Listers Last

July 16th, 2008

Listers Last

This post started as a comment in response to some of the comments to this post on Agent Genius. 

Russell, in a matter of a few minutes, can give you the names of dozens of listing teams across the nation doing equal or far more business than he does. He can’t, however, do the same for buyer agent teams.

Correct.  I am in the top 200 agents in the U.S. again this year.  But I am not "the" top.  Last year (2006 stats) I was number 25 in the team "sides" category.  There were a number of people who beat me (in both volume and units) who only had one assistant and were not even competing in the team category.     I don’t know of any high volume agent or team who has lasted, long term, that mainly works buyers.  This isn’t to say that some mega teams that mainly work buyers don’t do very very well.

Am I all wet, Russell?

No, BawldGuy, completely dry.  As usual, I pretty much agree with everything that you and Bill Lublin have to say.

Listing agents don’t need buyer’s agents whatsoever? That’s the biggest load of crap I have heard for quite awhile. I am willing to bet that there aren’t any listing agents (with the possible exception of bawld guy’s dad) doing hundreds of transactions who wouldn’t crash and burn if buyer’s agents didn’t sell most of their listings.

Allan Domb from Philadelphia: www.alandomb.com for years did not bother to even put his listings in the MLS.  He sold them without the MLS.  Long term, he is still one of the most successful Realtors to have ever lived – he was doing over 1,000 deals a year 20 years ago.  He does more than that today but doesn’t still enter "contests" (like me:-)

How many of your listings do you sell yourself Russell? I am sure you can give us an exact number.

Less than 15%  To me, using MLS is much easier.  That isn’t to say if the DOJ/FTC had managed to "change everything" I wasn’t fully prepared to withdraw from the MLS.  But thanks for asking so nicely.

The thing that is tiresome is that a lot of the people doing mega listing business have this arrogant superiority complex that their way is the only way.

I am not one of those people.  I have never claimed my way was the "only way".  It isn’t.  There are lots of ways.  None of them require my blessing.   However, I am flatly stating that if an agent’s primary emphasis is on correctly working listings vs. working buyers, it is better, easier, more profitable, more conducive to being run like any other successful business (owner can be gone and still make just as much money), and there might actually be something to sell to someone else when retirement time comes around.

There are plenty of people who make a great living working with buyers without investing 60 hours a week in the process. The trick is very similar to what it takes to be a good listing agent. Not working with just anyone, but learning how to generate enough buyer leads that you can afford pick and choose and only work with motivated buyers who are ready willing and able to make a decision.

No disagreement whatsoever with the above statement.  But if you need to be gone for 6 – 9 months (like I did in 2001 when I had cancer) it is much much easier if the business is listings based to continue making money while not there.

A lot of people think the only way you can find buyers is by having listings. That is just simply not true.

Correct.  Pay Per Click, SEO optimization, blogging – just to name a few.  But the "thing" being offered as bait to the buyer is still a house.  It makes no difference if that house is listed by you, your company or some other company.  Buyers respond best to houses.  Therefore – for optimum profit – it makes sense to have houses for them.

I don’t want to spell out exactly how it can be done, but trust me there are ways to advertise that will have your phone or email ringing off the hook. Then you can sift through the leads and find folks who have to move by a certain date, and have the money in hand.

I always do both. I generally have had between 10 and 20 good listings at all times for the last twenty years, and I am always working with at least 5 buyers.

I really don’t believe you and I have any real disagreement.  You take and market listings and have lots of buyers that you sell homes to.  Your business is listings based.  Even if you are currently selling more houses to buyers than you are listing.  My point wasn’t "don’t sell houses to buyers" but take salable listings.  Anyone who believes there is some downside to taking salable listings has a false idea.  That was – and still is – the main point of my original post.

Posted in Getting Listings, Leads Listings Leverage, The Millionaire Real Estate Agent, The Realtor Success Series | Comments Closed

Which is Better: a Home Buyer or a Home Seller?

July 14th, 2008

Buyers vs

It probably depends on your point of view.  Are you looking for a quick nickel or a slow dollar?  Do you want a job or a business?  How about in "this market"?  Isn’t it better to have a buyer than a listing now?

I’ve written before that my expertise is in getting and getting rid of listings.  In some of those posts I’ve seen comments to the effect that I forgot to mention working buyers.  I didn’t forget.  To sell a house you need a buyer.  Each time and without exception.  It just goes with the territory.  But if your goal is to have a long-term stable business then you are going to want to learn to list.  Period.  If you disagree – even a little bit with anything you’ve read so far, please do yourself a favor and set aside those disagreements and read on.

