There's more to it than the numbers

I hear the phrase, "It's all in the numbers", often when agents are discussing real estate. It’s all in the numbers – you need so many suspects to get so many prospects in order to get so many clients, so that you can get so many listings or buyers, so that you can close enough deals to make so much money. Numbers, numbers, numbers.

While I understand the mathematical logic of that argument, it has always gritted a bit on me; because I believe that it’s really “all in the people.” I’m just not comfortable with a philosophy that basically says if you get in front of enough people (no matter what your approach and people skills are) that a certain percentage will go with you and then a certain percentage of those client opportunities will turn into sales that you’ll make money off of. That ends up just looking at the people involved as numbers. I also believe it denigrates the role and people skills of the real estate practitioner by basically saying that any idiot who finds a way to get enough chances will somehow win.

 

Sure, I believe that you have to give yourself enough chances. You have to, through efforts of your own, get the opportunities to demonstrate enough people skills to be chosen to represent the owners and their property or the buyers. I also believe that if you limit yourself to some canned, “it’s all in the numbers” approach to what you do, that when you get those opportunities, you will, in fact, end up getting whatever small percentage of deals that fall out of that kind of thinking. Let’s be honest, many buyers and sellers end up choosing their Realtor for really stupid reasons. Many also end up regretting those choices.

 

So, if it’s not all in the numbers; what is the secret to success? I believe the answer has two components and the main one is how you define success. Those who define success only by more numbers – how much they earn from the sales – will likely never even consider the second component – how happy does the final outcome make the client and you? The funny thing is that the agents who focus more on that second component of success most often end up in the long run doing better on the first component. They end up with a constant stream of referral business that is built upon the foundation of making earlier clients happy and which brings in a constant revenue stream. Those who don’t focus upon that people aspect are constantly trying to keep that big, funnel-shaped new-prospect hopper full.

So is it all really a numbers game? No, it is and always will be a people game and the more you focus on that aspect – making your clients happy with the process and the product – the more you will be successful. After a while you won’t have to worry about the numbers, because the numbers will come to you. And the best part is that you will also feel good about what you do and how you do it. Now that’s my definition of real success – doing something that you like and enjoy and making a living off of doing it.

You can't miss, if you'll just try...

“Get the right perspective. When Goliath came against the Israelites, the soldiers all thought, ‘He is so big. We can never kill him.’ David looked at the same giant and thought, ‘He is so big. I can't miss.’"  (Russ Johnston) – from the Jack’s Winning Words blog.

I get the opportunity to help a lot of new real estate agents get started in the business, sometimes as a mentor in our office, but most of the time just because I’m there when they have a question. One of the first things that happens to most new agents, after they’ve completed their licensing training and perhaps the introductory training that our company offers, is that they get this overwhelming feeling of “what do I do now?”

It is rather daunting to tackle a new career, especially one that is so dependent upon being a self-starter and self-motivator. The independent contractor business model for agents means that there is normally no one there monitoring and directing your daily actions. There is no instruction manual for the job, although companies like the one I work for try to have frameworks to guide new agents through the first 6 months of getting started. Still, there are lots of blank spaces in even the best outline of things that one should be doing to get started. I suspect that many newbie agents find themselves thinking, “This is so big. I’ll never get it all done.” I try to help them see that, “This is so big, whatever you do will help you be successful.”

Of course there are things that should be done before others and that’s where our frameworks and mentoring help the new agents get started. Helping people get comfortable with being a bit uncomfortable is a big early thing to accomplish. New agents are often frozen into inaction by the feeling that they don’t know enough or they don’t know everything that they should know before getting in front of a potential client. If they can get over that and realize that they’ll never know everything in this business, they’ll be OK. They need to develop the ability to say, “I don’t know, but I’ll find out.” In the case of our company they can add, “That’s one reason I joined Michigan’s largest Real Estate Company, so I’d have access to the help and accumulated knowledge of all of our great agents.”

