REreflections.com http://rereflections.com Reflections on the Real Estate Industry and Real Estate Investing Mon, 06 Mar 2017 01:49:14 +0000 en-US hourly 1 11312854 Do Some Business Models Make Bad Real Estate Agents? http://rereflections.com/do-some-business-models-make-bad-real-estate-agents/ http://rereflections.com/do-some-business-models-make-bad-real-estate-agents/#comments Mon, 06 Mar 2017 01:49:10 +0000 http://rereflections.com/?p=1392 Read more →

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On Facebook today, Brad Inman was complaining about the lack of skill and courtesy demonstrated by an agent that he contacted as a consumer. That lead to a conversation about how low the bar is in the industry, and the usual complaints and aghast responses from some very skilled and professional people. Same old, same old. But why does that happen? Where was the supervision that could have helped that agent do a better job for someone in the industry that could certainly have been a wonderful source of future business?

It strikes me that the competition for agents created by different business models has led the real estate agent to assume that they know everything, well before they know anything –  And it also struck me that some business models do less to improve the competence of agents, and more to degrade the level of service received by consumers than others, so I thought I would throw those thoughts out to see if I’m alone in my concern.

Essentially there seem to be three types of business models in the real estate industry;

  1. The traditional model where the company (large or small, independent of franchised, virtual or brick and mortar) provides infrastructure, training, and some variety of services. The income of the firm is generated by the gross closed commissions earned by the agents, and the profit of the company is generated by the retained company dollar of those commissions.
  2. The desk fee or “downline” firms, where the company (large or small, independent of franchised, virtual or brick and mortar) may or may not provide some training, but the majority of the firm’s profit comes from desk fees, “up sales” on training programs, and/or selling services or tools to the agents, with some income coming from a modest amount of retained company dollars, usually hitting a ceiling or cap at a modest amount.
  3. The license warehouse where the income of the company(large or small, independent of franchised, virtual or brick and mortar) is generated by a monthly or annual fee – there is little or no company infrastructure, and the profit to the firm is generated strictly from fees. (CAVEAT: I know that there are companies of all shapes and sizes, and many of them have some amalgam of these models, but these are really the core model – I would gladly review any model you think is different from these)

The major difference between the first business model and the other two is that the company’s success in a traditional model relies significantly on the success of the agents – because if the agent does not succeed, the amount of retained company dollar is impacted. In the second model, the company’s success is less reliant upon the agent’s success as long as the desk fees are paid, training is bought, and services are used, and obviously in the third model, the company’s success is only reliant on the number of agents paying the monthly or annual fee. And therein lies the problem – if the core of the company’s profit is recruiting the largest number of agents without regard to how successful they are, you can’t be bothered spending much time on agent development. And since those companies operate on the thinnest of margins, the resources just aren’t there, and part of the agent development that is overlooked is conducting themselves professionally.

All of this leads to a large agent population that isn’t taught the simplest of professional techniques, let alone the finer points of the business, and that’s not good for anyone. Here are a few common issues;

  • Text messages or phone calls asking for information on a property or access to a property without introducing the sender (or caller) as an agent
  • Agents that call and ask for information about the property that is readily available in the MLS sheet. Often prefaced by a “My client saw this property and asked that I call you…”
  • Agents that send email offers without calling the listing agent to let them know that an offer is coming to them leading to;
    • offers that get caught in spam filters and languish without response
    • offers that are not responded to promptly because the listing agent was too busy actually meting with people to respond to their emails until late in the day
  • Verbal negotiations (which shouldn’t happen) and communications from Agents relying on those verbal negotiations who are often disappointed later when the principals refuse to execute the documents because they;
    • Didn’t understand the negotiation
    • Changed their minds
    • Felt uncommitted by their earlier response.
  • Agents that call the advocate for the other party looking for directions on how to ask for something for their client, or agents that don’t clearly understand how to act as an advocate for their client
  • And lots of other stuff – because the fact that you have had a few transactions and no one poked their eye out doesn’t mean that you have a full understanding of the business.  But there is, in many cases, a level of unwarranted pride that agents get just because they managed to survive their first year, leading them to believe that they have it all going on now…

The simple problem is this – when the success of the brokerage isn’t connected to the success of their affiliated agents, the brokerage doesn’t dedicate resources to help the agents grow professionally, and the agents therefore only know what they know – they have no idea what they don’t know about the business, and therefore are not able to grow in the profession in an organized manner, and often even lack basic skill sets that would make doing their job easier, make consumers more comfortable with them, and make other agents feel better about cooperating with them. It’s as if someone decided to open a restaurant without knowing how to design a menu, purchase raw materials, hire staff for the front and back of the house, or budget expenses against the price of their meals in a manner that allows them to be competitive, and then neglected to smile and welcome the consumer when they joined them for a meal.

When a company receives money based on the number of agents they recruit rather than the amount of business they do, they have little to spend on resources to train and support those agents. And that is based on hard economic reality. If the company doesn’t make enough to reinvest in their agents, or have no gain by investing in their agents, they just won’t do that, and the agents, their income, and their professional growth will generally suffer. I don’t think that it’s unusual that in our marketplace, the highest producing agents don’t work for desk fee companies, and the companies that have the highest average per person productivity are companies that have technology support, training, and managers that are dedicated to increasing the productivity of the agents that work there.

