Category: The Industry

For Agents Only

The agent-broker relationship, like so many others, is a value-for-value proposition.  The agent brings value to the broker and the broker returns value to the agent.  Ideally there is an equilibrium in this exchange of value and both parties benefit.  The agent brings something to the broker and the broker brings something to the agent and everyone involved is able to do more and be more.

The ordinary real estate broker wants to constantly add agents because that’s how his business grows.  What he wants from them (what they bring to the table) is their own personal sphere of influence – however big or small – which may become buyers and sellers with the company, thus expanding the broker’s reach.

The broker hopes and prays that each agent he adds will also become a successful prospector for new business.  He hopes that each agent will become successful calling on FSBOS, cold calling, farming and so on, ultimately bringing in far more business than is generated by the existing sphere of influence.  Though few agents ever really excel at this, those who do are Stars.

Since most ordinary brokers have the same tools and the same basic offer to agents, the agent’s decision about which broker to work for usually comes down to two factors:  personality of the office and commission split.  Since personality is hard to change and mostly reflects the leader,  the ordinary broker relies heavily on high commission splits to agents to get and keep salespeople.

So the value-for-value exchange between a broker and agent in an ordinary real estate office is this:

The agent agrees to expand the brokers business at least to the agent’s sphere of influence and hopefully beyond,

and

The broker agrees to give the lions share of the commission to the agent on closed transactions.

At Help-U-Sell it’s a whole different proposition.

A Help-U-Sell broker expands his or her business through marketing, careful leads management, constant exploitation of the opportunities that exist in the marketplace and through consistent follow-up with past customers and clients.  The Help-U-Sell broker doesn’t add agents unless or until the business has expanded to the point that he or she needs help.  Agents are brought in to help the broker handle the business the broker has created.

The Help-U-Sell broker says to the prospective agent, ‘I’ve built this business and have all of these buyer leads I can’t get to.  I want you to take the leads I’ve created and convert them to sales.  Period.  I don’t want you to prospect for new business, I don’t want you to call FSBOS or Farm.  I just want you to convert the leads I’m already generating.  And I’ll pay you a reasonable commission split to do so.’

The value-for-value proposition between a broker and agent in a Help-U-Sell office is this:

The agent agrees to become expert at converting buyer leads into sales

and

The broker agrees to maintain a steady flow of leads into the office and to the agent.

See, it’s a completely different proposition.

So how do the two propositions stack up?  Well average per person productivity in ordinary real estate is abyssmal.  Most agents muck along doing 3 – 6 transactions a year.  In may places if they do a dozen they get an award!  At Help-U-Sell we’ve set the bar at 2 a month, 24 a year.  In many offices that’s a minimum standard: what an agent must do to continue to tap into the flow of leads.

Unfortunately, ordinary agents get very hung up on commission split.  It doesn’t matter that they may be doing only three deals a year, if they’re commanding an 80% split that means they are a great agent!  Once they fall into this line of thinking, it’s very hard for them to recognize the value of leads over split.  That’s why Help-U-Sell brokers usually build their teams with new licensees, ones who haven’t been tainted by the tired old agent-oriented business model common in ordinary real estate.

Another ADDENDUM:

So I’ve already had calls.  Agent X with ABC Realty asked:  ‘What’s the long term payoff for an agent at Help-U-Sell?  I’m not sure I want to spend the rest of my life doing two deals a month.’

Well, then, do 5 or 7 or whatever!  But I don’t think that’s what you were asking.  You’re asking how Help-U-Sell agents grow.  The answer is:  they grow in two ways:

1.  They become ever more effective in converting leads and build their production to the point that they realize their goals.

2.  They expand their repertoire, learn how to work with sellers in the Help-U-Sell system, how to market and generate leads.  In other words:  they become brokers and open their own Help-U-Sell offices.  It’s a big step with big rewards and a very different focus.  Where the agent is focused on converting leads, the broker is focused on generating them.  The broker generates leads through marketing, through listings and by carefully managing the lead intake process in the office.  It’s a very big job with very big rewards.

In addition to questions about growth, it seems that some agents doing average production in ordinary real estate are intimidated by 24 sides a year as a minimum standard.  Don’t be.  If you work at it, you should be able to double your personal production when you move to Help-U-Sell.  You will have no more prospecting demands, no more listings to manage, no more price reductions to orchestrate.  You’ll have lots more time for working buyers and you won’t even have to look for them!  We’ll give them to you!

“What Am I Not Getting?” Commissions Demystified

We Help-U-Sell folk often get mis-tagged as ‘Discounters.’  We take umbrage at that notion because we don’t offer a stripped down version of ordinary real estate (which is what a discounter would do).  Instead, we offer a completely different model, a different approach, one that is more efficient and – surprise! – costs less.  Usually, the ‘discounter’ tag comes courtesy of our competitors who can be quite vocal in defending their turf.  But sometimes, on seeing how much they’ll save with Help-U-Sell, consumers also wonder how we do it.  They’ll say:

‘So, this looks like a great deal, but what am I giving up?  What am I not getting that I’d get with a ‘regular’ real estate company?’

