Tag: Don Taylor

Of Steve Jobs, the Music Business and Real Estate

Jose Perez of PCMS Consulting is on RISMedia today talking about Steve Jobs and the music industry.  What’s that got to do with us? you ask . . . quite a bit, I’d say.

Before we go there, however, let’s drop into Wall Street.  We often look at the history of the securities business in the last 15 years and draw parallels to real estate.  Remember?  Used to be, we had to contact a broker to trade a stock and we paid a percentage based commission for the privilege.  Stock trading was mysterious, complicated, beyond the grasp of most people and the commissions were, well, just the reasonable cost of entry.  Then along came Charles Schwab with $15 flat fee trades.  Consumers loved it and the industry took note.  The forward thinkers not only shifted to the new model, they enhanced it by putting powerful analytic information in the consumer’s hands on the Internet.

Sound like the real estate business?  You bet.

Perez is saying the same kind of change happened in the Music business.  Remember when we used to go to the music store to buy vinyl LP records, and then CDs?  That’s how music was distributed.  The whole industry was built around the idea of making and marketing these plastic objects called ‘records.’  But then, technology made it possible for people to take the records, digitize them and then share them (often illegally) over the Internet.  The industry reacted not by looking forward at how they might capitalize on this,  but by looking to the courts, suing the most prolific pirates.  Meanwhile, Steve Jobs – a music industry outsider – quietly invented the Ipod – nothing more than a solid state drive with a simple user interface – and the ITunes store for making digital music accessible to consumers.  For 99 cents you could buy a song . . . and, today, that’s what we do.

Just as in real estate, we had a music industry fighting to preserve the status quo . . . and losing; because you can never preserve the status quo.  It is impossible. In both cases we have industries struggling to keep information out of the consumer’s hands . . . and losing.

Want another example?  How about the Travel industry.  Not too many years  ago we used to call a travel agent to book a plane trip or a vacation.  They had all the information:  schedules and fares and so on; and they earned a nice commission for helping us navigate this mysterious process.  How many travel agents do you know today?  Really:  they have become largely extinct!  And how do we book travel today?  We go to the Internet where all the information is housed and make our decisions for ourselves.  Unfortunately, the pricing model for travel has not changed significantly . . . which makes me wonder:  whose getting that commission today?

And here we have real estate:  an industry that justified its percentage based commissions for decades largely by hoarding information.  Then along came Don Taylor (and by the way, he came along a good ten years before Charles Schwab had his epiphany).  He saw a way to do the real estate business not for a nonsensical percentage based commission, but for a Low Set Fee.  He saw all of this hoarding going on and decided that Information Without Obligation would be one of his new company’s core values.  The maturation of the Internet twenty years later put that value on steroids . . .

And how did the Industry react?  It ran in terror for the hills, dug foxholes, locked up the valuables (the information), put its fingers in its ears and refused to hear what consumers were saying.  Even today, with a real estate market undergoing complete upheaval, with change swooping down around us like a Tsunami, how many of the big national brands are talking about their pricing model?  Um . . . none.  Even today, when consumers can (with the click of a mouse) get all the information REALTORS used to hoard, how many are talking about how we can use that fact to streamline the process and make the experience better for the home buyers and sellers?  Um . . . none.

All I can say is:  get ready.  We’re about to witness a magnificent collision.  The vision of Don Taylor is about to come to full fruition as it collides with the reality of today’s consumer, the Internet and the upheaval in the marketplace.  Five years from now as brokers collect their Set Fee at closing, they’ll scratch their heads, look back and wonder:  ‘Did we ever really do business that old fashioned way?’

 

How Do You Frame Your Pricing Model?

Help-U-Sell is certainly NOT a For Sale By Owner company.  Yes, it’s true:  in the late 70’s Don Taylor pioneered the use of the phrase ‘For Sale By Owner’ on the Help-U-Sell For Sale sign.  In time, that phrase morphed to ‘For Sale With Owner,’ but the intent was never for Help-U-Sell to be a stripped down FSBO package vendor.  Our vision has never wavered from the notion that Help-U-Sell is a full service real estate company.

