Technology innovations are fueling rapid change in the future of real estate residential sales transactions
My first income-producing job was filing Multiple Listing Service sheets one-at-a-time, in a folder, while working with my mom in a small Ohio real estate brokerage. In those days, there was lots of lag time before receiving information on new listings. Over the years, access to listings evolved, with the production of MLS books and then online listings, available only to agents, and controlled by local and state chapters of the National Association of REALTORS®, the legislative body of real estate that advocates for the rights of property owners.
Today, professional associations are still the primary source for real estate-related information, but over the years, technology companies have challenged traditional real estate industry models.
Now, many potential buyers and sellers go to sites like Zillow to view property values and sales statistics in their area. And, lots of consumer-friendly software has been developed that allows access to information once available only to real estate licensees.
Through all of that, the transaction process has remained the same, but the future of real estate is changing the way we communicate and interact with clients.
Real estate brokerage models — another cycle of change is here
Though traditional real estate brokerages still exist, they must adjust to the technological changes and embrace working with agents who work for non-traditional brokerages. These agents may have different approaches to listing and selling real estate.
Innovative companies like eXp Realty have developed cloud-based, virtual real estate models that appeal to tech savvy real estate professionals — many of whom are millennials. Billed as “The Agent-Owned Cloud Brokerage®,” eXp Realty still puts the real estate professional at the center of every transaction, however, the methods of disseminating info and interacting with clients changes. Internet entrepreneur Brad Inman says eXp Realty is one of the most innovative real estate companies in the world. This agent-owned cloud-based brokerage is revolutionizing the way we assist our clients and managing the listing, selling and escrow process.
EXp Realty recognizes the need for real estate professionals, who are independent contractors, to have retirement benefits through profit-sharing and stock ownership. With the eXp Realty business model, real estate professionals who are willing to embrace the learning curve have an opportunity to build a business with retirement benefits.
Traditionally-trained (a.k.a. “Old School”) real estate pros must embrace the fact that transacting business through cloud-based offices is the near future of real estate. Millennial licensees — who live and breathe social media, online services and are often technology whizzes — are finding the cloud-based business model exciting!
Keller Williams is another realty brokerage that offers profit-sharing, and ways to build a real estate business in a non-traditional fashion. KW has open-door policy on agent training, for new licensees, and for seasoned agents needing to brush up on their technical skills and industry trends. KW’s transparency, and willingness to educate and offer tools for success, makes them one of the top real estate training organizations in the world.
Time to reinvent and re-educate
All markets have a cycle, real estate included; I have experienced many real estate market cycles. With each downturn or surge came greater public awareness, greater access to data, new technology, new laws, and new brokerage models.
Right now is an exciting time, if you embrace the philosophy behind the Infinite Success Alliance Market Cycle, espoused by Rick Glade, which says “…in any market cycle there are Innovators, Early Adopters, Early Majority, Late Majority and Laggards. All products and services have a life cycle. The time to reinvent or sell-out is during the euphoric state of market share.”
Buyers, sellers, and real estate professionals, should utilize all the technological resources and tools available, and become educated on market trends.
Change is inevitable in the future of real estate… embrace it
To arrange a personalized session to explore the changes we face and how you can adapt, please contact me!
Comment below, and offer your experience with change and how you’ve adapted.
When thoughts of getting out of the business of real estate cross your mind, here are some key considerations before transitioning
If you are a real estate broker or sales associate thinking of transitioning out of real estate by selling your firm or, transferring responsibility for your accounts to other agents, there are some important considerations to make before deciding the fate of your business.
One important facet to examine is whether getting out of the business is truly necessary, or, perhaps your approach to doing business just needs some fine-tuning.
Let’s examine some typical scenarios, and delve into possible approaches.