The question is not what you’re not getting;  it’s why are they charging you so much for the same thing we do for a low set fee?

Of course there’s an explanation.  It makes no sense from a consumer or business point of view, but it is an explanation.  It starts with what you’re paying for when you engage a real estate professional.  You could make a list several dozen items long but it boils down to just four things:

  • Marketing
  • Securing the Buyer
  • Representation
  • Managing the transaction details
At Help-U-Sell our brokers take responsibility for three of those four items.  Marketing, Representation and Managing the Details are all the purview of our brokers and though they might delegate bits and pieces out to qualified assistants, they don’t generally assign those tasks to agents.  The Help-U-Sell low set fee pays for those three things, and if the seller locates the buyer for his or her property that’s all they pay and it’s usually a huge savings over a percentage based commission.

How often do sellers find their own buyers?  You’d be surprised.  It’s not unusual for a seller to go to work two weeks after listing, learn of a co-worker transferring in for whom their house would be perfect.  It’s also not unusual for one of the neighbors to drop by with friends and family in tow.  We help our sellers find their own buyers by coaching them on doing their own open houses and letting them help distribute property information.

The ordinary broker charges a steep percentage based commission because his business model involves  paying four different people to do the same thing we do with one.  He has to be prepared to pay his company, his listing agent, the selling company and the selling company’s agent.  So the seller ends up paying not one, but four commissions!

And here’s where it gets really interesting.  Where we allow for the possibility of a seller finding his or her own buyer, in ordinary real estate, the four commission commission is the commission:  you pay the full fare no matter how the house sells.

What’s fun in this is that our listing brokers usually make more on a sold listing charging a low set fee than their competitors who charge a bloated commission.  The Help-U-Sell broker doesn’t have to split the dollar four ways!

The four commission situation is at the heart of the ordinary real estate world.  It probably won’t change anytime soon because there are about 1 million licensed real estate brokers and agents who depend on that model for their livelihood.  The industry will change when enough consumers find out they don’t have to do it that way.

Here’s a nice footnote to this discussion.  We haven’t talked much about the fourth item, locating the Buyer.  Yes, we allow our sellers the option of finding their own buyer and if they do they will experience maximum savings.  If one of the agents in our office finds the buyer, the seller pays the set fee plus a showing fee – which still ends up being much less than the four commission guys will charge.  If the seller wants, we’ll even put the listing in the MLS and offer it for sale through outside brokers.  If one of them brings the buyer, the seller pays our set fee plus whatever commissions will be necessary to take care of the selling agent and broker – but that’s still just three commissions, not four and it almost always costs less than what an ordinary broker charges.

Best of all, regardless of whether the seller elects to offer the house for sale through our agents or even through the MLS, if in the end he finds the buyer himself, the low set fee is all he pays.  It’s a great system.

ADDENDUM (The next day)
I’ve been asked to ‘demystify’ this post.  At Help-U-Sell we all understand what I’m talking about – but sometimes those on the outside need a little more explanation.

When you hire an ordinary real estate agent (who will likely charge a percentage based commission), you’re agreeing to pay not one, but four commissions:
  • 1 for the listing company
  • 1 for the listing agent
  • 1 for the selling company
  • 1 for the selling agent
You’ll be charged the same percentage based commission regardless of whether it takes all four commissions to get the job done, with any un-allocated overage going to the listing company and agent.


When you list with Help-U-Sell you get flexible pricing based on how the property sells.  Your low set fee covers marketing, representation and managing the transaction details.  If you locate your own buyer – which happens more than you think – you pay just that:  one commission.

If one of the buyer agents in the Help-U-Sell office locates the buyer, you pay two commissions – the low set fee to the Help-U-Sell office plus a showing fee that will compensate the buyer agent.

If an outside MLS agent brings the buyer, you pay three commissions:  the low set fee for the Help-U-Sell office, plus a commission for the selling company and agent.

With Help-U-Sell you may pay one, two or three commissions depending on how your house sells, but never four.

With ordinary real estate you pay four no matter how your house sells.

Make sense?

Things that make you go ‘hmmm . . . ‘

The American Dream – or, rather, the currently popular notion of the American Dream – is under attack.  Congress and the big banks are working hard to dismantle our industry and our way of life.  Credit has become difficult for the average American to get, causing housing demand to shrivel and prices to plummet.  The FDIC has used our tax dollars to buffer the losses of mortgage lenders so that often, it’s in their best interest to foreclose and sell assets for a song rather than work out a new deal with homeowners.  Some speculate that many of the same mega-millionaires  who engineered the fraud that led to the expansion and bursting of the housing bubble are continuing to benefit from the mess they’ve made and are slowly turning us into a nation of tenants.

