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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.

 

 

How to Raise Your Average Sales Price

Everybody has an organic price range that the are successful in. This is dictated by your lifestyle and the people you’re connected to. No matter the price range you start at, if you’re a smart agent, you’d like to raise your average sales price 10-20% a year. That means your incomes rises, as long as you’re able to charge the same commission rate.

I grew up in a small town in a low to middle income neighborhood. The first step I did to rise my average sales range was get an education. Getting an education helped me learn how to talk and to figure out topics people in the higher income brackets like to talk about. I also learned how to talk about finances because buying a home is a big financial investment. Changing the way you talk allows you to go upstream easier.

HOST OPEN HOUSES

So, how do you go from selling a $200k home to a $500k home? Typically I would start by using the associative method development process. The most effective way is start hosting open houses in a price you feel comfortable in. Hosting open houses will give you the opportunity to meet people who are looking to buy or sell in other price ranges. For example, you may meet parents looking to help buy a first home for their kids at a lower price, while they are looking to buy a home for themselves at a higher price. Or you may meet someone wanting to downsize, but need to sell their high priced home.

Learn about neighborhoods. Pick a neighborhood that is 20% higher that you are currently selling. Then go out to that neighborhood, preview the homes, study the MLS data, then sit open houses there. This is not a big jump, but the conversations will change and the buyers may be different.

BECOME A LOCAL AREA EXPERT

Working with out-of-state people is another way to move up. Realtors who have the most knowledge about a certain neighborhood have a greater chance of winning with an out-of-state buyer. Out-of-state buyers don’t necessarily care what price range their realtor typically works in, they want to work with a local area expert.

Agent Training

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

Stay in Your Lane

When starting in real estate, it can be hard to to identify the best path for you. Your best path in real estate is to work with people you connect with. Think about where you grew up and where you live now, this is your “lane” on the path to being successful in real estate. Your “lane” is where you will easily be able to connect and build relationships with the most people.

One of the most common ways to build your real estate business is through open houses and networking. The best way to network is to have things in common with those people. Unfortunately, too often, new real estate agents want to work in high-end neighborhoods that are outside of their familiarity. Your goal of a new agent should be to get to 200 transactions as fast as you can and this will happen faster if you “stay in your lane”.
Agent Training

CMA Mania

Why do I call this CMA Mania? Because I am looking to the evolution of the CMA (Comparative Market Analysis.) Frankly, there is too many elaborate CMAs being used by realtors today. Elaborate CMAs were necessary up until the early 2000s before Zillow, Trulia and Realtor.com existed. Today, the consumer has access to all of these sites to easily learn how many homes in their neighborhood have sold and for how much. So, it’s really no longer necessary for realtors to spend their time providing the consumer with all of the traditional CMA information.

USE DIFFERENT CMAs

CMA Mania is the idea that you are going to send different CMAs at different times, these CMAs are not going to always include house information. For example, after you host an open house, send all visitors a CMA that is a glorified information packet about you as a realtor. Then use different CMA before having an appointment with a potential client, most of this CMA is marketing documents on how you can help them sell their house faster for top dollar.

KEEP YOUR CMAs SIMPLE

Agents frequently get confused about CMAs, because they are often taught by their brokerages that CMAs need to be more elaborate than they need to be. I personally like CMAs to be in a simple form and not just a list to show comparative sales. I prefer to focus more on sharing marketing information that I will use to sell the house, instead of dozen pages of neighborhood comps.

Listing Strategies

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

Google ME

Many people may think that Google ME is the same as People Believe the Internet (PBTI), but PBTI is more about understanding your entire web presence. Google ME is the process of specifically working on most important things that show up when you’re Googled. This includes having a Google business page and YouTube videos. Google ME will also help you understanding the ranking of sites and helping make sure your website ranks on top. Once you understand the rankings, you will be able to build your website out to demonstrate all of the things that you want to say about your business. For example, you may want to say what neighborhoods you sell homes in by posting YouTube videos on your website of yourself in those neighborhoods.

5-REVIEWS

Usually I rank people on five different scales; new, needs improvement, good, great, and spectacular. The key to reaching the highest level is making sure that your website shows up first, that you have a Google business page and that you have reviews. It is important to have 5-star reviews on Google, Facebook, Zillow and Realtor.com.

BE UNFORGETTABLE

It is critical to make all of this impactful and unforgettable when you are Googled to make the most out of your business.

Agent Training

2nd Annual Agent Truth Solution Event

The Solution EventOn Wednesday, May 15th, realtors from around the valley came to the Must See Real Estate Event Of the Year – the 2nd Annual Agent Truth Solution Event! The 2019 event was held at the DoubleTree Resort by Hilton Hotel Paradise Valley – Scottsdale with over 300 attendees.

The Solution Event-PhilGuest speaker Tina Tamboer of the Cromford Report addressed the current real estate market. Then Jeff Sibbach and Phil Sexton took the stage and entertained the crowd with a game of “The Sales Price is Wrong”. Afterwards, Jeff and Phil shared the Top 5 Trends they have taken away from their 94 episodes interviewing top agents from across the country on The Solution podcast.

Were you unable to attend the event and want to learn more? Are you ready to learn about our Ultimate Real Estate Agent Makeover? Call us at 480-531-1285 or text SOLUTION to 99888.

How Reviews Triple Your Sphere of Influence Business

One of the hardest thing for realtors to accept is that internet affects people’s opinion three times more than a personal referral. I find it very odd that we research stuff online and get so consumed with information that it affects the direction in which we chose how we spend our time and money. Yet, realtors don’t think people Google them and believe the information that comes up. They still believe real estate is solely a word of mouth business.  I want to tell you, reviews are the key to tripling your business. Everyone you work with is Googling you, because people are not going to call you to ask how good you are at your job. Online reviews are like a cozy blanket letting customers know you are good at your job; lots of people have used your services; that you were successful and they were happy with your services. Additionally, when reviews are less than three months old, it gives them even more confirmation you that you are good at what you do.

The challenge is, when people are Googling you as a realtor, other realtor names might pop up. Now you’re being compared to someone else when they were just trying to search for you. In old-school real estate we were not compared to someone else at the moment of decision as much as we are today. Consumers will not only see your online reviews when they are searching, but they see reviews of others as well.  When you get lots of testimonials and work hard to get those five stars, you will see your business skyrocket.

Agent Training