How Is Your Real Estate Muscle?

I am into Geezer Fitness.  That’s what happens when old people work consistently toward achieving fitness goals.  Geezer Fitness.  I got serious about it 10 years ago, in my early 50s and it has paid big benefits.  I am much stronger, healthier and happier than I was when I began.  I look better too.

Geezer Fitness means 3 things:

Diet – which doesn’t mean denying yourself anything, but rather taking control and making small adjustments.

Mental Conditioning – stretching your brain and pushing it to grow.  For me this takes the form of learning new things:  another language, a new sport, painting.

Physical Exercise – (in order) Stretching – Cardio Exercise – Resistance Training.  I say ‘in order’ because if you haven’t exercised in a long time, that’s how you should start:  consistent stretching every other day until it becomes an anticipated habit;  then adding in a little Cardio, and a little more, and a little more, until it, too, becomes an important routine; then doing the same with Resistance Training.  If you’re just starting out, it will take at least a year to get all three happening in an integrated rotine.

If you are not a little careful, it is possible to ‘strain’ any part of this recipe.  If you go overboard on the diet thing, you can end up craving stuff that will set you back.  If you push too hard in learning, you can become fatigued and muddled.  And when you over-do any part of your exercise program you can end up in pain . . . as I have.

I strained my back late last week.  Believe it or not, I think I did it stretching . . . in a yoga class.  Yes, it’s even possible to over-do when you are doing the most gentle part of your program.

Pain is your body talking to you.  It’s telling you you’ve gone too far, done something wrong, and now need a break.  I’ve had five days of pain – each day a little less severe than the one before – and near complete cessation of physical activity since.  You have to do that when you strain a muscle:  stop, sit down, take a break, give the muscle time to heal.  And while you are recouping, think about how you did this to yourself and make plans about how you’ll avoid it in the future.  In baseball they call this the ’15 Day Disabled List.’

And all of this is true for your real estate career too! (you knew I’d get around to that, didn’t you?)

If you’ve done it right, your real estate career is a set of pleasant routines you’ve developed over time that produce a beneficial outcome. . . just like my Fitness program.  Your routines are probably in several categories:  Marketing, prospecting, lead management, client base development, and so on.  You can ‘strain’ your real estate muscle by being out of balance, by dropping the ball on any one of your routines, by becoming reactive and out of control of your business.

No matter what the cause, Real Estate Muscle Strain always feels the same:  you hate your job.  The thought of talking to one more FSBO contorts your entire face into a frown.  You can’t find the gumption to call the Seller with the unrealistic price to report no new activity and to suggest a price reduction.  You put your phone on d0-not-disturb mode and let it all go to voice mail . . . and then dred all of those calls to return.

Just as with physical muscle strain, there is a prescription for Real Estate Muscle Strain, and it is the same:  Stop.  Rest.  Think about how you got the strain and plan how you will avoid it in the future.

But how do you do that when your business is clicking along?  You can’t just abandon everything and take off to Cabo!  But maybe you could get the flu.  Here’s the cure:

  • Identify your real estate pals:  the one or two people you would trust to cover for you and for whom you’d be willing to cover in return.  Do this NOW, before you strain your muscle.
  • Meet with them and form a pact:  when one of you go down, the other(s) will pick up the slack.

Now, when you discover you’ve strained your Real Estate Muscle:

  • Devote an hour or two to organizing your current business so you can hand it off.
  • Meet with your pal(s) and give them your files.  Plan to talk with them once a day.
  • Contact your active clients – sellers and buyers – and explain that you have the flu or a family emergency or a sick parent or something and that your Pal(s) will be covering for you.  You expect to be back in the saddle within the week.  
  • Go somewhere where you can rest.  This might be home . . . or maybe it really is Cabo!
  • Give your mind and body a break from real estate.  Talk to your Pal(s) once a day and then drop it.  
  • Think about what it was that caused the strain.  What drove you over the edge?  
  • What can you do immediately on your return to put that straining influence in check?
  • And how can you organize yourself and your business so that a strain in this area will be unlikely in the future?  