That’s the dark view of our current situation.  And that’s all it is:  a slanted view through dark glasses.  There is an appealing alternate view as well and truth probably lies somewhere in between the two.

In this climate I think it’s important to remember something that seemed to gel in yesterday’s Broker Roundtable call:

The American Dream is Home Ownership.  It’s not appreciation, mortgage deduction, refi every two years and pay off your credit cards.  It’s Home Ownership.  People buy homes to build families and have comfortable lives, to control their lives and lifestyles.  The financial aspects, while certainly a factor, are just that:  one factor.  Ours is still a nation where the average citizen (with the help of a possibly carnivorous bank) can own and control their own home.  Our job is to help make that dream possible in any way we can.  We seek out those who have a passion for this idea and dig through mounds of possible properties to help them find the ONE that most perfectly matches their dream.  The REALTOR is a hero here.  And make no mistake:  REALTORS are fighting tooth and nail to defend the Dream.  Thank you all for that.  And let’s dig down and send an extra $50 or $100 to our State and National REALTOR Political Action Funds.  It’s the best line of defense we have.

* * * * *

Congratulate me!  I own the search phrase, ‘Set Fee.’  If you type that into your Google search bar, the Set Fee Blog comes up first and in several other positions on the first page of organic results.  This is what a year and a half of consistent content development on a focused topic will do.  It works with blogging, with your company website (new pages, hyper-local content), with your YouTube channel, and on and on.  Google functions today as a kind of collective consciousness for people everywhere.  It pays attention and notices consistent, value-rich information and if it sees it regularly over a period of time, it reaches a tipping point and suddenly, the creator of the content is deemed to be the best source for the information.

Of course, that’s not at all unlike your Help-U-Sell business (you knew I’d get around to that, didn’t you).  If you go out to a geographically defined population of homeowners with a clear, consistent message that they will recognize as valuable,  eventually you will own that position in your geography’s collective consciousness.  Each homeowner who uses your service and is delighted will sing your praises and your next customer will become that much easier to find.  Eventually a tipping point will be reached and most homeowners in your target market will know your offering; and since the offering is outstanding, most will be disposed to working with you when the need arises.  Twelve to eighteen months of steadfast, unwavering, hard work can have you garnering 10%, 20%, 30% marketshare in your target market and more.

Google has become an electronic version of word-of-mouth advertising.  It listens to what’s being said and if it hears the same thing enough times from sources it decides are credible, it tells the world.  There is no tricking Google – just as there’s not tricking the consumer.  There’s not a way to make this happen other than just do it.

* * * * *

How about a little double-ending action . . . that’s always been a hallmark of Help-U-Sell.  Unlike your ordinary competitors who simply throw a sign in the yard, plop the listing into MLS and then wait for some other broker to wander in with a buyer, Help-U-Sell brokers have always worked to put together transactions without outside help.  That’s why seller participation and consistent target marketing are so important to our program.  Unfortunately, for some of us,  the down market has obscured that focus on getting the job done ourselves.  In an effort to find the few real buyers who are in the market, some have fallen to marketing our inventory to the industry as well as to consumers.  That’s ok.  But here’s a little reminder, courtesy of Kimber Regan of Help-U-Sell Hanford-Lemore in California.

Kimber has taken to ‘creating listings’ for her buyers.  When she finds a real buyer, one who is ready, willing and able to buy now, she sends them off to get pre-qualified and then locates upside down properties fitting their list of wants and needs.  She goes to those homeowners – who are not on the market – and offers to help them with a short sale.    She’s double-ending much of her business these days with this little attitudinal gem, and you can too.

Part of the Help-U-Sell offer to buyers has always been that we will not just rely on the MLS to find their dream home.  We’ll also contact non-listed homeowners who are in neighborhoods and homes that would be right for them, looking for that one or two who may sell if a good buyer showed up on the doorstep.  It’s a very valuable offer today when buyers can find what’s in the MLS on their own via Zillow, Trulia or (if they’re smart and lucky) Listingbook. Thanks, Kimber for reminding us who we are and how we work.

Technology You Need

Realtors, there’s a ton of technological stuff out there vying for your attention these days, much of it pretty good, but most of it not worth the time and effort it would take for a good Broker or Agent to learn and master.  If you are good at selling real estate, it probably means your people skills are outstanding.  That’s where you need to focus:  doing the things that get you out in the field, meeting the people, putting this one together with that one and so on.  All this wonderful technology is just there to support that effort.  It is not the star, you are.

Because most Help-U-Sell offices are small in terms of agent population, we don’t often see the large number of bright young people who come into the business each year, quickly master all the technology, and never sell a thing.  It’s not about technology, it’s about people.

