Category: The Industry

Your Future in Real Estate

It’s time to get serious about your career in real estate.  The market is rebounding, homes are selling and it looks like we are in for another multi-year cycle of appreciation and normalcy in the marketplace.

Now is the time when great careers and great real estate businesses are made.  It is your moment, your time to shine, your best shot at major success . . . IF you are positioned to take advantage of the opportunity.  What does that mean?

If you are an agent working for an ordinary real estate company, be it franchised or independent, you are competing against thousands of other agents just like yourself, with the same tools, same information, same offering, and same pricing.  The only edge you could possibly have in that fishbowl – the only things that might set you apart from the pack – are your personality and your work ethic.  So, let’s assume you really apply yourself next year.  You work harder and smarter and you polish up that smile . . .  and you go from doing 18 deals to doing 25.  That’s very nice, but it’s hardly the stuff of real estate greatness.

This is not the time to increase your production by 30%.  It is the time to increase it by 300%.  And you won’t do it by doing the same things you did last year and the year before, only doing them harder.  It’s time to look for a better way to do the real estate business.

If you are a broker, get ready.  You have been able to rein back outrageous commission splits a little in the past few down years.  But with the market heating up, even your most mediocre agents will be looking for more, and you know if you don’t give it to them, the office down the street will.  You can expect your turnover to move higher in the months to come which means, if you are going to maintain current levels of production, you’re going to have to kick up your recruiting game.

I gotta tell ya:  I don’t envy you at all.  The success of your business is dependent on your ability to get people to come to work for you and then, to get them to stick around; and your only real tool for accomplishing either of those objectives is split.  And what the heck does any of that have to do with helping buyers buy and sellers sell real estate?

Clearly, it is time for a new game, a new model, a new way to do this business.  A way that results in incredibly satisfied clients, busy agents with healthy bank accounts and brokers who are functioning as successful entrepreneurs, not mere support for their sales staffs.

And you know what the way is:  It is Help-U-Sell.  Here’s why:

As a Help-U-Sell broker you will go into the marketplace with a consumer offer that is not only fundamentally different than that of your competitors, but also superior to theirs from a consumer point of view.  You’ll accomplish the same results the pack of ordinary agents and brokers will but you will save people thousands over what they’d pay anyone else!  It is an offer that is so compelling that, once word is out in the marketplace, potential sellers usually want to at least talk with you before making a listing decision.  And we find we get that listing about 90% of the time.

It is a focus on marketing and marketplace intelligence that more closely resembles what Home Depot does than what ABC Realty does. And because Help-U-Sell marketing is systematic and focused, it produces a steady stream of buyer and seller leads into the office.  These are leads the office has created, leads the office owns, leads the office will assign and track.

It is agents who want to come to work for you because you have the one thing nobody else can give them:  leads.  It’s agents who have had a close brush with burn out from the gigantic job description they tried to manage at an ordinary real estate company.  They will see the streamlined, focused job you have for them as an opportunity to do more, make more and have more fun doing it.

It is a smaller, tightly knit office team that is outperforming companies with 10 or 12 times the agents.  It is an team with one goal – yours, with one direction – yours, one purpose – profitability.  It is very different from an ordinary office where the broker begs people to come to work, begs people to stay, begs people to attend sales meeting, begs people to do the prospecting they promised to do and so on.  Aren’t you getting tired of all that begging?

And finally, it is a bottom line that is beyond healthy, that is growing and expanding every month.  This is the great truth ordinary real estate brokers and agents have the most difficulty understanding about Help-U-Sell:

Even though we charge consumers thousands less, we deliver more dollars to the bottom line per transaction than our ordinary competitors who charge much more!

I know you don’t believe me, but go ahead:  call a Help-U-Sell broker – any Help-U-Sell broker – and ask them to explain it to you.  I’m sure you will be surprised at what you hear.

The Help-U-Sell ship is sailing, and it’s going to do more than it did between 1998 and 2006 (the rough dates of the last up cycle in real estate).  And if you are serious about your success, it is time to fly a new flag on your own ship, to find a new and better way to do the real estate business.  For goodness sake!  Do it in a way that is different from what everyone else is doing and that is better for consumers and for you bottom line.  Do it with Help-U-Sell!

