Author: James Dingman

The Most Important Question

There is a question you answered a long time ago, just as you were deciding to get into the real estate business.  Maybe you actually asked yourself the question, maybe you even wrote down the answer.  Chances are, however, that you just intuitively knew the answer and never questioned it, never verbalized it.

It is the most important question of your business life.  The question is:

Why?

Why did you open this business?  What were you hoping to accomplish?  What do you expect the business to do for you?  How will you exit the business when you are ready for something new?

Too often we let business gurus answer the question for us.  We allow these self-professed masters to dictate that our desire is to get bigger and bigger and do more and more deals and dominate the market and so on.  But that’s a lie.  I’ve been in this business more than 40 years and I promise you, after you scrape away all the scripts that were learned in some guru’s class, most people are in it to be their own boss and have control over their time.

That’s a very different mind-set from wanting to build an empire.  And it is perfectly all right.

There is no right or wrong answer to the question, ‘Why.’  Different people will have different answers and each answer will be laced with its own nuances.  What’s important is that you very consciously answer the question and then let the answer drive your behavior.  A broker wanting to grow to 500 closed sides a year should behave differently than a broker wanting to get to 60, even if they are both starting at the same place.

When you parrot someone else’s vision or regurgitate the picture you think some expert wants to hear, you set yourself up for failure.  You babble away about more market share, more listings, more closed sides, more staff and  . . . nothing happens.  That’s because deep down inside you don’t really want that.  You don’t want to manage all of those people, to deal with issues and answers 15 hours every day, don’t want to devote yourself to that mission.

So get real.

Why are you doing this?  What are you hoping to accomplish?  How do you see your role changing as you move toward that goal?

If you do discover that you want to be an absolute beast in the marketplace, the dominant player, great.  We’ll help you get there.  But you have to want it.  If you realize that all you want is a good job where you’re the boss and you control your time, that’s great too.  But you have to admit it and plan your business accordingly.

Understand that our goal as Help-U-Sell Real Estate is to become the dominant player in all of our markets.  We have the perfect vehicle to get there: a better offer for consumers.  We are delighted that you are making that offer to consumers and moving us closer to our goal.

If you are a 30 to 60 closed sides a year person, we will work with you to become more efficient and effective and happier in your business.  If you are a 200 to 600 closed sides a year person we will pull out all the stops to help you get there.  Regardless how you answer the big question, we appreciate who you are and what you’re doing.  You are helping us achieve our ultimate goal and you are heroes in our eyes.

Should You Be Marketing for Millennials?

If you listen to the big real estate pundits, in fact, if you listen to our own weekly Power Hour, that title looks like a stupid question.  Of course you should be marketing to Millennials!  They are the next great home buying wave!  They represent something like 20% of the American population!  Of course you should be marketing to them!

Well . . . . maybe.

There are some realities about Millennial home buyers – born between roughly 1985 and 2000 – that are often ignored, realities that could inform your decision about pursuing them.  Here are two:

  • While high tech jobs and massive starting salaries do come to this group, the vast majority exit college and enter jobs paying near subsistence wages.  There are a whole lotta Masters Degrees working at Starbucks and the Verizon Store.  But that’s not all;  in most industries, entry level salaries have not kept pace with the cost of living.  In brief, Millennials often don’t have the income they would need to qualify for the entry level home.
  • Millennials and debt seem to go together.  For the college grads, it’s student loans – that $20,000 to $40,000 noose that hampers the creditworthiness of these home buyers.  For others it is the over use of credit cards to finance a lifestyle that is bigger than their entry level salaries.  Between lower income and higher debt, many Millennials present significant qualification challenges.

But so what?  We thrive on challenges!  Nobody is better at solving these kinds of problems than we are, right?  Yes, right, and with dozens of new financing instruments and special programs to help first time buyers, we have the tools in our arsenal.  But there is a third reality that just flattens home buying possibility for  many.  It is rapidly rising home values.