If they can put themselves at ease with that approach while they accumulate knowledge of their own, they’ll be ahead of the game. People really aren’t looking for a “know-it-all”; in fact that usually turns them off. Rather people are looking for someone who says. “I understand what you’re asking and I’ll find out the answer.” Being genuine with that approach will also give you a self-confidence that will show through to the clients and they usually like that, too. If it helps, you should also remind yourself that just getting licensed equipped you with more knowledge about real estate than 90% of the population and every day that you spend learning from your experiences just increases your knowledge.

So get our your sling and pick out a good stone; the real estate market is so big, you can’t miss – but you’ve got to get into the game. We can help you with that. If you’re getting your license and are looking for a great place to start, call our office manager – Mary Nicole – at 248-684-1065 and set up an interview to talk about out new agent programs.

The great weeding out...

One aspect of the current recession that is having a great impact on the real estate profession is the weeding out of many of the marginal, part-time agents. Unfortunately this same process has caught up many full-time agents, too; as more and more people in real estate find that they can no longer make a living in the current real estate environment. We've lost a few full-timers at our office. As a result of this process, the real estate "profession" is probably more heavily made up of part-timers than ever - mostly people seeking extra income who are not dependent upon real estate for their livelihood.

It's not so much that nothing is selling. It's just that so much of what is selling is so cheap and takes so much time and effort to get to a closing, that it is just no longer worth it to many. The average sale in my market area used to be about $200,000, which isn't much when compared to California or Florida or some of the other more expensive markets; but it was still enough to make a living, if you sold enough sides at that average. Now the average is approaching $100,000, with many deals on foreclosed or short-sale houses in the $20,000 - $50,000 range.

The real rub is that it takes as long, or longer, and as much, if not more, effort to sell one of those low cost houses as it did for the $200-300,000 homes that we were selling. It has ended up being much like the shift from high paying union jobs at $28-40/hour in the auto industry to the new second-tier jobs at $14-16/hour. It's tough to get by when your pay is cut in half or more. That's why a number of Realtors have abandoned the trade and why a number of them are also in the foreclosure ranks with their own homes.

There is one point of view on this whole matter that says, "That's a good thing. It gets rid of the people who shouldn't have been in real estate in the first place." There's something to that argument. There are very low barriers to entry into the real estate sales field; so, lots of people who got into it for the wrong reasons - thinking it is an easy way to pick up some extra money on the side - are now just as quickly exiting the field. That probably is a good thing. I'm not sure what the turnover rate for new agents is locally, but it's got to be high right now.

However, there are also good, full-time Realtors, who perhaps didn't jump on the foreclosure and short-sale bandwagons fast enough or who otherwise haven't adjusted as well to the new market that we face to maintain their needed income stream. We are losing them, too. Some older Realtors got disgusted with the market dynamics and retired, some shifted into other fields that are related to real estate and many just left for other jobs where they could make a living. That's a shame, but a natural part of any profession, I guess. Change happens and there are always some who just can make the necessary adjustments to accommodate that change.

I found myself with this same dilemma. I missed the foreclosure bandwagon and was loathe for too long to deal with short-sales; so, I got left behind. I decided to seek something else to do and went dual career - selling office copiers/printers, as well as real estate. The dual career path is not an easy row to hoe either, since you have two completely different sales environments vying for your time and attention. At first I had to devote most of my time to learning new products and a new company and getting started in the new venture. That took at least 3-4 months of hard work, during which my real estate business languished. Now I've been able to achieve a better balance between the two and had some recent success in rebuilding my real estate business with new listings - ironically all short-sales.

So, the great weeding out will continue. The strongest and most adaptable agents will thrive, even in the current market and many others will survive and hope that things get better soon. The thrashing and turnover will continue at a high level at most agencies and many of them will not survive either. The key to making it in real estate these days may well be the ability to let go of any dreams about things getting "back to normal" and dreams of "the good ole days" and figuring out how to deal with the "new normal" of the current market. I don't have an answer yet, but I'm working on it. In the mean time...anybody need a copier/printer?

Looking through the eyes of a Realtor…

I had an appointment today to go look at a house that I might list and the owner called to say that the house is a mess right now and asked if I could look past that. Of course, I replied, I’ll be looking through the eyes of a Realtor at the features of the house and how it compares to other similar houses. That got me to thinking about that phrase “looking through the eyes of a Realtor” and what that means.