In our company,  we tell agents that our commission schedule doesn’t cap because our support for our agent never caps, and when an agent’s commission caps, their employing broker has no practical business reason to worry about any individual transaction, other than in the vaguest and unconnected manner. Not that you might have some desire to help someone you like, you just no longer have a connection to the transaction and therefore are not invested in a successful outcome.

We need management teams who want to help, and agents who are willing to be helped, and to accept that professional development is an ongoing process. Though we all need to make a living, and it is important to do as well as possible financially, both the management team and the sales force need to be dedicated to being the best they can be – not just financially, but professionally

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We’re Not Confused – Your Coach is Probably a Trainer! http://rereflections.com/were-not-confused-your-coach-is-probably-a-trainer/ Sat, 27 Aug 2016 21:27:58 +0000 http://rereflections.com/?p=1395 Read more →

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Recently Brad Iman asked Laurie Weston Davis and I to participate in one of the “Provoke” panels at Inman Connect San Francisco. The Panel entitled “Why Coaches are Unnecessary” featured Laurie and I taking the position that Brokers, not coaches should be responsible for the success of the agents affiliated with their firms, and our two “opponents” were Samantha DeBianchi, and Becky Barrick , who are respectively a Broker Owner who is starting a coaching business and a real estate agent who uses coaches.

The panel was a lot of fun, though too short, and I would have left the conversation to the video in the link above if it weren’t for a persistent claim that Laurie and I were somehow confused about what Coaching was. We’re not.

On Businessdictionary.com,coaching is defined as :”Extending traditional training methods to include focus on (1) an individual’s needs and accomplishments, (2) close observation, and (3) impartial and non-judgmental feedback on performance.”

Dictionary.com says the definition of coach as a verb is “to give instruction or advice to in the capacity of a coach; instruct:”

Merriamwebster.com provides us this:

Full Definition of coach
intransitive verb
1: to go in a coach
2: to instruct, direct, or prompt as a coach
transitive verb
1: to train intensively (as by instruction and demonstration)
2: to act as coach of

So can we all agree that Laurie and I were not unclear when we discussed coaching as training?

The term coach in our industry represents, for the most part, professionals who want to acquire real estate agents as customers for their training programs. Just today, for example, I received a solicitation from a nationally known real estate coach for an event being held in my marketplace. The solicitation says, ”

With one of our master trainers you’re going to learn the latest strategies and techniques to take your business to the next level!

This event will sell out – registration is limited first 200 sign ups.

87% of agents fail within the first 5-years … our goal is not only to make sure you are not one of them but to make you thrive in real estate!

(The emphasis on all the preceding definitions in mine BTW)

With all due respect to the individuals who claim that Laurie and I were confused about what coaches do, I think that’s a pretty clear explanation of this well-known individual’s definition of their job. A job that they have been very successful at. So this is where I suggest that if a real estate coach looks like a trainer, walks like a trainer, and gets paid like a trainer, IT’S A TRAINER!

The concept is reinforced by that company that promotes their in-house trainers by calling them coaches. The job description from their website says that the job of those individuals are to ” Identify and assist in servicing their training, consulting and production needs.  In this full time position, the Productivity Coach / Trainer is responsible for delivering training to KWCP agents and ensuring that all instructor-led training solutions delivered to agents are delivered with high levels of quality and efficiency and meet the needs and expectations of the agents”

This job, regardless of how you view their ability to do their job actually coincides with the position that Laurie and I took – that it is the job of the broker or brokerage to provide a training infrastructure to assist their agents to grow and become proficient in the real estate business. Even though Becky, who works for one of those franchises, said that her broker’s job was to review her paperwork and assure compliance (my words, not hers, though I believe I am paraphrasing properly) that’s risk management and though important is not the only job of a good brokerage firm.

Training is so important to the job of a managing broker that it is included in job descriptions from ads looking for managing brokers – here are a couple of excerpts –

  • This person will be responsible for recruiting and training top talent, maximizing the productivity and efficiency of our current agents by utilizing our in-house systems
  • Proactively participate in continuing education and assist in the ongoing education of all Agents

To be truly crystal clear, outside of the box Brad wanted us to discuss this in, when you have learned how to do your job really well, and you are listing and selling property at the top of your form, leading your company, or at least in the top 5% of the firm’s agents, and you want to find someone to help you do more than you believe you can? Then maybe an outside coach can help you find what is blocking you from doing more – but if you’re not in that top 5%, then what you should be doing is getting good at your craft by doing what your broker suggests you need to do to generate business and become proficient – and be coached by the one person in the world who has tied themselves to your career and provided you the place to learn and the opportunity to succeed.

Bottom line? It is my belief (and Laurie’s as well I believe) that a well-operated brokerage will provide a training infrastructure for their new and experienced agents. We believe that brokerages must commit to the growth and career development of the people associated with their firm, and that abdicating that responsibility is almost an assurance that the quality of service in the company will suffer.

To those who say that their brokers didn’t provide support or training, I suggest that you find a brokerage that does – this business is too complicated, and your careers are too important to leave professional development to chance.

 

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Lowering the Bar in Real Estate http://rereflections.com/lowering-the-bar-in-real-estate/ Fri, 19 Aug 2016 17:25:55 +0000 http://rereflections.com/?p=1384 Read more →

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h670qzLast week I was complaining about an inaccurate view of the MLS that I saw on Inman News, and this week I’m even more upset about a new business model called REAL. I’m not concerned about the recruiting incentive that I think is an example of misdirection,and a reliance on agents not understanding what constitutes success in the real estate industry,  but I am concerned with the gift to the industry that this CEO is providing. As the article states;

Poleg previously told Inman that he envisions some people looking at Real’s business model, and thinking “I’m able to get a real estate license, and with a little bit of mentoring using that tool — real estate is made easy.”