1) You’ve built a consistent, successful business, and want to sell or transfer the business to another agent or family member
The best medicine for this scenario: Be prepared. We never know what life situation or challenge may be served up to us at any time. In order to “go out on top,” avoid letting some life-shattering event or circumstance force a transition. Before change is forced upon you, select someone who you know values and transacts business much in the same manner as you. Find someone who will care about your client’s needs and value the relationships you’ve built over the years. Enlist the aid of accountants and lawyers representing both parties, to discuss an orderly transition, and prepare the proper documentation — just as one would prepare a will. Make provisions in the agreement regarding whether/how much you will be expected to remain in touch with your current and former clients. Before stepping away, talk with clients, and inform them of the transition, so the value of your portfolio will remain.
2) You’re thinking about transitioning out of real estate because you’re burnt-out
My suggestion here: Count the cost! Make sure that you have your ducks lined up so your financial obligations can be met, as you work toward a different income stream. Plan ahead and start creating an exit strategy that will work for you. Consider how to build passive income through referrals you make to other agents.
3) After several years in real estate, transitioning out is a consideration, but you don’t have a retirement fund and medical plan in place to sustain your lifestyle or cover your cost-of-living, health care, etc.
The demands of the California economy have pushed many agents into this category. Lots of agents have pretty much spent their pending escrow checks before they are received, leaving no room for savings! Some people have another source of income to count on — for example, a spouse or significant other — but, for single agents going it alone, life can be a struggle while trying to grow a real estate business.
My suggestion: partner with a team, form a collaborative effort, and strategize how to grow your business beyond yourself. Stick to your strengths, and delegate to others who have different strengths that are necessary for completing a transaction. You may give up some commission, but you may increase your volume, with less stress and burn-out. The newer, recent real estate models foster this approach. A more agent-centric environment and the training offered in these models helps propel your success.
4) You’re living commission check-to-commission check, with no clear business plan
Get serious and develop a plan to generate a pipeline of continual business. Outline the activities that will help you reach your financial goals, then STICK TO YOUR PLAN! Your broker or an independent consultant can help you nail down specific actions that will lead to progress. Speak with your CPA for help with budgeting, and put aside a portion of your commission checks toward retirement.
5) You’re tired of juggling your real estate career with a second career to make ends meet
Evaluate how successful you have been at doing both careers. Balancing several pursuits makes it hard to focus on your personal financial needs, and still provide good customer service, build relationships and load your pipeline with repeat business. Agents with the energy and wherewithal to handle this effectively are a rare breed! A great team and/or office support is key.
6) You’re unsure if you still enjoy selling real estate
This is a crucial, fundamental issue. Doing well with a job or career path we don’t enjoy is very difficult. When the work becomes simply a means to an end, clients will sense you are just in it for the commission, and doubt whether you have their best interest at heart. The reward for providing great service and/or a great product is exponential growth in revenue. Do an over the top job and your revenue will grow.
7) You have another source of income, i.e., spouse, significant other, pension, rental income, investment dividends
Getting too comfortable in this scenario could be unwise. You might have the best of both worlds, which allows you to focus on service to your clients without the concern of how you’ll pay for the basics. However, the one thing in life that is consistent is change! Don’t get blindsided when change happens! Manage your life as though your business is your only source of income.
8) The stress of your real estate business has begun affecting your health
Consider all of your options. Health comes first! You’ll find it difficult to do ANY job well, without good health! You must first take care of YOU, before you can take care of others well.
9) You’ve got more going out than coming in, and are frustrated because your investment into your business has shown little results
The most difficult part of being an independent contractor/entrepreneur is DISCIPLINE! This means putting together a business plan and sticking to it. Take the time to map out your desired financial results, and determine what activities and client/customer service goals are needed to accomplish your financial goals. Then, find an engaging broker, accountability partner or coach who is going to hold you accountable for what you do or don’t do. Being “independent” doesn’t have to mean “go it alone.”
These are all scenarios you might face at some point, whether you have been a seasoned agent/broker in the industry for only a few years, or for many years. Do a self-examination, and take the time to think about these and many more issues that will arise.