The biggest single barrier to increased production is FIXED IDEAS.  We all have them in one area or another.  You have certain ideas about "how much business is possible".  Those "logical thoughts" are the very thing holding you back.

Is is easier to get a buyer and sell them a house than it is to take a salable listing?  The correct answer is yes.  If this were not a true statement new agents wouldn’t have a prayer of ever getting any business.  Reason?  Buyers are seldom ever looking for an agent.  They are looking for a house; they are willing to tolerate talking to an agent in order to see the house.  Most buyers are almost never "shopping for an agent".  If you wanted to buy a car can you imagine saying to your partner, "I sure hope we meet a charming and fun car salesman today.  Someone who is a lot of laughs we can really bond with." 

Sellers are different.  Most of them are looking for an agent to hire.  Totally different mindset.

Why does it take more skill to list than to work buyers?  Simple: because you don’t have to ask the buyer to pay you.  It is a "free" service you are offering to them.  The seller is going to give the listing agent a high enough commission that there is a paycheck for both agents.  It is the listing agent who goes in and gets that agreement signed.  Please understand that I am not saying it is "harder work" – because it isn’t.  In fact, it is a lot easier work, with no heavy lifting of any kind.  But that isn’t the good part.  Lets pretend that your goal was to do as good and as efficient a job as possible and to make as much money in the same amount of time.  Just pretend that with me.  How many buyers can you work at once?  Without help and if you are amazing?  How many at the very same time?  Two?  Three?  Could you juggle 4 or 5 at the same time?  And keep doing all of the necessary actions to have 4 or 5 more for next week because you will sell all of the ones you are working with right now?  Could you keep doing that week after week?  Month after month?  Year after year?

I don’t think so.  I’ve seen one agent here in Phoenix do around a hundred buyer sides a year for 2 – 3 years (without meaningful help) before hitting the wall.  Finally a heart doctor told him he was going to have to slow down.  The best buyer agent I’ve ever seen or heard about (he had a remarkable system for working buyers) did (with help) about 500 buyer deals the year before last.  This year he isn’t even in his companies top 10 agents.  (Hint: none of his companies top 10 agents are doing 500 deals this year).  Am I saying one can’t make money working buyers?  Nope.  What I am saying is that I personally know (or at least know of and what they are doing) most of the top agents in North America.  The pattern for almost all of them who enjoy long-term stable success is they have a listing based business.  Even though most of them do about as many buyer sides as they do seller sides, their businesses are listings based. 

Do you have to have a listings based business?  No, you don’t.  One of the wonderful things about this business is you can set it up any way you want to set it up.  Further, you can change it anytime you feel like it.  My first 12 years in the business I primarily worked buyers.  I "took listings" but wasn’t very successful at actually selling most of them.  The only meaningful thing that separated me from the pack was I continued to know that I was an incompetent dolt on the subject of taking listings.  I didn’t figure out explanations of how it was "better" to keep doing it my way.  I knew there was something to know that I didn’t know yet.  Was it hard for me to figure out?  Well, yes and no.  The biggest obstacles were the stupid (anything I believed that was unworkable) ideas I had about how it should be done.  If an idea is really "right" that "rightness" is easily tested: it works.  Again and again and again, without variation.  My own fixed ideas were what got in my way.  If you think you already know all about something there would be no good reason to then work on finding out about it.  You already know.  Once you know you don’t know you then can actually know – or at least start to know.  So one has to first come up to not knowing.

Nothing about the subject or learning it is complex or difficult.  Like most subjects, this one too, just reeks with false data and moron ideas.  Our industry is chock full of people who don’t do it or never did it who (for only X dollars) will tell you how to do it.  But it can be done and (if you want) can be done by you.  I’ve written all about it here.

Posted in Getting Listings, Leads Listings Leverage, The Millionaire Real Estate Agent, The Realtor Success Series | Comments Closed

How High and How Low Can Your Commission Go?

July 7th, 2008

how high - how low

What is your time worth per hour?  Your fee structure would reflect that amount.  Just how does a working Realtor get their income up?  Charge more?  Get more people to pay them?  Both?  Some other answer?

A few years ago (late 2004 and through 2005) there was more downward pressure on real estate commissions than I’ve seen seen in the past thirty years.  There were a lot of lower commission companies that started and there was a tremendous amount of media coverage about real estate commissions needing to go down.  The "news articles" and that viewpoint are still being worked on today by the DOJ and the FTC, along with various professors, among others.  It is vary easy for a working Realtor to find articles and opinions expressing the viewpoint that "you charge too much".

Do you?  Do you charge too much commission?  Are your fees too high?