 

Seriously? Am I alone in my amazement? There are far more people in the United States who have gotten their real estate license and failed than have gotten their real estate licenses and succeeded, and that’s with substantial training being provided, and a manager or trainer or “coach” doing their best to help the new agent. And that’s not even addressing the issues of compliance, ethics, providing an industry level standard of care for the clients (all issues that aren’t even near the minds of new agents), or competing with other agents that are well trained.

Real estate is made easy because they don’t bother talking about the difficulties of being in the business and dealing with consumers on a daily basis. It seems that with 7.2 million in VC money and a killer App, real estate agents don’t need to be trained – they can act as agents for people in one of the most expensive and complex transactions of their lives and do no wrong. So I guess that these agents will have no contractual deficiencies, no communication issues with sellers or buyers, no environmental issues they need to be informed about, no fair housing issues, no transactional problems, no litigation from dissatisfied clients, no disputes with other agents, and no need for the messy business of actually learning the job.

After years of people ranting in social spaces about how “big box” traditional companies recruit too many low-producing and unprofessional agents even though these companies all have structured training for new agents, continued training for experienced agents, and a wealth of management resources directed at increasing agent productivity, we now have a firm that breaks the constraints of traditionalism by building their business model on recruiting inexperienced agents because real estate is so simple that anyone can succeed armed only with the basic license course and an app!

“Training? We ain’t got no training! We don’t need no training!I don’t have to show you any stinking training!” – With apologies to The Treasure of Sierra Madre

I am a fan of technology, and I’m fine with the idea of a new business model, but this is not that thing. The idea of creating a real estate business based on offering a higher commission to agents regardless of their skill, expertise or experience is so 1970s – when it started with Realty Executives and went national with ReMax. And the idea that a company will grow by paying their agents to recruit is at least that old if not older,and was memorialized by KW and Exit Realty, and frankly, both of those franchises need to have people dedicated to recruiting because agents aren’t generally recruiters. In fact, they lose money when they recruit because the time and effort that they devote to that long term relationship building job would be far better spent selling or listing properties if you’re a good or even competent agent. So all we’re left with is that this is a virtual company – again, nothing new, and in my experience, those companies have no assurance that the agents that the recruit will be productive in the virtual environment.

So here’s a company betting on what? The venality of agents that want a higher commission split but haven’t had the production to achieve that in a traditional setting? Agents that have so much spare time that they want to create a one year override on another agent by spending the time to recruit them? On recruiting agents without training them?  Having a great ratio of developers to agents? A referral network of a few hundred agents? That the real estate business is so simple that anyone can do it? I’m just confused, but I’m not smart enough to think that it’s a good idea to get rid of our company’s training, management, recruiting and support staff and believe that our company’s agents will be more productive, we will recruit more agents, and our clients will be better served.

There seems to be a ton of VC money that is willing to invest millions of dollars in backing any run at the real estate industry, without a great deal of investigation into what it takes to be successful in the real estate business. And because they inject large amounts of money into these ventures, without any expectation that they will be profitable for a period of time, it’s hard to determine if they have a project that’s a winner. But I don’t believe that removing knowledge, experience, training and a clear career path is going to be the way to achieve that goal.

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Why You’ll Pry My MLS from My cold, dead hands http://rereflections.com/why-youll-pry-my-mls-from-my-cold-dead-hands/ http://rereflections.com/why-youll-pry-my-mls-from-my-cold-dead-hands/#comments Wed, 10 Aug 2016 19:35:53 +0000 http://rereflections.com/?p=1379 Read more →

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BATMAN MLSMaybe it’s the summer heat, but after reading a recent article on Inman.com entitled “Let’s get rid of the MLS,” I just felt like hitting my head against the wall to relieve the frustration the article generated. Written by Kenneth Jenny, the article has three takeaways according to Inman.

They are as follows:

  • Face it. The MLS industry is a monopoly operating in a brokerage industry that has no alternative.
  • Brokers don’t have the best opinion of NAR, the state association, the local boards or the local MLS.
  • The brokerage industry has long awaited a viable alternative to the MLS.

I feel that these three takeaways seem wildly divergent from reality, and because this is my own blog,  I get to tell you why I feel that way –

Mr. Jenny’s article seems to have a limited understanding of what the MLS is. It is a way to facilitate the efficient operation of individual real estate markets through an offer of cooperation and compensation – it is not a Monopoly. There are hundreds of Multiple Listing Services, owned by Associations, Individuals, groups of Brokers, and/or Corporate shareholders. They are all individual organizations of varying sizes with their own agendas. They are members of various trade associations specifically for MLSs like Cove and CMLS (Council of Multiple Listing Services) and RESO (Real Estate Standards Organization), and they deal with a wide variety of technology vendors. In addition, they have varying levels of service offerings including core, basic and optional services to offer their members. These MLSs have one thing in common – they all have members, and if they didn’t do their job well, the members would leave, or dissolve the organization or start a competing organization (all options that have been chosen by members over the years) so to say that the brokerage industry has no options, is to ignore the facts.

