The difference between business owners and real estate agents is that business owners tend to focus on profit, rather than commissions.
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If you don’t know whether you’re on track with making a profit, you should.
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This is because the point of a business is to turn a profit. I can’t tell you how many agents I meet with who don’t have any idea what their profits are like.
If you don’t know whether you’re on track with making a profit, you should. Based on your income level, what should you be taking home for a net profit?
I’ve got some great PowerPoint slides that can help you determine these numbers. They’re from the new Keller Williams course “Business by the Book,” and they’re available for download here and here.
If you have any other questions or would like more information, feel free to give me a call or send me an email. I look forward to hearing from you soon.
As real estate agents, it’s very important that you play “Red Light, Green Light” with your expenses.
In other words, we agents have to hold our money accountable, especially as you make investments to grow your business. You need to understand that those are investments, not expenses.
We meet so many agents who throw their money at different things. When we ask what kind of return on investment they get on those, they shrug their shoulders. Frankly, they have no clue what their ROI is.
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Do you know what your return on investment is?
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We make sure that our agents are getting a return on their money. That could mean the investment they are making with us here at Keller Williams, online lead generation, and more.
We have a few suggestions of where your budget should be spent as an agent. We also have a little exercise on how to play “Red Light, Green Light” with your expenses. Check out the PDF here and here. As always, if you have any questions, please don’t hesitate to reach out to me. I would be happy to help you!
Today I want to present you with something that can help you build a team and build your business.
In the video above, I have in my hands the organizational chart many of the top agents here at KW Realty use to go from being a solo agent to building what we call a “seventh-level business empire.”
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With this chart, you can build a seventh-level business empire too.
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What’s cool about this is Gary Keller talks about the seven levels of real estate success in his book “The Millionaire Real Estate Agent,” which was published nearly 11 years ago. On page 202 of that book, you’ll find a lot of the same models and systems this chart has.
This chart, though, has updated versions of them—they’re the new seven levels from a course we teach called “Business By the Book.”
If you have any more questions about how you can build your business to the seventh level, give me a call so we can sit down together and get started. I’m happy to help you.
If you want to grow your database and your real estate business, most agents know that there are two ways you can go about it: prospecting or marketing.
Most new agents focus on prospecting. They do open houses, knock on doors, make cold calls, and call expired listings and for sale by owner properties. They go out and find the business.
Most top agents focus on marketing. Typically 80% or more of a top agent’s business comes from marketing. They get past clients, repeat business, and referrals.
What do they do to market? I have the answer here.
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Top agents focus on marketing.”
In our Business By the Book class, we teach the top marketing and prospecting techniques to help you grow your business. You can download the list here. If you have any other questions or you’re interested in our class, just give me a call or send me an email. I would be happy to help you!
How do our top agents stay in front of their databases and close hundreds of transactions per year? The answer is simple and I’m going to share it with you today.
As an agent, your database is the core of your business. Even though we talk a lot about the database, it can be hard to truly grasp the significance of what it does for you and your real estate career.
Your database is something that you’re interacting with every day. So, how do you communicate with it in a systematic way?
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These systems and tools help our agents to stay in front of their databases.
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Systematic communication with your database is going to be key to your success, and I’ve got an amazing way to achieve it: the updated 36 touch system and the 19-to-connect from the Millionaire Real Estate Agent 2.
These slides are from our great Keller Williams class called “Business by the Book.” This class teaches you all about how to connect with your database, and these are the same tools and systems that our top agents utilize all the time with their databases.
If you’d like to learn more, have any other questions, or would like more information, feel free to give me a call or send me an email. I look forward to hearing from you soon.
Have you ever taken a behavioral assessment before?
We have many agents who want to build teams and leverage behavioral assessments in their screening process to determine whether the people they’re hiring will be a fit. The most common of these behavioral assessments is one called the DiSC profile, and the big mistake a lot of people make is going to Tony Robbins’ free website and using the free DiSC profile offered there.