I’ll admit that since I’ve become a bit more experienced as a Realtor I look at homes that I enter differently, even if I’m at someone’s home as a guest. It’s a thing that one can’t turn off and on. Of course I’ll notice if there’s stuff laying all around or the place needs a good cleaning, but I’ll also be looking to see if it looks cluttered – too much furniture and stuff all over. I’ll glance at the windows to see if they look newer. I’ll check out the flooring to see if it needs cleaning or replacement or maybe re-finishing. I’ll look at the ceiling and the walls for evidence of water stains or settling issues and tape and nail pops. I’ll admire the crown molding, if it’s there, or the coved ceilings and arched doorways, if it’s an older home. I’ll check out the woodwork, if it’s a historic home.

In addition to all of those things, I’ll be making mental notes about the room sizes and the layout and mentally comparing those to other similar homes. I’ll likely have noticed any exterior maintenance that needs to be done or issues that need to be dealt with by the owner. Inside, I’ll look into the kitchen to see if it has been updated or if it needs updating. The same is true of the bathrooms. If I’m there on a pre-listing appointment, I’ll probably ask to see the basement too, so that I can check out the mechanicals and the electrical and plumbing to see if they need updating or pose any issues.

There are also lots of things that I don’t “see”, which I’ve discovered over time is as much a function of looking as a man as anything. I don’t see lots of the “cute” things that my female counterparts see when they go through the same house. I may notice a kitchen countertop that could be replaced, while the women agents notice the cute decorating and nice curtains in the same kitchen. Sometime we get back from our weekly tour through new listings and it’s as if we went through different homes. I’ll say, did you notice that the electrical box is still fuses or that sure looked like and older furnace; while my female counterparts will be talking about the nice color in the dining room and the cute way the children’s rooms were decorated. Neither of us is right or wrong, we’re just looking at the home through different Realtor eyes. Having that second and different view was one of the valuable things about the partnership that I had for a while with a female associate. Now, I have to solicit that second opinion from other, female agents.

So there really is a difference in how a Realtor, even a friend who happens to be a Realtor, will look at your house. Don’t be offended they can’t help it. I can’t turn off my Realtor eyes just because I’m visiting a friend or relative, but I promise I won’t ask to see your basement or open your electrical box to check that out. I can’t turn it off, but I can control it.

Is it time for a career change?

“Enjoy when you can. Endure when you must.” (Johann Wolfgang von Goethe). Those words from the blog Jack’s winning words, which I get a feed from every morning, certainly apply well to the real estate profession.

I do enjoy meeting and working with the people that I meet and the feeling of success of finding the right new home for clients; and, certainly going to closings is normally a joy (although some as just to be endured). I enjoy going through the nicer homes that people have kept up and are proud to show off. I also enjoy much of the Internet work that I do to market the houses and the virtual tours that I create. I enjoy maintaining my three real estate Web sites and making sure that the other sites that I use are updated. I enjoy writing my monthly newsletter and posting this daily blog.

What I must just endure are the long open house afternoons in empty houses, especially when no one comes to visit. And, the seemingly endless parade of cold, empty and run-down foreclosure houses that everyone wants to see these days. A day full of that can be fairly dismal. Of course there is the market itself, which has changed the behaviors of both buyers and sellers. And the home sellers who refuse to price to the market and yet can’t understand why their house isn’t selling. Those all kind of come with the territory, along with the seven-day work weeks.

On balance, though, there is more to enjoy than to endure and that’s why I stick at it. Like life in general and a good marriage, it takes work to make it worthwhile and enjoyable. So I get through the things that may not be as enjoyable and look forward to the things that are, and the rewards that go with them, both the money part and the on-going sense of accomplishment and satisfaction.

Now, you can be a part of this satisfying profession. Our company has a goal of hiring 300 more sales agents this year and has programs to provide license training to get you started. If you are in the 5-county Southeastern Michigan area, there is a good chance that there is a Real Estate One office near you. Email me for more on this program and become a part of our team. You'll be glad you did.