Saturday, January 22, 2011

How Many People Did you Get in Front of Today?

In response to a question I was asked on my post entitled, "When There's No Wind, Row!",I decided rather than respond at the remarks portion of my post, I would share my answer with all of you who care to hear how at least one person knows it works, having tried it, worked it, seen it work, helped others work it, and watched other succeed in it. I do this because maybe it will help someone jump start their career, get it on track, keep it on track, enjoy the fruits of their hard work, and be able to have the personal satisfaction of having succeeded in a wonderful business like ours, by sticking to what works through thick and thin.

The question posed was, "Being very new to the business and having no sphere or family to rely on I am finding that this (making contacts) is a great way to make it all happen. Of course I am learning to deal with rejection but I will overcome that. How many people did you try to get in front of either by phone or in person a day?"

For the people who work with me, they know my answer, they've heard it a thousand times. For those of you who havem't benefited from the experience, here's how it works, and it's not rocket science.

For each 25 calls or contacts you make, you will get decent one lead.

For each 3 decent leads you get, you'll get one appointment.

For each 3 appointments you get, you'll get one listing.

For each 2 listings you get, you'll have at least one closing.

Do the math, and you will find that it takes 450 contacts to get one closing. If your average commission is, say 4500, then you earn $10 for each contact you make, on average, whether they say yes, no, maybe, or tell you things about your parents you never knew. Now, there are some ground rules. First, a contact is a contact. Leaving a message doesn't count, licking an envelope, petting a dog, etc, none of these count. Only human interaction. Voice to voice, face to face, they are good. Everything else is a follow up call you have to make later.

The fact is, your economic driver is appointments, and there are an assortment of things that can skew the numbers. Your talents on the phone or door knocking (its important to always comply with the DNC list and local door knocking ordinances) will get better as you do and learn more, your appointment and conversion ratios will increase, etc, and all these will make your numbers go from leaner to more robust. Keep doing the basics, have a business plan, know your numbers and stick to them.

So, the numbers for the model I described above are simply, if I want to make $100,000 on listings, and my average value of the phone call is $10 (based on the numbers above), I have to make 10,000 contacts for the year. Sound like a lot? Lets drill it down. 10,000 contacts, divided by 50 weeks a year (you're entitled to at least two nice weeks off if you do it right), is 200 contacts per week, divided by 4 days per week (you should also have a day off during the week for yourself, since you need to be available Saturdays to show homes) equals 50 contacts a day. Does that still sound like a lot? Well, truth be told, it is a lot, but it is a do-able a lot. When I started in the business, my average sale (in the late 1970's) was in the mid 30,000 range, and the average agents listing side was about 500 and change. I wanted to make $100 a day back then , which was pretty good in those days, especially for a 19 year old, which is what I was when I first got licensed. I figured out the numbers, and then figured out that to make my $100 at listings, I would need to make app 75 calls a day at a value of $1.40 per call on average. Now that was a lot of calls, I know because I tried to make them every day, and almost did, every day, 4 days a week, 50 weeks a year, until my business took off.

The moral of the story for you, Cody, the (current) new agent who asked the question and who sounds like he's not afraid to work, and for any one else who cares to be consistent and busy, is to figure out how much your average commission is, how many of those you have to do to reach your monetary goal, and then divide them by 450 calls per closed listing, divide by 50 weeks, 5 days, and then get to work.

Good Luck!

Tuesday, January 18, 2011

Give Your Clients a Free Prize in Every Box

Seth Godin hits it on the head again in his new book when he says to make sure you give a free prize in every box. Think of it, you go to the store, and there on the shelf are two brands of caramel popcorn, which is precisely what you are in the mood for. Box #1 is Joe's Caramel Popcorn, and Box #2 is Cracker Jacks. Which do you buy? I've asked this question 50 times since I read his book, and each time it was the same answer....the Cracker Jacks, of course! Why? Because of the free prize inside!

