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What’s More Important? Improving the Sales Process or Recruiting More New Agents?

The question that needs to be asked of every agent of their association is why are there so many agents? What’s more important, realtors focus on improving the sales process before its taken from us or recruiting more new agents?

Is the goal to keep the requirements and fees so low that everyone can be a real estate agent? If we keep the status quo, then at this pace there will soon be 2 million real estate agents, while there are not even 6 million homes sold each year.  As I watch the value and reputation of realtors continue to fall, my hope is we will actually “raise the bar” and decide to put the consumer first, which is improving the sales process and customer experience in line with the technology available today versus staying agent-centric.  Gosh, even if an agent sells 3 houses each year, it is questionable how good that level of experience can be? Let’s take a look…

The market or economy and the people in the world control how many home sales there are and this number remains relatively flat versus the agent population count, which I am counting on to improve the experience!

In my article written for Inman titled “Why Some Agents Hate the Team Model,” I was quoted saying:

“Home sales grew by 5 percent from 2013 to 2018, yet agent count increased by 30 percent during the same time period, according to a report from NAR. “

What Inman chose not to publish were the graphs which took away the impact. In today’s society, the impact is even greater due to the amount of cell phone internet usage that has changed society to be more affected by pictures or videos, versus the article. Let’s look at the charts from NAR Monthly Membership Report that demonstrate the severe climb in agent count over the past five years versus previous ten. The challenge to the population is a contradiction to the amount of homes sold, that is clear when seen side by side.

First, here is the Historic Report:

If the amount of homes sales were growing, more agents would be less impactful on the customer experience, except it’s barely ticking up so this is increasing the competition between those trying to help buyers and sellers, and adding to the empty promises that may occur due to more headbutting to win.  Unfortunately, the Agent Centric focus put pressure on the recruiting process making it juiced as brokers and teams have to pitch sunshine when recruiting instead of discussing the outlandish failure rate of 87% of new agents entering the business that the industry produces. It is clear we should be focusing on improving the home selling process like Zillow or Opendoor or Quicken, versus trying to identify more agents to start new. Check out the lack of increasing home sales over the past 7 years.

 

Here are the home sales from Trading Economics:

The point I want to emphasize is – why do we not focus on improving the process vs recruiting more agents?  Technology has advanced massively in showing homes. Opendoor and Zillow have demonstrated this with their focus on improving the pre-process by producing ready, willing buyers in the PA4 and flex model. Quicken has created a one-click mortgage to simplify the lending.  Why are our brokers not looking to improve the sales process?  We should be seeing more advancement from the major brokerage brands to advance the process. Except when an icon like Gary Keller improves the process, he is clearly focused on the agent, not the consumer which is where I think he is open to losing his leadership position as the world turns.  I think we should be focused on expertise and improving the process. I’m not saying we should not have new agents, there just should be better-required training. Expertise comes from doing something 10,000 times and our industry is creating the opposite.

Here is the chart overlapping:

The Agent Centric Model is set to ruin the status of realtors if we continue on this same path.  The Agent Centric model puts pressure on the system to not punish those, in fear or affecting the brand, instead of a focus on the client and upholding customer satisfaction and improving the process. The first crack has been made as customer satisfaction reviews were launched by Zillow, not the legacy brokerage brands.

I believe a renewed focus on the customer is the path forward.  We can make it a requirement of every broker to have customer satisfaction surveys and reviews with every transaction posted online, kind of like Yelp for every transaction.  This aligns the industry with the consumers and begins to transform the process. This would put the focus on training. Due to the heavy constant influx of new agents, brokers are forced to focus on risk reduction, not client service. Therefore, do we want the past average performers to teach the new? For goodness sake, the world has changed.  It is clear 99% of realtors do it the same way, but there is a better way to do it. If the industry can pivot, the best could train the rest who care to perform real estate at a higher level, who are best at serving the client.  The right compensation would bring this about. The training would be fee based and fund the system. Then agent population could provide unforgettable service along with improving the home selling process. Training actually focused on what the agents need to provide, superior client service, versus currently focused on the risks! Of course, if their performance is revealed by the clients, there will be less risky agents!  The time is now.

 

 

Become a Listings Pro

When I speak around the country or around my town, every time I ask the audience if they want listing leads, everyone vigorously raises their hands. I won’t be able to cover all of my tips for becoming a Listing Pro in this short blog, but I would like to introduce a couple key components.

MARKETING

A challenge for many in the real estate industry is marketing. I cover marketing under “How to Become a Listings Pro” because this is our chance to change and put the consumer first. Good listing marketing is the difference to becoming a listings pro.

Old school marketing is mailing postcards of the listing to the neighborhood and calling that marketing, but that is not how buyers are shopping. It’s possible a neighbor will receive the postcard and want to move within the neighborhood or it’s possible a renter will see the postcard and want to buy, but it is not the best place to be marketing a listing. Advertising in magazines is also an example poor old school real estate marketing. Old school marketing is more about marketing the listing agent, not the property for sale.