How would you find out if your fees were too high or too low?  If you lost a listing "because you charge too much" would that be an indicator?  How many listings would you have to lose before it was "true"?  How about if you can’t pay your bills?  Would that mean you aren’t charging "enough"?  Or enough people?  It is an interesting dilemma for a working agent.  Back in the "old days" agents didn’t have this problem; the broker announced to their agents how much they would charge.  That was it.  No arguments, it was the broker’s decision.

Re/Max wasn’t the first "100% company", not even the first successful 100% company – that’s Realty Executives.  But they were most assuredly the first successful national 100% company and they are the company that set the standards nationally for all other brokerage companies – 100% company or not – working Realtors can pretty much charge whatever they please.  Complete and total freedom for working agents.  To fail.  An individual agent at the listing table hears the seller say, "I will only pay ‘X’ amount of commission".  The agent is broke and needs a deal.  This one thing alone has had a bigger impact on commissions than the internet, the Justice Department, the Federal Trade Commission and all the various limited service and discount companies combined.  It is up to the individual agent.  It is up to you.

So what’s fair?  What is a "fair" commission for you to charge? 

Please notice that I am not asking random people so we can get a consensus of opinion here on what they think is a "fair commission" for Realtors to charge.  Nor am I suggesting you learn some scripts so you can justify to your customers or someone here how much you charge.  I don’t believe you need scripts to "justify" your commission – at least not in the way most Realtors and the public seem to think of it.  There is just ONE PERSON you do need to "justify" your commission to: you.  End of list. 

Does it seem right to you?  Not, would you like more.  Not, do you want more money.  Just is it right to you.  Different cities have different amounts and percentages that are considered fair or right.  A neighboring community might – for no good reason – have a lower or higher typical commission.  Price points enter into this, as well.  What might be right for you – as a percentage – if you live in the Los Angles area could be very different than if you are a working Realtor in Ames, Iowa.

But it is what you consider "right".  Will you lower your fee if someone asks you to?  If they ask nicely?  If they demand it as a condition of doing business with you at all?  How low will you go?  What if the amount you charge is more than they are willing (or even able) to pay?  Will you then do it for less?  Under what conditions?  Is the amount you say you charge sort of a gag – you kind of want that much but you don’t really expect anyone in their right mind to actually pay it?

When do you really decide how much to charge?  Do you work it out in full and complete detail during a planning session – where you’ve set aside the time to work ON your business, not in it (with all the various "what if’s" considered)?  Or do you have a vague idea that there are "times" you will take less and then you can just make the decision there at their kitchen table if they happen to bring it up.  What if they simply won’t pay what you say you charge?  Is it then alright to lower your fee?  How low?  How low will you go if they say they won’t pay "that much"?  How low?  That is your real commission number.  The amount where you are totally willing to walk away if they won’t pay it.  At that number (percentage or flat amount), they either pay it or they don’t hire you.  Period.  Is your walk-away number the same as the amount you say you charge?  If not, why not?  What successful business principle is being applied to advertise or promote a higher fee and then secretly accept a lower fee?  When someone asks me how much I charge, I answer the question.  I don’t need to see the house, find out their loan balance, get "further information" or first explain how wonderful we are.  Do we have people who tell us they won’t pay that much?  Of course we do.  Every day.  I mean that literally, every day.  In fact, (this is probably true for any business) if you don’t have some people telling you they won’t pay "that much" either you aren’t charging enough or you aren’t talking to enough people.

Unless you are planning on building your business with a marketing strategy of: "no matter what we tell you we charge, we will take less, a lot less – have us over and see for yourself", I don’t know of any advantage in saying you charge a certain price for your services to then routinely accept a lower amount.  Just like you would tell a seller who says he will take less for his house, get it in writing so you can tell the world.  I am not telling you to lower your fees.  I am not telling you to raise your fees.  I am telling you (most of you, anyway – there are a few who don’t need to hear this) to spend some time looking this over for yourself so you can sort it all out.  Once you know what you are worth you won’t have any trouble explaining to your customers.  But the funny part is once you really know you will seldom bother explaining it to anyone.

Posted in Getting Listings, The Millionaire Real Estate Agent, The Realtor Success Series | Comments Closed

Is it Possible That Only 7% of All Realtors Do Over 90% of the Business?

July 6th, 2008

Churchill Quote 

Jonathan correctly pointed out that a third of of the members of NAR sold nothing last year.  Amazingly, that isn’t new – that has been true for as long as such stats have been kept on how much is being sold.