Feel free to contact me, and set-up a time when we can discuss how to enlist my help with nailing-down your next move.
If you’ve battled through experiences like these, please Comment below, and share your results with us!
Best practices to ensure safety in your day-to-day business activities
Often, people do not start to think about safety until something devastating happens to trigger an awareness. We don’t think about safety unless we “feel” unsafe.
Most people are unaware of the high risk that comes with working in the real estate industry. Too often, real estate professionals fail to incorporate safety strategies into their day-to-day real estate practice.
Real estate agents are very vulnerable during the course of their day. Often, you meet a potential client/buyer over the phone and agree to meet at a listing they wish to view. This is usually someone you’ve never met or known prior to the encounter. With the excitement of potentially procuring a new client, some agents act impulsively and assume that the caller is a bonafide buyer.
Another scenario: Open houses, where potential buyers preview homes during hours established by the local industry… usually on a Saturday or Sunday afternoon. Strangers come in and out at will. The agent is especially vulnerable in vacant homes, and homes in remote, woodsy or secluded areas.
Listings are gold so, any time you get a potential listing opportunity, safety can be furthest from your mind. Precautions should be taken when going on what you assume is a legitimate listing appointment.
Establish best safety practices in your day-to-day business activities
Most large corporate real estate offices have protocols and safety practices for their agents. Since most licensed real estate agents are independent contractors, they typically run their own businesses within the corporate environment and structure. The company typically does not dictate how an agents manage their business practices as long as real estate code of ethics or real estate laws are followed in the course of their business dealings. That being said, licensees should establish their own personal safety protocol.
Some common Safety Commandments published in REALTOR® Magazine include:
- Don’t meet a stranger at any property Set up appointments at your office so others in your office can see the potential buyer. You can take another agent or family member with you. Agents often work in partnerships so, this would not be unusual.
- Drive your own car Have the buyer follow you, or, you drive them in your car. An exception: You personally know the buyers or sellers, or, they are referred by a credible source. It is still a better practice to drive your own car.
- Limit your showings to daylight hours, and avoid working after dark. If necessary to work after dark, take a partner.
- Dress for safety Dress professionally and do not wear flashy jewelry or anything that would attract undo attention to yourself. Avoid carrying a large amount of cash.
- Arrange a showing itinerary Use a standard office form, or, create a form that shows the properties being shown. Make sure the buyer is aware that the list exists. Leave a copy at your office with someone, or, with a family member.
- Prior to showing a property, verify who you are meeting Complete a “prospect ID form,” a printed office or custom form that requests the buyer’s name, address, auto make and model, auto tag, driver’s license and references. This is not a step practiced in our local market but is a great idea. Only show properties to persons who are willing to provide this info. A loss of a client is better than the risk of losing your life!
- Use an agent ID form Make sure your office knows your car’s make and model, vehicle license tag number and your cell number.
- Set a coded distress signal Establish a coded message that appears to be a harmless routine call that you can make to your office or home that serves as an alert to someone if you are in a situation that appears to be unsafe.
- If you pick up on something suspicious, stop working immediately If you pick up on anything suspicious such as: inconsistent answers from the potential client, or any abnormal behavior or anything that sends a signal that something is not right. Stop working and trust your gut. Make an excuse to leave immediately. Like, “OMG, I forgot I have to pick up my [son/daughter from school, a friend’s house, the day care, etc.]”
- Notify your Broker immediately Your broker (if they are available) should decide what action to take if you feel threatened. I would rely on my instincts depending on the situation take the necessary course of action, which could be to notify the police.
My personal additions to the above are:
- Be proactive and think through your strategies in the event of a threat.
- Pre-approve all buyers with a lender prior to showing them property. This is also a way to confirm they are who they claim to be.
- Preview properties before showing, so that you know what areas to avoid that might put you in harm’s way. Let the clients view those areas alone while you stay near an exit.
