On this 230th episode of my Monday Morning Pep Talk, I will take you through the bedrock principles of marketing and selling a property. The changes coming to our industry have put a renewed focus on execution. You'll be able to use these bedrock principles and concepts as you revamp your listing presentation and processes over the coming weeks and months. The successful launch of a property to market will not change but it could be disrupted if not executed properly.
We don't have to look far for a perfect example of how to sell high priced ticket items. The ownership of a home will be the largest asset most people will ever acquire.
Sotheby’s, one of the world’s oldest and most renowned auction houses, has a fascinating founding story that dates back centuries. Founded on March 11, 1744, in London, the company was established by Samuel Baker, a bookseller, who held the first-ever auction under his own name in London. Initially, Sotheby’s focused primarily on selling books, manuscripts, and rare documents. However, as the business grew, it expanded its offerings to include fine art, antiques, jewelry, and other collectibles. The auction house quickly gained a reputation for its expertise, integrity, and exceptional service, attracting a prestigious clientele of collectors, dealers, and connoisseurs. In 1804, Samuel Baker’s nephew, John Sotheby, joined the business, and the firm became known as Baker & Sotheby. John’s son, Samuel Sotheby, eventually took over the company, and in 1861, it officially adopted the name “Sotheby & Co.” Over the years, Sotheby’s continued to thrive, establishing itself as a global leader in the auction industry.
Throughout its history, Sotheby’s has facilitated the sale of some of the most valuable and iconic works of art and collectibles and paintings, rare manuscripts, historic artifacts, and modern masterpieces. The auction house has played a pivotal role in shaping the art market and setting record-breaking prices for exceptional pieces. In 1976, Sotheby's entered the world of real estate brokerage. Real estate brokerage, essentially, is a form of "auction process.” Each time we launch a listing, we start with a goal of getting as many prospective buyers as possible to "raise their paddle" knowing that as the number of bidders increases, the odds of a successful listing launch for our sellers also increase.
Successful listing launches (creating the maximum amount of bidders for our sellers) almost always come down to the "3 P's": People, Property and Price.
People
In the changing real estate brokerage landscape where commissions will be at the forefront of most discussions, your ability to project your value, your marketing reach, your negotiating talent, your operational skills, your network of service providers and your processes will be what will protect and improve your professional fee for services provided. The better you can explain how you execute your listing launch process and the people involved will be directly proportionate to the fee you will be able to collect.
"People" also includes the seller, your client. Your ability to explain to them that they need to be a partner with you in the launch is paramount. A well-informed and supportive seller will have a huge impact on whether the launch will be successful or not. How the property shows and the access you have to show the property directly impacts momentum and the number "of bidders" that will show up. As you are interviewing a potential seller, their commitment to the process should dictate whether or not it is a good fit for you and your time.
"People" includes the buyer's agent. A talented buyer's agent provides advice, support and comfort for the buyer allowing for a higher contract to close success rate. The last thing a seller wants to do is go back to "auction" to drive new bidders back to the property. That almost always results in a price drop.
Property
If the property shows well, you increase the number of qualified and interested buyers/bidders. If the property does not show well, your buyer pool drops off dramatically. This has always been the case and is at the top of the page in "Real Estate Brokerage 101.” If you want buyers to raise their paddle, the seller, with your help and direction, needs to create a visual which allows the buyer to see themselves living in the property. If that is not accomplished, it will need to be reflected in the listing price for the launch to be successful for the seller.
Price
No broker or seller will ever be smarter than the market. Going to market as close to the "appraised" final value as you can will drive the highest number of buyers to raise their paddle. If you go to the market too high, your seller most likely will be the only bidder in the auction which will require that seller to eventually drop the price of the property until more bidders show up. Establishing a launch price as close to "right" from the beginning creates the crucial initial momentum. Human nature dictates that a buyer will want what other buyers also want, enticing them to raise that paddle and compete for it. If the property sits on the market, it tells potentially interested buyers that "something is wrong with it,” dampening the mood of the buyer pool. Sotheby's, the auction house, has mastered this concept. They have an incredibly sophisticated appraisal process for their offerings before any item goes to auction, resulting in getting more collectors to raise their paddles and creating a competition that lifts the price of their offering.
If a seller is fixated on a price that is over what the market will provide, they will have two choices: Join the market with a well-priced property or wait until the market meets their price. The latter could take months or years.
Those who win in this new real estate brokerage environment will need to be best in class in the "3 P's" when working with sellers and launching their listings. Is it possible you can use this concept as a talking point in your listing presentations?
Next week, I will talk more specifically about how the NAR settlement impacts the seller, its impact on successful real estate launches and how to further entice buyers to raise their paddle. As a teaser, let me ask you this simple question: If a seller opts NOT to offer a buyer agent commission, will that increase the number of buyers in the buyer pool or decrease it? I think the answer is obvious. More on that next week.
As I wrap up, remember, no seller or listing agent is smarter than the market. Selling properties is an art form. You've got to get the 3 P's right when launching a listing. Your ability to explain that to your sellers and execute on it will protect and/or increase your fee for services offered and will most likely allow you to take market share. Better yet, it will allow you to take the market share that you most desire.
