markgalloway.com

I last wrote about the success of the Bothell Countdown, a Dutch auction format real estate sale that resutled in a successful home sale for it’s organizer/seller.  

Right on the heels of that post is the launch of  a new online auction service that has adopted the Dutch auction method as it’s model.  It’s called 4Sale4Now.com.

Basically, it’s like eBay, except instead of bidding an item up, the price regularly drops until someone bids…..and wins the item!  As I said before, I like Dutch auctions and think this could be a boon to anyone with a unique real or personal property item.  

Check it out.

Congratulations to Justin Wilcox at Bothell Countdown for selling his beautiful Washington home after launching a truly creative FSBO marketing campaign!

From the site at BothellCountdown.com:

The idea is simple and starts as soon as you decide a fair price for the house. If you think the current price is too high, wait a week and I’ll lower it by as much as $10,000. Each week, I’ll continue to lower the price until you, or someone else, thinks it’s fair and submit an offer.

Well, after starting on May 28th, at an initial asking price of $500,000, he proceeded to honor his end of the bargain and faithfully lowered the price each week until finally, on August 30th, he received a contract. On October 16, Justin wrote that after some additional negotiations they had closed with a final closing price of $409,500.

Really, as unusual as this appears to be, the concept is ancient. Technically speaking, this is called a Dutch Auction, with the distinguishing characteristic being that the auctioneer sets an initially offer price and keeps dropping the price until…….BOOM!, a bidder snaps it up. Regardless, it’s one more example of how when properly done, auctions really do set the fair market value for real estate.

If all real estate were sold this way, we would avoid another overvalued housing market like the one created by the mortgage industry over the last decade that’s led to our current economic crisis.

If you’re a FSBO looking for a newsworthy way to sell your house, consider emulating the Bothell Countdown. Incidentally, he offered a cooperating commission of 3% to a broker who brought a buyer.

This is another excellent example of outside-the-box thinking that gets real estate sold!

Did you ever notice how one innovates while others emulate? What I mean is that if one entrepreneur, company or artist creates something new, they will find many followers right on their heals. This applies to large core industries like automobiles and real estate as well.

I’ve often thought that if people would look outside their own industry for inspiration they could distinguish themselves as leaders – as innovators within their industry, without having to actually create new methods from scratch.

What the Car Business Could Learn from Real Estate Professionals

For example, if auto retailers would look at what real estate marketing pros are doing, and then adapt some of their successful ideas for themselves, they could be ahead of the curve, instead of just copying what other successful auto dealers are already doing. (Did you ever notice how one car dealer will launch a series of annoying commercials only to see other dealers airing similarly annoying commercials a month or two later?)

If car dealers would treat their sales staff as sales professionals – as agents of the dealership – and give them the freedom to market their cars the way a real estate agent can freely market client’s properties, while giving them the tools to do it, they would see serious results.

An example here would be if individual salesmen would use a listing syndication service like Postlets, vFlyer or ClassifiedFlyerAds, and then post individual vehicles on the prime online marketplaces in their area, they would be more effective at finding serious prospects than just waiting on the lot for the next “up” to appear. As a bonus, they would be compiling a prospect list that they would own instead of simply managing leads belonging to the dealership.

The dealer would benefit from a having a legion of sales agents pushing their brand name out in a way that would increase exposure without requiring any out-of-pocket investment from ownership. It’s a win-win approach that can work, but requires thinking about the role of salesmen differently.

Ask any sales manager and they will tell you that most salesmen are relatively lazy and will not take the initiative necessary to successfully implement an approach like this. Ask any salesman and he will tell you that most sales managers micromanage don’t want salesmen to have any freedom to sell “their way” and that ownership is too greedy to let them own their leads. These are big hurdles for an industry that is still doing business in the 20th century.

What a Real Estate Agent can Learn from the Car Business

However, from the perspective of a real estate professional, there is much value in observing how the car business traditionally works – not so much from a marketing standpoint, but rather from a sales standpoint. If real estate pros actually learned how to sell, their effectiveness would increase significantly, and many of the headaches they often find themselves encountering later on in a deal wouldn’t crop up as often. What I mean by this is that real estate people are usually not sales people.

They may be people persons, customer service pros, agents or advocates for their clients……but they usually aren’t sales people.

The thing that distinguishes a great salesperson is the way they “qualify” their prospects and then archive that information for when the time comes to “close” the deal. I’m not talking about closing the real estate transaction, I’m talking about a sales “close” where you get the customer to commit to purchasing.

Unfortunately, many real estate agents waste gas, paper and time chasing properties for clients who aren’t really buyers. Had they been qualified properly the agent could have saved themselves a lot of grief, or been able to work on more productive business. In a listing presentation failing to qualify a seller means you have failed to determine how serious they are about selling. If you’re seller isn’t serious about selling, they won’t – despite your efforts.

I don’t agree with the philosophy many Realtors have that the secret to success is having as many active listings as possible. If you have the courage to be selective about what you list, and even turn down a potential listing, you will ultimately do far better, because you will come to be known as someone who actually gets their listings sold. Especially in times like these!

Furthermore, you can refer the listings you don’t want to other agents and still benefit if they do sell. But you won’t have the headaches to deal with along the way! Most agents will disagree with this approach, but there it is! The old Pareto principle is at work once again since only 20% of the agents a doing 80% of the business.

The key to this method of listing properties is contingent upon developing good sales skills, and potentially emulating some of the good techniques from the car business. Sadly, most agents who are struggling are waiting for their broker to tell them what to do, or provide them with the latest and greatest technology tools to find buyers or listings, while most car salesmen are standing out in front of their car dealership wondering if they’re going to hit their “quota” for the month and wishing that management would “advertise better”, “get better inventory”, “increase commissions”, or some other lame excuse.

The bottom line:

History proves time and time again that nobody ever achieves great success by following others. Sure we can learn from others successes and failures, but our own success is contingent upon our own innovation. Therefore, be an innovator, not an emulator!