For real estate agents who want to build a solid and sustainable business, obtaining an exclusive contract is the Holy Grail, the ultimate goal. But an exclusive contract can sometimes be difficult to obtain, because it requires total trust from the seller towards the real estate agent. As a real estate agent, you will have to double down on your efforts to convince a potential customer to trust you with the sale of their property. Let’s take a look at the essential steps to securing more exclusive contracts!
How to convert your leads and get more exclusive contracts: 4 essential steps
- Best Practices & Trends
How can you transform your customer journey?
An improved customer journey that brings you closer to your clients can assist you in converting existing leads into valuable clients. But where should you start? Our ebook covers the most essential steps.
The content of this article is based on our webinar broadcast on 1 June 2021, hosted by Julien Cornette, who is a real estate expert and coach. Please contact us if you would like to receive more information and view the recording of this webinar (in French).
First of all, what exactly is an exclusive contract? It is a contract by which an owner instructs an agent to act on their behalf in connection with the sale of their property.
Generally, contracts or mandates can be simple or exclusive. As the name suggests, the former allows a seller to hire different real estate professionals, while the latter creates a single relationship with a single real estate agent.
Step 0: plan your meeting and make sure you come across as professional
After all, one always hears that first impressions are the most important. Before any appointment, it is important to be well prepared. This will enable you to position yourself as a leader and conduct the meeting successfully, keeping in mind three important aspects:
- Understand your customers’ background: Get to know your customers first, understand what makes them tick as well as their expectations.
- Property evaluation: This step must not be skipped, and it must be taken after having evaluated a potential seller. Otherwise, the human aspect of the sale might be overlooked.
- Guidance: This is the time when you answer your potential customers’ questions. Address their fears and anxieties, reassure and support them in their decision.
These elements, which make up the “process”, are the basis of the four stages that will naturally lead the owner to award an exclusive contract for listing their property.
Step 1: valuation and pricing
The first barrier to overcome is a discussion about the price you think is realistic, as opposed to the price the seller hopes to achieve. Always base your pricing on facts. There are different methods available to you (comparative approach, qualitative approach, rental approach or competitive analysis). The objective is to explain to the seller how the price was established, and to validate with them the process you used to arrive at the price. For this meeting, prepare a valuation report. It will serve as a basis for explaining your pricing and will support your sales argument.
PriceHubble tip: Consider using digital tools for preparing your estimate file. Tools like Property Advisor allow you to provide accurate and comprehensive estimates more efficiently.
You will often find a discrepancy between the price the seller hopes to get for their property, and the price you consider appropriate for their specific market segment. Julien Cornette explains this discrepancy by citing the “four losses” that the seller will have to accept at the time of the property transaction:
- Memories: moments spent in the home with family and friends.
- Relationships: the network built up around the property, with neighbours, shopkeepers, etc.
- Habits and routines: there are many – for example, the daily trip to the bakery where the seller used to buy bread.
- Financial: your seller will set a selling price that may not be in line with your estimate of their property.
The sale of a property often unfolds in a complex emotional atmosphere, and the seller will need to go through these four losses in order to fully embrace the selling process. It is therefore up to you to guide them, reassure them and answer their questions.
Step 2: demonstrate the benefits of working with a professional
Potential sellers are sometimes reluctant to go through a real estate professional to sell their property, and sometimes think they can do without one. This is where you can demonstrate your skills as a market professional and explain the value you add. This step is crucial, yet often ignored: “The mistake often made by real estate agents is to go directly from the valuation to the choice of contract, without going through the two intermediate steps.”
At this stage of the sales pitch, you can highlight four points to emphasise the advantage you represent for the seller in the sale process:
- Multichannel: Thanks to access to the largest advertising platforms and your presence on social networks, you are able to spread the word about your potential seller’s listing. In this way, you are able to market and promote their property effectively.
- Security: Screening of potential buyers is often necessary to avoid disappointment for the seller. By checking credit ratings and screening, you can guarantee your potential seller quality offers.
- High-level information: Your knowledge of the market and your experience allow you to advise your potential seller on the best strategy to adopt in order to make the most of their property on the market at a given point in time.
- Availability: As the interface between the seller and potential buyers, you are able to invest time in your work, both for questions and for showings.
Julien Cornette recommends mentioning the advantages of working through a professional, but also explaining the downsides of not doing so, by indicating the losses that can result from a sale done solely via classified ads.
There are many risks when choosing the latter option: a slower property sale due to poor advertising, or greater risks regarding the solvency of the potential buyer. The potential seller, who is likely to be risk averse when it comes to selling their main property, will therefore seek to avoid risks by going through a professional.
Step 3: communicate the value you add
At this stage, you will need to convince your potential client to choose you rather than another agent. This is your time to stand out from the competition. As Julien Cornette explains it, there are four main themes you can use to showcase your expertise:
- Visibility: It is important to explain how and why you are going to ensure visibility for your potential customer so that they do not miss out on any opportunities. You will then highlight the different communication channels at your disposal.
- Appeal: This will demonstrate your ability to showcase and promote a property through the skills and technologies you have mastered or used. Virtual tours, videos or home staging are all assets to be exploited.
- Security: Your ability to screen for serious and relevant potential buyers will ensure a smooth sale for your customer.
- Transparency: For the seller, an exclusive contract is a sign of trust in the real estate agent. You must therefore demonstrate your commitment to the seller. You do this throughout the sale process, through various actions or initiatives that you commit to, such as weekly reviews, buyer feedback, or discussions on the strategy adopted.
Step 4: highlight the advantages of an exclusive contract
Compared to simple contracts, there are a number of advantages for your potential seller in opting for an exclusive mandate. Tailoring your message to suit the context is the best way to create a more coherent argument. For example, you can explain that taking on an exclusive mandate will facilitate a sale at the best price, since rare properties are more expensive.
“Many real estate agents say they give 100% to an exclusive contract. However, it is more important to highlight the advantages of choosing this type of representation, and how the customer can personally benefit from it.”
Finally, do not hesitate to list the different services and their terms and conditions by type of mandate. This will help your potential customers understand the steps you will take on their behalf, based on the contract they have chosen.
Julien Cornette’s tip: create a chart of the different services you offer, with a comparison between exclusive contracts and simple contracts. Also indicate your success rate for either type of contract. This will serve as a visual aid and help the seller to understand, as it highlights the advantages of choosing an exclusive contract. Such a chart also symbolises the commitment you are about to make to your seller on this project.
The exclusive contract as proof of a relationship of trust that goes both ways
If the seller chooses to work with you through an exclusive contract, it is also important that you make the choice to work with this customer. Julien Cornette recommends using a rejection matrix of six criteria to help you decide whether or not you want to pursue a business relationship with a particular seller:
- What level of competition do you face?
- What will be the actual selling price, as opposed to what the customer expects?
- How long will this transaction take?
- How urgent and serious is this project?
- What are the potential fees?
- Do you want to get involved in this project?
The objective is to remain committed to a sale project, to work within a specific and consistent framework in relation to the market, and, eventually, to make a fair financial return on the efforts you invested. This will increase your motivation and improve your results significantly.
“It is important to work with customers who are like you and who share the same values as you.”
Remember that it is important to keep people at the centre of the relationship. The exclusive contract is only a symbol of the trust that your customer places in you. While there are benefits for both parties, it is the desire to work with you that will be the main driver for choosing exclusivity.
PriceHubble’s tools offer you a way to give your customers a more precise valuation, as well as to know and understand your market better. Contact us for more information.
We would like to thank Julien Cornette for his very valuable advice on how to convert your leads into sales contracts!
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