- Let the potential clients walk in front of you as you approach various rooms in a home, especially in vacant homes. Keep them in your range of sight whenever possible without putting yourself in a compromised situation i.e. basements, remote areas, detached garages, etc.
- If the potential clients are whispering regularly and not openly discussing the property being shown, be on alert or interrupt and ask if they have questions you can answer.
- Leave your business card at the property for the seller to know who has shown their home. This will make it easier to trace your steps if foul play occurs.
- While you are showing the property, take pictures of the house interior as though it’s routine, capturing the buyers in at least one of the photos.
- Buyers who insist on a rushed visit without allowing you time to do a thorough, professional job of showing the property rarely buy the property they are so anxious to see.
Safety at the touch of a button
A variety of safety applications designed for real estate professionals are now available to install on your phone. I suggest trying out all of them, until you find one an app that works with your particular cell phone type and service. When you have to make quick safety judgements or take action to prevent being a victim, a phone app may be the answer, and could save your life. While an app might be convenient, nothing takes the place of common sense, preventative precautions and measures. One can never be too careful.
There are professional criminals who bank on an agent’s eagerness to make a commission, hoping safety is not in the forefront of the agent’s mind. Put your safety first! Be aware and be extra cautious. You have only one life! Protect it by using good sound judgement and wisdom in all your real estate dealings.
Feel free to contact me for help with reviewing your personal strategies, to speak with your group.
READ ALSO: Planning Your Safety Strategy
Tips for a successful beginning to your career as a real estate sales agent
There are lots of millennials interested becoming a real estate sales agent. From taking courses in college classrooms or online, to pursuing a real estate license, it’s awesome that the next generation of people filling out real estate sales careers is taking shape! And, many mature people seeking a career change are joining the real estate sales profession.
If you are considering becoming a real estate sales agent, first, talk with people already in the industry, and get a firm understanding of what you’re getting into, by entering the real estate sales industry.
Once you have made the decision to charge ahead, here are a few tips to use, once you are licensed:
Do your homework
A real estate sales agent is almost always a commission-only independent contractor. As a real estate sales agent, you must have a broker supervising your transactions. Join a broker’s office that embraces, and is successful at, training new agents. Do the homework that will help you select the working environment that offers you the best chance at success. A lot of your commission will go to the broker, but the trade-off is the training — at least until you earn the annual income it takes to get you to the next commission split level.
When brokers interview you, they will be trying to gauge your drive and ambition. Every broker knows what makes a great real estate sales agent. Being clear about what motivates you will go a long way towards helping you land a spot as a real estate sales agent.
It’s a marathon, not a sprint!
Upon becoming a licensed real estate sales agent, focus on managing your real estate sales income carefully. Being prepared for the long on-ramp to your first few real estate sales is an important step. Your first transaction can take 30-to-60 days to close, from the beginning to the end of the real estate sales process. So, creating a capital reserve that will last you at least six months is crucial. It could be that long before you earn your first commission check! You must have enough reserve funds to support your lifestyle, and the cost of doing business, i.e.: dues, fees, taxes, customized marketing materials, electronics, and other business tools. A cash reserve will help you be focused and effective in your first year.
And, since real estate sales, like most other sales-oriented professions, is cyclical, having funds available to help you weather the ups-and-downs of the market is key. All boon years come to an end… budget for surviving the down cycles. Market downturns force many agents to leave the business, because they failed to budget and manage their commission dollars.
Moving on up
Once you have launched your shiny, new real estate sales agent career, connect with seasoned agents, and stay in touch. Listen to their advice, and find out their keys to success. Ultimately, you have to make your own path to success, but you’ll get enough to help you make informed decisions along the way to your success.
In addition to the traditional ways of procuring listings and buyers, find a niche market that uniquely suits you i.e.; buyer’s agent, probates, investment properties, condos, multiple units, relocation services, etc.