Coupled with the realities of lower salaries and higher debt, the affordability crisis is pushing home ownership out of the reach of many Millennial buyers . . . in fact of many buyers of any generation.  In California today there are many markets where fewer than 28% of the population makes an income sufficient to qualify for a mortgage on the median priced home.  It is a trend that shows no signs of reversing and that is spreading across the country.

My advice to you is to think, focus and aim before you fire your marketing at Millennial home buyers.  Are you in a marketplace where young home buyers can afford to buy?  Do you have inventory – condos or single family homes – that price somewhere in the $150,000 – $250,000 range?  Are you in a location where there are good jobs for college educated young people?

When I consider those questions, I immediately think of Greensboro, North Carolina, home of Jack Bailey and Steve Vincent, two Help-U-Sell brokers doing a great job of putting young people into their first homes.  It is a marketplace where housing is relatively inexpensive: the median sale price is still below $200,000.  It is also a market where employers are expanding, so there are jobs.  This may be a great place to seek out Millennials.

But then I consider David Bartels in Westlake Village, CA.  There, the median sale price is $775,000.  Yes there are some lower priced areas close by, and there are even lower priced condos, but prices still put those properties out of the reach of most Millennials.  You’d think Ventura County with its proximity to the employment mecca of Los Angeles would be a perfect Millennial market . . . but affordability creates huge headaches for this group here (despite what I wrote about Millennials in your blog, David).

Look at your market place and make a logical decision about whether or not to target Millennials.  Consider home prices, employment opportunities and typical starting salaries.  You may discover that it’s not worth pursuing this group at all . . . despite what the pundits may say!

Flashback: The Ineffective Realtor (or what to do when your agent sucks)

This post from 2013 has been getting lots of hits lately.  Must be a lot of unhappy home sellers out there!

You are a home seller and you’ve become entangled with an ineffective real estate agent or broker.  The relationship started out well enough and you had high hopes that it would result in a successful transaction but now things are . . . off track.  What should you do?  Without giving legal advice  (I’m not an attorney, and truth is:  what you legally can do varies from State to State) I’d like to explore this for a few paragraphs.

First, let’s get clear on what constitutes poor performance on the part of a listing agent and office.  The logical answer would be:  no activity, no offers.  It would be logical, but it wouldn’t necessarily be correct.  You have to dig a little deeper.  Why is there no activity?  Why are there no offers?  Here’s a great truth:  agents and brokers don’t just pull showings and offers out of their hats.  They have to have a marketable product and the product attracts potential buyers.  Agents and brokers orchestrate exposure for their listings and those that are marketable are shown and eventually sell.  So, the real question is:  did your agent advise you about the marketability of your home?

What does that mean?  Marketability?  Here’s a short list:

  • Is it located in an area into which people are interested in  buying?
  • Does it look inviting from the street?
  • Does it show well on the inside?
  • Is it properly priced?
  • Is it fully and easily available to be shown on a continuous basis?

I can see you nodding ‘yes’ as you read each of those bullets, but stop for a moment.  Think back to the Listing Consultation.  Do you remember the price range your agent/broker recommended?  Did you price within that range?  Or did you insist on a few thousand more?  If so, that’s probably the problem:  price.  If you overpriced against the recommendations of your agent, don’t blame the agent when the house isn’t shown.  If you want to blame your agent for something, blame them for taking an overpriced listing!

And what about that availability thing?  Do you have a lockbox on your property? And is the house available to be shown with or without an appointment?  Those are the homes that are shown the most (assuming they are priced properly) because they are easy to show.  I realize there are often very good reasons why some homes may not have a lockbox, may require an appointment 24 hours in advance, but those good reasons don’t negate the fact that each time you add a showing restriction . . . you restrict the number of showings you will get.

