An Agent’s Guide to Gaining Mind Over Market Breakthrough to Mastery An Agent’s Guide to Gaining Mind Over Market Becoming an Opportunity Warrior Version: 3 Revision Date: August 2008 Note: For maximum impact all attendees should have their own copy of An Agent’s Guide to Gaining Mind Over Market.

Gaining Mind Over Market An Agent’s Guide to Gaining Mind Over Market Gaining Mind Over Market Main Ideas Perspective on the Market Opportunity Mindset Master Your Skills Install Key Systems Get in the Game

Perspective on the Market An Agent’s Guide to Gaining Mind Over Market Perspective on the Market How’s Your Market? People always need to buy or sell Markets always shift over time—they have a cyclical nature Change = opportunity Have agents read the three stories on page 8. Discuss why this market has been good for these agents. Read aloud the quote from Gary Keller on page 9. Pages 7-9

Perspective on the Market (continued) An Agent’s Guide to Gaining Mind Over Market Perspective on the Market (continued) The Law of Supply and Demand Demand exceeds supply = high prices Supply exceeds demand =low prices Page 9

Perspective on the Market (continued) An Agent’s Guide to Gaining Mind Over Market Perspective on the Market (continued) This chart provides and overview only. Note the trends: Buyers’ market in late 80s and early 90s Late 90s transition market 1999-2006 was a sellers’ market 2007 saw a shift back to a buyers’ market Page 10

Perspective on the Market (continued) An Agent’s Guide to Gaining Mind Over Market Perspective on the Market (continued) Other Factors Signal Market Change—Inventory Inventory as a Measure of the Market Sellers’ Market Less than 5 months’ inventory Balanced Market 5-7 months’ inventory Buyers’ Market More than 7 months’ inventory Note that these are merely approximations or guidelines. Some of the hardest hit markets have seen 9 or more months of inventory recently. Page 11

Perspective on the Market (continued) An Agent’s Guide to Gaining Mind Over Market Perspective on the Market (continued) Other Factors—Affordability Index Measure of financial ability to buy Index of 100 = median income family can afford median priced home Higher index over 100 = greater affordability Understanding this index, and how to use it, is a key insight. Learn about the Affordability Index in your market ASAP. Page 12

Perspective on the Market (continued) An Agent’s Guide to Gaining Mind Over Market Perspective on the Market (continued) Affordability for Austin, TX Median income $69,300 Median home price $182,500 Mortgage amount (after 20% down) $146,000 Required income (25% of $146,000) $36,500 Affordability Index ($69,300/$36,500 X 100) 190 Austin currently looks strong on the affordability issue. Page 12

Perspective on the Market (continued) An Agent’s Guide to Gaining Mind Over Market Perspective on the Market (continued) Three Ways to Close the Affordability “Gap” Lower home prices Increased borrowing power (e. g., lower rates, more options) Increased income What factors can an agent control? The market controls these factors, not the agent. Agents help to bridge the gap with knowledge, skill, and new tactics. Page 14

Perspective on the Market (continued) An Agent’s Guide to Gaining Mind Over Market Perspective on the Market (continued) What Impacts Affordability and Availability? Macro (National) factors Economic growth Inflation Interest rates Metro (City) factors Population Employment Household income Micro (Local) factors Neighborhood dynamics Property conditions Home prices The affordability issue is complex, but very important to understand. Take the time to do your homework on this subject. Page 14

Perspective on the Market (continued) An Agent’s Guide to Gaining Mind Over Market Perspective on the Market (continued) What’s Your Affordability Index? What’s the median income? What’s the median home price? What’s the affordability index? Direct participants to write down answers to the questions and to do the calculation. This can be done as a group exercise. Page 15

Perspective on the Market (continued) An Agent’s Guide to Gaining Mind Over Market Perspective on the Market (continued) What Are Buyers and Sellers Thinking? Role of media Seller beliefs Inflated sense of value Can’t sell for what they need or want Can sell “as is” without improvements Marketing and open houses will be enough to sell If they can’t afford the payment they will lose the home to foreclosure Market psychology is very important to understand, especially in this market. Listen to what the media is saying; think critically about what you hear. How different are clients’ perceptions (and the media’s) from the realities in the data? Ask agents what they’ve heard sellers say about the market and their beliefs and fears. Pages 16-17

