Graham Wood is Executive Editor of Digital Media for REALTOR® Magazine. He can be reached at email@example.com.
Is the Foundation of Your Business Sound?
Master these fundamental skills to best serve your clients and advance your career.
The familiar line “You can’t build a strong building on a weak foundation” was originally a religious prophecy, but it’s applicable to your business, too.
Sales skills, relationship-building aptitude, product expertise, and entrepreneurial know-how make up the core competencies of most successful practitioners. Strive for a balanced skill set rather than relying on a single strength, recommends Julie Youngblood, owner of Youngblood Coaching & Consulting and a sales associate with Keller Williams Realty Southwest in Las Vegas. The value of people skills alone, for example, may be overrated in the business. A strong work ethic may be just as important to a client as your communication style.
Read more about how to "Own It"
“You’re putting a puzzle together for your client in which, at the end, they move into [or out of] a house,” Youngblood says. “It takes many skills to complete that puzzle.”
We asked practitioners and real estate coaches serving a wide range of markets to share their reminders of the fundamentals that may be overlooked in the bustle of tending to everyday business. The result is this back-to-basics guide for establishing and maintaining a solid foundation for your real estate business. No matter what stage you’re at in your career—even if you consider yourself a guru of all things real estate-—shoring up your foundation may be the key to overcoming a slump, filling your pipeline, or just starting the new year off right.
The Right Mindset
It’s not like what you see on HGTV; a love of houses isn’t the linchpin of your success. “It’s just the product you’re pushing,” Youngblood says. Instead, customer service will be the centerpiece of your business. Your strongest passion must be to serve.
Treat your business like a job. Don’t be swayed by the freedom of not having a traditional 9-to-5 job. Whatever work schedule you set for yourself, you must show up every day and put in at least 40 hours a week for your business to grow. When you don’t have appointments lined up, you still have to work to find prospects. Fill holes in your schedule with activities that provide networking opportunities, such as volunteering or serving on a board.
Act like you have a “boss.” Despite being self-employed, you will have to answer to someone—and that person is not your broker. Consider every client to be your boss. Though customers don’t have actual authority over your career, they act as ambassadors to your business and have power over your referral pipeline. What they say about you to their friend and family affects the health of your business. Focus on providing them exceptional service.
Write out a business plan. Include a vision statement, which affirms why you want to work in real estate, and the goals you’d like to achieve in one, three, and five years. Create an organizational chart that shows how your business must be structured to achieve your goals, and spell out the tasks you must complete every day, week, month, and quarter to reach those goals. Assess your business plan at least once a year. Consult your broker, mentor, or coach if you need guidance.
Investing in Your Business
It can be difficult to decide how to spend your money in order to grow your business, especially when you’re a rookie with limited cash flow. Don’t just throw money at any product that promises to generate more leads or save more time. Test-drive different technology and invest in items that have proven their value.
Start with free marketing options. It costs nothing to call your friends, family, and people in your sphere of influence to ask for business, go door-knocking to introduce yourself to neighbors, or attend local professional networking events. These methods can lead you to your first client—and sale. Don’t automatically convince yourself that you need to pay for leads to land your first few deals.
Consider hiring a coach. In real estate, you don’t have a supervisor who will closely monitor your business plan and require you to hit your goals. It’s your responsibility to find a mentor to advise and guide you. One way to do this is by building a relationship with a more experienced colleague. Paying for a professional coach ensures that you have someone whose job it is to help you succeed.
Use free trials before buying a product. A free trial can be a great way to assess the value of a new technology tool. Track the free period in your calendar, and at the end, take stock of whether the product saved you time or money. If it did, consider buying it. But recognize that even if you can afford the latest gadgets, you may not need more than the free version of cloud-based tools to streamline your business.
Most agents take one of two paths when it comes to prospecting, says Mike Stott, founder of Your Coaching Matters and broker-associate at Northwest Atlanta Properties in Roswell, Ga. They either focus on their sphere of influence or they go “scorched earth” with telemarketing, cold calling up to 100 people a day. Neither approach is necessarily more productive. “I’ve only met seven agents in 38 years who really like the scorched earth method,” Stott says. “But your sphere of influence will typically generate only four to seven deals a year.” Find a middle ground between these methods.
Connect with five new people each day. Even if the bulk of your business is from referrals, always be looking for additional client sources. Call on FSBOs and expired listings, target a geographic farm, or launch a door-knocking campaign.
Ask prospects at least one service-oriented question. You need to know more than how many bedrooms and bathrooms prospective clients want in a home. Find out what kind of service they are seeking from an agent. You might ask: “What’s one thing I could do to make this process simpler for you?” This kind of question lets prospects know you truly care about their needs.
Never stop prospecting. Don’t let a good run lull you into complacency. Some deals inevitably will fall apart. If there’s nothing in your pipeline, the loss of expected commission income can be devastating. It takes time to see results from your prospecting efforts. If you stop, it’ll take more time to restart.
Setting Buyer Expectations
You want buyers who are realistic about what they can afford and what options are available in their price range. It’s as important for you to understand what your buyers want as it is to advise them what is realistic in their market.
Make sure buyers are preapproved for a mortgage. Your clients should complete this step before you begin looking at houses. The process of getting preapproved will give them a solid idea of what they can afford, making it easier to narrow down their options early in the search process. This will help you avoid a lengthy home search in which your clients are misunderstanding their financial limits.
Walk them through the entire buying process ahead of time. Particularly for first-time buyers, make sure they understand what’s involved at each stage of the transaction, from making an offer to the home inspection to the closing table. It’s a good idea to revisit these details throughout the process, but empowering buyers with this information from the start will make the process go more smoothly.