New school marketing aims to generates more traffic to the listing. Overall, I generate 3-5x more traffic to a listing than the average agent. I help people present their house like its their wedding day. Then I use direct to consumer advertising – that is advertising to where the people are watching. This includes advertising on Facebook and Instagram.

IDENTIFY PEOPLE WHO WANT TO SELL

Another key component is to be able to identify people who own a house and want to move. People are staying in their homes longer, it used to be an average of 5 years, now it’s 10 years. Many people open up the discuss of moving about 3-4 yrs before they move. It is up to you to identify where they are in the moving process.

I think one of the best strategies to find seller leads is to hold an Open House, because the people who come in are indicating they are thinking about moving – your follow up process is the key, along with your web presence. You need to have a strong Google presence – this is a very underestimated factor.

I’ve been talking about this for the past 5+ years, and over this time, I still see a lack of strong websites. If you’re going to become an elite listing agent then your website needs to exude one thing – that your are a local area expert.

Learn more how to become a listings pro with Agent Truth!

Listing Strategies

Don’t Get Stuck Talking to Clients Too Long

Too many people think that selling is talking with their mouth, but the reality is this can waste a lot of time when you are not able to get your point across.

STOP WASTING TIME

I often hear agents say they work really long hours. Too often they are working long hours because they are not effecient with their time. I know they are not being effecient with their time when they tell me they are spending a hour or more on the phone talking to a client about a specific issue without making any progress.

USE PICTURES

This is when showing the client a picture is more effective than telling them. Share with your client a screenshot of a webpage backing up your point. When sharing a photo from a website, do not use your own website, its important to use a 3rd party website to make the point more factual to your client.

Learn more with Agent Truth how to use pictures to get past “stuck points” with your clients.

Agent Training

House Pricing Strategy

Pricing a house can be difficult because too often agents feel pressured to list the house at a price the sellers want. Yet, the best agent for the seller is an agent who tells the seller what the house will actually sell at. Over the last 500 houses I have sold, my listing price has been within 2% of the sales price 98% of the time.

AGGRESSIVE, PASSIVE AND NON-COMPETITIVE

I like to use three prices when pricing a house; a low, medium and high price that I call Aggressive, Passive and Non-Competitive. I believe if the house is listed with the Aggressive price, the house will get multiple offers and sell the first weekend. The Aggressive number is usually below or right at the current comps. Next is the Passive price. I like to set the Passive price 3-5% above the current comps, this is usually the top end of the range for the neighborhood. The Non-Competitive price is the highest price. When giving sellers this price I always preface it by letting them know that we can list the house at this price, but there will not be as much traffic through the house and even though the house may sell at this price, I don’t think it will.

NEVER USE PRICE-PER-SQUARE-FOOT

My pricing strategy never includes price-per-square-foot, because I think neighborhoods sell in a range. I think price-per-square-foot is a derivative value that is wrong 30% of the time. Agents who only use price-per-square foot to determine the listing price often lack experience and knowledge. Agent Truth training classes are here to give you that knowledge to become a real estate expert.

Listing Strategies

Atomic Open House

It’s time to get excited, because I’m going to talk about the Atomic Open House. The Atomic Open House mean is my best open house strategy ever.

This starts with the preparation of the house. (Please see Photo Seduction class or How to Make Your House Sexy too.) I recommend hiring a home stager, but it’s up to the agent to reinforce these principles. When you’re putting the house online it needs to look its best. I talk about selling houses like online dating, because if you were trying to get a date you would want to look your best.

MARKETING YOUR OPEN HOUSE

I think that open house directional signs are crucial because you need to direct people to the house, but I don’t use as many signs as most realtors because I don’t think it brings in good quality traffic to sell the house. My goal with an Atomic Open House is to SELL THE HOUSE.  The key to the Atomic Open House is making sure your house is marketed on all of the top websites: Zillow, Trulia, Redfin, and Realtor.com. Also, make sure you schedule your marketing in your MLS by Wednesday or Thursday.

Atomic Open House is a mindset that you are trying to sell this house and that you are going to do everything possible to generate as much traffic through this house as possible. This is not just something that you do to placate your seller. Your job is a marketer to create high-quality traffic.

CAPTURING DATA

When buyers come to the open house, you need to capture their data. I believe individual forms to capture information are better than a sign in list. I believe having a flyer ready to hand to the people entering the house shows that you’re attentive. Hopefully before the open house, you’ve already done your research and you’ve identified off-market properties for that neighborhood, but even if you didn’t, some neighbors may come to the open house. When neighbors come in, ask questions about the neighborhood and ask if they are considering selling.  Those neighbors then also become potential clients with potential off-market properties for sale.

Put this all together and you have an Atomic Open House. You’re doing a great job for your seller and you’re maximizing your end killing it at the open house!