Perspective on the Market (continued) An Agent’s Guide to Gaining Mind Over Market Perspective on the Market (continued) What Are Buyers and Sellers Thinking? Buyer beliefs Values may continue to go down Plenty of time to look and buy Seller will take almost any offer Wait for more homes to come on market May not be able to get a loan Great time to invest in real estate In markets, one person’s fear always creates another person’s opportunity. Ask agents what they’ve heard buyers say about the market and their beliefs and fears. Read the quote on page 17 aloud and discuss the point that Sharon Hamilton makes. Page 17

An Agent’s Guide to Gaining Mind Over Market Opportunity Mindset Six Truths About Markets From When Markets Shift by Gary Keller A paper written right after 9/11/2001 Guidance still relevant in today’s environment Gary Keller’s observations post-9/11 remain powerful to this day and are very relevant in this market. Page 18

Opportunity Mindset (continued) An Agent’s Guide to Gaining Mind Over Market Opportunity Mindset (continued) Markets Shift—It’s a Way of Life Markets are always in transition. Myth: Market determines your success. People buy and sell in all markets. Down markets tend to have fewer great deals—and those that are, sell faster. Markets are always changing. Page 19

Opportunity Mindset (continued) An Agent’s Guide to Gaining Mind Over Market Opportunity Mindset (continued) Up Markets = Proactive and Reactive Lead Generation BUT, in down markets only proactive lead generation works! Proactive lead generation is the key to just about everything in today’s climate. Page 20

Opportunity Mindset (continued) An Agent’s Guide to Gaining Mind Over Market Opportunity Mindset (continued) Market Shift = New Strategies Required Adopt opportunity mindset. Seek only motivated buyers and sellers. Price ahead of market—do not chase market. Make condition of listings stand out. Motivate buyers with sense of urgency. Qualify and convert leads quickly. Continued The Breakthrough to Mastery guides from KWU are based on the 12 tactics Gary Keller has set for success in today’s market, as reflected in SHIFT: How Top Real Estate Agents Tackle Tough Times. Pages 20-21

Opportunity Mindset (continued) An Agent’s Guide to Gaining Mind Over Market Opportunity Mindset (continued) Market Shift = New Strategies Required Catch and convert leads on the Web. Bulletproof your transactions all the way to closing. Find out where market is and get in it. Do more with less—expenses, services, people. Learn alternative financing options. New times require rethinking your game plan. Pages 20-21

Opportunity Mindset (continued) An Agent’s Guide to Gaining Mind Over Market Opportunity Mindset (continued) The Theory of Equilibrium Sellers’ market = agent count increase Buyers’ market = agent count decrease Big opportunity for those with stamina, skill, and adapted, improved business practices There’s a huge “numbers opportunity” for agents who stay in the game and adapt to the new environment. Page 21

Opportunity Mindset (continued) An Agent’s Guide to Gaining Mind Over Market Opportunity Mindset (continued) When Markets Shift Downward, Time to Reach Equilibrium Is Unknown Myth: Wait it out, it will be over soon. Truth: Face the market, adapt as needed. Commitment Consistency Reduced expenses Page 21

Opportunity Mindset (continued) An Agent’s Guide to Gaining Mind Over Market Opportunity Mindset (continued) In a Down Shift, It’s Time for “All Hands On Deck” Prospecting Converting to appointments and contracts Cost control Negotiation Transaction bulletproofing Customer service Page 22

Opportunity Mindset (continued) An Agent’s Guide to Gaining Mind Over Market Opportunity Mindset (continued) Your Role as Opportunity Warrior Have a plan and know what you should be doing at all times. Know your strengths, leverage them, and execute. Delegate tasks you do less well. Pages 23-24

Opportunity Mindset (continued) An Agent’s Guide to Gaining Mind Over Market Opportunity Mindset (continued) Opportunity Warrior Affirmations I’m an opportunist and this is an opportunity. I’m a market maker and will create my own market in these conditions. I’m able, ready, and willing. I’m a knowledgeable real estate consultant. I understand the big picture. I’m a professional guiding clients through the process. Sellers need me more than ever to get a sale. Buyers need me more than ever to get the best price. Have agents stand and recite these affirmations together out loud. Remind them of the importance of daily affirmations. Page 24