In a solicitation email I received from Dirk Zeller he talked about the Pareto Principle – better known as the 80-20 rule.  This would suggest that 20% of the agents do 80% of the business and that 80% of the agents do the remaining 20%.  Dirk did some research for his area (Bend, Oregon) and concluded that Bend matched the NAR numbers which are even more astounding than the 80-20 rule.  Dirk’s conclusion: 7% of Realtors control about 93% of the total business.  Pretty amazing.  I have not verified this number but I know it is close, if not exact.  For the Phoenix area here is what I found: there are about 40,000 members of the MLS (ARMLS).  Only 4.50%  of the total members of ARMLS had six sales or more (buyer or seller sides) in the past twelve months.  This is not an "average", this is flatly stating that less than 5% of all Realtors (selling homes through the MLS) made at least 6 sales in the past year.  I don’t have an easy way of deleting those Realtors who work for builders, etc., but I can say the number with six or more sales is about 1,800 agents.

Dirk goes on to say that the 7% of agents who are doing all the business do things differently:

How do they do it?

Well, quite simply, I’d have to say differently. That’s right… they do more business than everyone else because they do business differently.

That they do things differently than the 93% who don’t do much business is pretty obvious.  That would have to be a true statement.  However, I don’t believe the successful agents do things much differently than any successful small business does them.  Main job is still: get and keep customers.  This never changes.  In the residential brokerage business there is one thing that is "different" than most other businesses.  Listings.  If you will take the time to really learn to list you can make more money than most people you will ever know.  And it isn’t hard either.  In fact, so simple, even a Realtor can do it.

Recommendations:  Read to the point of understanding, The Millionaire Real Estate Agent.  Go to this page and spend some time.  It’s free and it is all about getting and getting rid of listings.

Posted in Getting Listings, The Millionaire Real Estate Agent, The Realtor Success Series | Comments Closed

Quantity – Quality – Viability

June 26th, 2008

“Miracles are great, but. they are so damned unpredictable.”

– Peter Drucker

Quantity, then quality, then viability.  That is the correct sequence with regard to leads, listings and leverage.

Leads always comes first.  In this business if one can not generate sufficient leads nothing else will matter.  It will make no difference how smart you are or how much you know – if you don’t have any customers to talk to.  Lead conversion is obviously the action sitting between having sufficient leads to wind up with a sufficient amount of listings.  But just having enough leads is the very first thing.

Ever “get careful” with a client or customer?  You know, where you don’t dare screw up?  It is a great feeling, isn’t it?  Not.  Nothing succeeds like insouciance.  Show me someone “being careful” and I’ll show you someone who is really “serious” and who is also about to make mistakes.  When one is playing, having fun, there is no need for carefulness.  To achieve this with customers it is necessary to know that you can get more.  If you know there are lots of them and that they are easy to acquire then no need to be “careful with this one”.  You’re happier and the customer gets a much better experience too (as they are being taken care of by someone who is relaxed about about the outcome and knows what they are doing).

Quite often, if one has the viewpoint that customers are scarce, they get into carefulness.  This is common with agents barely making it – as the very reason they are barely making it is they don’t have enough customers.  The reason they don’t have enough customers is either they don’t have an effective lead generation system or don’t consistently use the effective one they do have.  Either way, not enough leads is a “bad” thing as it leads to carefulness.

The future success and viability of a real estate office can be accurately predicted by how many producing agents they have.  Not how many high producing agents, just how many producing agents.  Offices (particularly those paying rent for space in a commercial office building) with just a few producing agents are often candidates for going out of business.  For agents it is how many listings they have; the average number of listings an agent carries will be the best indicator of their future viability.  Notice it is quantity first, not quality.  Having one or two “good ones” is not a substitute for having many listings.  In the first place if an agent has two “good ones” he won’t have them for long and he is at once down to zero listings for sale.

Obviously we strive for the very highest quality – in every area of our business.  But when just getting an area going (for the very first time or when getting it going again) do not fixate on quality.  It is quantity.

Posted in Getting Listings, Leads Listings Leverage, The Realtor Success Series | Comments Closed

The iRuss – a Look From the Other Side

June 12th, 2008

iRuss - the other side

This post is in response to my last one.  I had no idea it would be so well received.   Having surveyed only myself, to me it was a post I tossed off.  This post consists of the responses to the questions and points raised.

I want an iRuss also! A mini iPod crammed full of Russell Shaw podcasts and videos… You know, there could be some $$ that idea…

Go to this page and load yours up.  Scroll down to the lower half for the audio and video content.

sometimes as we are at the appointment, we learn about things that cause us to NOT take the listing. Honestly, it is more us not TAKING it than us not GETTING it. My business plan does not allow me to take a listing that is overpriced or in a condition (physically/financially/emotionally … ) where I do not think that I can do the BEST by my seller clients.