The same goes for the service you render, and the services your company renders. Each service experience should incude a "Free Prize Inside", that extra value or feature that will stand out in your clients mind when they think of choosing a Realtor. Cracker Jacks has proven it doesn't have to cost a lot, it can even be low cost, but it has to be consistent to be recognized. It could be as small, perhaps, as assuring your client the CO will be submitted on contract (if practiceable) or that you will make sure you ask for a Sellers Disclosure and always provide one when available(I am not in a mandatory state, but I highly recommend its use) or whatever consistent point of Value you can think of that you can commit to doing consistently and properly. It is up to the individual firms to make sure they adhere to all the points of service consistently for the consumer to recognize the Free Prize in Every Box .

Whatever you do, do what you say you are going to do, be consistent in your Service delivery, and always remember to give your clients the Free Prize in Every Box. It will make it much easier to win their business and referrals by standing out from the rest of the caramel covered popcorn in your market.

Good luck!

Saturday, January 15, 2011

Where will your Real Estate career be in 2011

You're on the net, researching what to do and looking for ideas to help you succeed in real estate. You're serious about your career. And there's probably hundreds of reasons why you do what you do, or want what you want. But, depending on where your sights are set, you have to like what you do.

Not just a little. To succeed, has to be something that makes you do those things you may not want to do, in order to succeed. You hear some say, "I've always loved houses". Okay, thats great, but is that enough to make you do those things like calling fsbo's, farming, showing endless homes to endless people? Train, apply, read, do?giving up pieces of your life with no guarantee of renumeration?

Its like children playing sports. At age 5, everyones coming out to play pop warner football, there's 60 kids spread out over 3 squads, and every week they have 2 or 3 practices and a game every week. But, 6 years later, you have almost 20 kids still going. Its not that the ones who quit didn't have talent, it's not that they weren't strong. What they lacked was the passion for the game that makes you be willing to work out 5 days a week, play hard on day 6, and get yelled at by your coaches while doing laps or feeling pain. Is it the coach, or the manager, or the market?

Maybe, and maybe not. You'll find out when you think make those choices. But I submit to anyone who "isn't sure when things will get better, or will things flatten, or why won't things come together, or my deal fell apart,or why isn't my listing selling, or should I tell the seller the house is overpriced," etc etc etc that you look deep into the passion of what you do. If you are passionate, nothing will get in the way, you'll figure out the right way around it. You know the answer, its that you have to work. Now, the question is, will you do those things that need be done, over and over, and service a multitude of potential clients and opportunities while looking for more, or will you work the one overpriced listing and one or two buyers you met along the way.

Our futures, our destinies, are guided by our decisions and activities, and activities breed success. You'll decide.

Good luck!!!

Tuesday, January 11, 2011

Real Estate Isn't Just a Run Down The Field

Real Estate is a wonderful business, but it isn't necessarily an easy business, especially nowsadays. Then again, being a success at anything isn't necessarily easy. Pro's go through a lot of work to be pros, Remember what Edison said, "success is 2% inspiration, and 98% perspiration.". It's like Brett Favre says about football. He would play Sunday for free, because he loves what he does so. It's the practises in between, the staying in physical shape in the off season, the hard work leading up to game day that they paid him for. Likewise, Realtorswe are paid for all they do, the training, the networking, the prospecting, the following up, and all that which leads up to the final moment. The great feeling in helping someone achieve their dream, or the personal satisfaction of knowing we have done a good and professional job to the benefit of all involved, that is what most Realtors enjoy the most. All the work that leads up to that day, whether directly or not, thats what one gets paid for.

Monday, January 10, 2011

When there's no wind, row!