Opportunity Mindset (continued) An Agent’s Guide to Gaining Mind Over Market Opportunity Mindset (continued) Gain Market Share in a Slowing Market Maintaining your volume = increasing your share This powerful concept describes the reward that’s out there for agents who stay the course and build their businesses in tough times. Page 25

Opportunity Mindset (continued) An Agent’s Guide to Gaining Mind Over Market Opportunity Mindset (continued) Gain Volume in a Growing Market Maintaining market share = increasing volume Here’s the payoff when the market shifts back up. Page 26

An Agent’s Guide to Gaining Mind Over Market Master Your Skills Focus on the Basics Assess your skills and look for ways to improve Keep up your education Be a student of the market Be a great communicator Lead generate 3 hours a day Talk competently with sellers about pricing Motivate buyers to buy Convert leads to appointments It’s time to fine-tune existing skills and build new ones. Page 27

Master Your Skills (continued) An Agent’s Guide to Gaining Mind Over Market Master Your Skills (continued) Assess Your Skills Know your market Prospect Try new sources for leads Know scripts Make offers to generate responses Have clear, concise Unique Selling Proposition (USP) When assessing your skills, ask yourself the following questions: Do I know my market numbers backward and forward? Could I be more diligent about prospecting? Have I tried other sources for leads? Can I recite my scripts for any objection buyers or sellers may throw at me? Does my direct response message make an intriguing offer to generate more immediate responses? Is my USP clear and concise, and does it reflect what my customers need and expect from me? If you answered “no” or “well, sort of ” to any questions, take a moment to devise an action plan to improve. Another way to get answers to these questions is to have a trusted colleague ask them of you. Answer them with strong justification backed up by past performance. Page 28

Master Your Skills (continued) An Agent’s Guide to Gaining Mind Over Market Master Your Skills (continued) What improvement would benefit you the most? Direct participants to write down their answer. Page 29

Master Your Skills (continued) An Agent’s Guide to Gaining Mind Over Market Master Your Skills (continued) Keep Up With Your Education Be a lifelong learner. Become a teacher, coach or mentor. When you cut expenses, don’t cut education. Use education to plug in and grow. Education is a “forever thing.” Attend KWU education events at your Market Center, Region, or through Keller Williams Realty International. Pages 29-30

Master Your Skills (continued) An Agent’s Guide to Gaining Mind Over Market Master Your Skills (continued) Be a Student of the Market This is an everyday commitment. Data is your friend—know where to find it. Know both the national and local statistics—use graphics to share what you know. Know the best buys. Know the status of all homes in proximity to your listings. Learn, learn, learn, and become the true market expert in your town. Data sources include NAR or CREA, your local board, KWRI, government, banks, lenders, title and escrow companies, and others. Go over the list of sources for market data on page 32 of the guide. Pages 31-34

Master Your Skills (continued) An Agent’s Guide to Gaining Mind Over Market Master Your Skills (continued) Be the Media—Become a Spokesperson, Speaker, and Resource Write articles. Speak at town meetings. Speak to businesses and other organizations. Put updated, insightful content on your website. Start a blog. Speak back to the media, counter their opinions, contribute your expertise, and gain a reputation as “the expert” in your market. Show the report on page 33 of the guide. Page 35

Master Your Skills (continued) An Agent’s Guide to Gaining Mind Over Market Master Your Skills (continued) What are your market numbers? Homes on market Homes sold Homes pending Expired listings Days on market Average list price Average sales price Direct participants to write down answers to these questions. This can be done as a group exercise. Pages 35-36

Master Your Skills (continued) An Agent’s Guide to Gaining Mind Over Market Master Your Skills (continued) Be a Great Communicator Seek first to understand—ask, listen, and validate your understanding. Study and practice scripts. Leverage script knowledge through conversational skills. Communicate with your clients faithfully, relieving their stress—and yours. Continued First-rate communication will both win and keep business for you. Page 37

Master Your Skills (continued) An Agent’s Guide to Gaining Mind Over Market Master Your Skills (continued) Be a Great Communicator Remessaging Evaluate every message you are putting out. Are your messages driving prospects to you? For sellers (time to sell, % of list price) For buyers (best buys, foreclosures, free searches) Use web domain names that attract an audience. Changing times may require some revised messages. Know what needs to change and get it done. Focus on what sellers want, and what buyers want. Page 38