*Unlike other franchises who will give you a list of their 12 happiest franchisees to call, I have no problem telling you to talk with any Help-U-Sell franchisee.  We are a multi-year winner of the Franchise Business Review’s franchisee satisfaction survey.  Year after year, our brokers affirm their delight with the business model and the power of the team.  So go ahead:  pick a Help-U-Sell broker – any Help-U-Sell broker – and let them tell you why joining this team is a very smart move.

 

Welcome to Normal

REALTOR.com is out with its market data report and analysis for August and has pronounced that the national real estate market stabilized over the summer selling season and is now nearing normal.

Normal . . . Oh! how we have longed to hear that magical word.  Normal, where an adequate number of homeowners need to sell and an equally adequate number of home buyers want to buy.  Normal, where it takes 45 – 90 days to sell a home and where prices increase in the 3% – 5% a year range.  Normal, where smart marketing works, producing leads.  And Normal, where home sellers are very interested in saving money on real estate commissions.

Getting to Normal wasn’t easy.  We were mired in market sludge as the year began but starting sometime in February, something happened.  Home buyers who had been sitting on the fence for so long they had splinters, started to come back into the market.  By the Spring we had lurched forward to a new kind of craziness, in places reminiscent of the lunacy that preceded the crash:  low to non-existent inventories, multiple offers, over asking price bids, sudden stupid appreciation.

In my own San Diego neighborhood (Hillcrest/Bankers Hill) I remember looking at the MLS one week and seeing 3 active listings.  Three. The next week there were 15 as home sellers, hearing the news that crazy buyers were back in the market and that NOW was the time to sell, raced to get in on the action.  The effect was like pulling the emergency brake on an out of control car.  Everything stopped . . . for a few weeks.

The craziness subsided a bit and we eased into Summer with a little more sanity.

Now we’re into the last months of the year.  In a normal market, this is when ordinary Realtors go into hibernation.  Nothing happens between Thanksgiving and New Years Day, right? Of course, that’s ordinary thinking for ordinary brokers.

But you guys, you Help-U-Sell guys are anything but ordinary, remember?  By their standards you are just plain weird!  So this year, after you get home from Success Summit, do the weird stuff you did last time the market was “normal.”  Market like mad to the end of the year and hit January with a white board full of new listings and a pipeline overflowing with sellers who wanted to wait until after the first of the year.  Because each new listing is an opportunity to market for and get another and another and another, there is no better prep for the Spring Selling Season!

Have a great time at Summit this year, gang.  I will be there in spirit and look forward to hearing about all the great stuff that was shared!

Why NOW Is The Time To Become A Help-U-Sell Broker

Welcome to 2013, the year the real estate industry stopped staggering and returned to swaggering.  We all knew it would take a recovery in the housing market to initiate a recovery in the overall economy and this is the year the home-buying public decided it was time to make a move.

But what about you?  What’s your next move?

If you are a real estate broker – a savvy one –  you have to be on the lookout for the next trend, the next twist, the next thing that will give you a competitive advantage over others. Up until the late 70s, about the most innovative thing the industry did was create the MLS. But with the advent of the franchises, the real estate business began moving at locomotive speed, with giant competitors looking for new and better ways to grow.  Unfortunately, it has been a one-track itinerary for that locomotive:  recruiting.  The industry so overwhelmingly decided that the way to grow is to add more and more people that today we hardly question why recruiting should be a Broker’s single most important activity, why recruiting is the ‘Lifeblood’ of the real estate business.

Here is a tip about change:  it will the innovators who question what everyone else holds to be true who will ride the next big wave in the real estate industry.

Let’s go back to basics.  Our business is built on the idea that people who want to buy real estate and those who want to sell it need qualified, knowledgeable help.  That’s what the real estate industry is about, our reason to BE.  But notice: nowhere in that statement is there one word about recruiting.  Yet recruiting has become the only acceptable ‘HOW,’ the only strategy for accomplishing the goal of helping consumers.