I remember figuring out in 1980 that there is no such thing as 'nobody is buying houses'. Interest rates were way high (now they're way low), demand was seemingly low, the then-old timers in the business were telling me they never saw it this bad, yet everyday, when I checked the MLS, there were new listings, new sales, new pendings and people calling to see properties. What I also figured out was if I wanted to be busy, I had to have a consistent plan that I engaged, and work it. My plan was based on how many contacts I made a day to sellers, irregardless of if they were my farm calls, past lead calls, expireds, fsbo's, etc. When I had nothing going on, I stayed on the phone or in front of people. Of course, technology was different, so there was no time spent online, and only a little on getting new catbon paper to work. The only mail I used were handwritten thank you notes to the people who became listing leads in my farm and the like. And you know what happened? There was a lot of business for me as an agent! lo and behold, I was, with the exception of one other agent who used to go canvassing with me and who concentrated on fsbo's when he wasn't farming, outproducing the other 6 or 8 agents in my offices at the time PUT TOGETHER! It wasn't because I was a rocket scientist, and it wasn't because I was selling to family. It was about good, old fashioned, reasonably targeted, consistent work.

I submit to you that concept still works. I am reading many entries on AR from agents who may not have never seen markets temper. Almost any agent who started before 2007 had to learn to deal more with how do you get your contract accepted when there are 6 others on the same property. Now that they know how, they won't have to use that for a bunch of years, till the market gets back to that place.

In the meantime, if they want to have the good fortune of being here to use what was learned pre 2007 post 2015, they'd better get to work making calls, learning their business, honing their skills, going on appointments, being consistent, and doing those things that successful Realtors do when there is no wind. Make sure you know how to use those oars, roll up your sleeves, and get to rowing!

Remember your drivers - appointments, inquiries, contacts, and at the end of the say, conversions. Good luck!

Thursday, January 6, 2011

Real Estate Websites - They don't work by themselves

I have always taken a deep interest in Internet marketing since Al Gore invented the thing (it was Al, right?), and while my knowledge has matured, I don't make believe to be an expert in the subject, although I can assure you I have developed a deep appreciation for and understanding of its' value to our industry. I still am fascinated at some of the new applications I see, both for the consumer and the Realtor, by how it really works, and even more fascinated by how the net has matured and where it can and will take the industry. To me its much like the Edison's light bulb, or Bells telephone. There's no doubt it will be interwoven into and change some of the course of our business.

At the same time, it amazes me how so many brokers have no real web strategy, other than to build some kind of a site, get it on the net, and wait for the results. For those who are doing just that, pay attention to the activity you don't get, and start working on how to change that. For a web site to succeed, you need more than hits, you need more than leads, you need more than a lead tank, you need it all for it to work. The web isn't about rankings, it's not all about hits, and it's not about selling a house today, necessarily. It is about client or lead conversion, the science behind it, and the need to incubate leads properly.

When a site is offered, remember who is coming, the consumer, not Realtors. They arent coming to see your picture or your awards, they are coming to search for houses. Give the consumer what they want, and you've got a good beginning. Then, develop a strategy for driving APPROPRIATE traffic to your site, and monitor it to see what works and what isn't. And then monitor it again to see if what works still works, and so on.

Then, when you do that, make sure you have a mechanism that lets you get right back to the consumer. I recently heard a stunning statistic, that most Realtors take 54 hours to get back to their lead. If thats you, don't expect much. Find a way to make sure that at least 90% of the time, you or your agents get back to the seller within 4 hours, and you will convert on avg 30% of app 20-25% of your inquiries, or .6-.75 per 100. If you can do that, then find a way to get back to them in under an hour hours, and then, you should convert almost 50% of the 20-25%, leading to a 1% conversion to sales. if you can do that, find a way to get back to them within the twenty minutes, and you will convert 72% of app. 20-25% of your leads. Get the picture? the leads mean nothing if we do nothing with them, and the longer it takes to get to them, the less likely will will be able to ultimately convert them to sales, which is what its all about.

Another great stat to know....60% of all Internet leads will buy from the first person to get back to them on the net, provided that person stays in touch through the incubation and sales cycle.

