Category: Listings

Flashback Friday: Marketshare

Today I”m thinking about Marketshare and found this post from Spring of 2010 that addresses it from a Help-U-Sell perspective.  This metric was so important to us 10 years ago.  We doggedly pursued it, pushing and pushing to increase it.  We watched it like no other metric in the book because it was the most meaningful measure of success.  

I’m afraid, in the downturn, all that flew out the window.  We took our transactions where we could and the idea of dominating a defined geography went away.  I strongly believe we have to get back to a geographically focused marketing program and, therefore, an obsession with marketshare as a measure of success.

Now, if you are roaming all over God’s earth taking listings wherever you can within a 100 mile radius of your office, I wish you luck with that.  It was a good strategy five years ago, but today, it’s a recipe for both burnout . . .  and lousy customer service.  However, if you want to get serious about establishing Help-U-Sell as the dominant force in your TARGET market, you must get back to the basics of:

  • defining your target market
  • collecting data about your target market
  • tracking your share of the target market

One last thought:  Help-U-Sell is a company built on a superior offer to home sellers.  In the post that follows we talk about tracking your marketshare based on closed sides. This method (which is best) takes buyer sides into consideration as well as seller sides.  But since our marketing is oriented to the seller’s side, here’s a quick and easy alternative.  Count the number of active listings in your target market and compare that with the number you have (in the same target market, of course – those outside don’t count).  Your listing marketshare ought to be very similar to your closed sides share.

I’m working through the old Operations Manual and just read through the section on marketshare.  We used to tell everyone they should get 25% marketshare.  That was the goal.  For everyone.  Did we have members who did that?  Yes, quite a few, actually.

We calculated marketshare by taking a carefully defined geography — the area(s) in which the member intended to do business, into which he or she directed marketing — and discovering what portion of the total number of closed sides done in that area were the member’s.  Further dissection of the marketplace into smaller units, like carrier routes or individual neighborhoods, might reveal that the member had 24% marketshare in this neighborhood and 14% marketshare in that neighborhood and so  on, each adding up to a total share of the target market.  We wanted to see target markets in the 10,000 – 15,000 household range with overall turnover rates in the 4% – 5% range.

The problem with this prescriptive approach is that it does not take in to consideration the vast differences that exist between markets.  Factors like:  the sheer number of competitors working the same area, the density of households, the impact of REOs on one market versus another, urban vs. suburban vs small town vs. rural areas . . . these were not considered.

Suppose your target market is a densely populated urban neighborhood.  You have 15,000 households and could probably walk your entire area in a few hours. Mostly it’s condos in the $200,000 range.  You set your fee at $3,950 and you figure with a 50/50 mix of buyer sides and seller sides, your average fee per closed side will be about $4,500.  You build a first year budget with expenses at about $12,000 a month.  Non-REO Turnover is at 4.2% — that’s 630 sales a year or 1,260 available closed sides.  Break even would be at about 32 closed sides:  a 2.5% marketshare.  This becomes our first milestone:  the point at which you start to look for ways to expand the number of transactions you can do by adding staff or improving systems.  You’d expect to hit that milestone within the first year and to be at 3% -5% marketshare  (36 – 63 closed sides), in your second year — and making a good profit.  Getting into your third year,  you’d want to be hitting  5% – 10% (63 – 126) closed sides.  This is usually where the ‘snowball’ effect takes over and as long as you’re willing to invest in more staff and better systems, an increase in marketshare and profit becomes very attainable, even up to say, 20% or 25%.

Now think about a smaller town, say 13,000 households.  Turnover is much lower:  3% in town and 2.8% in the surrounding county.  Although expenses might be lower and competition less fierce, average sale price and average fee are lower, too:  $3,200 per closed side.  A 10% share here (that’s 42 closed sides) — which was the tipping point in the above example — is just getting by.  It’s a nice job, but to be making money and building a business (not just a nice job), you’d need to be at 20% or more, and your snowball might not start until you were at 30%.

The first office needed 5% – 10% marketshare to be ‘thriving.’  The second needed more than 20%.

You have to think about more than just numbers of closings, too.  You have to consider the cost of doing business in each marketplace, the number of closed sides required to break even and how many it will take to get to a reasonable profit.

To further muddy the waters, you have to consider how you’re calculating marketshare.  We use closed sides.  Period.  That’s our yardstick and it makes sense from a dollars and cents perspective.  However, I met a Re/Max consultant once who told me they calculated marketshare on numbers of agents.  Production didn’t matter at all.  Just bodies.  When you think about it, it makes sense for their model. Re/Max operators make money by renting space and services to agents, so numbers of agents is a good measure for them (I’m not sure it’s the best measure for the consumer).