Explain the value of a reasonable offer. Lowball offers risk offending sellers and crushing any chance for a serious negotiation. Particularly in a competitive, low-inventory environment, buyers should be ready to make their best offer. Also, help them consider ways to improve their offer, such as by waiving certain contingencies or accepting a closing timeline that fits the seller’s needs.
Acing the Listing Presentation
Earning an opportunity to present your marketing plan to prospective sellers is half the battle when it comes to winning a listing. It’s important not only to sell your skills as a real estate pro but also to listen to the sellers’ needs and create a campaign that suits their specific property. Generic sales pitches will fall flat.
Tour the seller’s property first. Before scheduling a listing presentation, ask the seller to show you around the home so you can get an idea of its strengths and weaknesses. Then you can make your presentation more relevant to the sellers. Don’t just talk about marketing campaigns you’ve done for other clients. Explain to sellers what you will do for their home and your thought process behind the proposal.
Practice what you want to say. Going into a listing presentation unprepared could leave you rambling. New agents, in particular, should use scripts to help guide the flow and learn how to speak authoritatively and concisely. Don’t worry about sounding like a robot at first; practice will help you sound more natural. Over time, you can adapt scripts to your own style and language.
Ask for the business. Don’t leave a listing presentation without a firm plan for following up with the sellers. At the end, ask if they are ready to list with you, and then iron out next steps, such as whether any repairs are necessary before putting the home on the market. Asking for the business lends urgency to the seller’s decision to work with you and gets the whole process moving more quickly.
Landing on the List Price
Establishing the sales price of a home can be a contentious issue in the agent-client relationship. Some sellers have an exact number in mind and will be resistant to your advice. Make your case by providing credible local market data and CMAs, and know when to end the relationship if a client is being too inflexible.
Help clients understand what makes a good comp. It may vary depending on your market, but generally speaking, an appropriate comp is a home similar in size and features, within the same neighborhood, that sold no more than six months ago. To support their own opinion on list price, some sellers will conduct research online and use criteria outside these parameters. Be ready to explain how geography, time on market, and other factors affect the profile of comps.
Tell it like it is when the list price is too high. You may agree to “test the market” by listing at a high price that makes the seller more comfortable. But if you’re not drawing buyer interest and a price reduction is necessary, be direct with the seller. Appeasing your client by keeping the price too high will drag out the sales time and lead to frustration for both of you. Be diplomatic in your approach, and make sure clients understand you have their best interest at heart.
Accept when it’s time to walk away. As you’re discussing pricing, gauge how open the client is to accepting your input. A seller who refuses your advice is waving a huge red flag. If you sense too much push back, even after you have a signed agreement, don’t be afraid to suggest that the client may be more comfortable working with another agent. Be sure to communicate who’s responsible for paying marketing or staging fees that have been incurred under the agreement.
If you’re in agency relationship, your duty is to protect your client’s best interests, but give and take between parties is usually necessary to satisfy both buyer and seller. When you reach the negotiating table—and finally the closing table—be open to reevaluating your position while keeping your client’s bottom line in mind.
Don’t get in a cat fight with the cooperating agent. When the buyer and seller reach a point of disagreement, it is not wise for their agents to fight on their behalf. Then it becomes agent versus agent, when the transaction should be about the clients. Never throw low blows or burn bridges. Remember that you and the cooperating agent both want to execute a deal that pleases everyone.
Ask appraisers how well they know the neighborhood. Appraisers are generally hired by the lender; sometimes, they’re unfamiliar with the area. That can lead to value estimates based on incorrect data and can imperil sales. If you’re dissatisfied with the appraisal, suggest that your client get a second opinion from another appraiser. Of course, the lender has discretion over which appraisal to accept.
Tell your clients not to make large purchases before closing. If they buy a big-ticket item such as a car before closing, it could affect their credit score and creditworthiness in the eyes of their lender, who might rethink their mortgage approval. They could find themselves denied the loan at the closing table, which would negate all the work you’ve done together to make the transaction work.
Your relationship with consumers doesn’t end once a transaction is complete. If you want them to send you referrals, and choose you as their agent the next time they buy or sell, you need to stay top of mind. This mean you must have a reliable system for keeping in touch with clients.
Choose only what you need in a CRM. You want a customer relationship management tool you’ll actually use. Don’t spend time trying to learn the bells and whistles of a fancy CRM if all you intend to use are the basic client communication capabilities. The more intuitive your CRM is, the more you’ll use it. And that ensures you’ll touch base with your clients when you’re supposed to.
Make your communication personal. Don’t rely solely on generic drip campaigns; clients will see it as junk mail. Write personalized notes or, better yet, meet face-to-face once in a while. Also, don’t make your communication all about real estate. Show your clients you’re interested in them as human beings. Be inquisitive about their lives. People do business with people they like.
Try to touch base once a month. Staying top of mind means making regular contact to say hello. Monthly communication is a good baseline to start with. Vary your forms of contact, using email, phone calls, and in-person get-togethers. Connect with clients at intervals that are manageable for you. But make sure it’s often enough so they don’t forget who you are.
Sources: Kathy Baker, KB Consulting Solutions, Raleigh, N.C. - Shannon Garcia, Reflections Real Estate Group, Henderson, Nev. - Michelle Gordon, CRS, JH Realty Partners, Ada, Mich. - Tina Jahrsdoerfer, Coldwell Banker M&D Good Life, Shirley, N.Y. - Robin Kuklenski, Firehouse Real Estate Services, Addison, Texas - Kyle Schulze, Berkshire Hathaway HomeServices Ambassador Real Estate, Omaha, Neb. - Mike Stott, Northwest Atlanta Properties, Roswell, Ga. - Julie Youngblood, Keller Williams Realty Southwest, Las Vegas
Executive Editor of Digital Media