Point two? An opinion of Mr. Jenny with absolutely no support. I’m a broker, and I have a really good opinion of NAR, my state association, my local boards, and my MLS. In fact, my company has more past Presidents of our local Associations than any firm in our marketplace. And there are a huge number of people just like us. People that serve on committees act as directors, work on leadership teams, attend educational events, and participate in the efforts of the associations to make the industry a better place. And that doesn’t even include the dedicated people that work as Association Executives and staff members. Each year I travel well over 100,000 miles flying to REALTOR events of all sorts and to speak with REALTORS all over the US and Canada, and I find that the people who know what the associations do are overwhelmingly supportive of them on all levels. People that don’t know what the associations do are more likely to be critical of them because if you don’t know someone or something, it is easier to be critical of it. If I could have one wish, it would be that the average member meet the people that work at NAR in Chicago and Washington so they could see firsthand the level of dedication to the members and the industry that is the norm there. All of that being said, there are, of course, some actions of each of those organizations that I disagreed with or disapproved of, but I live in a world where the majority rules and the rest of us need to be supportive of the decision made by that group.

And finally point three -I don’t know what brokers are waiting for an alternative because my firm is too busy using the existing system. The MLS system in our country works so well that the average agent never worries about where to find property, or if they will get paid if they make a sale. And that security is created by this unique system of competing while we cooperate with each other. If something works and works well, why would anyone be looking for an alternative?

So let me give you three  four takeaways of my own;

  1. The offer of cooperation and compensation assured by the Multiple Listing system is crucial to the operation of the real estate marketplace.
  2. Real Estate agents and brokers take the MLS for granted the same way we all take air for granted. We don’t recognize how precious it is until we don’t have it.
  3. MLSs all across the country are engaged in efforts to improve their services and the member’s experience through their membership in organizations like COVE, CMLS and RESO.
  4. We are the Associations and the Multiple Listing Services, and through our participation in these organizations we can impact the industry in a far greater manner than we can in our individual businesses

My MLS allows me to operate my business,grow that business and serve my clients in the most efficient manner possible,and facilitates my business, as it has in the past, and will in the future. You will certainly need to pry it from my cold dead hands if you want to replace it because I’m thoroughly convinced I need it – How about you?

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Why Haus is No Uber http://rereflections.com/why-haus-is-no-uber/ Tue, 09 Aug 2016 10:59:34 +0000 http://rereflections.com/?p=1365 Read more →

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Fair" - You keep using that word, I don't think it means what you think it meansYou can tell that the real estate market is recovering because new business models spring up to take advantage of the growing market. We see more articles about  “disruptive” business models, and people outside the industry come up with “new” technology offerings to solve problems they perceive exist in the real estate process. Haus.com is just the latest.

Recently one of the Co-founders of Uber introduced a website called Haus, and because he was involved with Uber, the roll out has more credibility on the face of it. Haus is a negotiation platform. As reported by TechCrunch, the platform lets “sellers put their listing on the platform, where buyers and their agents can both post their offers, amend them, and see an anonymized version of other offers that have been made on the property.” The platform declares itself “Clear for everyone.Fair for everyone.” All parties are exhorted to be engaged in the “fair for all”. The site promises Sellers that Haus will help them sell, agents are exhorted to “List a home the open and fair way with Haus” and buyers are offered an open and fair home buying experience. Sounds great! Who doesn’t want things to be fair and clear? The truth is that the site promises the unachievable and provides no benefit to any of those parties.

Why unachievable ? Because “fair” is a subjective condition. When a child asks their parents if they can have that candy or that toy, or stay home from school and the answer is “no,” their first response is “that’s not fair!”, and yet from the perspective of the parent, their action was not only fair, it was in the best interest of the child. So assuring a consumer that using a particular platform will result in their achieving a subjective state is just, well, unfair (sorry, I couldn’t help myself)

The second problem is that no one in the real estate transaction actually wants the transaction to be fair, they want it to be in their best interest. That may not be the PC thing to say but it’s the truth nonetheless, and it’s obvious to anyone who is intimately familiar with the way negotiations work. The conflicts or interests are obvious at first glance – buyers want to purchase a property at the lowest price and sellers want to sell their home for the highest price. even more, buyers want the property to be in as pristine a condition as possible and sellers want to do as little work as possible. So if the buyer and seller have opposing interests in the negotiations for any property, their agents are required to be their advocates and advance those interests. Agency law requires this of all licensees, and those that are REALTORS are further obligated by the REALTOR’s Code of Ethics, so who is left to determine what’s “fair” in a given transaction?

Uber has evolved into a huge company and is the poster child of disruptive tech companies, but Haus is not Uber. Uber offered a faster, cleaner, less expensive and convenient form of inner city transportation than conventional taxi cabs (though the expansion of the Uber experience, frequent “surge pricing” and the uneven quality of their drivers has made the whole process less appealing today than it has been in the past)  . Haus on the other hand, doesn’t offer a benefit to the agent, the seller, or the buyer. In fact Haus not only fails to make the transaction more efficient or more pleasant, it actually weakens the positions of sellers while creating a danger point for buyers in their making their offer. I can’t see where the product makes the home buying or home selling process more efficient, provides savings to the consumer, or reduces the agent’s work load. In short, to me, Haus is a solution in search of a problem – and that’s a problem that I can’t find.