Usually, when listed sellers complain about their agents/brokers, a little digging reveals that the seller didn’t take the agent’s advice about pricing, marketing, staging or showing availability, and that’s why activity is slow.  If there is an agent problem here, it is that the agent didn’t go back again and again to make the point that the price needed adjusting or the house needed to be staged or the showing restriction lifted.

But if you did follow the recommendations of your agent at time of listing and you are still not being shown, before you blow a gasket, find out how long it takes to sell a home like yours in your general vicinity today.  Is it 60 days?  or 160?  Do listed homes in your area have anniversaries before they sell?  Really:  if your market is sloooowww and you need to sell fast, don’t blame your agent; reduce your price.

I know:  I’m putting a lot of this back on the sellers’ shoulders.  I’m making it sound as if the only problem with any listing is the seller, not the agent.  And that’s not really true.  Agents screw up too.  How?

Not exposing the property.  This is rare today.  Any listing put into the MLS is almost always automatically syndicated out to dozens of Internet real estate portals and that’s the best possible exposure.  But, in addition, is your agent making it easy to get information on the property?  Is s/he keeping the flyer box filled?  Is there a QR code on or near the sign?  Is there a recorded information number?  How about a virtual tour? Does somebody answer the phone when the number on the sign is called?

Not following up with regular market updates.  Real estate markets shift.  Sometimes rapidly.  Two months ago, here in my San Diego market, homes were selling in days with multiple offers.  Buyers were paying more than asking prices and waiving appraisal contingencies.  Since then, two things have happened:  interest rates have risen a full percent and potential sellers, intrigued by the feverish activity, have jumped to put their homes on the market.  End result?  Today things are a lot slower.  Your agent should be talking to you once a month or so about changes in your marketplace and how they affect your listing.

Not communicating.  As an agent (a long time ago), I hated to call my listed sellers when there was really nothing to report.  If I’d done everything I could, If the property was properly priced and the marketing was working but we still had no activity – that’s when it was so hard to pick up the phone and make the call.  But that’s the most important time for an agent to call.  You, the seller, have to know that your agent is on the job and concerned about your home selling project.  If you’re not being talked to at least once a week . . . well, that’s a problem.

Not knowing their business.  There’s no substitute for experience and in real estate it is measured in numbers of closed transactions.  Each one adds to an agent’s knowledge of how to make transactions work.  If your agent does not have that depth of experience s/he may not be equipped to handle the inevitable problems that arise during a transaction.  Interestingly, it’s not the new agent you need to be cautious about:  they are usually closely supervised by a savvy broker.  It’s the average agent who’s been in the business for several years and bumps along at 6 – 10 deals a year.  That’s enough production that their brokers assume they know what they’re doing, but their knowledge base can’t compare with agents doing, say, 20 transactions a year.

Charging a stupid percentage based commission.  And that’s exactly what they are:  stupid. They make no sense at all.  A broker charging 5% or 6% or 10% is operating in the real estate dark ages and charging you way more than you need to spend to sell your house.  Find a broker who charges a reasonable flat fee and who allows for the possibility that you may find the buyer yourself (and charges less in that event).  How do you find that modern broker?  Go HERE.

That’s an incomplete list.  I am sure there are other ways in which agents let sellers down.  But what do you do if you are on the receiving end of this kind of poor service?

First:  when you list, get an agreement in writing that enables you to cancel your listing if you are unhappy.  Be fair.  Allow your broker a reasonable time after notification of your dissatisfaction to remedy the situation:  a few days.  And don’t think this kind of agreement enables you to ax your broker and negotiate directly with a buyer or to whimsically flip to a different broker with a shinier business card.

Second:  call your agent and set up a meeting to talk about the problem.  Give them a reasonable time – again, a few days – to fix it.

Third: call your BROKER (the person for whom the agent works) and set up a meeting to discuss the problem.  Your agent is representing the broker and if s/he is not performing in a way that will have you crowing about the great service you received, the broker is going to want to know about it.