I believe the information here is the most important, most vital, high impact information there is for stable success.  Here is one of the sample emails I send out every month to invite agents in the Phoenix area to one of the talks that I give every month.  There are four different talks that I give and at the end of the 4th month I start over with talk number one.  Since April of last year I have given one of these talks to over 1,200 agents, at about 15 agents at a time (that is a lot of talks:-)

1. Did you discover new reasons to turn down a new listing?

2. Was there an area harboring more than their share of unsold listings?

3. Was there a pattern showing numbers of bedrooms/bathrooms (or other physical attributes or lack thereof) being shunned by buyers?

4. Was there a particular (and discernible) seller mindset hindering the sales process?

5. Was there an area/neighborhood which was, for some reason, consistently listed over market value?

We don’t have new reasons to turn down a listing.  We have the same reasons we have always had: bad seller or a bad price.  If the seller exhibits a majority of  the 12 characteristics covered here I don’t want their business at any price.  Even if a “nice” person, it is necessary for them to price the house at or below the water line.  Once we can see we are fishing with our bait out of water we must get the price lower.  Sellers who can’t or won’t reduce have a listing that isn’t going to sell.  Therefore, they cancel or we do.  There is always some price point at which it would sell, in any market.  If they are really serious, we can and will find that point.

I often hear remarks from agents like, “the bank sold that house really cheap – 30% below market value”.  I don’t agree with that kind of statement.  If various banks are the only sellers selling in an area and they are selling all of their houses at a perceived “below market” sales price – perhaps that IS the market for that product in that area.  A good price fixes any of the various bad conditions.  There is no good reason to take (or keep) a listing that isn’t going to sell.

Speaking of keeping records, what does a Millionaire Real Estate Agent use to do just that?

We use Agent Office for our transactions, ACT for all of our names and addresses, etc., and Excel to keep the production numbers. 

Pricing is a crap shoot and we don’t get the list price until it hits the market and that’s well into the process. Sometimes they’re priced well right off the bat, sometimes they’re not. If they don’t sell, the bank keeps lowering the prices until they do, so that’s not such a big deal.

Correct, pricing IS a crap shoot.  This is true in both a rising and in a declining market.  In a stable or slowly rising market (like we used to have before 2005 when we could use “comps”) we all pretty much knew how to price a property.  Now we really are guessing.  Sometimes pretty good guessing and it seems currently to be as much an art as a science.  That will only be true until the market stabilizes and then it will only be the super high end and unique homes that it will still be an art to correctly price.  Now it is most homes in our area.

And from this jewel, this:

Whatever it is, people are on edge. Have you noticed?

Yes, I have.  Many people in our industry have been very very stressed.  Everyone has stress points. Everyone.   No matter how easily any given person confronts and handles situations that make others marvel at their ability, that person has something they don’t easily confront.  That thing or situation is then capable of causing them stress. They are transmitting those feelings to pretty much everyone they come into contact with and those people in turn are passing that energy along to others, etc.  People are calm and relaxed when they feel they can confidently predict what is going to occur – what is about to happen.  When their prediction goes out there goes their certainty.  Once certainty is gone it doesn’t take much to then feel stressed. 

What is “stress” but too much environment pushing against the person than there is of the person to push back?  When there is enough of “I” (you) there to push back at whatever is pushing – no problem.  A big cut in income alone is usually enough to cause most to be on edge nonstop.  When a person feels out of control of a situation the very best thing they can do is to deal exclusively in certainties.  What do you know is true?  What is for sure?  Concentrate on those things.  Look around and find other things and ideas that you are certain are true.  When you see something you are not certain of – recognize that fact.  Don’t pretend to know things you don’t know – if you aren’t certain (based on direct observation) know that you don’t know it.  That not knowing is – in itself – a form of certainty.

When you are not feeling “up” recognize that fact.  There are things you experience in your life that bring you up.  Take a walk, call a friend, eat something you like, buy some new shoes, whatever gives you a “lift”. What are those activities for you?  Make a list (lists?) of them.  Really.  Write down fun stuff you like doing.  Things that are simply fun and make you happy.  If possible, make it a point to do some of those things every day.  You want something that will help you have a better business?  Get in a good mood and then make your business decisions.

Posted in Getting Listings, Leads Listings Leverage, Marketing, The Realtor Success Series | Comments Closed

How To Get The Listing Every Time!

