Success in real estate sales requires understanding basic, everyday terminology. In this opinion piece Charles Tarbey , Chairman and Owner of Century 21 Australia, helps to demystify some key phrases.
A while ago a friend invited me to watch a class at his martial arts studio. It struck me as interesting that for the first hour of the training session everybody in the room performed exactly the same basic exercises regardless of whether it was their first class or whether they were an experienced black belt. These core moves built further skill in the discipline.
I’ve always thought that the practice of martial arts draws a nice parallel to selling real estate. Unless agents have a strong understanding of how the fundamental real estate concepts are defined and put into practice they may never become a truly effective salesperson (a black belt if you will).
Unless agents have a strong understanding of how the fundamental real estate concepts are defined and put into practice they may never become a truly effective salesperson.
For real estate agents such knowledge consists of having a solid understanding of the terms: ‘listing’, ‘price reduction’, and ‘listing extension’ – three of the most fundamentally important definitions in the sales process but which often remain misunderstood in practice.
Many agents commonly fall into the trap of believing that the more listings they achieve, the greater their success will be. This will only be true if each of the listings in an agent’s books achieve ‘listing status’ i.e. are at a reasonable and saleable price– if you can’t sell a listing today, then realistically it’s just a home on display.
To get a property signed and sealed today, price quickly becomes critical. We’re really only ever in one of two markets; we sometimes see booms, where buyers rise to meet a seller’s high price, and other times we witness periods where sellers change their expectations to satisfy a purchaser’s offer which they may deem to be low. This second period is what we are in ninety per cent of the time – it’s called real estate.
“If you can’t sell a listing today, then realistically it’s just a home on display.”
The price management process often sees agents announce the achievement of a price reduction on a property, when in reality the outcome has been a price adjustment – the two concepts are very different. A price reduction requires the lowering of price so that the property achieves listing status, thus becoming sellable today. Understanding price and the value and necessity of sound price management are concepts that all agents must grasp to be successful.
At a seminar I spoke at many years ago, upon asking the audience what they thought to be the meaning of a listing extension, one gentleman called out that it was “prolonging the agony”.
If a listing extension occurs it is essential for agents to immediately get the property down to listing status at that time, otherwise a negative cycle will continue. The agent may have their listing, but that ‘For Sale’ sign has now been sitting there for quite awhile, signalling failure to many potential clients in the neighbourhood.
A listing extension shouldn’t mean “prolonging the agony” so long as agents realise that a listing extension is actually an opportunity to practice some price management and deliver a sale.
“A listing extension shouldn’t mean “prolonging the agony”.
When it comes down to it, real estate agents can do the best marketing to improve levels of sales success, but at the end of the day, if the basics aren’t there, results won’t come easily.
The concepts of listing, price reduction and listing extension form a solid foundation for any type of property transaction, whether it’s the sale of a studio apartment or an entire residential development. Just like the core martial arts moves, understanding these basic real estate definitions will provide you with a strong platform to be an effective agent who achieves consistent sales over the life of your career.