUR COMPETITIORS MARKDOWN PERCENTAGE?MARKDOWN PERCENTAGE?

WAYS TO DEMONSTRATE WAYS TO DEMONSTRATE OUR VALUE:OUR VALUE:

EX. – IF YOUR LIST PRICE TO SALES PRICE EX. – IF YOUR LIST PRICE TO SALES PRICE PERCENTAGE (MARKDOWN) IS 2% AND PERCENTAGE (MARKDOWN) IS 2% AND YOU CHARGE A 6% COMMISSION, THEN YOU CHARGE A 6% COMMISSION, THEN THE TOTAL COST IS THE TOTAL COST IS 8%8% (PLUS THE (PLUS THE CUSTOMARY CLOSING COSTS)CUSTOMARY CLOSING COSTS)

IF YOUR COMPETITOR’S LIST PRICE TO IF YOUR COMPETITOR’S LIST PRICE TO SALES PRICE PERCENTAGE (MARKDOWN) SALES PRICE PERCENTAGE (MARKDOWN) IS 5% AND HE/SHE CHARGES A FOUR IS 5% AND HE/SHE CHARGES A FOUR PERCENT COMMISSION, THEN THE TOTAL PERCENT COMMISSION, THEN THE TOTAL COST IS 9% (PLUS THE CUSTOMARY COST IS 9% (PLUS THE CUSTOMARY CLOSING COSTS)CLOSING COSTS)

WAYS TO DEMONSTRATE WAYS TO DEMONSTRATE OUR VALUE:OUR VALUE:

DO YOU KNOW YOUR DO YOU KNOW YOUR AVERAGE DAYS ON AVERAGE DAYS ON MARKETMARKET COMPARED TO THE BOARD COMPARED TO THE BOARD AVERAGE, OR THE AVERAGE D.O.M. FOR AVERAGE, OR THE AVERAGE D.O.M. FOR YOUR COMPETITOR?YOUR COMPETITOR?

TIME IS MONEY!!! AVERAGE HOME IN THE TIME IS MONEY!!! AVERAGE HOME IN THE VALLEY IN 2008 WENT DOWN OVER 2% PER VALLEY IN 2008 WENT DOWN OVER 2% PER MONTH.MONTH.

EX. - IF YOUR AVERAGE DAYS ON MARKET EX. - IF YOUR AVERAGE DAYS ON MARKET IS 60 DAYS AND YOUR COMPETITOR IS IS 60 DAYS AND YOUR COMPETITOR IS FOUR MONTHS, THEN YOU SAVED THE FOUR MONTHS, THEN YOU SAVED THE SELLER FOUR PERCENT! MAY CALCULATE SELLER FOUR PERCENT! MAY CALCULATE IN THEIR EXPIREDS AND CANCELLEDS.IN THEIR EXPIREDS AND CANCELLEDS.

WHAT ARE YOUR WHAT ARE YOUR NEGOTIATING SKILLS NEGOTIATING SKILLS

WORTH?WORTH?

HOW MUCH CAN YOU SAVE A SELLER HOW MUCH CAN YOU SAVE A SELLER ON ON HOME INSPECTION REQUESTSHOME INSPECTION REQUESTS??

SAVING YOUR SELLER ONE OR TWO SAVING YOUR SELLER ONE OR TWO PERCENT IN THIS ARENA IS JUST AS PERCENT IN THIS ARENA IS JUST AS CRITICAL AS SAVING THEM MONEY CRITICAL AS SAVING THEM MONEY ON SALES PRICE OR COMMISSIONS.ON SALES PRICE OR COMMISSIONS.

WHAT ARE YOUR WHAT ARE YOUR NEGOTIATING SKILLS NEGOTIATING SKILLS

WORTH?WORTH? CALCULATE THE AMOUNT THAT CAN CALCULATE THE AMOUNT THAT CAN

BE SAVED BY A SELLER BY HAVING A BE SAVED BY A SELLER BY HAVING A TRULY PROFESSIONAL AGENT DO TRULY PROFESSIONAL AGENT DO THE WORK FOR THE THE WORK FOR THE APPRAISERAPPRAISER. .

A SAVINGS OF 1-3 PERCENT TO THE A SAVINGS OF 1-3 PERCENT TO THE SELLER CAN OFTEN BE ACHIEVED. SELLER CAN OFTEN BE ACHIEVED.

SIX ONE DOLLAR BILLS SIX ONE DOLLAR BILLS DEMONSTRATION:DEMONSTRATION:

THREETHREE GO TO THE COMPANY AND GO TO THE COMPANY AND AGENT THAT BRINGS IN THE BUYER.AGENT THAT BRINGS IN THE BUYER.

ONEONE GOES TO MY COMPANY. GOES TO MY COMPANY.

ONEONE GOES TO ME AND MY FAMILY. GOES TO ME AND MY FAMILY.

ONEONE GOES TOWARDS THE GOES TOWARDS THE MARKETING OF YOUR HOME.MARKETING OF YOUR HOME.

CARL & JEFF’S 186 THINGS THEY CARL & JEFF’S 186 THINGS THEY DO WHEN TAKING A LISTINGDO WHEN TAKING A LISTING

CARL & JEFF BLACK’S 186 THINGS THEY DO CARL & JEFF BLACK’S 186 THINGS THEY DO WHEN TAKING A LISTING TO WHEN TAKING A LISTING TO DEMONSTRATE THEIR VALUE IS AN DEMONSTRATE THEIR VALUE IS AN INCREDIBLE TOOL. INCREDIBLE TOOL.

