San Francisco Real Estate: “The Scoop”

,PossibJeil~st questipns:I. List the firm’s five primary strategies.2. Cite five characteristics of Marcus & Millichap that ournational competitors can’t match. Add five services that localand regional competitors can’t offer.3. Explain five seller-benefits of firm-wide specialization.4. List tcn reasons why an owner might sell.5. Give three reasons why buyers buy.6. Explain seller and broker benefits of individual specialization.7. List the perceived advantages and disadvantages of thefollowing:• FSBO• Open Listings• Exclusive listings.• A Marcus & Millichap Exclusive8. Explain the concept of probability brokerage.9. Cite thc three common goals of most sellers.10. Explain how our size and experience attract a higher price.II. Explain what you can do that the owner can’t do alone.12. Explain what you can do for the owner that another brokercan’t.13. Explain what you can do that will cause a buyer to pay more.14. Explain the concept of open-ended probing questions.15. Provide four examples each of how open and closed questionsare commonly phrased.16. Explain the difference betwecn Fcatures and Benefits.17. List phrases that are commonly used to convert Features to Benefits.18. Explain benefits of Marcus & Millichap features (Exclusives, reputation,network, size, marketing plans, research, cooperation, etc.)19. Explain the concept of Windows of Opportunity.20. List at least eight common Windows of Opportunity.21. Explain the principles of managing objections.22. Explain principles for determining when to handle and when to deferobjcctions.23. List useful responses to any objection we have covered in class.24. Explain the technique of trial closing.25. Cite two goals of trial closing.26. Explain the concept of tag questions (incremental agreement).27. Cite the goals of the business development call.28. Explain how sales skills might be used in each step of the call.29. Cite goals of different first appointment types.30. Explain how you will establish your credibility during a first appointment.31. Cite the Features & Benefits of proposals, the-proposal process, and eachproposal section.32. Explain reasons why an owner should provide books and records during theproposal process.Remember that the reasons must be phrased in terms of seller-benefits.33. Define and provide the fonTIula for NOl, CAP, GRM, LTV, OCR, Cash-onCashRate of Return, and Equity Build-up.34. Givcn lncome and Expensc Statcments and Market Comparables, calculateany of the abovc.35. Identify the activity numbers and ratios that will be necessary to meet yourpcrsonal business goals.64SECTION 10: THE REAL ESTATE FIELD - OPEN DISCUSSIONs

issues?. FINAL TEST QUESTIONS:Demonstrate your ability to identify irrelevant sales and rent comps.Demonstrate your ability to identify low rents, using rent comps.Demonstrate your ability to identify the effect of different financingoptions on values.Demonstrate your ability to identify market trends from camps.Value a property in your product type.Define and calculate CAP, GRM, SGI, NOI, Total Return, ROI,Cash-on-Cash Return.¥’ Calculate mortgage payments.–~j—–61Content I Notes ,,OUR STRATEGIESFINAL TEST QUESTIONS:1. Build Long-tenn Client Relationships ./ Explain Marcus & Millichap’s five strategies.2. Specialization ,3. Exclusive Representation4. Practice Probability vs. Possibility Brokerage5. The Value of Representation,;;5SECTION 7: THE PROPOSAL AND THE 2nd APPOINTMENT“,’, ” ” Notes “”,. ContentTHE PROPOSAL AND THE 2nd APPOINTMENTThe goal of the second appointment is to secure a signed ExclusiveRepresentation Agreement.Before you reach that goal, the client needs to agree that. .../ selling will accomplish his or her objectives,./ your price is reasonable and optimal, and./ the terms of the listing agreement are appropriate. IWhile 2″d Listing Appointments vary, there are generally four phases.\. Recap and provide a progress report. l2. Present the price and terms. - I3. Get feedback and structure the transaction.4. Gain the final agreement.I62SECTION 8: LEASED PROPERTIESLEASED PROPERTIES:Please see in-class handouts.~-~—63SECTION 9: FINAL TEST

Step 6: END THE APPOINTMENT AND SET THE NEXT APPOINTMENT• Make sure all decision-makers are able to be present.• Schedule a date and time, even if it needs to be changed. Try to schedule it 3-5 days after the 1st appointment.• Schedule at least one hour.• Review the agenda for the second appointment with the client.• Ask if the client has anything to add to the agenda.• Provide a blank copy of the Exclusive Representation Agreement. Ask the client to review the form and raise anyquestions at the next meeting.59Exercise: Role-play the entire First Appointment:Scenario 1: The Andrews are a retired couple who have held the apartment building for 30 years. They utilize amanagement company and know very little about the property’s current value or rents. Their objection to selling is capitalgains taxes. But they are also worried about their estate planning and will consider selling if it helps. Their building mayhave below market rents and high vacancies.Scenario 2: Albert is an active real estate investor with a track record of buying in neighborhoods that are becominggentrified. His apartment building doubled in value over the last five years, but this increase has now slowed. This ownerprides himself on being more knowledgeable than others.Scenario 3:Joseph carefully plans his investment strategies. Unfortunately, he didn’t predict that he’d have to continuallypolice his unruly tenants. He complains that managing his apartments is making him nervous. On the other hand, hewould prefer not to sell if it results in capital gains taxes.Scenario 4: Sally contacted you. She read about the real estate market in the newspaper and is excited about the recent highpriced sales. She owns a triple-net leased property that she has only seen twice. It produces a generous cash-flow and nohassles.60SECTION 6: FINANCIAL ANALYSIS.”FINANCIAL ANALYSISThe Instructor will hand out a case study.Price the property in your teams.Any team member may be chosen to explain how youcalculated the price.A debate between teams may ensue - Be prepared tojustify your price. Hint: have you considered all of the

• Another market may have more upside. The motivation is to seize a new opportunity.• Prices are high. The motivation is to capitalize on that.• Interest rates may be shifting. The motivation is to prepare for an anticipated change.55Step 4: GATHER INFORMATIONOverview:During this step you ask the client for the books and records that you will need to do an accurate evaluation. If he or sheresists, you resolve the objection. If you can’t, it’s possible that the client lacks motivation.How to ask for Books and Records:Just follow this example: “Do you thjnk this proposal will help you determjne a course of action?” …. “Great. Let’s getstarted by gathering the information that will help me set an accurate price: your income and expense statement, rent roll,leases, deed of trust, and the note.”Alternatively, if you client is more interested in the speed of the transaction, you could say “Let’s get started by gatheringthe information that will help me determine how quicldy we could sell your property.” Whenever possible, try to tailor yourstatements to the client’s actual priorities.How to overcome a reluctance to provide Books and Records:1. Ask why the client doesn’t want to produce the Books and Records. The probable reasons are …a. ot understanding why.b. Concerns about confidentiality.c. A lack of motivation.d. A hidden agenda.e. You lack creillbility or rapport.2. Explain how providing Books and Records will help you achieve the client’s goals.3. Verify that he or she understands why you need the books and records.4. Ask again.Bottom-Line Standards:Did you get the books and records?• Is the benefit of providing the books and records explicit?• Is the benefit of proviillng the books and records matched to the client’s relative priorities - price, time, or probability?56Step 5: GET A CONDITIONAL AGREEMENT TO LIST(”The Trial Close”)What is a “A Trial Close”?Seeking a conditional commitment to list establishes momentum and uncovers objections. Here’s how to ask:• “Ifwe can agree on the price and ter