 

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Could real estate teams solve the agent quality problem? Not so much! http://rereflections.com/could-real-estate-teams-solve-the-agent-quality-problem-not-so-much/ Wed, 06 Apr 2016 01:59:59 +0000 http://rereflections.com/?p=1356 Read more →

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Willy Wonka Smiling with the caption "There is no right answer for the wrong question"

There is no right answer for the wrong question

I enjoy reading industry news and opinions, and Inman News is one of the sources I turn to frequently. Just this past week there was an article entitled “Could real estate teams solve the agent quality problem?”, an interesting question, but one that is based on a misunderstanding of what real estate teams are, what they aren’t, and why they exist.

Part of the problem with the question is that you need to define the term “real estate team”. No particular structure represents a real estate team. As I travel around the country, I see a lot of different arrangements that are called teams in their respective firms. For example, an individual who has a partner, a professional whose son or daughter is joining the brokerage where they work, a listing heavy agent who has an agent working with them to show buyers homes so that they don’t have to be bothered, or a large complex operation within a brokerage are all given the same title in different places. Because of that lack of uniformity, the question is fatally flawed.

The second problem in the phrasing of the question arises because real estate teams are not intended to facilitate training of agents in any manner. They’re business units. And love them or hate them, they’re business units that are popping up and getting a lot of attention, not all of it good. Regulatory agencies across the country, for example, are almost uniform in their dislike of this intermediary level of salesperson supervision that is, in most jurisdictions, undefined, or poorly defined at best.

But even with the flawed question of the title, and the other flawed questions and inaccurate answers that arise from it, there was a thought raised that might warrant further investigation or cogitation. The idea of only tasking new agents with one aspect of a transaction to avoid overloading them as they learn their new career is a fascinating concept.

Think about an agent who is just starting and is trained just to respond to buyer inquiries and show properties. No marketing, no listing training, no rentals, no personal branding, just responding to buyer questions and showing homes. We could even restrict their early activities by having a more senior agent meet with the consumer at the initial interview to help determine needs abilities and motivation and then meet with the customer after the showings to de-brief the agent and ask for the sale if appropriate.

The idea is not new – in fact, decades ago, when I started in the real estate business, some of my training was handled in that manner by the brokerage where I worked. A relatively small brokerage, who wanted their agents to learn to do specific things before they expanded their professional skill sets started me with the simplest tasks. I was told to make appointments, show houses, and then come back to have the manager meet with the customer – while I watched and learned the next set of skills. In the commercial world, agents are often not allowed to work on larger transactions until they have one or two smaller leasing transactions completed. The theory is that the smaller lease has all of the problems of a larger transaction, but the risk to the company is limited.

Though the writer suggested that a team environment could make that work, and a brokerage could not, that’s just not true. In fact, the issues and economics that would challenge that approach don’t differ for a team or a brokerage. In fact, teams have far less educational infrastructure and the high producing agent who started the team will likely have less time to supervise their subordinates than the management team at a brokerage. If the smaller unit premise was a sound one, smaller brokerages would have more highly trained agents that larger ones – something that just isn;t reflected by reality.

The facts of the matter are simple. Though many agents fail because they join companies too small to have any formal training program, there are as many associates who fail because they went through the brokerage training program and then failed to execute against the training they receive. The proof of that is that the wildly successful agents in that brokerage also attended that same training. The difference? Not just supervision or the type of training, but their work ethic and whether they did what they were trained to do.

After recruiting and training real estate professionals for decades, it is evident to me that the success of the agent is directly related to the drive and effort the agent brings to the job, followed closely by consistency and persistency. If an agent does what they are trained to do, again, and again, and again they will get the results they want. And if the agent is doing the right thing and not getting the rigth results, they need to meet with their broker or manager, mentor, or team leader to be sure that they are doing it the right way. In the words of Pete Cashmore,founder of Mashable, “Execution really shapes whether your company takes off or not.” and the new agent’s execution will shape whether their career takes off – not being on a team.

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When Your Social Marketing isn’t Social – or Marketing http://rereflections.com/wne-your-social-marketing-isnt-social-or-marketing/ Thu, 24 Mar 2016 02:24:23 +0000 http://rereflections.com/?p=1331 Read more →

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Why isn't social media magically solving all of our problems cartoon

cartoon courtesy of Tom Fishburn www.marketoonist.com

Back in the stone age (around 2006) social media platforms were new and exciting and exploding into the awareness of individuals and business communities alike. Now, 10 years later, Facebook, LinkedIn, and Twitter have become a ubiquitous part of marketing, and an extension to broadcast media like newspapers, TV, and radio stations as people send in crowd-sourced material, and entertainers and personalities use these platforms as extensions of their shows. But even with large corporations co-opting the conversation in some instances, the magic of social platforms is still best found in the conversations that we have and the real relationships we establish online.
It may be a little more challenging today to cut through the noise, and the platforms are still shifting as some companies sell or fail and others appear amidst the clutter.

Real estate agents, always chasing the elusive magic bullet that makes the job of prospecting easier, and the vendors that want to sell products and services to them see the social spaces as huge billboards or bullhorns for broadcasting listing inventory to the networks of the agent and everyone they know. At least twice in the last month I have had vendors tell me how great it would be if every listing of every agent in our company was to be featured in the social streams of every other agent in the company. They take about how creating thousands of listing ads placed (IMO) exactly where consumers don’t want them, in the stream they use to follow their friends and family or to share with them the details of their perfect lives (or their tough lives).