So, if you are developing your Internet strategy make sure it includes a whole lot more pro-activity than some nice graphics and an idx platform. Track how many unique visitors you are getting a month, how many inquiries (aka internet leads) you are getting out of your unique visitors, contact leads who return to your site, and most importantly track your conversions to sales. If your conversion after 4-6 months is less than 1%, you need to fix what you are doing. The average internet buyer can take up to 18.6 months to buy, and there are those that will buy in month one. You won't know the difference until they give you the sign. In any event, track your numbers, think of how you can improve them, develop procedures, dialogues and relationships, and you will be on track to huge success.

An interesting fact - the average buyer age is 35, the average Realtor is 54. Bridge the gap with technology, and you won't become extinct someday.

Wednesday, January 5, 2011

Are You A Farmer or A Hunter

There's all types in the Real Estate business, and many of us have grown up in the business with each other as the years go by, and while we compete, we are no longer competition in the trenches. There's all kinds of people we see come and go and stay. I was thinking that over the years, i've seen many styles, many hunters, who hunt for todays food, many farmers, who farm for the harvest season, maintaining their farming areas, staying in touch with their leads, and cultivating their business so they have something to show when its time to harvest. I've seen other types too, blind squirrels and the like not worth posting here, who are bound to trip over an acorn every so often. I suppose for many of us who have survived the ups and downs in our industry, we can be one, or the other or both. Hunters do well when there is abundance to be hunted, and farmers do well always, as long as there dirt and water, and somehow almost always find dirt and water.

In todays market even farmers may have to hunt, looking for unfound opportunities while cultivating their farms that they have maintained for months and years. They will survive, becasue they are poised to survive through good and bad.

What are you, a farmer or a hunter?

Tuesday, January 4, 2011

Be A Purple Cow

I had heard Seth Godin talk and shared in a prior blog a few years ago what I thought was a great marketing strategy, given all the interference the consumer deals with every day in every way from every industry that deals with consumers;

Picture yourself driving through the country with your spouse and two kids. Your kids are 5 & 7, and naturally are squabbling most of the way to wherever you are going. Along the way, you pass some cows. They stop, turn their head for a moment, look at the cows with some interest, maybe even commenting on them. Within moments, the cows will be forgotten, the ride continues and so do the chldren squabbling.

Now, picture that same ride, only this time,you pass a purple cow. A real purple cow. You would look in amazement, having never seen a real purple cow. Your kids would be ooing with amazement. You probably would stop to get out of the car, and take some pictures with your camera phone of. Pictures of your kids with the cow, pictures of the cow, and when the ride resumed, no doubt the cow would be remembered every so often. When you got home, your kids would tell all their friends about the purple cow, and bring the pictures of the purple cow to show and tell. The purple cow would stick out among all the other cows, and other people might even drive out there to see the purple cow for themselves.

In todays multi billion website and mutli billion $$$ media markets, you want to be a purple cow. You want people to pick you over all the other regular brown cows they see all the time that mean nothing unless they happen to need a cow when a cow happens to be there. But the purple cow is remembered, talked about, and its popularity will grow.

Monday, January 3, 2011

Time is an irreplaceable commodity - use yours wisely

Time is an irreplaceable commodity, the raw material of life. We can use it wisely, sell it, exchange it, waste it or even kill it. To do everything we need to do and be everything we can be, we need to use our time as effectively as we can. Time is finite. If we had forever in our lives, we would have no reason to set goals, set priorities or plan regularly. But the facts are that we are given one lifetime to do it all, see it al and feel it all, and we better keep ourselves on that track. Once time is gone, it is forever spent, gone forever. Even the time you spend reading this is gone, you will never get it back. This isn't a walk-through. It what we get here, we can't buy more time, make more time, squeeze more time, than the 24 hours a day we are given,and all we need to do for us and those around is within that time, and at the end of the day, hopefully with a little time to spare. So, the next time you say where did my day go, have an answer, and train yourself to get as much of the good stuff done in the time allotted. As Tom Hopkins, one of my personal favorite Real Estate trainers, said, "We must do the most productive thing with each and every moment of our time".