Master Your Skills (continued) An Agent’s Guide to Gaining Mind Over Market Master Your Skills (continued) Talk Competently About Pricing with Sellers Know the market facts. Be truthful, then test their understanding of what you’ve said. Use the bottom line or net approach. Let them vent their emotions—remain calm. Discuss financing options that might be offered to buyers. Page 39

Master Your Skills (continued) An Agent’s Guide to Gaining Mind Over Market Master Your Skills (continued) Motivate Buyers to Buy Make offers that generate immediate response. Understand and overcome fear with scripts. Educate them about the opportunities. Lead Generate 3 Hours a Day! See the KWU courses Lead Generation 36:12:3 and An Agent’s Guide to Upshifting Your Lead Generation. Discuss the examples from page 40 of the guide. Pages 40-41

An Agent’s Guide to Gaining Mind Over Market Install Key Systems Be Efficient and Effective! Review everything you do with a critical eye. Focus on your 20% activities. See Lead Generation 36:12:3, Introduction: The Power of One. Take command of your business and use every tool that makes sense. If you don’t know what resources are available, ask and learn! Page 42

An Agent’s Guide to Gaining Mind Over Market Install Key Systems (continued) Be Efficient and Effective! Use tools from KWRI eAgentC for your website ProManage/TOP PRODUCER—contact management system Calendar tools Task lists and checklists Use technology to leverage your time and add more to your bottom line! Page 43

Install Key Systems (continued) An Agent’s Guide to Gaining Mind Over Market Install Key Systems (continued) Be Efficient and Effective! Rethink how you use and work with people. Restructure as needed. Increase accountability. “Quit the wrong stuff. Stick with the right stuff. Have the guts to do one or the other.” Seth Godin, The Dip Page 43

Install Key Systems (continued) An Agent’s Guide to Gaining Mind Over Market Install Key Systems (continued) Systematize Everything! Lead Generation 36:12:3 describes “the 3 hour habit”—DO it! Convert leads; follow up on everything. Manage expenses; know all numbers, prioritize. Leverage your people and a great vendor support team. Go over each bullet in detail. Explain how and why agents should take these steps. Pages 44-49

An Agent’s Guide to Gaining Mind Over Market Get in the Game! Commit and don’t quit. Lay your foundation for growth in improving markets. Have a game plan, and stick to it. Know your role, revamp it if necessary. Focus on dollar-productive activities. “Commit and don’t quit” says it all—that plus knowing what to do and how to do it. You have plenty of help available. Pages 50-52

An Agent’s Guide to Gaining Mind Over Market The Bottom Line Be an Opportunity Warrior—embrace the market. Accept the Law of Supply and Demand. Understand and use your local Affordability Index. Become the media. Master your skills (market knowledge, communication, lead generation, conversion). Evaluate yourself on all challenges and build your action plan now! Page 53

Productivity Boosters An Agent’s Guide to Gaining Mind Over Market Productivity Boosters Send Market Snapshot—feature of ProManage/TOP PRODUCER—to prospects and customers. Track your lead generation efforts with ProManage/TOP PRODUCER. Check out technology offerings from KW—eAgentC, etc. Page 54

An Agent’s Guide to Gaining Mind Over Market My Action Plan Don’t put away this guide without developing a plan to put what you have learned into action! Refer to the Action Plan on pages 55-56 of your agent guide to assess your strengths and areas for improvement. Write down steps you will take to improve your skills—complete it, share it, and commit to it! Direct participants to fill out their Action Plans on pages 55-56 of the guide. Ask them to share their commitments with the class. Pages 55-56

Take the other courses in the Breakthrough to Mastery Guide series An Agent’s Guide to Gaining Mind Over Market Take the other courses in the Breakthrough to Mastery Guide series Upshifting Your Lead Generation Seller Pricing Strategies Seller Staging Strategies Lead Capture and Conversion Internet Lead Capture and Conversion Creating Urgency to Buy Bulletproofing Transactions Expense Management Effective People Leverage  Short Sales, Foreclosures, and REOs Financing Solutions

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