The problem is, that particular behavioral assessment is geared towards a person who is in their personal and home life, so the results you get from it can vary wildly from something you’d get from a paid Abelson DiSC that costs anywhere from $10 to $20 per report.
Dr. Abelson has a great DiSC report that’s entirely based on a person’s job world, and it provides much more clarity for the hiring process. Beyond that, we see people also use things like activity vector assessments from corporate consulting that cost $250 each.
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This the only assessment that analyzes cognitive abilities as well as behavior.
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At Keller Williams, we’ve built our own proprietary tool that our agents have access to called the Keller Personality Assessment. This is the only one that actually gauges not only what a person’s natural behavioral style is, but it also talks a little bit about their cognitive abilities by checking things like IQ and how quickly they pick up on new things.
We’re very excited to be able to offer this to our agents. For a limited time only, you canclick here and submit the form and we will send you a link where you can complete the KPA. We’ll then sit down with you and talk about what your strengths are and how you can leverage them to be a great real estate agent.
If you have any questions, don’t hesitate to give us a call or send us an email. We’re here to help.
There are a lot of agents out there who are moping around because there are only one-and-a-half months of inventory on the market.
On the contrary, low inventory actually means big opportunity for you and your real estate business.
In fact, just last month we sold 214 homes. That is the second-highest month that we’ve had in 10 years of being in business, beating even our May, June, and July numbers.
So, how are we doing that when there are only 4,800 homes on the market?
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You have to proactively prospect every single day.
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We’ve helped our agents realize that low inventory means big opportunity. You can’t just do three of the four P’s in real estate. You can’t just put the sign in the yard, pop the property on the MLS, and pray that another agent brings a buyer along.
You have to proactively prospect every single day to find listing inventory.
The latest numbers are in for San Diego County, so I wanted to take a moment to talk about the real estate market and what I’m seeing right now.
We’re down about 9% in the number of new listings from last year. We’ve only brought about 12,000 homes on the market this year compared to 14,000 last year. The pace of sales is slowing down a bit too. We saw 7,400 home sales by this time last year, but right now we’re sitting at around 7,300.
Combined, those two factors are really knocking down inventory in the market just as the busy season is starting. That’s going to make prices shoot up. Who knew that San Diego County could get more expensive to live in, right?
Our median sale price is up by another 5.5% from last year and sits at $510,000, which is absolutely incredible. Half of the home sales are below $510,000, but the other half are above that number. That’s a higher figure than we saw in 2006.
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There are only 1.6 months of available inventory right now.
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The big question looming for Southern California is what will happen with our active inventory. We’re down by 30% year-over-year.
As of April 1st, we had 4,864 properties listed for sale in the entire county, a 1.6 month supply. We typically sell about 3,700 homes each month and that number can rise as high as 5,000 in the summer.
Buyers face a scary proposition in this market. When you consider that half of buyers are also sellers, the inventory problem makes sense. Sellers are hesitant because it’s hard for them to answer the question of where they are moving next in this kind of market. That’s where the best agents are turning this market into an opportunity.
Next time, I’ll talk about how you can turn these market conditions into a big opportunity for your business. If you have any questions in the meantime, don’t hesitate to give me a call or send me an email. I look forward to hearing from you.
Are you aware of tying arrangements and the risk they pose to agents? You need to be careful when tying a buying and selling transaction together with the same client.
Most agents know about tying arrangements, they just don't know what they’re called.
A tying arrangement is when we talk to a client who wants to put an offer in on a property and we ask if they will list their home with us. Any time you tie two transactions together, you put yourself at risk for an antitrust violation.
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This can put you at serious risk for antitrust violations.
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The biggest instance where this can show up for agents is when an agent takes a listing and the buyer says 'If I sell this house with you and buy the next one, will you give me a discount?' Agents can't sell a house for a client and buy the next one with them at a discount.
It's a tying arrangement and it just can't be done. If you want to give them a discount independently of their ability to perform on two transactions, it's your money and you can do what you want with it. You just can't tie two transactions together.