Need an example?  Here’s one that has ‘strained’ many real estate people:  shifty, rude or obnoxious clients.  Honestly:  if you are working with people you really don’t like, it’s a strain and it can drive you right off the cliff.  So give yourself permission to get the real estate flu, hand your business off and go to . . . Cabo!  But think:  how did  you get yourself into this pickle?

You’ll probably realize that at some point you were so desperate for business that you took whatever business you could find.  That’s usually how we end up with obnoxious clients.  The real problem isn’t the clients, it’s the desperation.  Without the desperation you can be picky about who you work with.  So what caused the desperation?  Oh, lack of leads (perhaps).  So how can you generate enough leads so that you can be picky about the ones you choose to work?  Oh, I know!  Marketing!  Maybe it is time to jump into that great mailbox program from Excel . . . or try this Facebook pay-per-click thing, or buy a zip code from Zillow.  And when you get back to work, is there a listing you want to give back?  A buyer you want to pass off to someone else?

See how it goes?  Strain is a symptom.  First you have to take care of the symptom by stepping back, by stopping.  Continuing to work when you have a strain only makes the strain worse.  You think:  what caused the strain?  What can I do NOW to get control?  And what can I do going forward to ensure that I don’t have this problem in the future?

I’m sure my strain came from forward bends:  downward facing dog, child pose, bent-leg forward bend and so on.  I pushed too hard and, I think, did a lot of bending from the low back, not from the hinge of the hips.  When I go back to yoga next week, I am going to limit my forward bends.  I’m going to use blocks under my hands to ensure that I don’t over-bend.  I’m going to consciously think about my hips and stop when they stop hinging.  It’s taken a week in a chair on muscle relaxers to come to this understanding.

Now:  What’s your plan of attack on your Real Estate Strain?  And where are your muscle relaxers?

Flashback Friday: Revisiting the Elevator Speech

Happy Friday, everyone. This is the day we dig into the archives and recycle a SFB Post from the past. Today it’s from our second month in existence and I laughed when I re-read it: I remember the exchange between the Financial Planner and myself vividly – and we are still friends. As you read, pay attention to the ‘Set Price’ bit near the end. Really: what do you think about that? Enjoy!

I had an interesting conversation with a gentleman yesterday about the Elevator Speech. When I told him I worked for Help-U-Sell®, he asked (as if from a script): ‘What do you do?’

Like Pavlov’s dog, I spoke right up. ‘We are REALTORS® and we do all the things the other REALTORS® do – and more – except instead of a commission, we charge a low set fee, which can save you a lot of money when it comes time to sell your house.’

He scowled.

‘What?’ I asked.

‘You lost me at REALTOR®,’ he replied. I continued to look puzzled, so he went on. ‘As soon as I heard you were a REALTOR®, I thought I knew exactly what you do. I didn’t really hear anything that came after . . . nothing to set you apart or make you different.’

‘Nothing?’ I asked, aghast. I was in shock. Seeing my discomfort, he smiled.

‘I’m kidding,’ he said, ‘I heard what you said, I really did. But I was listening like a consumer.’

Turned out he was a Certified Financial Planner and had been working through an exercise in his company to get at how to most effectively communicate their message to consumers in a quick, concise and differentiating way: an Elevator Speech.

‘What we discovered was that when we differentiate first, our message gets through,’ he said. ‘We don’t lead with ‘We’re Financial Planners’ because people have a mental image of what that is and if they put us into that picture we look just like everyone else. Another thing – we did away with all the ‘buts’ and ‘ands’ and ‘excepts’ in our speech. We found that those kinds of qualifiers negated what went before in people’s minds.’

My original impulse was defensiveness: I learned that elevator speech seven years ago. I knew why every word was chosen and I knew why it was supposed to work. But when I ran through it again, in my head, I remembered that the opening phrase was chosen to combat the rumors our competitors were spreading, not to differentiate us from them. We said we were REALTORS® right up front – and sometimes elaborated to say we were ‘full-service REALTORS®’ – because the other guys were telling everybody we weren’t!