I don’t think anyone has ever woken up in the morning and said “I think I’ll check Facebook (or twitter, or Instagram, or Pinterest or Snapchat) to see if there’s a property I can buy” – and if I’m right, then what are those non-ad “ads” doing in our Facebook stream? Likewise, I don’t think that any social space is where people go to look for open houses, and yet weekly I see people sharing those events with people that they call friends… but is that something you would do to your friends? Do you call them on Friday or Saturday each week to let them know where you’re holding an Open house?  Or do you, at least, text them all? Or email them all? Of course, you don’t – your Momma raised you better than that! So why abuse your digital community? Did they somehow offend you? Or do you think it’s OK because someone, somewhere, told you it was a great marketing idea?  Because they were wrong- in a huge way that could cost you real relationships – because these online relationships are real relationships.

So if you want to use social spaces, consider using them in a social manner. Talk to your community about what they are interested in, not what about things that serve your business interest. Celebrate their successes with them, share their agony or stress when appropriate, and do so out of real concern, not as some electronic “lip service”  – then you will be a valued member of the tribe or group or community, and as a valued member, you will increased your sphere of influence as an individual and a professional.

If networking is not necessary, and marketing is your main thrust, then consider advertising in the social channels. Use retargeting – or promoted Tweets, or targeted Facebook ads to reach your desired audience with whatever it is you want to sell. It’s far better to be an honest hustler than a false friend, and people will respect you far more. 

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6 Ways to Get Your Buyer’s Offer Accepted http://rereflections.com/6-ways-to-get-your-buyers-offer-accepted/ Wed, 09 Mar 2016 02:29:58 +0000 http://rereflections.com/?p=1334 Read more →

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closingthedeal

image courtesy of uberof202 ff

Like most real estate salespeople, I started my career predominantly working with buyers. They were easier ti find, faster to get appointments with, and their shorter timeline meant I got paid quicker. Like most real estate sales people, I learned that representing buyers meant that achieving my client’s goals relied on working with the listing agent to get them the home they wanted.  And like most successful real estate sales people, I learned that  having a good relationship with the listing agent was often an important part of getting my client’s offers accepted.

I’m not suggesting that any ethical listing agent would close an inferior offer because of their relationship with the agent that wrote it no matter how close, but as a listing agent, I sometimes find myself advocating for the offer written by an agent that I have some respect for. When you don’t have an existing relationship with another agent, how you approach your communications with them can be crucial in establishing the manner in which your offer is presented to the seller. You become the agent you present in your text, email and phone conversations, so how you do that is crucial to being perceived as a competent professional and having your offer well accepted. So here are a few things that would help you make the best impression possible

  1. When you call a listing agent, identify yourself as an agent seeking cooperation by introducing yourself, naming your complete company name and telling them what property you are calling about. Saying you work for Century 21, or ReMax or Keller Williams is inaccurate and annoying unless you happen to be in franchise sales or support. And if you work for a regional brokerage or multi-office operation, you might want to let them know which office you work out of.
  2. Don’t meander in your conversation. Everyone is busy, and not everyone has time for small talk with someone they don’t know. Be considerate of the other person’s time. Have any questions about the property organized so you can communicate in a professional manner.
  3. Don’t ask the agent to do or tell you things that may be contrary to the seller’s best interest. Asking if there are multiple offers is one thing, but asking if the agent is “expecting other offers” is a little much. Asking the listing agent to call you if they get an offer from someone else so your buyers can decide if they want to put in an offer isn’t necessarily a reasonable expectation.
  4. Don’t try to “play” the other agent. They know their inventory. They know that the unrepaired REO property needs work. They  understand the negative points of the house as well as its positive points, and reciting the obvious to me will not make your inadequate offer look any better, in fact it may make me more resistant to the idea of your offer, and that is bound to come through when discussing it with the seller.
  5. Don’t call the listing agent and ask them about low-ball or verbal offers because “you don’t want to waste their time”. This is what we do for a living. Making offers and presenting is how we get paid – we should not consider it a waste of anyone’s time. If your buyer is serious enough to go through the process of reviewing a contract and making a substantial deposit, the listing agent should be willing to present the offer for the seller’s consideration. You’re wasting my time when you call me and ask me to negotiate verbally on an offer that neither you nor the buyer are serious enough about to submit properly.
  6. Call the listing agent and inform them if you are emailing an offer. I don’t open any attachments on unsolicited or unexpected emails from random email addresses. That’s how you fill your computer with malware and viruses and can put your entire company at risk. Even if the subject line cryptically says “Offer” , or “Contract”. Again, take a little time to get it right.

I know it might seem that all of this is simple professionalism or etiquette, but in our hurry up and get it done world of texts and emails and business done from a distance, we sometimes build barriers when we mean to build bridges. If you want to avoid that, then these six simple steps will help you get where you want to go.

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How To Solve The Four Biggest Problems With Real Estate Branding http://rereflections.com/how-to-solve-the-four-biggest-problems-with-real-estate-branding/ Mon, 11 Jan 2016 16:27:28 +0000 http://rereflections.com/?p=1318 Read more →

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13985BirdsEyeViewWith agents trying to differentiate themselves from other real estate professionals, personal branding has become a popular DIY marketing skill for many. And yet a lot of them seem to get it wrong.  Like every other real estate professional I spend a certain amount of time in real estate centered Facebook groups. In one of them, I started seeing a lot of conversations about agent’s personal logos, and a lot of “Which logo do you like?”. Being a fan of crowd sourced opinions, and always having an opinion or two to share, I would take a quick look, and I noticed that most of the logos, and most of the branding presented by a lot of these agents were violations of state law and NAR’s Code of Ethics. The problems seemed to boil down to a few thing that were more misunderstood than willful violations of these two sets of standards, and it seemed to result from a lack of information on the part of the individuals involved.