Slowdown in REO Sales Stalling Housing Recovery in 2011

A friend asked me to print this recent press release to my blog, so here it is. Don't let is scare you, people always need to live somewhere.

Wayne, NJ, December 05, 2010 --( According to Charles Blumenkehl, managing partner for Blue Asset Management, real estate investor of performing and non performing mortgages and distressed real estate, the number of properties reaching the end of the foreclosure cycle are increasing and will dramatically add to the supply of homes availble to today's home consumer. The result will manifest itself, according to Blumenkehl, in increased pressure on home pricing, particularly on REO's as banks will find themselves needing to either engage value enhancement strategies which will enable them to open their inventory to buyers who would not otherwise have the funds necessary to rehabilitate the home, or lowering their prices so investors will still be able to create equity for their investments by making the needed improvements.

Blumenkehl added, "The market is not responding well right now to the buying incentives it isn't receiving. The only true incentive available to today's homebuyer are the historically low rates and low prices that are only available to the most creditworthy of borrowers, and that discounts a large portion of buyers who should otherwise be a part of the process of fulfilling the American dream of homeownership. And even those buyers find their enthusiasm tempered by by the difficulties imposed throughout the mortgage loan origination system as designed to meet today's lending concerns."

According to Charles Blumenkehl, the market will eventually thin out, with even areas that have 13-18 months of inventory and climbing hitting their apex, and eventually inventory levels will lessen. When asked when he thought that might be, Blumenkehl said he didn't have the answer but said "God stopped making land a long time ago but he hasn't stopped making people, especially those moving to the United States. Eventually, the people will overtake the land, and the pendulum will swing in the other direction."

For more information about Charles Blumenkehl or Blue Asset Management, log onto the company website at or call the company directly at (973)835-1400


Sunday, January 2, 2011

Real Estate is a Contact Sport

Ours is a business of people. It's all about people, contacting people, farming, FSBO's, sphere of influence, expireds, lis pendens and any other target audience we choose to service. You can have the nicest materials, have the greatest presentation, be the most orderly and knowledgeable agent there is, but if you don't engage in regular prosepcting or making your contacts, you are missing out and not getting your fair share of listings.

Its all about people, and its all about contacting people. Show me an agent who is making their calls consistently and diligently, and I will show you an agent who is honing their presentation and prospecting skills, developing a solid lead base to feed their business, and probably producing a good amount of business. It's almost a guarantee! It's all about the numbers. You have to make the contacts. If you are cold calling, or farming, you will get a listing on average for every 225 contacts you make. If 50% of your listings sell, that means you need 450 contacts per closed listing. If your average commission per side is $2,250, then you are making about $5 per phone call or physical contact (mail doesnt count) whether your call says yes, no, or hangs up (and honestly, most people are nice, even fun to talk to) If you are calling FSBO's, those numbers go considerably up, meaning your average value per phone call is much higher, and depending on your listing presentation and follow up skills, the value of each FSBO call should be 25, becasue each FSBO is someone you already know is selling, as opposed to cold calling where you may average one good lead for every 25 contacts. Likewise with expireds, they are worth about 12 to 15 times the value of the cold call.

But, to be great at anything, you have to be good at a bunch of things, not just one. That includes your prosepcting efforts, focus on a few areas where business can be found, keep working in those places, and remember, this is a contact sport, you have to do your numbers.

Agents will often avoid calling, most often because of the fear or distaste of rejection. No one likes rejection, but we have to have it to get to the acceptances. If you view rejection not as rejection but rather as a statistic that is required to get to the 1 of 25 that are good, you'll overlook it. A friend of mine jokes about how he thinks agents would rather "eat glass" than phone canvass. Maybe, but those agents are at the mercy then of those who do canvass for business, and have to hope that the proactive agents get listings that the non-proactive agents can sell to someone they get from floor time, or a relative or some other personal contact, and before any one else sells it.

No matter how you ply your trade, making contacts should be an intricate part of it. Do it consistently, keep track of your leads, and you will build yourself a business that will feed you well for years to come.

Good luck!!!