This is just the tip of the “getting started” iceberg! Good luck on a prosperous future! Feel free to drop me a line with your questions about how to succeed in real estate sales.
Tips for smoothing out your new listing workflow, and helping prospective clients make the right choices
The most successful real estate agents have a process for getting a new listing. Their listing plan of action has continuity that helps make each listing presentation and listing process easy.
Your workflow should be relatively the same with each prospective client. Unique homes, i.e.: price ranges above $1 million, might require adding a few extra steps. These properties are known as “elite homes.” Elite homes may call for a customized approach, but the fundamentals of getting the new listing stay pretty much the same.
Let’s review the pre-listing stage or, as I like to call it, the educational stage. During this period, give as much information as possible. This prepares your sellers, and empowers them to make informed decisions throughout the selling process.
Here’s what these steps look like.
Step 1: Ask qualifying questions
Before proceeding with any potential client, it’s important at the initial meeting or conversation to ask qualifying questions.
- How do you feel about working with a Real Estate Agent?
- How soon do you plan to sell?
- Why are you selling — are you moving locally, out of the area or out of state?
- What is or are your greatest fears or concerns about selling?
If out of area is the answer, then ask: What agent is working on your behalf in that area/state? Asking this question could lead to your doing a referral to another agent that services the area where your client is moving.
These questions will help you determine if this is a bonafide “A” list seller lead — they plan to sell within the next few months. Someone planning to sell further than 6 to 12 months out should be placed on your “B” list of leads. “C” leads are warm potential clients who are unsure what they want to do, when or with whom. Of course, you want to follow up on all leads, but your time and energy should go towards your “A” list clients.
Your initial meeting with a potential or confirmed seller can be in a casual or formal setting — whatever is convenient to the prospect. While asking your qualifying questions, be a good listener, and take detailed notes.
Step 2: Visit the property
If your initial meeting goes favorably, it’s time to visit the property.
Schedule a time to perform a walk-through. Take copious notes about the features of the property during your visit. Refrain from giving an opinion of the value (selling price) on your initial visit. Too many agents, in their anxiousness to get a new listing, will throw out a price that they later regret. Your Opinion of Value should reflect the best possible price based on actual sales data and how closely the comparable properties are in features and benefits to the subject property. Save pricing discussions for the listing presentation.
Step 3: Make the pitch
Now, it’s time to give your Comparative Market Analysis and make your Personal/Company presentation, also referred to as the Listing Presentation or Listing Appointment.
During this presentation, you will educate the seller, set their expectations, and distinguish yourself from competitors. Your presentation should set the standard by which the sellers will judge your competitors — if there are still other agents being interviewed.
If you are in competition for the listing and the seller chooses you as the listing agent, schedule your Listing Appointment ASAP.
Step 4: Get the listing
When you come to your Listing Presentation or Appointment, be prepared to take the new listing. Have all the necessary forms to complete a listing packet, including disclosure forms. Also, review the Purchase Agreement, and leave it with the seller. This will give the seller time to get familiar with the agreement, and ask questions prior to receiving an offer.
Another good idea: Provide a list of reputable tradespeople to call for inspections. Pest control, sewer lateral/plumbing, roofing, HVAC, etc. all should be inspected prior to actually listing a property. Your seller will have more negotiating power if the condition of the property is known before a price is established, and the property goes on the market.
Termite, roof and structural damage such as dry rot are typically the some of largest repair expenses that affect the sellers bottom line, so, your seller should, at the very least, pay for a general home inspection and pest control inspection.
If the buyer pays an inspector, the subsequent report is usually more buyer-friendly than seller-friendly. Surprise repair expenses that surface after a contract has been negotiated will force a renegotiation phase that usually drives the selling price down.
If a deal falls through, the inspections by the buyer become a part of the public disclosures associated with the property.
So, do your best to help the seller understand how contracting all inspections can help avoid unintended consequences.