In This Chapter

In other real estate sales books, this would be the chapter on sales. In this book, it’s on dealing with your client and peers in a more authentic, professional manner. It presents The New Ideal for the services agents render their clients and the way agents treat their clients and one another.

During the last two decades, the hard sell was the standard for real estate and how real estate agents represented their clients. As a result, the real estate sales profession entered this new century with a reputation that requires serious bolstering.

The New Ideal presented in this book is about bringing the real estate profession up a level so that we are treated as the professionals we deserve to be and our clients receive the quality service they always deserved.

Times have changed, but some agents often use the same old high-pressure sales techniques advocated by sales trainers. The style of agents who fancy-talk their clients with sales scripts and other trickster routines is outdated and certainly not in pace with our sophisticated and savvy modern-day real estate clients. Nor does it fulfill the agency obligations agents have to clients.

Real estate buyers and sellers no longer want to be assaulted by sales gimmicks of yesteryear. They ask their real estate legal representatives to pressure them less and treat them more like respected clients in need of reliable guidance. They want to be treated intelligently and honestly, not as though they can be tricked. Sincere and willing agents want to be thought of as more professional. However, we have not yet bridged the gap between pushy salesperson and professional representative.

The problem isn’t only client dissatisfaction. Legal issues exist. The use of sales techniques practiced on clients does not legally satisfy your fiduciary duty to a client. The law gives one important legal directive to agents while outdated sales training techniques give another. They are in conflict.

If you follow The New Ideal set in this book and put the interests of your clients ahead of your financial success, you will find legal, moral, and financial satisfaction in abundance. You will be rewarded with commissions, referrals, and your clients’ high regard. In addition, your clients will receive the fiduciary representation the law always said they should have.

A fiduciary duty is the legal duty an agent owes his or her client in a real estate transaction. Exactly what is this important relationship that all real estate agents should aspire to maintain with clients? A fiduciary acts on behalf of his client with the utmost of care, integrity, honesty, confidentiality, and loyalty. Your mission is to take all steps with your client’s best interest in mind. You are your client’s trusted advocate.

This is the highest duty the law imposes. The fiduciary relationship is therefore the most important legal relationship any two people can have. It is a relationship built on the highest trust where the agent is designated the legal caretaker of his client. It is actually more consequential than marriage because the fiduciary relationship legally requires one to act in the other’s best interest; in marriage, the obligation is mostly moral. Even the lawyer-client relationship does not meet the very high standards legally imposed on real estate agents.

Some sales trainers compare the real estate agent-client relationship to hunting. The correlation goes like this:

You are instructed to treat your client as the rabbit you are stalking, to hold your unsuspecting rabbit in your focus, and continually berate him or her with sales scripts. The purpose isn’t really to kill the client; it’s to push him or her to your only objective: closing on a deal.

Motivational sales trainers describe clients as “sitting on the fence” when they are faced with concern and indecision. They tell you this is the time to hit ’em with a script. Pressure does it. Get ’em while they’re down.

There are hundreds of sales scripts for every occasion. Some are tailored to be delivered in particular rooms of a house. Some work in any room. One is the very sad story of your last client who waited and lost the home they loved. They never bought another. There wasn’t another one like the one they lost. The well-trained agent is able to deliver these lies with sincerity and emotion, thereby instigating the emotion of concern in the wavering buyer.

Agents are often instructed to hide blank offers in a notepad they carry around so they can pull one out just as they are ready to strike their unsuspecting buyer client with the closing script. There isn’t time to open your briefcase and take an offer out. You’ve got to strike quickly.

Some trainers teach you that you must drive your buyer clients to properties. One reason is to maintain control. The other is to condition them by the careful delivery of sales scripts while you have them in your car. There are scripts about getting them in your car so you can feed them these scripts. For the challenging situation when there are too many buyers to get in your car, the answer is to scoop up the children and take them in your car. This ploy is called “kidnapping the kids.” The parents are guaranteed to show up when you have their children, and you can work on the impressionable kids in your car.

The sales script is aimed at one thing and one thing only: inducing pressure and fear in clients. These scripts are professionally designed to work these two human emotions to motivate the unsuspecting client. And they do work. They cause buyers to buy when they should pause and evaluate. They cause sellers to sell when another course of action might serve them better. The result is the demoralization of a profession that should be revered as one that discharges the highest legal and ethical obligation to its clientele.

The rabbit-hunting analogy and the kidnap-the-kids routine blatantly depict the grave need for a transformation of the real estate sales profession. The sales script may have had its place years ago when the modern real estate agent industry was still in its infancy. Now that real estate has matured into a multibillion dollar industry and a most popular investment choice, the time has come to overhaul the foundation of the agent-client relationship.

You’ve come to a profession that is held in low esteem. On the ladder of disrespect, real estate agents come just above used-car salesmen. You therefore have an image problem to overcome, and The New Ideal is your tool. The first step is to look more closely at the fiduciary relationship you establish with your client and the legal obligation it imposes.

When does the fiduciary relationship begin and end? It begins the first moment you have contact with the person who becomes your client and continues all the way through the last step you take on behalf of your client. The person to whom you are pitching sales gimmicks in your listing presentation is the person with whom you are forming a fiduciary relationship. How can you, in good and legal conscience, serve this potential client with anything less than bona fide goodwill and good real estate practice? We look at how in the following sections.

Real estate does not require the hard sell. Nor do your services. However, you are often told that you must master your sales skills and apply them expertly for anyone to hire your services. I disagree. I believe that you have a professional service to render but no product to hard-sell.