‘Let me hear your speech,’ I said. I wanted to turn the tables, put him on the spot and see if I could find the holes in his dialogue.

‘Sure,’ he replied, ‘We fix people’s broken investment portfolios.’

‘Really?’ I asked, ‘How do you do that?’

‘See?’ he answered, ‘It works.’ I continued to look puzzled. ‘The whole point of the speech is to let people know you are different in a way that might benefit them and get them to ask for more information. You played your part very well.’

I’ve been thinking about our speech ever since. Perhaps it is littered with little land mines that could blow up and ruin our chances of getting through to the consumer. I remember Mike Miller, during his brief stay as our Chief Communications Officer, insisting that ‘set fee’ was a negative: Lawyers charge fees, banks ‘fee us to death,’ airlines charge excess baggage fees. He was pushing for ‘set price.’ Personally, I’m not ready to go there; but it is something to ponder.

Here’s what I’m thinking: the answer to ‘What do you do?’ might simply be, ‘We are a set fee real estate company.’ Period. It says you’re different, hints that there might be a benefit to the consumer and begs the question, ‘How does that work?’

Please don’t change your elevator speech – you know, the one you currently have that is working. But chime in: What do you think about the advice I got this weekend? Should we rethink the Elevator Speech? If so, how do you see it in the future? Click the ‘Leave a Comment’ link above and speak your mind!

Small Adjustments

Most of us want to lead healthier lives. Most of us want to build a healthier planet. Most of us want to have a healthier business.

Getting healthier in your business is just like getting healthier in your body and your home: it is often a matter of small adjustments applied consistently over time.

Think about water for a moment. It’s a precious resource, one that becomes even more so as populations increase. What small adjustments could you make in your relationship with water that would benefit your health or planet?

From a health standpoint, you could drink more of it and cut out the ‘junk’ alternatives to water humans have concocted through the years (read: soda).

From a conservation standpoint, you could turn off the tap while you brush your teeth and shave. A very small adjustment with a very big benefit. Really: can you imagine how much water we’d save if everyone did this?

From an environmental standpoint, you could quit carrying your water around in a ‘disposable’ plastic bottle. There’s nothing ‘disposable’ about them and the alternative is so simple.

Small adjustments in your relationship with water can mean big benefits in your life and the lives of others.

Now, think about your business. What small adjustments could you make in your business life that would yield equally big positive results?

How about planning your day the evening before? Really, simply writing your to do list before going to bed has proven to increase productivity. Simple step: Big return.

How about getting up 30 minutes early every day and spending the extra time stretching and breathing? You will be better prepared physically and mentally to tackle your day and, over time, you will reverse the natural fossilization that occurs as people age. I mean: do you really want to look like a question mark when you hit 80? Small adjustment – Big benefit.

How about committing to NOT respond to crisis? One of the things that happens as we get busy in real estate is that we become reactive. We are bombarded with urgent requests to get things done and to solve problems and to help others with their own tasks. Your entire day can be taken up responding to one urgency after another.

The truth is there are very few real estate emergencies. Not real ones. Most problems can be solved and few ever require immediate attention. So why allow the crisis of the moment to derail your plan for the day? If you will plan your day the night before and then give your plan primacy over everything else, you can quit being re-active in your business and start being pro-active.

If you have agents, you know how they can overload you with dozens of problems. Are you better equipped to solve the problems? Sure. But what other important activities are you going to sacrifice to do so? You could insist that nobody come to you with a problem without also bringing a couple of potential solutions (this short-circuits a lot of unnecessary problem dumping). Or you could be less formal.

I’ve written about a great broker for whom I worked in the early 80s. He was Godzilla’s boss. Remember? The man was adored by his agents. Really: we were so proud to work for him and to have him on our side. One of the things he did so well was to solve problems. We all knew, if we were backed up against the wall with a terrible situation, he could find a strategy, a solution, better than anyone else. And the conversation always went something like this:

‘Have you got a minute?’