Having said that (and fully embraced it without reservation), I think it might make sense to examine our Consumer offer – the one to Sellers, specifically – and how we present it.

Pictured below is the graphic that is often used with sellers as we talk with them about putting their home on the market.  It acknowledges that there are really three ways a home might sell and prepares the seller for the good news that we charge them, not on some arbitrary percentage basis (no matter how the house sells), but on a logical pricing model that varies depending on how it sells.  This chart forms the real heart and soul of most Help-U-Sell listing consultations.

*Note:  the savings in this example are versus an ordinary broker charging, say, 6% commision on a $300,000 home.

We use the first option, the ‘You Show’ option to talk about seller involvement in the sale process through holding open houses, showing prospective buyers through and talking the listing up at work and in the neighborhood.  If they procure their own buyer in this way, then the Low Set Fee is all they pay; which means  maximum savings.

The second option, ‘We Show,’ is the place where we introduce the idea that one of the Buyer Agents in our own office may be working with a buyer for whom the home might be perfect.  If the seller opts we can include this option as well. (Notice, in this example, the broker charges a set fee on the showing side too and it’s equal to the listing set fee.  There are variations out there, but let’s remember: we are a set fee real estate company.  Shouldn’t the showing fee also be a set fee?)

Finally, option three has us putting the listing in MLS and having the seller be prepared to compensate an outside company and agent should they have a buyer and affect a sale.

Regardless of which options are selected at the time of listing, the seller will always pay based on how the house actually sells.  Even if we put it in MLS, if the seller ultimately finds his or her buyer, all they pay is the option one price: the Low Set Fee of $3,950 in the example.

There was a time when many sellers opted for  option one or one and two, choosing to stay out of MLS all together, thereby ensuring a large savings.  With the downturn in the market, however, this has become a rarity.  Most sellers, with the advice of their Help-U-Sell brokers, want to pull out all the stops when it comes to initial marketing and so go into MLS from day one.

All of this brings me back to option one.  I think it might be helpful to remember that a whole lot of marketing  happens in that option:

  1. A proper price is recommended.  Any truthful agent will admit that 75% of marketing is done the night the home is placed on the market, when the seller chooses a price.  Properly priced homes, marketed well, sell. Period.  Improperly priced homes don’t sell, regardless of how much marketing is done.   That simple Low Set Fee option comes with the credible advice of a knowledgable expert (you) on matters of pricing, terms,  fixing up, showing procedures and a multitude of others things.
  2. The brilliantly beautiful RED Help-U-Sell for sale sign is installed in the yard.
  3. Flyers on the property are created and made available inside the house and out.
  4. Directional Signs, Open House Signs, Sign-in Registers and other tools for holding an effective Open House are given to the seller along with expert coaching on how to hold a effective Open House event.
  5. The Buyer Agents in the office are briefed on the home so that they can talk intelligently about it when inquiries come into the office and do so in such a way that caller interest is maintained, even heightened.  And what do we do with these inquiries?  If the only option the seller has chosen is option one, we send them directly to the seller for showing.
  6. Dozens of photos and a virtual tour are created for the listing so that potential buyers can see it in its best light when deciding whether to proceed with a showing.
  7. The listing is input into www.helpusell.com and is available there for prospective buyers all over the world.  In addition, once on helpusell.com, the listing is syndicated out to dozens of other consumer oriented real estate websites for maximum web exposure.
  8. A QR Code for the listing is generated and made available for use on flyers and on the For Sale sign so SmartPhone enabled buyers can get the information they want, when they want it.
  9. A knowledgeable expert (again, you) is available to help with questions and concerns, to write any purchase agreement and to handle all the details of transactions processing and coordination all the way to and through a successful closing.
  10. And more . . . meaning that every office has other things they may do on an option one only listing.

Look at that list!  That’s a lot of stuff! And you know what?  That may be enough to affect a sale even in today’s tough market, a sale that could yield a very happy seller who saved thousands!

I’m not suggesting you abandon the MLS (although I am looking forward to the next generation MLS – the one that is not connected to your Board of Realtors and whose policies don’t restrict your business).  However, I’ll go back to what I said earlier:

A properly priced listing, marketed well, will sell.  Period.  And that applies no matter what the market realities.