Real estate trainers often analogize real estate sales with sales of other products, such as computers, cars, and cellular phones. They talk apples and oranges. In product sales you need to talk up your product in comparison to another product. Product sales are competition driven, for instance, comparing an IBM to a Dell computer. You answer the question of why your product is better than theirs. In product sales you must be one up on your competition and a salesperson in every sense of the word.

But real estate sales are different. You are not direct-selling a product. You work with listings on a centralized database through which real estate sells itself with your skilled representation. You offer your professional representation to a client who has real estate to buy or sell. The way to do this isn’t with sales pitches; it is through the delivery of quality professional services.

The statistics on real estate appreciation are compelling, and become even more so when tax benefits are considered. Over the past two decades real estate has become the top investment choice for a growing segment of society. Everybody needs a home, many people need real estate investments, and others need real estate for their businesses. Real estate is in high demand, especially because the stock market has proven unpredictable. There is more need for an agent’s services than ever before due to the increased demand for real estate.

The ever-increasing complexity of the real estate transaction also means increased need for agent services. The routine purchase and sales transaction has transformed into a complex, multistage operation. Property disclosures become more complicated every year, as do the number of details and players involved in a real estate transaction.

In a single transaction, an agent may deal with as many as 35 people. Agents work with people and computers; they complete contract documents, coordinate professionals, and review complex disclosures and reports; and they use psychology, analysis, and other people skills. Agents deal with valuable and coveted assets, sometimes in the million dollar range. In addition, agents must navigate their clients through all these transactions during high times of stress and in very brief timeframes.

Given the breadth and depth of what agents handle, it doesn’t make sense to perceive them as salespeople. The real job is for agents to adopt a new mindset. We must provide quality, professional services to our clients, not to get their listings or sign on their purchases, but because we are their fiduciary representatives. If you make your client’s interest more important than your own, you will attract and keep far more clients than the master salesperson. You also will be meeting your legal obligation.

Clients are making the biggest decisions of their lives and may be making the largest financial investment they have ever handled. That alone makes clients vulnerable to the most nerve-racking reasons for indecision. Equally as mind-boggling is the fact that the home purchaser is trying to satisfy the personal and emotional needs of his entire family. Home buyers must evaluate their most basic human needs affecting how they live and where they live. The investment property buyer is investing money into what she hopes is a valuable investment for her and her family.

These days there is also another layer of analysis a buyer must make. How will they hold title? Should they have a living trust, and what about a family limited partnership? With an investment property, should they utilize asset protection and form a limited-liability company to hold title?

The following is a partial list of decisions clients face when purchasing a home or an investment property:

As the purchaser’s agent, you will often be involved in your client’s deliberations when considering these vital issues. As their advocate, always be aware of the consequences of the decisions that face them. It is only through this awareness that you can best discharge your obligation to support their best interest in the transaction.

You will find yourself involved in client deliberations or decision-making. In the course of transactions, some clients attempt to second-guess themselves and try to undo what they have done. I am never surprised when clients turn around and head in the other direction. As their advocate, you want to take away the stress and give your clients the space and support they need to make well-informed decisions. The very last thing they need is their trusted agent feeding them scripts intended to move them to buy or sell irrespective of their needs.

When you’re having an interaction with a client or potential client and you don’t know what to say, just be honest and put their interest first. Your client interactions are just that—conversations between two people, one of whom has a fiduciary relationship with another. If you don’t know an answer, say you don’t know. If you do know an answer and your interest conflicts with theirs, choose your client’s interest.

Here are some typical client questions followed by a typical sales-trainer script and what the agent following The New Ideal might say. It is quite telling to compare the difference in flavor between the scripted response and The New Ideal response:

The problem hasn’t just been the relationships between agents and clients. We need to transform the way we treat our fellow agents as well. As we change our client relationship from salesperson to facilitator, we also must change the competitive way we treat our peers. Competitiveness is part of sales mentality. It is not a part of professionalism and high integrity.

Competition consciousness goes hand in hand with high-pressure sales. It takes fear of others pulling ahead of you to fuel your motivation. The result is the real estate field becomes a back-biting, dog-eat-dog industry full of agents willing to do just about anything to get business. This attitude does not speak highly of the profession, and it takes its toll on the relationship between agents. The New Ideal, therefore, also extends to upgrading the way we treat our fellow agents.

Here are some examples of how the New Ideal agent and the competition-driven old ideal agent relate to their peers:

If you follow the steps in this book, you have chosen real estate sales as your profession because you are willing to discharge your legal obligation to clients in a professional way. You are genuinely interested in helping people find their next home, office, or investment property that will serve them through the upcoming years. There’s really no good reason why you should strong arm someone into hiring you. You’re good at what you do. You enjoy doing what you’re doing. People need your service.

Find your clients through successful marketing described in the chapters on marketing. Genuinely and intelligently offer them your professional services to represent them in their purchase or sale. Let them know you are not part of the old soft shuffle. Define the fiduciary obligation you have to them and commit to your willingness to fulfill it.

Realize that real estate is in high demand, as are your services. Discard salesmanship and competitive attitudes as you embrace The New Ideal. The natural result of practicing this type of high-integrity professionalism is that you will gain market share and you will feel a pride that will permeate your professional life. Hopefully, someday soon sales mentality will be a thing of the past in real estate sales. You will be on the cutting edge and clients will naturally gravitate your way because you are part of The New Ideal. High integrity and competence draw people like a magnet. They are an unbeatable combination.