Listing Strategies

Open House Marketing

Open house marketing seems to be a foregone event in real estate. I don’t know why agents act like there have not been any recent changes in marketing. I still see the biggest thing in open houses is putting out lots of signs with balloons-we need to take this marketing to the next level. Traditional open house marketing strategies are events that begin the day of. More thought has to be put into planning ahead. Today’s buyers begin their search on their own, and where are they searching? The are searching online! When they see a house online they like, they are immediately looking for an access point to see that house, they aren’t waiting to see an open house sign on the weekend. If you don’t have the open house information online with the listing, you are missing up to 90% of your potential traffic.

I still feel the open house signs with balloons are good. The signs are helpful for the run of the mill traffic and the online shoppers to find you. Fresh flowers, water bottles and cookies at an open house are also great, but they are the icing on the cake, not the meats and potatoes of the open house marketing. Open houses need to be marketed on Wednesday, Thursday and Friday online. You need to see your house on every website, meaning: Zillow, Trulia, Realtor.com, Homes.com, Redfin and on all broker sites.

Listing Strategies

Get Better at Selling Your Own Listings

It is easy for real estate agents to get complacent in the marketing of their own listings beyond the hundreds of relationships their brokers and the association have already concreted for them.  The past success of this is still winning new listings and sales. The majority of time in the recent past, another realtor would bring their client after the realtor emailed them the home or they found limited information online and contacted their agent to show them and get more details.  In years past, the buyer did not have the access to information the internet now provides, hungry for house details, more consumers would engage agents earlier in the home buying process relying on them to provide this information, allowing this old school marketing to reach all consumers. This is only one side of the new world of real estate.

Realtors now have more access to consumers in the home buying process but its going to require more effort to draw them out.  

Realtors have traditionally spent more time trying to attract other realtors because they were the one in charge of getting their client to come.  This model is weakening as the buying public is out in front of the search process exposing themselves to listing agents like never before.  This is very cool as next generation marketing methods are changing as we speak away from traditional models. This will cause further innovation in the world of real estate and what has encouraged us to come out with the Real Estate 2020 podcast, to discuss the evolution of the industry and what it takes to be successful.

The advancement of technology, the explosion of photography and the acceptance of realtors letting the consumer control the house finding has decreased the engagement of their traditional buy side agents and empowered the consumers to shop alone until ready to write.  

This approach is not exposing the consumer to portals to get their data.  This has also changed the influence that agents have on reaching the consumer directly through effective and enhanced market brought online.  This enables listing agents to reach their intended target consumer directly, the buyer, making it easier to sell the house versus selling through the agent.  The intent is not to cut out the buyer broker (I double dipped less 5% of my sales as I keep my reputation high) and often buyers have an agent they prefer to write the contract, but to get more traffic through your house in hopes of selling faster and for more money.  Your goal as a listing agent is to drive maximum traffic through your listings, which leads to faster sales for higher return for the seller.  Advertising directly targeting the consumer goes way beyond photos in MLS that are syndicated to agents and consumers, and now leading agents will win deals at massive rates when they understand how to leverage this paradigm shift.

Now that consumer friendly companies that are in control of the data, like Zillow, Trulia, Homes.com and Realtor.com, that have eloborated and expanded the offering gaining the trust of consumers.  I am talking about how realtors can leverage this versus selling against it.  These portals are accepting consumer contact information hand over fist.  It is best to get engaged with the portals, understand the offerings and benefits in hopes of luring their viewers to the homes you are trying to sell and this does not mean buying the leads. The best way to do this is clearly the open house.  We have seen spectacular results having 50% of our homes sell from open houses over the past 6 months, which amount to 4-5 sales per month.

Listing Strategies

Selling Challenges

Most sellers are unsentimental about their homes, instead they prioritize profits from the sale over concerns about the home’s future under a new owner. As reported in the Zillow Consumer Housing Trends Report, half of sellers say maximizing profit is the most important goal, while 38 percent of sellers prioritize selling within their target time frame, and 12 percent say making sure their home has a good next owner is the most important priority.

TIMING CONCERNS

Urban sellers are more concerned compared to suburban sellers about selling within their target time frame. Urban sellers are usually selling in competitive markets where they often get their list price or higher, so it’s little surprise that these sellers are less likely to say that maximizing profits is a top concern.

SELLING FOR THE RIGHT PRICE

When sellers reflect on the entire selling process, they are overall satisfied. Sellers who do face issues during the sales process say the top four they find difficult are timing the sale with the purchase of their new home, selling within their desired time frame and price range, and entering a competitive buyers market after selling. As expected, younger generations seem to experience slightly higher levels of difficulty than older sellers. All generations find most aspects about the process easy to navigate or deal with. Baby Boomers and Silent Gen sellers report breezing through some of the activities that Millennials and Gen Xers rate difficult. Yet, as crazy as the selling process can be, most of those sellers will still go on to buy another house, and find themselves back in the market as sellers in another decade.

Are you efficiently assisting your client through the home selling process ? WE CAN HELP…LET’S GET STARTED TODAY!