The message on the Brokers’ internal billboard glows with self-congratulatory phrases about ‘providing an environment where talented people can thrive,’ and ‘serving the community with the most knowledgeable and professional agents in the business.’  But here is the more honest, though somewhat cynical paradigm that underlies that business model:

As a Broker I know that almost anybody with a license can sell a few houses.  Everyone has friends and family who would be willing to give them a shot.  While I am actively seeking super agents, I know that half the people who enter the business will do 4 – 6 deals from their personal network, and quit.  That’s ok:  I’ll take those 4 – 6 deals.  Those agents aren’t costing me much and I can almost cover my overhead on their production.  I also know that 35%-40% of those coming in will stay in the business but will muck along at 6 – 8 deals a year, each personally making $25,000 – $35,000 a year but making $20,000 to $30,000 for me.  20 of those agents and I’m doing ok.  40 and I’m great!  Because I know most people won’t make it, and that many who do will eventually move on to what they perceive as greener pastures, I accept the fact that I must constantly recruit to replace those who leave. My job as a real estate broker is to provide comfortable space and acceptable systems for my agents.

Is that the kind of real estate universe in which you want to live?  Because that’s what’s out there whether it calls itself Keller-Williams, Re/Max, Century 21, or Local Independent Realty.

If, on the other hand, you are ready to shake things up a bit, to return to the business of actively seeking customers – not agents, then you owe it to yourself to take a look at Help-U-Sell.

Step one is to set your prejudices aside.  You have been marketed a picture of Help-U-Sell that keeps you at a distance.   Here are the underpinnings of that false picture:

How can they make any money?  I can barely make it charging full fare and here they come charging half what I do.  What a stupid idea!

They don’t do anything for their sellers, that’s why they charge so little.  You get what you pay for.

Its a pure come-on.  They give away the listing side to get the buyer side and then sell OUR listings for full buyer-side commission.  I think we should automatically cut their buyer side commission when they sell our listings!

Help-U-Sell?  They’re still around?  I thought they went bankrupt.

That’s all just REALTOR-speak.  Don’t let your competitors make up your mind for you.  Do your own investigation.  You’ll discover:

  • Help-U-Sell is not just some discount real estate ‘service.’ It is a completely different way of approaching the real estate business, a different business model.
  • Help-U-Sell fess are lower because the business model is more efficient.
  • Help-U-Sell brokers deliver more dollars to the bottom line charging less than their ordinary competitors who charge much more . . . really!
  • The Help-U-Sell bulls-eye is the consumer.  That’s what we are all about.  We love agents, but they are part of our business model, not the target of it.
  • Help-U-Sell takes the broker out of the role of administrative support for agents and puts him or her back in a role of entrepreneurial leadership.
  • Help-U-Sell is not a do-it-yourself FSBO company but rather offers full-service to consumers that looks very much like the full-service ordinary brokers offer.

If you are attenting the California Association of REALTORS EXPO this week or at the National Association of REALTORS Conference next month, stop by the Help-U-Sell booth.  Talk to our people and discover why this 40 year old twist on the real estate business might be your ‘next big thing.’

 

 

 

 

 

Exotic Dancers, Real Estate Agents and Minimum Wage

Earlier this month, Bloomberg reported that a U.S. District Judge ruled that exotic dancers at Rick’s Club in New York are entitled to minimum wage.  The decision came on the heels of a class action lawsuit filed on behalf of 1,900 dancers whose only compensation had been the tips they received from customers.

The Plaintiffs’ lawyer said the ruling “makes clear that employers cannot pass their statutory duties to pay wages on to their customers and gain an unfair advantage in the marketplace while their employees go without guaranteed or long-term benefits such as Social Security.”

As usually happens when I read a story about exotic dancers (or almost anything else), I thought about the real estate business (!).

You know real estate, don’t you?  It’s that business that thousands of people enter every year when what they really wanted to do doesn’t pan out. They become ‘Independent Contractors’ (which is what Rick’s Club considered its dancers to be) and only get paid when they bring in a commission.  The business model is a little like Avon or Amway or Herbalife where the number of people you recruit is more important to success than the amount of product you sell.  In real estate almost anyone who has a license can go to ‘work’ for almost any broker whether they ever produce or not because, hey, they’re not costing the broker anything, are they?