The sticking point are two. Most state regulations require that you name your employing broker so the consumer knows who you work for and who to complain to (or about) if they have a problem. Since most state regulations require the broker to be responsible for the licensees in their company, this is a simple common sense aproach.  Secondly, Article 12 of NAR’s code of ethics states. “REALTORS® shall be honest and truthful in their real estate communications and shall present a true picture in their advertising, marketing, and other representations. REALTORS® shall ensure that their status as real estate professionals is readily apparent in their advertising, marketing, and other representations, and that the recipients of all real estate communications are, or have been,
notified that those communications are from a real estate professional.” It would seem that telling people who you work for is a pretty basic truth to tell a consumer. But just in case you’re still confused, Standard of Practice 12-5 says “REALTORS® shall not advertise nor permit any person employed by or affiliated with them to advertise real estate services or listed property in any medium (e.g., electronically, print, radio,television, etc.) without disclosing the name of that REALTOR® ’s firm in a reasonable and readily apparent manner. This Standard of Practice acknowledges that disclosing the name of the firm may not be practical in electronic displays of limited information (e.g., “thumbnails”,text messages, “tweets”, etc.). Such displays are exempt from the disclosure requirement established in this Standard of Practice, but only when linked to a display that includes all required disclosures.”

Here are the biggest mistakes most agents seem to make;

1. Advertising yourself as a Business

Real Estate Agents don’t work for themselves. I know that it isn’t popular to take this position, and I’ve been involved in any number of heated conversations around this topic, but the facts are simple and aren’t really open to interpretation. If you have your license in a company that is owned by someone else, you work for them. True, you work for them as an  independent contractor, and you are responsible for your own success or failure, but according to state law, all contracts with a real estate company are between the consumer and the company, not the agent. If your broker closed their company tomorrow, you would be forced to either find someone else to work for, or to actually get a broker’s license and become a licensed real estate company. All of your exiting contracts would be disposed of in the manner determined by your broker or your state regulatory body, but certainly not by you. Therefore by definition, you work at someone else’s company and you need to tell consumers where you are licensed. Your state regulations probably require that you tell people where you work whenever you advertise yourself as a real estate professional, requiring that you name the brokerage through which you are licensed. There is a reason that they call them employing brokers.

2. Not Naming the Company Where They Work

Real estate professionals have been all over the idea of social media marketing for years. There isn’t space or time in this post to discuss all of the things the they do right and wrong, but one thing that seems to be done poorly more often than not is completing profile information on social sites with information that informs the consumer who you work for (See #1) – and that’s just not smart (or compliant with state regulation or the Code of Ethics) Take a moment and complete the information with the name of the firm, physical location, phone number etc. Someone wanting to buy or sell just might drop by and look you up.  Oh, and as a bonus, it puts you right in compliance with Article 12, SOP 12-5 that I quoted earlier in the post.

3. Presenting the Wrong Company Name

I don’t know if it’s a result of different business models, or the prevalence of franchise organizations, but misnaming the organization that they belong to is a very prominent problem. You don’t work for Keller Williams or Century 21 or any other franchise organization unless you actually work for the company that sells franchises. If you work for a real estate agency that has bought a franchise, you work for a company with a name that is longer than, and different from the franchise organization. For example the agents that work at my company don’t work for Century 21, they work for CENTURY 21 Advantage Gold – a completely different organization that sells real estate, not franchises. It’s important that you use the correct name of your employing broker when you advertise or speak about where you work. It provides better information for the consumer, makes it easier to find you, and once again, makes you compliant with state regulations and the Code of Ethics.

4. Using a Personal Logo without Integrating your Employing Broker

Presenting an inaccurate picture to consumers is, as you may have guessed by now is a huge problem. Using a personal logo without integrating the name of the employing brokerage does just that. Many of the logos I see agents use would be a good logo for them if they were to open their own company, but if that hasn’t happened, the name of their employing broker should appear whenever the logo appears. And that includes all social media avatars, Facebook pages, LinkedIn profiles etc. (Back to Article 12, SOP 12-5 and the state regulations here)

So Who Cares?

Well, frankly, you should. You agreed to follow the state regulations when you got licensed, and as a member of NAR, you agreed to abide by the Code of Ethics. But let’s look at this on an even more pragmatic level. Why wouldn’t you want to leverage the value of your company and their brand when advertising or doing business with consumers? I have always taught that you need to answer 4 questions to get a consumer to do business with you;

Why should I use a REALTOR?

Why should I use your brand?

Why should I use your company?

Why should I use you?

Like any good set of sales questions, the answer to each question sets up the answer to the next question, and makes it easier for the consumer to understand all of the value that you and all of your relationships bring to their real estate need. Don’t think your company provides any value to the consumer? Maybe you should investigate their value package to determine whether you’re missing something. May you should look at affiliating with another company that does provide that value. Or maybe you should open your own company. Then you can worry about whether the associates that work with you are compliant with the law and the COE when they decide they want to develop their own personal branding 🙂

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The NAR Code of Ethics is NOT Illegal (Definitely) http://rereflections.com/the-nar-code-of-ethics-is-not-illegal-definitely/ Fri, 19 Sep 2014 20:12:43 +0000 http://rereflections.com/?p=1302 Read more →

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iStock_000006938226XSmall copyDid you ever have a friend that you really like and respect who sometimes drives you crazy? Rob Hahn fills that slot for me.