So what do you do?  You need to be up-to-date, and you need to be able to pick out the handful of tools out there that will be worth the time and effort it will take you to master them.  If you’re lucky enough to have some ‘Tweens’ running around, a great course of action is to let them do the investigation, let them organize the database, let them update your website (you stay in charge of content).  Pay them lavishly – what?  $10 an hour plus at least one meal a day (and all the bread and water they want).

If you do not have that biologically built in tech support system, let me give you three – just three – bits of technology I think you need to have today.

1.  A broadband capable Ipad, tablet pc or netbook.  What do they all have in common?  They are small, lightweight, connect to the internet when you are out on the road, and can access your MLS from anywhere.  Honestly, I don’t know how you work buyers today without one.  For example, you’re showing property and your buyer nearly climbs out the window when she spots a brand new sign (on a listing you knew nothing about) on your way to show a property.  With one of these devices, you quickly access the MLS, pull the listing and, bam!  you’ve got it covered.  Or, you’ve just shown the third house she hated.  It’s becoming clear that what she told you she wanted is not actually what she wants.  With mobile device like this, you can quickly stop, search and come up with a set of more appropriate properties to see.

I know you can probably access your MLS with your smartphone, but screen size creates all kinds of problems:  pictures are hard to see, typing is very difficult and despite recent gains, they tend to be slooooowww.

In this category, the Ipad has captured everyone’s imagination – a tribute to the excellent marketing Apple does.  But I like the Samsung Tab.  I know Verizon offers it and others may as well.  It runs on the Android operating system so has great expansion capabilities via numerous free and paid Apps.  Most of all, I like its size.  It’s narrow enough to fit in the palm of one hand so you can type with the other.  The Ipad feels cumbersome by comparison.  Both of these devices are, well, sexy . . . and are bound to turn a few heads if you’re into that sort of thing.  But if you just want something small you can use to access the MLS, check out some of the new NetBooks.  These are more like traditional notebooks with a lot of the power stripped from them.  You’re not going to use them to edit video, but if you get one with a wireless broadband card (or purchase a USB dongle from your provider), they can do the job of surfing the MLS quite well — and you don’t even have to give up the keyboard!

By the way, I didn’t mention the new device that’s getting a lot of buzz right now, the Motorola Xoom.  Sorry, I thought it was clunky and heavy.  Just my opinion.

2.  A notetaking system.  I’d love to give you a menu of options but the first one I tried I loved and I think you will too.  It’s Evernote (www.evernote.com).  You install it on your computer and on your mobile phone.  You can create ‘notes’ on your computer and sync them so they are available on your phone:  to do lists, pictures of your dog, voice memos, house showing itineraries, whatever.  You can also create ‘notes’ on your phone and sync them with your computer.  So you collect data in two places simultaneously (much better chance you’ll find what you want when you want it).

Most good Brokers and Agents I’ve known were a disaster when it came to note taking and organization.  I can’t tell you how many I’ve seen running around with a briefcase full of little scraps of paper each with a name and phone number scrawled on it.  I swear, one lady who worked for me – a good agent – spent 20% of her time just looking for stuff she’d written down . . . somewhere.  With Evernote, you can still write that number down on a scrap of paper, but then you immediately take a photo of it from Evernote on your phone and zingo! it’s stored on your phone and uploaded to your computer all at once.  Best of all, ‘notes’ are searchable.  You can even make voice notes in Evernote.  Push the button on your phone and say, ‘check out the new listing at 123 Elm’ and the reminder will be stored where you can find it.  How about this:  you meet someone who may want to buy.  Rather than writing their contact info down, ask for it, then push the button on your phone and record them giving it to you.  It’s also great for taking photos of business cards, which are automatically converted to searchable text.

Why not download your free copies on your phone and computer, spend a little time getting comfortable and then challenge yourself.  See if you can get through a whole week without hanging on to a single scrap of paper or note.

3.  A buyer incubation/loyalty system.   You know I love Listingbook.  It think it’s the most exciting buyer/agent tool I’ve seen in a long time.  When you give your buyer a Listingbook account, you’re giving them something better than Trulia, Zillow, Realtor.com or any other aggregator website.  You’re giving them real time access to the LOCAL MLS.  You’re giving them the ability to search to their hearts content and giving them a means to keep you in the loop in a way that is not intrusive.  They love it and you stay in control.  Not all MLSs have Listingbook, but most have something.  Call your Board and ask:  ‘What tools do we have to help buyers in the search process, that they will perceive as being ‘high value,’ and that will help me maintain contact and control as they incubate?’

As with all technology, each of these three items has a learning curve, but it’s pretty gentle.  Take them one at a time, get comfortable with one before adding another; and see if your efficiency and productivity doesn’t increase as the year unfolds.

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