Finally:  seek legal advice. That means an attorney who specializes in real estate.  When you list your home for sale with a real estate broker, you sign a listing agreement – which is a legally binding contract. Often they cannot be unilaterally cancelled.  If you were to ‘fire’ your broker and then sell your house through another broker, you might be liable for two commissions!  A good local real estate attorney can advise you and may be able to get you out of a bad situation.

But make that attorney option the last resort.  Talk, talk, talk to your agent and broker first.  The real estate business is built on the referrals of happy clients and an unhappy client can do big damage to a company’s reputation.  Most brokers would rather do whatever it takes to make you happy than have you become a fountain of negative talk in the neighborhood.

Holistic Marketing

Ahhhh . . .  .remember the good old days?  You know:  a dozen years ago or so, when you would buy an ad of some kind and then measure the leads it would create, even analyze the quality of the leads created, and then pick and choose the marketing vehicles that seemed to work the best going forward?  That process of trial-measurement-choose to arrive at a marketing plan was central to the mindset of a Help-U-Sell Broker.  Unfortunately:

It Don’t Work That Way No More!

I talk with brokers every day, mostly about marketing.  Many are still looking for that magical marketing silver bullet, that one advertising vehicle where they can invest their money and receive the highest return.  Truth is:  there are no magical lead-generating machines – not today.  Today, marketing is not about spending a little money here and there and waiting for the phone to ring; it is about laying down a prolific blanket of media that reminds the consumer you are there and can save them money.

Flashback – 2005:  Sitting in a room full of Help-U-Sell Brokers hearing about a Help-U-Sell only homes magazine one group had created.  They were distributed in bright red boxes all over town and produced lead after lead after lead.

We used to hear that kind of story all the time . . . but we don’t anymore.  The consumer is fundamentally different today and there are a dozen reasons why, the most powerful being the maturation of the Internet. With all of the information readily available online, consumers very rarely respond to a specific ad about a specific property.  Today, they are slowly drawn to work with you.

Slowly drawn.  What does that mean?

I know brokers whose Google Ad Words campaigns work.  I know brokers who get leads every time they send out an EDDM.  I know brokers whose CI postcards produce listings and sales.  Often it is the same brokers.   These are the ones who understand that they must mount a continuous, multi-pronged assault on their target markets.  They do Ad Words, Facebook, Zillow, EDDMs, Just Listed/Sold, FSBO, CIs and even toss in a little print advertising from time to time.  For this group, marketing is not the placing of an ad here or there, it is a holistic combination of dozens of things that keep their name and program firmly rooted in the minds of consumers in their target markets.

Today it is much more difficult to determine the source of the lead you get.  They didn’t call you because of one specific marketing piece, they called you because they have casually noticed you in the market over and over and over again.  ‘I found you on the Internet’ doesn’t just mean they got lucky with a Google search.  It probably means they saw your EDDM a couple of times, noticed when your sign went up in a neighbors yard, received your door hanger, passed your office with its prominent sign 6 times last week . . . and on and on.

Richard Cricchio of Help-U-Sell Honolulu Properties is a good example of how to market today.  Not coincidentally, he has been the number one Help-U-Sell office in the world for a several years.  Richard started with Help-U-Sell core marketing, one piece at a time.  Then as the program began to work, instead of wondering where he could cut, he looked around for what he could add.  Every year he adds a thing or two to his marketing program:  radio, homes magazines, new postcard program, blog and so on.  He almost never cuts anything out because he realizes that all of it works to keep his company firmly in the minds of home sellers and buyers on Oahu.

Now, I know.  If you are not drowning in discretionary income, you’re probably thinking, ‘Ok, Holistic . . . that means Expensive, right?’ Yes, it does.  But it also means one step at a time.  Your first order of business is to crank up core marketing.  Get that working and keep it working for  . . . well, forever.  If you need a refresher about what Help-U-Sell core marketing is, you can find it here.  Then start looking for what to add.  Talk to me as you make those decisions; I may be able to help.

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