June 11th, 2008

iRuss

 

With this post, I am introducing the new iRuss.  Here is another email from Raymond:

Hi Russell,

I’m trying to get some realistic perspective on the fall out rate of listings as experienced by successful listing specialists.  It’s not my intention to invade your privacy so I will understand should you ignore my request.  Anyway here is what I’d like to know:

How many listing appointments/presentations did your team make in the past year?

How many listings did your team take in the past year?

Of those how many sold?

And, how many expired or were canceled or withdrawn?

Of those that did cancel or withdrawn, what was the most common reason?

Thanks for your help.  And thanks for answering my previous question to you on AG.

It was extremely helpful

Take care and be well.

There are several ways to be able to say, “I take a listing for almost every appointment I go on”.  They are pretty much all stupid.

In 2006 we took 612 listings.  In 2007 we took 524 listings.  This year, Jan – May we’ve taken 187.  I don’t have stats for the past twelve months handy but believe I can answer your questions.

In 2006 our percentage of appointments to listings taken was about 56%.  We went on just under 1,100 face to face appointments.  We closed 405 escrows in 2006, about 60 of them buyer deals.  In 2007 my number of escrows dropped to 369.  312 of them were seller deals.  The percentage of listings taken to appointments for 2007 was 49.90%.  Just under half.

So far this year (through the end of May) we have gone on 406 appointments, Jan – May we’ve closed 106 escrows.  Our percentage of listings taken to appointments this year is about 46%.  This number has always changed with the market.  At the highest (for the year – not a particular month) it was years back nearly 60%.  Over the years, it has usually been around 55% listings taken to appointments.  Right now we are intentionally going on more appointments (therefore a lower percentage) as our “problem” isn’t the Listers are too busy.  Even though some days lately we physically have (with 3 Listers) 9 face to face, in the home interviews – in a single day.  Why yes, my new TV ad has caused the phone to ring more. 

What is interesting (besides the utterly horrible long term downward trend of my major stats) is how “good and bad” we are doing compared to the market.  For the past twelve months my percentage of of listings taken to those listings sold is 60.9%  That is just awful, in the past 12 months we aren’t selling almost 40% of the listings taken.  It is just awful and at the same time, a hell of lot better than almost everybody else here.  Most agents in my market area are selling about 20% in that same time period.  Not selling 80% of what was listed.  Most of the better agents are running around 41 – 43% sold.

Why did they cancel?  Or why did we cancel?  Oh, there are lots and lots of “reasons” given.  But there is really just one.  We didn’t sell the house.  With the exception of their transfer fell through or they can’t move to the new city after all, all of other “reasons” are crap.  We didn’t sell the house.  My advertised average time to sell is 44 days.  That is going back one year and compares to a market average for the same time of 121 days.  That was true as of May 1st.  As of June 1st, my average dropped (going back 365 days) to 42 days and the market average increased to 126 days.  Because they are calling me for results, if I don’t perform in the time they expect, they fire me.

So…. anyone going on more than a few appointments (their friends, relatives, etc.) is not listing them all.  If they think they are, they are keeping really crappy records.  Some agents only count an appointment if they took the listing – which is a great way to bat 1000 all the time.  Or they only had 1 or 2 listings in a year and sold them both.  Well done.  But if going on lots of appointments and taking lots of listings plan on them not all selling.  That way, your plans will match the reality of the business.

Posted in Getting Listings, Leads Listings Leverage, The Realtor Success Series | Comments Closed

The 100 Days Trick

June 3rd, 2008

100 Days Trick 

I have seen the future and it is a lot like the past, only longer.  There is a "trick" that time plays on people.  For most working Realtors the trick that time plays is about 100 days.

In this business, it takes about 100 days from the time you do the things that matter until you get paid.  What you did or didn’t do (Dollar Productive Activities) in March will determine how much income you receive in June.  This lag in time contributes to many agents failure to realize that they personally control their income.  But there is a time lag.  This isn’t to suggest that if you were hit by some natural disaster that you won’t be effected – you will.  I have a Realtor friend in Biloxi, Mississippi whose entire office was physically under water after Katrina hit.  That can kind of wreck your day.  Another friend of mine, a top ERA agent, who woke up to find that every open escrow and every listing she had was just gone or under water.  No surprise, those escrows didn’t close.  I am not suggesting that these things don’t matter or can’t cause quite an effect, at least a temporary one.  But those agents – both winners – bounced back.