‘Sure, what’s up?’

‘Well, I’m having a heck of a time with blah blah blah blah.’

‘Really? Tell me about it.’

‘Ok: blah blah blah blah blah.’

”What solutions have you already tried?’

(From this point forward, I will omit the ‘blahs.’ All lines will be the Broker’s – they are the only ones that count)

‘Why wasn’t that solution successful?’

‘What do you think might make a difference?’

‘How do you think we could make that happen?’

‘I think that’s a pretty good plan – what do you need to move forward?’

And so on. He rarely if ever gave us the answer. Mostly he just asked questions and we found a solution. Now, I don’t want to imply that he never had input. He did. But mostly he got us to think about our problems in new ways and to invent our own solutions.

It was a small adjustment in his style (he curbed his own impulse to have the answer)  that had a big payoff in his business – a happy, loyal and productive staff.

Finally, think about baseball for a moment, professional baseball.  There are superstars being paid millions to play the game and there are many not-s0-super-stars making a whole lot less.  The average players – the ones who will be largely forgotten when they leave the game – will successfully make contact with the ball and have a hit 5 times out of every 20 times they come to the plate.  The superstars?  What makes them so much more valuable?  What makes them worth millions to a club?  Every 20 times they come to the plate, they will get 6 hits.  Just one hit more.

What small adjustment can you make in your business and your life to get just one more hit?

Flashback Friday: The History of Real Estate

Hey! It’s Friday! Yipeee! In honor of the perfectly placed day, I am going to recycle a post or two from time to time. This was actually the first post I ever did on the SFB – way back in September of 2009. The truth it contained then is still there today. Enjoy!

My dad was a Broker.  I guess that makes me an S.O.B.  Son-of-a-Broker.  Anyway, I remember the week he passed his first salesperson’s test.  It was 1965 and he was so excited.  Out came the ‘want-ads’ after dinner and he scanned the real estate section for an opportunity.

Eureka!  Ted Tamminga (I’m not kidding- that was his name), the Broker in Avondale Estates a few miles away was looking for a salesperson.  My dad went to see him the next day.

This is where things get interesting, because Ted, unlike the Brokers of today, was not recruiting my dad; he was looking for help. Forty-Five years ago, real estate brokers were community fixtures.  The broker was the business and the business was the broker’s.  If a broker took on a salesperson, it wasn’t for business expansion purposes.  I mean:  the broker wasn’t doing it because the new agent might bring new customers the broker didn’t already have.  No.  He hired agents because he had too much business to handle himself!

Ted saw my dad as an apprentice, to whom he’d toss off the low probability prospects who required much of his time.  By hiring him, he could take an afternoon off in the middle of the week to play golf.  Dad got the left-overs and the hand-me-downs and was paid reasonably for the good work he did:  50%.

Ted was quite a character.  He had the biggest, longest, goldest Cadillac convertible I’d ever seen.  He also had a collection of pastel colored polyester leisure suits that would make Johnny Carson jealous.  But what I really remember about Ted was the sunglasses — always on — and the huge grinning shark smile.  He was just gonna eat you up.

By the time I’d gotten my license in 1976, my dad had done what good salespeople did.  He’d developed his own legion of loyal former customers and, being too busy for any more of Ted’s hand-me-downs, opened his own office.  I went to work for him.

It was an interesting time in real estate.  The franchises were just coming on the scene.  Red Carpet was first and showed everyone it could be done. But the big gorilla was Century 21.  We’d heard about the company that was taking over the business in California and we heard it was coming our way.  When it arrived, we quickly jumped on-board.  Why?  They offered survival.

We’d watched as some of the Ted Tammingas in our little universe realized that every time they hired an agent, their business got bigger.  We’d watched as they added and added and their signs became more and more plentiful.  Suddenly we were no longer the comfortable community real estate company.  We were just the little guys and it was hard to compete with our more rapidly expanding local brokers.