But even beyond that, marketshare is both static and dynamic.  Your static marketshare is a shapshot of a period of time.  It’s what we used in the examples here:  a one year shapshot  —  of all the closed sides done in your marketplace in the past year, how many did you have?  But your marketshare this month or this quarter is probably very different from your market share 8 months ago or two quarters ago.

Use the static, annual marketshare as your report card, the measure of the success of your business, the metric you use to set your goals.  But continually monitor the dynamic marketshare to make sure you are always progressing toward the next milestone and as an early diagnostic tool for problems in your operation or your marketplace.

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

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.

Flashback Friday: Charging Less, Making More

The ability to go into the marketplace with a financially attractive offer for consumers AND walk away from the transaction with more dollars than your more traditional counterparts is at the heart of Help-U-Sell’s appeal to brokers.

Think like an ordinary broker for a moment:

  • The success of the office is built on one thing:  your ability to attract and retain productive agents.
  • Your primary tool in accomplishing this is commission split — you know to be successful you need agents and to get them, you’ll need to pay well.
  • Unfortunately, the health of your bottom line is dependent on how many commission dollars you retain after splitting with your agents.

Put all of that in a hat and shake it up and you’ve got  . . . a mess!  Your formula for success is at war with itself! No wonder ordinary real estate offices suffer from embarrassingly low profitability if they make a profit at all (despite the fact that consumers think they’re paid way too much!).

Help-U-Sell takes dynamite to all of that nonsense.  First thing we do is demystify the listing process.  We toss out the notion that personality is what sellers buy when they list their property for sale.  Bunk! we say.  Listing is a logical thing.  If you present a system with a track record of success for a fee that is reasonable, most people jump at it.  Instead of two hour marathons where traditional agents warble on about how wonderful they are, listing presentations become simple, short and matter-of-fact:  here’s what we do, here’s what you do and this is what it costs.  Listing is so easy in Help-U-Sell that, well . . . even a Broker could do it.  That’s why we take the listing side of the business out of the agents’ hands.

We believe the listing side of the business belongs to the company, and the broker or an assistant (that’s different than an agent) takes all listings.  The agent’s role is on the buyer side, where we can afford to split commissions.  But, since we create all the leads for our buyer agents through our large number of listings and the power of our well-conceived marketing, we don’t have to give away the farm to get and keep salespeople.  We’re not asking them to call on FSBOS or Expireds, to knock doors or make cold calls to find listings.  We’re not asking them to master a slick listing presentation or memorize responses to two dozen common seller objections.  We just want them to take the prospects we’ve created and find them a property.   Good agents thrive at Help-U-Sell.

Back to the listing side;  here’s how the dollars break down:

Here’s where the ‘yeah-buts’ start to echo from the mouths of ordinary agents:

Yeah-but, with no listing agent the seller is getting less than full service!

Says who?  Full service is getting the property sold for the greatest walk-away dollars in the right time frame — and we do that every day.

Yeah-but, you get what you pay for!  When you list with me I’m going to actively market your property until it’s sold!

Um, let’s see . . . ‘actively market‘ . . . I guess that means put a sign in yard and a listing in the MLS, which then syndicates to a couple dozen Internet sites, right?  In my experience that’s what ordinary agents do when they get a listing.  In my Help-U-Sell office, we have a comprehensive marketing plan (that includes all of that and much more), orchestrated, monitored and constantly improved by . . . ME.  It’s not just a bunch of agents running around willy-nilly, making it up as they go along on every listing they take.

I could go on with the ‘yeah-buts,‘ but we try to keep these posts to a ten minute read or less.

We are a very proud group, and rightfully so.  We’ve taken the fluff and snake oil out of selling real estate and converted the process to logical systems that get results.  We’ve done it in a way that saves consumers thousands of dollars and makes our brokers a nice profit.  Who could ask for anything more?

How Help-U-Sell Works, Plain & Simple

Real estate sales commissions are high because they are designed to compensate four people: the listing agent, the listing agent’s broker – the selling agent (the one who brings in the buyer) and the selling agent’s broker.

Most real estate commissions are a percentage  of the sales price that you pay whether outside brokers and agents are involved or not. Because they are a percentage, the more expensive your home, the more you will pay.

At Help-U-Sell, we ‘un-bundle’ commissions and services. Our home sellers may choose to offer their property for sale through outside brokers and agents – or not. They may choose to go into the local MLS – or not.

Regardless which services the home sellers selects at the time of listing, however, the final fee is based on how the home actually sells. If there is no outside office or agent involved in the transaction, all the seller pays is the Help-U-Sell Set Fee.

That’s another difference: instead of a percentage based commission, our sellers pay a low Set Fee to market their homes through Help-U-Sell. And while there are minor variations based on specific market niches, generally the seller with the $400,000 home who lists with Help-U-Sell will pay the same Set Fee as the seller with the $350,000 home.