YOU MUST BE ABLE TO ARTICULATE THE YOU MUST BE ABLE TO ARTICULATE THE IMPORTANCE OF THIS TOOL, AND FOLLOW IMPORTANCE OF THIS TOOL, AND FOLLOW UP AS YOU DO EACH OF THESE THINGS. UP AS YOU DO EACH OF THESE THINGS.

THEN THE SELLER WILL FEEL THEY GOT THEN THE SELLER WILL FEEL THEY GOT THEIR MONEYS WORTH, - AND THEN SOME! THEIR MONEYS WORTH, - AND THEN SOME!

PAST VS. PRESENTPAST VS. PRESENT 2005 AVERAGE SALES PRICE OF $640,000 X 2005 AVERAGE SALES PRICE OF $640,000 X

2.5% = $ 16,000.2.5% = $ 16,000. 2009 AVERAGE SALES PRICE OF $350,000 X 2009 AVERAGE SALES PRICE OF $350,000 X

3.0% = $ 10,500.3.0% = $ 10,500. 2009 AVERAGE SALES PRICE OF $350,000 X 2009 AVERAGE SALES PRICE OF $350,000 X

2.5% = $ 8,750.2.5% = $ 8,750.

CONCLUSIONCONCLUSION: THE MARKET IS ALREADY : THE MARKET IS ALREADY GIVING YOU A CUT IN GIVING YOU A CUT IN PAY. PAY.

IS IT EASIER OR MORE DIFFICULT TO GET A IS IT EASIER OR MORE DIFFICULT TO GET A HOME SOLD TODAY THAN IN 2005? HOME SOLD TODAY THAN IN 2005?

TODAY’S MARKETTODAY’S MARKET DO WE SPEND MORE OR LESS TIME, AND DO WE SPEND MORE OR LESS TIME, AND

MONEY IN MARKETING TO GET A HOME MONEY IN MARKETING TO GET A HOME SOLD IN TODAYS MARKET? SOLD IN TODAYS MARKET?

OFTEN IT IS NECESSARY TO SELL THE OFTEN IT IS NECESSARY TO SELL THE HOME 2, 3, OR 4 TIMES. HOME 2, 3, OR 4 TIMES.

THE DAYS ON THE MARKET IS LONGER THE DAYS ON THE MARKET IS LONGER NOW THAN BACK THEN. NOW THAN BACK THEN.

THE SKILL IT TAKES TO CLOSE AN THE SKILL IT TAKES TO CLOSE AN ESCROW IS MUCH GREATER NOW. ESCROW IS MUCH GREATER NOW.

THE CHALLENGES TODAY ARE GREATER, THE CHALLENGES TODAY ARE GREATER, CONSIDERING THE TIGHTENING OF CREDIT CONSIDERING THE TIGHTENING OF CREDIT & FINANCING, APPRAISAL ISSUES . . .& FINANCING, APPRAISAL ISSUES . . .

F.S.B.O’sF.S.B.O’s F.S.B.O.’S ARE THE MOST ARDENT F.S.B.O.’S ARE THE MOST ARDENT

BELIEVERS IN THE COMMISSION BELIEVERS IN THE COMMISSION MYTH OR MISCONCEPTION. MYTH OR MISCONCEPTION.

THESE SELLERS FORGET THAT THESE SELLERS FORGET THAT BUYERS WHO WANT TO BUY A BUYERS WHO WANT TO BUY A F.S.B.O. ARE LOOKING FOR A F.S.B.O. ARE LOOKING FOR A BARGAIN. BARGAIN.

STUDIES REVEAL:STUDIES REVEAL: ACCORDING TO A RECENT N.A.R. STUDY, ACCORDING TO A RECENT N.A.R. STUDY,

THE AVERAGE MARKDOWN OF SELLERS THE AVERAGE MARKDOWN OF SELLERS WHO DO ALL THE WORK THEMSELVES WHO DO ALL THE WORK THEMSELVES (WITHOUT ANY ASSISTANCE FROM A REAL (WITHOUT ANY ASSISTANCE FROM A REAL ESTATE AGENT) IS 15.4%!!! ESTATE AGENT) IS 15.4%!!!

A SEPARATE A SEPARATE USA TODAY USA TODAY STUDY CAME UP STUDY CAME UP WITH AN EVEN HIGHER NUMBER!!! WITH AN EVEN HIGHER NUMBER!!!

THEY MAY BE PAYING ZERO DOLLARS IN THEY MAY BE PAYING ZERO DOLLARS IN COMMISSION, BUT THE TOTAL COST OF COMMISSION, BUT THE TOTAL COST OF GETTING THEIR HOMES SOLD FAR GETTING THEIR HOMES SOLD FAR EXCEEDED ANY COMMISSION THAT EXCEEDED ANY COMMISSION THAT SHOULD HAVE BEEN PAID.SHOULD HAVE BEEN PAID.

BY THE WAY…BY THE WAY… WHAT EVER HAPPENED TO ALL THE WHAT EVER HAPPENED TO ALL THE

DISCOUNT BROKERS FROM THREE DISCOUNT BROKERS FROM THREE YEARS AGO? YEARS AGO?

WHAT HAS HAPPENED TO HELP-U-WHAT HAS HAPPENED TO HELP-U-SELL?SELL?

OUR CONCLUSION:OUR CONCLUSION:

SELLERS JUST NEED SELLERS JUST NEED TO BE TO BE EDUCATEDEDUCATED

AND AND ENLIGHTENEDENLIGHTENED!!