I love talking to Rob, conjecturing about the future of the business and having those long late night Frat House beer infused conversations that range over the wide open spaces of “What if” and “If that then this”, but sometimes he draws conclusions and paints pictures that make me wish he wouldn’t draw or paint at all because he get people excited about things that they really needn’t be concerned about. His blog post entitled “The NAR Code of Ethics is Illegal (Probably)” is a prime example of that.

Rob explains that NARPM, a professional organization for property managers has entered into a consent decree with the FTC centered around that groups Code of Ethics. Now while I am not a member of the group, its nice that they aspire to have a code of ethics, but writing one of those is a difficult job – far more complex than it might at first seem.

In Rob’s blog post, he suggests that their COE is similar to NAR’s Code of Ethics, which is the result of either hasty reading  or poor analysis.

Rob quotes the official press release which says :

The FTC’s complaint against NARPM, which represents more than 4,000 real estate managers, brokers, and agents, alleges that NARPM and its members restrained competition in violation of the FTC Act through provisions in its code of ethics that restrict comparative advertising and solicitation of competitor’s clients. The provisions read, “The Property Manager shall not knowingly solicit competitor’s clients,” and “NARPM Professional Members shall refrain from criticizing other property managers or their business practices.”

The proposed consent order settling the FTC’s charges requires NARPM to stop restraining its members from soliciting property management work, and from making statements that are not false or deceptive about a competitor’s products, services, or business or commercial practices. NARPM also must implement an antitrust compliance program, among other things.

He then goes on to say : “As all REALTORS know (or should know, if they are members of NAR, and therefore subject to the Code of Ethics), those two provisions are exactly equivalent to the Code of Ethics Article 16 and similar to Article 15.”

And he couldn’t be more wrong – REALTORS should actually know that these two clauses are very different from the Articles that Rob quotes, and as a result avoid the very issues that the FTC censured NARPM for. 

Article 15 of the code actually says “REALTORS® shall not knowingly or recklessly make false or misleading statements about other real estate professionals, their businesses, or their business practices. (Amended 1/12)”.

Nothing there about criticizing other members at all – say what you will – have whatever opinions you wish- criticize anything you like – as long as you don’t say false or misleading things about that person. A far cry from the offending NARPM article.

Rob seems to have difficulty with the word “misleading” in the article (though the word “false” is the key here I think) and says ““Don’t work with Jones because she’s senile” is probably misleading. “Don’t work with Jones because she doesn’t have a college degree” is probably not misleading.” I think he’s wrong.

These are factual matters –  If you said that someone was senile, without their having been diagnosed as senile, you are being misleading – specifically because you don’t have the medical authority to make that claim. And if Jones doesn’t have a college degree, you aren’t being misleading. You might even say that in your opinion a real estate agent needs a college degree and you would not have violated the Code. Its not as difficult to determine as Rob indicates, and we have lots of professional standards panels that are trained to help determine the facts of such a case.

Article 16 that he refers to says “REALTORS® shall not engage in any practice or take any action inconsistent with exclusive representation or exclusive brokerage relationship agreements that other REALTORS® have with clients. (Amended 1/04)”

Nothing here about soliciting clients – just about avoiding interference with two people’s contractual agreements. In fact, the issue of solicitation is clarified in Standard of Practice 16-3 which says in part. “Article 16 does not preclude REALTORS® from contacting the client of another broker for the purpose of offering to provide, or entering into a contract to provide, a different type of real estate service unrelated to the type of service currently being provided (e.g., property management as opposed to brokerage) or from offering the same type of service for property not subject to other brokers’ exclusive agreements. ”

The Code goes an extra step to explain that solicitation of consumers in areas where they are not already obligated by contract to another member is absolutely fine – again something far from NARPM’s COE, or the conclusions that Rob has jumped to without reviewing the Code. Rob’s examples of people soliciting business at Open houses or at existing listings happens now in slightly different forms when agents solicit future or different business from clients of other REALTORS, while avoiding interfering with their current contracts.

NAR’s COE is 101 years old. It first iteration wasn’t even adopted by NAR until they had worked on it for 5 years.  It is reviewed and modified in an ongoing manner, under the eyes of the Professional Standards Committee, the Interpretations and Procedures Advisory Board, the amazing staff at Law & Policy, and the governing body of NAR. Those same staff members have met with and spoken to the FTC and the DOJ more times than anyone cares to count, and is a model of thoughtful analysis of the issues surrounding a professional interactions with consumers, clients and other professionals.

Each Article and each Standard of Practice is discussed and reviewed in what seems like endless meetings before words are changed or positions adopted, and that thoughtfulness should not be brushed aside by blog posts comparing it with the product of some other organization without the history or effort that has been spent creating our current Code.

Rob says ” As far as I’m concerned, based on the facts of the NARPM case, NAR’s Code of Ethics will be changed. ” He’s wrong and his concerns have no basis – and I wish that he would become more familiar with the Code and the processes surrounding it before engaging in headline hyperbole – he’s far better than that 🙂

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