Maybe it’s time to start offering this option more vigorously to our equity sellers who are willing to price right and are interested in saving maximum dollars.  It’s hardly ‘For Sale By Owner.’  It’s full of good marketing and advice.  And remember:  there is a direct coorelation between seller savings and seller delight; between seller delight and word-of-mouth advertising; between word-of-mouth advertising and the growth of your business.

 

 

 

 

 

How To Do It: Step 4 – Ace The Buyer Inquiry

(This is an elaboration ofAnd HERE)

This is the arena.  It’s where all of your marketing dollars and hours of business building activity come together to produce either a potential client or a lost opportunity.  It is the pivot point on which your entire business turns.  And yet it gets little more than a passing thought from most brokers.

I’ve sat in lots of real estate offices and listened to many agents handle an incoming call and have generally been sickened, saddened and disgusted by the experience.

‘Brand X Realty,’ says the duty agent, ‘How may I help you?’

‘Of course, just a moment . . . let me look it up.’

‘That home is priced at $189,500 . . . would you like to go see it?’

‘Well there are others a little less expensive I could show you.’

This is the point at which the ‘agent’ holds the receiver out and stares at it for a moment, shakes his or her head and hangs it up — just like the caller did, a moment earlier.

Listen: I know of no better skill to polish than those required to handle a buyer inquiry if your goal is to improve your bottom line.  And if that’s not your goal, you need to get busy getting publicity for your firm because you’ll be the world’s first official non-profit real estate company!  Step 5!E.   And HERE.

This is a pivotal point in your quest to Rule the (real estate) World, too.  You’ve used your wonderful consumer offering to get more than your share of listings and now the listings are creating inquiries.  You have to capture those inquiries and convert them into leads and then into clients to move to the next steps:  staffing, accountability and closed sides.  You’re not ready for the next step – staffing – until you do this because you have nothing to offer a new recruit unless you have a buyer pool book and you get that by effectively handling inquiries.

There is a set of simple telephone techniques that work together to produce favorable results with incoming buyer calls.  Mastery of the techniques — using an ‘interrupt’ to gain control of the call; never answering a question without asking one to keep the conversation going and earn you more information about the caller; taking advantage of opportunities to demonstrate the value you bring to the transaction, and so on — is very important.  But what’s just as important is attitude.

Funny.  I have a really good friend who will turn 78 in a few weeks.  You’d never guess his age because he looks a lot younger and acts even younger than he looks.  I’ve been thinking of buying an ocean Kayak and a few weeks ago, he agreed to rent one with me — a tandem — to see how it performed.  We put it in the bay and had a great time paddling about, playing with the sea lions.  What I didn’t know until later is that he’s terrified of water.  He never learned to swim.  When I heard this, I suggested maybe he ought to go down to the Y and learn . . . and the other day he had his first lesson with his coach.  I think buried in that verbiage is one of the secrets to staying young, but that’s not the point.  The point is what the coach told him.

He said that, while technique and breathing are very important in swimming, what’s most important is your attitude about water.

That’s true with the buyer inquiry, too.  You have to know, without ever having to think about it, that the person on the other end of the line needs you.  They may have amassed an artificial barricade between you and the need, but it’s there.  You also have to believe right down to your marrow that And HERE.  Honestly, that’s what makes you good on the phone.  It makes you purr with confidence and competence.  You become an irresistible force and you own the call.

So, how do you get to that glorious state?  You have to know your stuff.  You can’t fake it.  You have to know what’s on the market — which means previewing regularly.  You have to know all the ways to buy a home today — which means learning about financing and contracts and keeping up on what’s new.  You need to be comfortable getting down to that caller’s wants, needs and financial capabilities and mixing that information with what you know to produce . . . the dream house.

I know of no better way to build this knowledge and confidence than by doing (really doing) the training exercise our great founder, Don Taylor, created, Step 5!.  It is absolutely what a new agent should begin on day one.  If they do they will have tangible business  in 30 days.  But it’s also what you old dogs should do if you’re running out of steam and fire.  Science to Sales is activity based and if you do the activities you can’t help but create new business.  Plus, no matter how much you already know, you will uncover some real gems while working through the program.