Over the years, sometimes you catch a buyer at just the right time or happen across a seller who wants to list immediately and as luck would have it, you wind up with an escrow in just a few weeks from the time you first made contact.  Because it is so easy to to remember when you connected with them it is common for an agent to wind up with a very false picture regarding how long it takes to get business and get paid.  It is very seldom just a few weeks.  Very rare, indeed.  It is usually about 80 to 110 days – about 100 days.  Don’t depend on luck.  If you were to actually do the things this month that really matter (not the pointless, silly and non-productive actions that are so "important") like working directly on Lead Generation, Lead Conversion and Listing Appointments – your income this next September could be your highest ever.

I swear this isn’t some trick I’m trying to play on you.

Posted in Getting Listings, Leads Listings Leverage, The Realtor Success Series | Comments Closed

An Amazing Formula to Accurately Predict Your Income

May 27th, 2008

Money Pool

Many years ago I was in a sales training class room and learned a simple and remarkable formula that I have never forgotten.  I want to pass it along here. 

Step 1.  The instructor told us to write down on a piece of paper the amount of income we absolutely had to have for the year.  He was very specific on the issue of this wasn’t what we "wanted" or "desired" but how much did we have to have – no matter what.  The irreducible minimum.  Step one was for us to figure out what really was our personal bottom line.  He said we have to know this number before we can proceed to step two.  He gave us about fifteen minutes to figure it out and waited until each of us let him know we had the amount and had it written down on the paper.

Step 2.  Look at that number.

That was it.  He announced that we each were going to make that amount of money.  Most of us groaned and protested.  He said that unless we changed our ideas of how much we really had to have the number on the paper was going to be our income for the year.  As you might imagine, it turned out he was right. 

What allows income to change is the DEMAND FOR INCOME.  Not "want".  Demand.  The same is true for savings or net worth.  There is an amount of money that is "right" for you to have.  Get much below that number and something must be done about.  Now.  If the amount on hand rises much above that set point you will see the person obsessively get rid of the "excess" money on hand.  The amount that is just right – the correct amount – varies from individual to individual greatly.  It has precisely nothing to do with intelligence or I.Q.  It has everything to do with the considerations of the person. 

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The most interesting things I have ever learned on this subject were ideas I learned from L. Ron Hubbard.  Change a person’s acceptance level and you have just changed the thing that actually matters.  People are not impressed (for long anyway) with what they have.  If they already have it (and can keep it) they aren’t looking up at it – they are looking down or across.  This issue, acceptance level, is the monitoring factor in one’s income, wealth, really their environment in general.  Want to know the person’s Havingness Level?  Just look.  What do they have?  You’ve been to someone’s home at some time, wondering how could anyone live like that, in that condition of squalor.  That level of squalor is what they can accept.  Same thing in the relationship department.  We’ve all seen the man or woman who leaves a nice and decent person so they could run off with a tramp.  They could not "have" a nice and decent person.  What they could have was a tramp.

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What is fascinating (at least to me) is the realization that the person usually does not wait until he physically receives the thing he can’t easily accept to then waste it (customers, money, relationships).  The most common point of waste is prior to receiving it.  What I am about to write in this paragraph is so obvious once you see it that it will seem like you’ve always known it.  Lets take money as an example.  Most of us are currently wasting HUGE amounts of money.  That is correct, you are actively wasting a huge amount of money.  For example, how much could you make if you really applied yourself?  Really.  With what you know and what you have at your disposal right now (nothing new to learn, nothing major to buy or acquire to make the change possible) how much could you make right now if you did the things you know you "ought to be doing"?  Nothing here I’m telling you to do.  You already know this and no part of it is new data or a new insight.  So subtract the amount of annual income you currently make (last 12 months) from what you know you could make if you did the things you know you could and should do; isn’t that quite a bit of money?  That is the amount you are currently wasting.

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There are actions you take which are your Dollar Productive Activities.  When you are doing those actions you are making money, lots of it.  For a Realtor a primary method of wasting income (never receive it) is to spend time (fill the day) working on things that – even when done correctly – do not lead to getting more listings or getting a buyer into escrow.  Most agents spend the bulk of their time working on things that don’t even have the charm of deliberate nonsense.  Deliberate Nonsense can be a lot of fun.  And it has its own very desirable product.  I believe that if you are not going to work on something that matters (leads directly to getting and keeping customers) in your business you are better off to goof off.  Literally.  Know that you are not working and that you are not pretending to yourself to be working.

This isn’t "work hard, play hard" – whatever the hell that means.  It is DO WHAT YOU ARE DOING WHILE YOU ARE DOING IT.  That is also from Hubbard and that is a recipe for success.  Do what you are doing while you are doing it and know that you are doing that thing.  If you’re not working, don’t work.  If you are working, work.  None of this is to imply that work – even hard work – can’t be a lot of fun. 

