Winning with Finance

Lynne Holcomb (Help-U-Sell Cape Coral) came up to Sarasota yesterday for the Florida rally.  She’s a 20 year member of the Help-U-Sell team and has always been a strong player and participant.   Early in the day,  one of the Bank of America representatives went through the Alliance program we have with them.  She showed us a place in the BAC mortgage center website where a borrower can input their income and expenses and get down to a real ratio driven picture of their financial capabilities.  It was really quite remarkable and sparked a spirited discussion about financing in general:  new programs, procedures and products. 

I watched as Lynn stepped right into the conversation.  It was very clear she knew exactly what she was talking about and at times it was hard to tell who was the loan officer.  Her detailed understanding of real estate financing was powerful and impressive.  She and John Powell agreed that knowledge of finance and the ability to discuss financial options with prospective buyers is essential to gaining buyer loyalty.  It’s a value package they recognize and, once they see it, they don’t want to leave it. 

When I sold real estate (you know:  back when dinosaurs roamed the earth), finance was something you just learned.  You studied it, tasked your favorite mortgage people with keeping you up to date and you talked finance all the time.  Your knowledge of finance enabled you to makes sales that  you’d otherwise lose.  Somewhere in the ’90s there was a shift.  It seemed that agents knew less and less about the financial products that enabled their business.  Increasingly the lender was brought in to answer the most basic finance questions. 

Of course I’m talking about traditional agents here — I had not encountered Help-U-Sell yet — and I think the aversion to finance was a result of a couple of broker driven factors.  First, as the mortgage industry became more regulated and more complicated, brokers were concerned about the liability of agents trotting out their possibly incomplete or inaccurate understanding of finance.  Understandable.  Second, brokers found that they could retain their solid middle producers if they kept them slightly dependent on office resources and so de-emphasized the importance of agents understanding finance.

Since Help-U-Sell is a broker-driven, consumer-centric model, I’ve seen a much greater willingness among our people to learn and use finance in their day to day real estate practice and I’ve seen it make a huge difference, especially with buyers.  Buyers, like any other consumer, will stick with you if they perceive value.  Everyone can show them property — some will zero in more quickly on their needs than others, but it’s not a difficult process.  Anyone who pays attention can tell them a little about each community.  But it’s the pro who can show them how finance can make the home more affordable, how it can solve many of the problems that come up in a real estate transaction.  That’s value. 

Yes, you do need a strong relationship with several lenders you can call for the very detailed explanation of finance.  But you also need to understand the products, what they can do, how they fit and the benefits and pitfalls they bring to the transaction.  All you have to do to see the power of this knowledge in action is to listen to Jack Bailey talk about creating a ‘Real Estate Plan’ for a prospective purchaser.  I’m sure Lynne Holcomb is just as impressive. 

Make time with your favorite mortgage people to take you through their portfolio of products.  Have them show you how they work with qualifying guidlines and underwriting requirements.  Become a student of finance and then don’t be afraid to talk about it with your customers — with the caveat that you’ll want them to discuss this with a mortgage rep too! 

I remember a sad cartoon I saw once.  It wasn’t funny, really.  A real estate agent and buyer were standing outside a house that was for sale.  The buyer says, ‘Hmmm.  $180,000, right?  If I put down 10% and get a 30 year fixed, roughly what would my payments be?’  The agent is digging in her bag.  ‘Hang on a second,’ she says, ‘Let me call my lender.’  Sad.

Revisiting the Elevator Speech

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!

Are the Yellow Pages Extinct?

It’s a real question — one I hope you’ll answer in a comment.  I’m asking because I found myself irritated this morning.  It happens about once a year. 

I live in a 24 unit condo.  Every year, about this time, a man with a dolly and 24 yellow-bagged copies of the Yellow Pages makes a visit to the YPbuilding.  He leaves the books in a stack by the mailboxes.  Every year I find more and more of the bagged books (mine included)  in the recycle bin in the garage.  Last year, probably 18 of 24 were never taken into the home.  That’s what irritates me:  the incredible waste of natural resources involved in printing the thing for no reason then to recycle it. 

I know I’m abnormal (in so many ways), but I haven’t used YP in years.  If I want to find something locally I usually Google the name of my city and the service I seek and then review a few websites.  Is this true for you?

So tell me:  do you use the Yellow Pages to advertise your business?  Do you have a line ad or a display ad?  Does it produce leads for you?  Just click ‘Leave a comment’ above to respond.