Finally, role playing the buyer inquiry should be like brushing your teeth.  You do it so often that you don’t even think about it.  There is no discomfort, no hesitation, no embarrassment.  You create an office culture of constant improvement through the three P’s:  Practice, Practice, Practice.

So set a goal today:  You want to get contact information and earn the right to continue the relationship with 5 out of every 10 buyer inquiries you receive (of course, this means you’re going to have to fastidiously log and track incoming inquiries!).  Then get busy studying and practicing.

On to Step 5!

It’s About the Buyer, Klem!

I met Don Taylor for the first time last month.  I had a meeting with his daughter, Marci, and when I showed up at the Orange County Starbucks we’d chosen as our meeting place, there stood Don, as well.  Needless to say, it was a thrill and an honor to meet them both.  They deservedly occupy a very hallowed perch at the top of the Help-U-Sell family tree.

We talked about all kinds of things but Marci said something that was quickly echoed by Don:

‘People forget, but Help-U-Sell was always about the buyer.’

(Stop.  Think about it for a minute . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Ok)

I immediately pictured a slide I used in the first round of Help-U-Sell rallies done last year.  It is a simple diagram of how Help-U-Sell generates leads:

Put succinctly, we go into the marketplace, set a fee for our home marketing services that is reasonable and logical, that saves sellers money and still generates a nice profit for the office.  The Low Set Fee* creates interest and results in more sellers inquiring about our service than would if we were ordinary brokers charging a one-size-fits-all, percentage-based commission.

We all know what happens when a prospective seller asks about Help-U-Sell:  they almost always list with us.  So more interest, more inquiries, means more listings.

It almost makes me sick to think about it today, but during the high flying times of 2004, 5, and 6, many Help-U-Sell brokers stopped right there, where the dashed red line is.  They put blinders on and believed that if they just worked listings and didn’t worry about buyers, they’d make plenty of money with fewer staff.  They thought, ‘It’s a sellers’ market.  I have a model that enables me to get more sellers than anyone else.  Why should I scramble around chasing after buyers?’  All you have to do today to comprehend the completeness of that folly is to look around . . . and see that those brokers are no longer with us.  Like the Dinosaur, they became extinct.

You can’t ignore the buyer, no matter how overheated the market becomes.

While listings are not a loss-leader at Help-U-Sell (we expect to make a reasonable profit on them), one of the benefits of having them is the buyer leads they generate.  These are buyers who might buy one of our listings, perhaps generating a selling fee, or buy an MLS listing, thus generating a co-broke commission.  In either case, the buyer side usually generates more revenue to the Help-U-Sell office than the listing side.

That’s why the most popular way to implement the Help-U-Sell model is with the Broker and/or a licensed assistant taking the listings (after all, with our system, it’s not Rocket Science), and licensed agents working with the buyer leads the listings generate.  There’s usually a few more dollars on the buyer side, making splitting commissions with an agent possible.  In most cases we don’t have that kind of latitude on the listing side.

So, here we are in 2010.  The market is still weird, but it’s not nearly as weird as it was last year at this time.  And you know what?  It doesn’t matter how weird the market is anyway;  the great truth is still true:

He who controls the inventory, controls the market

So get out into the marketplace.  Tell your story.  Take more listings.  And then . . . capture, incubate and close the buyer leads those listings generate.  That’s the Help-U-Sell way.

*By the way, Don has no problem with ‘Flat’ fee.  He thought the whole campaign about tires going ‘flat,’ and ‘Set’ fee being preferable was splitting hairs.  I have a feeling the consumer would agree.

The Help-U-Sell Consumer Offering

Remember Denzel Washington in ‘Philadelphia?’  He played the no-nonsense attorney that finally takes Tom Hanks’ case.  Several times in the movie, he stops the person speaking to him and says, ‘Talk to me like I was a five year old.’  It was a plea to be spoken to plainly and clearly so that there would be no misunderstanding.  If you’ll indulge me for a few minutes, I’d like to speak to all of us as if we were five year olds about the most basic of concepts:  The Help-U-Sell Consumer offering. 