We are a full service real estate company. We do what ordinary brokers do and more, including:

  • Consulting with you on pre-sale preparation and pricing
  • Calculating your estimated net proceeds
  • Marketing you home using the most up-to-date and effective methods
  • Helping you evaluate every offer that is received
  • Looking out for your best interest through the transaction
  • Communicating what’s going on every step of the way
  • Handling problems as they arise
  • Coordinating inspections and transaction deadlines
  • Reviewing closing documents with you

Plus – we will save you thousands over what you’d pay most ordinary real estate brokers!

What Does Your Seller Landing Page Look Like?

I’ve carped about it several times . . . most recently in my last post: Your website should enable potential sellers to learn how you can help them at a glance.

That seems so simple, until you start looking at real estate company websites. Most are oriented almost totally toward potential buyers – which is as it should be. Buyers find us online and if your company website doesn’t offer them superior tools and search capabilities they are not going to stop there. That’s why home search dominates almost every real estate company website.

But what if, like Help-U-Sell, your real estate company is really different? What if you have a completely different approach to working with home sellers than your competitors? If so, you’ve got a story to tell, and you’ve got to find a quick and easy way for potential sellers to hear it – which means ‘online.’

By the way, if you are Century 21, Coldwell Banker, ERA, BH&G, RE/Max, Exit, or any other national Brand, there’s no need to read further. You have nothing unique or special to offer sellers. It’s just business as usual done the same tired way it’s always been done in each of your offices. From a seller’s perspective, what’s the difference between Century 21 and Re/Max? Sign color.

Now, you, as an individual agent or broker, may be extraordinary! You may be completely unique in the spin you put on that old tired operating system. But consider this: if you were to sell your business to someone else, subtract your personality from the equation, what would your sellers have left? Yep: the same old tired way of doing business that is virtually identical to the way it’s being done in your competitors’ offices. No difference.

If, on the other hand, you ARE Help-U-Sell, you do have a completely different program for sellers. It costs WAY less, and the pricing makes sense! (what a concept)! You create opportunities for your sellers to save big time while delivering what they regard as ‘Full Service.’ You let them be as involved in the transaction as they want to be and you don’t play stupid REALTOR games like not letting them talk to potential buyers. If that’s you, you need to be using teaser ads to drive potential sellers to your website, where they can get a quick feel for what you do, which will enable them to take the next step: contact you.

In other words, you need a landing page for sellers, with its own unique URL and QR code.

What should be on it? At Help-U-Sell we have a great template: the ETM. Pictures and descriptions of homes for sale, sold and saves, testimonials and an Easy Way. Here. I took a stab at creating a seller landing page. It’s not pretty, but it could be:

Real estate sales commissions are high because they are designed to compensate four people: the listing agent, the listing agent’s broker - the selling agent (the one who brings in the buyer) and the selling agent’s broker. Most real estate commissions are a fixed percentage that you pay whether outside brokers and agents are involved or not. Because they are a fixed percentage, the more expensive your home, the more you will pay. At Help-U-Sell we ‘un-bundle’ commissions and services. Our home sellers may choose to offer their property for sale through outside brokers and agents - or not. They may choose to go into the local MLS - or not. Regardless of what services the home sellers selects at time of listing, however, the final fee is based on how the home actually sells. If there is no outside office or agent involved in the transaction, all the seller pays is the Help-U-Sell Set Fee. That’s another difference: instead of a percentage based commission, our sellers pay a low Set Fee to market their homes through Help-U-Sell. And while there are minor variations based on specific market niche’s, generally the seller with the 0,000 home who lists with Help-U-Sell ABC Realty will pay the same Set Fee as the seller with the 0,000 home. We are a full service real estate company. We do what ordinary brokers do and more, including: Consulting with you on pre-sale preparation and pricing Calculating your estimated net proceeds Marketing your home using the most up-to-date and effective methods Helping you evaluate every offer that is received Looking out for your best interest through the transaction Communicating what’s going on every step of the way Handling problems as they arise Coordinating inspections and transaction deadlines Reviewing closing documents with you Plus - we will save you thousands over what you’d pay most ordinary real estate brokers! See how much you could save!

Ok:  Sold and Saves, Testimonials, and a more detailed version of the Easy Way.  By the way, I know you can’t read that, but if you’ll click it, it will open up a PDF version that you can view or download.

At the bottom there is a link to the great ‘You-We-They’ interactive savings calculator Robbie built last year.  If there’s something missing it’s contact information or a contact form.  Oh, and a request for a free CMA.

Once you have your landing page built, use Facebook Ads, Google Ads, little teaser ads everywhere to drive potential sellers to it.  The landing page should communicate enough of your program so that a viewer would feel comfortable calling you.  And you know what happens when they call you, right?  About 97% of the time, you get the listing!

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