Century 21 offered a way for the little mom-and-pop brokers to unite under a common banner and appear to be even bigger than the big local independents.  That was worth the fare for the first few years, but then it became clear that even under the Century 21 umbrella, the best rewards went to the biggest offices.  The franchisor — in fact all real estate franchisors — realized that the most important thing they could do is to teach their franchisees how to recruit.

That was big.  The whole industry changed in  a couple of years.  The broker bulls-eye shifted from doing an excellent job listing and selling real estate to recruiting as many agents as possible.  It was the moment when brokers got out of the real estate business and into the recruiting business.

And it worked beautifully . . . for awhile.

Then, in the mid-80s, a tsunami washed over the industry and took it to its knees.  The tsunami was Re/Max and its power was the 100% commission concept.  Dave Liniger and his team realized that, since the bulls-eye was on recruiting agents, and since many agents are motivated almost entirely by money, if they could find a way to pay them more than anyone else, they’d get ’em all!  And ya’ know what?  It worked.

Productive agents went to Re/Max in droves and there was little the traditional broker could do but stand in the door of his office and wave goodbye.  By the end of the decade, the survivors had started monkeying with the model to cope in the new Re/Max universe.  Graduating commission splits started to graduate higher and higher and broker profits sunk lower and lower.

That was  pretty much the story up to the market collapse in 2006.  It got beyond crazy.  In the best real estate market in history, most brokers were making no money.  They had to throw it at their agents to keep them from going down the street.  Here in San Diego, new agents with no experience at all were routinely offered 80% splits!

History of Real Estate

While the industry was careening out of control there was a quiet little revolution brewing a few blocks off Main Street.  A gentleman named Don Taylor started charging a set fee to market homes — and the fee was way less than a standard percentage based commission! — and he was getting his sellers to help by showing their own property and holding their own open houses.  He carefully orchestrated a marketing program that kept the phones ringing with prospective buyers and at the end of the day was able to turn huge numbers of transactions with very little help,  amass a legion of delighted customers, and realize a staggering profit.

That was 30 years ago; and while the history of Help-U-Sell is a jagged line on a piece of graph paper –wild rises and horrendous crashes — the brand has endured.  Remarkably, it’s changed very little from Don Taylor’s original vision.  It still puts the consumer first and the broker in the center.  It still delivers on the promise of seller savings over typical commission models.  And it still delivers great profits to the broker.

Today we are in real estate purgatory.  We’re paying for the excesses of the first five years of this millennium.  Agents have exited the business in droves (this is a good thing), and those who remain are working harder than I’ve ever seen agents work in my life.  Prices are falling, interest rates are low, yet despite great government incentives, it’s hard for people to buy today.  Financing requirements are tough, time-lines are longer and there’s lots of uncertainty around every corner.  It’s a simmering soup of conflicting forces struggling to find a way out of the cauldron.

Here’s a great business truth:  you don’t make huge market share gains in the good times.  The market share battle is won in times like these, times of crisis, times of chaos.  As we emerge from this, the consumer is going to be making a choice about which real estate companies he wants to see in the future.  He’s got lots of baggage.  He remembers the huge commission expense that showed up on the HUD 1 last time he sold.  He has gained access to much of the information brokers and agents kept from him in the past.  And he’s learned from the banking business and the stock brokerage business and the travel business that he’s able to do a lot of things on his own, without the help of a knowledgeable expert.

I don’t think he’s going to be choosing one of the Big Five (or Six or Seven — it doesn’t matter:  they all have the same tired, agent oriented model).  He’s going to be making a new choice, one that fits in the new world of empowered consumers.  This is going to be fun!

Do-It-Yourself

Most people don’t want to attempt the sale of their own property without professional help.  That’s smart.  There are so many things that can go wrong, so many landmines on that path; and these are BIG things that can cost a lot.  Still, when the alternative of paying, say . . . $15,000 or more in sales commissions is considered, some elect to brave it on their own.  And sometimes they’re even successful.  Most of them, however, say they’d never do that again!