The end result of this idiotic business model is awful productivity.  The average real estate agent sold fewer than 8 homes in 2012 and made about $34,900 gross (before business expenses).

Can you imagine how quickly the whole industry would turn around if brokers were forced to pay their agents minimum wage?  Massive staff cuts would occur across the board.  Century 21’s sales force would shrink by 70% and all of those people would get letters from the Unemployment Office informing them that as Independent Contractors they are not eligible for benefits.  Keller Williams would have a big company-wide picnic to say goodbye to half of its agents (a picnic because they have such a family-like culture).  Re/Max would shrink to a dozen offices nationwide because there would be no independent contractor agents left to rent desks.

Nothing much would change at Help-U-Sell, though.  Our business model (which, HELLO, is completely different than the rest of the industry), makes it impossible for us to maintain non-productive agents already.  An agent doing industry average production in a Help-U-Sell office is costing the broker a king’s ransom in blown leads and lost business.  So we’re already lean and mean.

Funny thing:  that bit about an agent doing average agent production in a Help-U-Sell office costing the broker a ton of cash?  That’s true in the other guys’ offices too.  It’s just that they don’t pay attention to that kind of stuff.  Like the Herbalife people, they believe their success is dependent on one thing:  how many agents they can stuff into their offices.  Productivity doesn’t matter.  What counts is bodies.

Prior to the downturn, Help-U-Sell had a very carefully conceived salary model in place.  It worked beautifully . . . when the market was somewhat normal.  When the business went off the cliff, however, much of what worked so well stopped functioning.  Almost everyone went into survival mode, abandoned the salary model and cut back on staff.  One notable exception was Patrick Wood, owner/broker of Help-U-Sell Prestige Properties in Chino Hills, CA.  He continues to run his office on a modified salary model and, coincidentally, has ranked in the top 5 of all Help-U-Sell brokers for years.

I have been pretty tongue-in-cheek in this post . . . except for the parts about Help-U-Sell: that was quite serious.  But let’s remember that the IRS has been after the real estate industry for years.  They’d like to see the Independent Contractor status of agents get tossed and it’s only been the flexed muscle of the National Association of REALTORS that’s kept it from happening.  If that kind of change did occur, many real estate brokers would simply shut down.  They couldn’t make their business model work with that additional constraint.  The survivors?  They’d do something the industry has historically NOT done very well:  they’d adapt.  And after a little shake out time, the industry would be better, the consumer would be better served and real estate would start to be an occupation people choose, not just fall back on.

Pet Peeves

Real estate professionals who don’t know how to use their calculators and can’t figure (or at least look up) a mortgage payment on the fly.

Real estate professionals who don’t know how to measure for and calculate square footage (at least good enough to tell if the tax records are wrong).

Real estate professionals who can fill in the blanks of their State approved purchase agreement but can’t walk through it with a buyer or seller explaining each boilerplate paragraph.

Real estate professionals who stop at ‘No,’ when trying to get a deal closed or financed.  The answer to ‘No’  is always the same:  ‘What do we need to do/add/change/find to make it work?’ and ‘What can I do turn this around?’

Real estate professionals who can’t do basic pre-qualification of a buyer including an initial discussion of finance including an examination of income-to-debt ratios.  (Though important, this is not a substitute for an in-depth discussion with a lender).

Real estate professionals who can’t accurately (within a reasonable tolerance) calculate seller net proceeds and buyers’ funds needed to close quickly and on a legal pad if necessary.

Real estate professionals who are afraid of the Internet . . . or even uncomfortable with it.

Real estate professionals who ‘wing’ their listing presentations.  It’s a job interview, for goodness sake!  You at least need an outline of where you want to go with it!

Real estate professionals who don’t spend money on marketing.  Agents should be spending a minimum of 10% -15% of their anticipated 1099 on marketing.  Brokers should be spending more.

Real estate professionals who expect the MLS to sell all of their listings.

Real estate professionals who organize their companies to appeal to agents rather than to serve consumers.

Real estate professionals who celebrate mediocre production.

Real estate professionals who don’t constantly question why things are the way they are and how they could be better for the buying and selling public.

These are just some of mine . . . what are yours?

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