You can factually change your income by changing your viewpoint of "how much you really have to have".  I understand that seems simple.  It is.  Actually, it is really the only way one ever does change their income.  They change their mind about what is "necessary".  Then there is the other part: DO WHAT YOU ARE DOING WHILE YOU ARE DOING IT.

The future is yours.

Posted in Leads Listings Leverage, The Realtor Success Series | Comments Closed

Thrive – Survive – Thrive

May 20th, 2008

Pushing the River

It is sometimes amazing how it lightens one’s load to find out that you weren’t alone in having a particular problem.  The downside of course is if one is seeking agreement on having that problem the people they find in agreement with the problem can become a support group for the problem.  And that can equal agreement with being a victim.  Not really where I am wanting to go with this thought.  I’ve written before that from the time the Phoenix market crashed at the end of August last year until March of this year I had to feed my business a bit over $500,000.  I didn’t like it but wasn’t really concerned.  My wife and I had dinner Friday night with one of the other most successful agents in Arizona (also a couple) and she confided that they were out of pocket just over $300,000 for the same time period.  They work a higher price range than we do (their average sale is 550k, mine is 250k) and they didn’t have to start feeding their business until November.  We got hit earlier as our price range was instantly effected by the sub-prime meltdown.  Well, we went into the black in April and so did they.  Not for the year but for the month of April.  Home sales in Phoenix were up April 2008 over April 2007.  That is the first time that kind of stat has been true for over a year.  When you have a really big operation (read: marketing based) you can get a nice rise from a rising market.  You can also get a brutally big bump from a falling market.  None of this is to suggest that one’s stats are not caused by themselves.  But none of us personally pushes the river.

Memorize This

When one’s business is based on prospecting they can turn it around much much faster than if marketing based.  Surveys are the key to stats.  That is such an important concept that if you were to memorize it and learn to teach it to others it would be a good thing.  Surveys are the key to stats.  When you are marketing or selling anything – if successful – you are delivering a message or making an offer that the public you are trying to reach will respond to.  If you are offering the "wrong" thing (they don’t think it is valuable) your efforts won’t be successful.  If what you are offering is what they want – success.  For example, I am currently promoting "we can sell your home even when others are giving up".  In today’s market that is an acceptable message.  If I were to have run an ad like that three years ago it would have been absurd.  Most cab drivers could have sold a home in the market we had three years ago.  So when the phone stops ringing it isn’t that "marketing no longer works", it is the "button" or offer being made isn’t current any longer.  When you are talking to someone it is almost instantly obvious if what you are saying "doesn’t survey well with them".  You can change your message on the spot.  All agents successfully listing and selling homes are quite skilled at doing these "surveys".  They just have never thought of what they were doing as gathering survey data.  It is faster and easier to change your message if your communication is mostly live.  Finding the correct buttons for a marketing campaign takes much longer, not to mention the ad production time.

The Truth Is…

Agents all across the country have taken a beating this last year.  And many of them have felt like they were in the wilderness all alone.  Most agents don’t have accurate data on what other agents and companies are doing.  As most real estate agents tend to present themselves as "I’m really really really successful"  – even when they are not – there can sometimes be a very false picture.  The agent knows they aren’t doing very well (compared to how they were doing) but doesn’t have that same subjective reality on how the other fellow is doing.  I am surprised when I answer someone about my stats and they experience relief that "I was honest".  They had been talking to agents who were telling them, "I’m doing great".  We all like to think of ourselves as buzzing along like the green line on the graph up top.  Truth is almost all of us – when highly successful – have stat graphs that look much more like the red line.  Periods of survive, followed by periods of thrive.  We make the bulk of our money during the thrive periods, when the stats are moving up.  The goal isn’t to have a great year.  The goal is to have a great career.

Imagine the Discount Brokerages

If you think traditional Realtors have had it rough imagine what it is like for the discount real estate companies.  In my area, with my stats way down (a little over 75 million production in the past 12 months) my group outsells all of the Help U Sell offices here combined.  They have 14 offices (that someone is paying rent on) showing in our MLS and my group does more business than all 14 of them combined – and this is a national company.  The small discount companies aren’t even doing that well.

Thrive – Survive – Thrive

Lower commissions aren’t the "thing" now.  Results.  Can you sell my house?  Do what you have to do, learn what you need to learn to be able to convince a seller to price their house correctly, so you can answer that question, "YES", and you too will see that your very best years are yet ahead of you, not behind you.  Survive until you can thrive.

Posted in Getting Listings, Leads Listings Leverage, The Realtor Success Series | Comments Closed

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