The Seller offer is pretty easy.  By easy, I mean I think most grasp it pretty well.  It is:  We charge a set fee for our services which is not only logical, but can also save thousands over what an ordinary broker would charge.  Our set fee is comparatively low for a number of reasons but mostly because we market efficiently* and because we let the seller handle some of the less complicated parts of the process. 

We get all hung up about that last bit.  Somehow the whole Full-Service vs. Limited Service vs Discounter debate trickles in and next thing you know, Help-U-Sell brokers are holding open houses and handling the showings and filling the flyer box.  If you factor all of that into the low set fee, you may be working for $5 an hour when it’s all said and done.  (By the way, I’m all for you holding an open house to find buyers, just as long as you’re not the only one doing it!)

Remember how Don Taylor created this thing.  He meticulously kept track of his activities and paid attention to which ones produced the highest payoff and which could easily be handled by others.  Clerical and admin stuff was assigned to assistants who were paid a reasonable hourly rate.   He realized that some of the things ordinary agents did were probably better handled by the seller and, if taken out of the broker’s job jar, could free him to spend more time on high pay-off activities.  Seller participation was born and suddenly it made sense that the fee was low:  it was a trade off. 

Today, the seller’s phone number has disappeared from the sign.  We’ve grown stingy with those buyer calls and want to field them ourselves.  But seller participation is still key to making this system work.  It allows you to hold dozens of houses open on a Sunday (Instead of just one), allows you to multiply the number of directional signs leading to all of those open houses and frees you from the very basic tasks of opening the door, showing the house, etc. 

As far as limited-service, full-service and discount-service goes, that’s just your competitors talking.  The Consumer doesn’t care, really, as long as the value is there.  And Help-U-Sell is the Best Value in Real Estate. 

We’ve always struggled with the consumer offering on the buyers’ side.  We tried rebates for awhile, but truly, they don’t fit with the logic of Help-U-Sell.  If all you’re doing is giving the buyer $$$ back out of your commission without a specific consumer offer to go along with it, you’re just saying that your commission is too high.  Like the Seller offering, the buyer should save money for a reason, a corresponding action on his part that enables you to rebate some of the cash. 

Here’s what I’m thinking:  Consumers have changed.  They want to do their own research.  They don’t want to sit in the back of your car weekend after weekend looking at houses.  They want access to good information that’s easy to use and they want someone available when they have questions or need a door opened.  I think that might be the basis of an offer.  It might go like this:

“I’m different.  Unlike an ordinary broker who’s going to want to drag you around to house after house after house, who’s going to want to be your only source of information and who’s going to hound you until you buy, I’m going to partner with you in the process.  I’m going to show you how to use the best tools available so that you can do a lot of searching on your own.  Oh, I’m going to be searching too, just in case you miss something, but you’ll have all the time you need to look at what’s available and compare.  I’ll be in touch when I have something important to share and you can call me anytime you need information or have questions.  I invite you to drive by neighborhoods and homes you think you might like to help narrow the field.  All I’d ask is that you not go into any home without me.  I’ve found by helping my buyer clients do their own research – something most want to do today – they get more involved in the process and actually have fun doing it.  Any time you want to see something I’ll be there to take you.  Because you’re participating in the house hunting process, I’m able to rebate $$$ of my commission to you at closing.  It’s like we’re working as a team.  How’s that sound?” 

I believe the low set fee was always a value for value exchange:  the seller got a low set fee because they did some of the low pay-off activity typically done by brokers.  If we’re going to have a similar offer to buyers, it’s got to have a similar exchange, value for value. 

What do you think?

*By efficient marketing I mean that we don’t do what ordinary brokers and agents do.  In an ordinary office every agent is on his or her own.  They take a listing and they devise a marketing plan from scratch on it.  Every agent has a different marketing plan for every listing.  There is no coordination, no maximization of effort and usually no accountability for results.  In a Help-U-Sell office, the marketing is organized, orchestrated, coordinated and controlled by the broker.  He or she has made judicious decisions about where to market, how to market and which properties to feature so that every bit of marketing he or she does creates buyer leads for every listing held.  It’s efficient.  It’s why well run Help-U-Sell offices are lead generating machines.  And it’s something your prospective sellers can understand. 

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