The problem with Do-It-Yourself is the definition of ‘it.’  What is it you are going to do yourself?  The whole thing?  Pricing? Preparation? Marketing? Screening? Showing? Open houses? Contracts? Arranging financing? Handling details? Solving problems?

Frankly, I don’t like that definition of ‘It.’  It’s too big.

But, what if we defined ‘It‘ as simply being those things any capable homeowner could do for him or herself?  What if we pull out all of the technical aspects of selling a home, all of the tasks that take specific knowledge and experience, and shortened our list of ‘It‘ to:

  • Showing the home (I know:  50+ years of REALTOR-speak has conditioned us all to believe we can’t do this well, but, come on:  who knows your property better than you?)
  • Holding open houses

Now, that’s an ‘It‘ I can live with! Especially if it means ‘It‘ can save me big bucks!

And, guess what:  it can.

You see, one of the many things Don Taylor, the founder of Help-U-Sell, questioned about the Ordinary real estate business way back in 1976, was the role of real estate agents in the typical office and the expense associated with having them.  Instead of a real estate office with 50 or 100 agents stumbling around doing half a dozen deals a year each (which, by the way, is a true picture of what an Ordinary real estate office is:  that’s  normal for them), he wanted a handful of agents, focused on a specific job description, doing four or more times the average production of agents elsewhere.  To realize this vision, he looked at the list of things agents have to do in a real estate sale – which is similar to our big list of of ‘It‘ above – and tried to pare it down.

He recognized that most agents spend huge amounts of time opening doors for people and sitting in open houses.  Overheard at a REALTOR meeting:

What did you do last Saturday?

What a day!  I had to show one of my listings in the morning – someone called and wanted to see it.  I drove 30 minutes to get there, waited another 30 minutes  . . . and they didn’t show up.  So, that was my morning.  Then I had an open house in the afternoon, which meant I needed to start an hour early putting out signs and making sure the house was ready to show .  And then it rained all afternoon, remember?  Hard!  I sat there for four hours with my lemonade and cookies and didn’t see another living person.  

Gee, why didn’t you just close up shop and go home?

Believe me, I wanted to, but I promised the seller two open houses and this was the day they chose, so I was stuck.

Don decided that a typical homeowner – carefully prepped by a sharp agent – could easily show his or her own house and, with a little more preparation, hold an open house.  That would save a lot of time in a typical agent’s career – and saving time saves money.  Whose money, you ask?  In Don Taylor’s mind, it saved the homeowner money.  After all it was the homeowner taking over these simple tasks that steal agents’ time.  With a seller participating in this fashion he would need fewer agents and could charge less.

There’s more to how Help-U-Sell brokers are able to charge less and still make more than their Ordinary counterparts.  There is a ton of difference in how Help-U-Sell offices approach the business – marketing, lead capture, incubation, transaction processing – but for now, we’ll stay focused on this one aspect:  Seller Participation.

Think about it for a moment.  You’re a home seller.  It’s a beautiful Thursday afternoon.  You’re home, working in the yard.  The house is neat and clean . . . what the heck!  Why not put out the Open House sign and a few directionals.

Meanwhile, Ms. P, always looking for her dream home, takes a new route from the grocery store and finds your open house.  After a bit of friendly chatting, you get her name and contact information (your agent prepped you well), and take her through the house, which she loves.  She wants more detail and might want to make an offer.  You hand her your broker’s card and tell her he will be in touch.  You wave goodbye.

You call your broker, who calls Ms. P, has her come to the office to answer her questions and have her pre-qualified for a mortgage.  Then he brings her back to the house for a more in-depth tour.  That evening, he comes back with her offer and earnest money check.

You found the buyer yourself.  There was no outside broker or agent involved.  When the sale closes, you’re only going to have to pay your Help-U-Sell Low Set Fee.  It is a successful sale – and you saved thousands of dollars in commissions!

That’s a Do It Yourself I can live with!

 

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