Agents Are The Problem, Right? Wrong

Help-U-Sell is a broker-centric business model, which is to say:  the broker is in control of the business.  He/she takes responsibility for studying the market, designing and implementing the marketing, generating the leads, converting them to listings and sales and ensuring the survival and growth of his company.  That does not imply that there is no place in a Help-U-Sell office for agents.

True, if you look at the issues that plague traditional real estate offices, you can easily conclude that the agents are the problem.  Their huge commission splits, constant shopping for a better deal and complacent acceptance of sub-standard productivity have all but destroyed any chance for a traditional broker to make a reasonable profit.  But truth is:  that’s not a problem with the agents, it’s a problem with the broker. 

Traditional brokers adbicated their leadership role to agents back in the 80’s.  Forced to compete with 100% companies, they allowed their commission splits to soar to impossible heights.  Less company dollar meant cutting marketing budgets, focusing what cash there was on attracting more agents.  (It’s really sad that so many brokers who averaged less than 25% of GCI as company dollar thought that if they just had more agents they’d somehow make it up in volume!)

The issue isn’t agents.  It’s broker control.

The Help-U-Sell model is absolutely suited to agent populated offices if the broker stays in control.  This means:

  • The broker decides when, where and how to market — he doesn’t leave this up to the agents
  • The broker pays for the marketing
  • The broker considers every lead that comes into the office to be his
  • The broker demands a high level of performance in converting leads to clients to sales
  • The broker hires only when the business grows to the point that another person is needed (the Buyer Pool is his gauge)
  • The broker stays primarily responsible for the listing function.  That means he takes the listings or has an assistant stand in for him.
  • The broker pays buyer agents in the 50%-60% range — which makes sense because he’s furnishing all the leads and is not asking them to knock doors, cold call or take lisitngs
  • The broker holds everyone accountable and does not hesitate to eliminate poor performers

Agents flourish in this environment.  They come to work every day with something to do, confident that there will be another buyer and another buyer to keep them busy because the broker is marketing and the marketing works.

Sellers receive maximum exposure because the office has a well thought out marketing program in place, controlled by the broker, not a bunch of individual agents.

Buyers get to work with specialists who aren’t distracted by the listings that aren’t selling or the ad that’s due today or anything else that goes on in the other side of the office.

The Broker smiles every month when he sees his bottom line.  His business makes sense because he stayed in control.

Client Base Development, Doggie Style

My dog, Homer, is a master at client base development.  I’ve been studying his technique on our walks and believe I have the salient details down.  Homer relies almost entirely on Pee-mail to stay in touch and to communicate his message.  We have half a dozen walk routes we take on a rotating basis and on each one he stops up to 20 times to sniff out his incoming messages and respond with a little dribble here and there.  (Dogs have about 220 Million scent cells in their noses; we have just 5 Million)  Here’s what I’ve noticed:Homer

His commuications are very brief.  He doesn’t waste the other dog’s time by pee-ing about the bush, so to speak.  He comes right to the point and uses the minimum to communicate his message:  usually 10 drops or less.

His messages are focused on things of interest to his client base.  Since they are all dogs, the thing that interests them most is food, so Homer keeps his conversation on this topic.  Today’s message was (approximately . . . I am translating):  ‘Hey, James made pasta with an Alfredo/Tomato sauce last night and gave me some.  It was good!  I also had two Alpo Snaps, but I had to sit up and roll over to get them.’  Short, focused, to the point.

He responds to new messages quickly.  Usually, we just make the rounds:  he stops at pretty much the same trees, bushes and light poles on each of his routes, picks up his messages and responds.  But every once in awhile he’ll pick up something new, probably from a new friend, or on a new shrub.  In these cases, he stops what he’s doing and devotes full attention to learning as much about the new dog as possible and then responds with a quick welcoming splash.

I have to say, it works.  When we meet other dogs out on our walks there is the usual wagging and sniffing ritual and then, sometimes, the surprise of recognition.  Homie will prance about and say something like, ‘Oh!  I know you!  You pee on that palm tree on Third, near Brooks, right?  I remember something in your last message about chewing up one of your owner’s shoes . . . did you get in trouble for that?’ 

OK;  I’m being a little silly, but there is a some Canine wisdom here: 

  • Have a system that occurs regularly, effortlessly and automatically
  • Keep your communications brief
  • Focus on items of interest or of value to your clients
  • Respond quickly to new contacts and get them in the system
  • Be friendly, personable and conversational when you run into any of your people on the sidewalk. 

The sniffing . . . you can probably do without.  A little wagging never hurt anybody, though.

Accessibility Toolbar