If you have any other questions about tying arrangements or any transactional violations, give me a call or send me an email. I'm here to help.
No seller likes to have to make price reductions, but sometimes they are necessary. How do you determine when your seller needs a price reduction?
Today, there are fewer than 5,000 homes on the market in San Diego and in any typical month we sell between 3,000 and 4,000 homes. If your home has been on the market for weeks or months without accepting an offer, it’s time for a price reduction. Homes priced correctly are selling very quickly in today’s market, within days and weeks.
The best time to set the stage for this is during the listing consultation with the seller. This way, they can clearly understand the dynamics of today’s market. If we are on the market for more than two weeks and have had fewer than 10 showings and no offers in that time frame, we need to start entertaining the idea of a price reduction.
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The best time to set the stage for this is during the listing consultation.
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The key to getting the highest price when reducing your price will be to cut fast and cut hard so you get the property under contract quickly.
The longer a home sits on the market, the lower the seller’s net is. Sometimes getting the highest possible price for a property requires being brutally honest. If a home has been on the market and is not receiving offers, we call our sellers and let them know the situation.
If the market has spoken and the price is too high, we have two options for a reduction. One is a big 10% price reduction to sell quickly or a 5% reduction to test the waters further.
At this point, it’s not even an opinion that the home is overpriced, it’s a fact. If you have any questions for us about price reductions or anything else, give us a call or send us an email. We look forward to hearing from you soon.
We're heading toward a market shift, so pricing a home properly is going to be a more important skill now that it has been in the last 10 years. How do you help your sellers do this?
I wanted to give you some advice on helping your sellers choose the right price for their homes.
As we go into this shifting market, pricing a home is going to be a more in-demand skill than it has been in the last 10 years. As we come into the fourth quarter of 2016, we’re starting to see that the homes that aren't priced exactly right are sitting on the market. In fact, a lot of them end up having multiple price reductions and selling for less than they probably should have right out of the gate.
When you're helping your seller choose the right price, here's the simple formula for me: I want to get real about the condition of the property I'm about to bring to market. Is it a two or is it a 10? From there, I want to get real about the condition of the other properties on the market. Are they nicer, or is your seller's property nicer?
Once I've identified that, then I'm going to look at the competition and the way they are priced. I intend to be the best, highest quality home on the market for the price. What I'm saying is that if you're the best value on the market, you'll always be the first to sell.
As somebody who has sold dozens of properties of my own and thousands for other people, I can tell you unequivocally that the market does not let properties sell too cheaply. Here's what I mean by that–if you think a property is worth somewhere between $450,000 and $500,000, I'm listing it at $450,000 every time. If I list at that price and it was supposed to be $500,000, I'm going to get multiple offers in a short time and it's going to sell for $500,000 or maybe even more.
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The free market will always help you find the right price.
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That's the beauty of the free market system; the market always helps you get the pricing right. It also punishes you when you get greedy on the front end.
If the property is worth $500,000 and you price it at $510,000, the property begins to stagnate on the market, you have a low number of showings, and buyers start to wonder what's wrong with the property. Other agents may not show it, and it eventually sells for far less than it should.
Do the right thing by helping your sellers pick the right price out of the gate and get the home sold quickly. If you have any more questions about pricing homes or I can help you in any way with your real estate career, give me a call or send me an email. I'd love to help you out!
With inventory as low as it is, your sellers should be receiving multiple offers. You need to be prepared to help them pick the best offer for their unique situation.
Inventory is at an all-time low, and if you have a property that is priced right, you should be concerned if you’re not getting multiple offers. As a listing agent, it is your job to help your sellers choose the best offer.
Is the best offer always the highest price? Or is a cash offer the best offer? Should you go with a buyer with conventional financing or a buyer with a VA loan?
The best offer can actually be any of the above. Ultimately, the best offer is the one that makes the most sense for your seller and is the most likely to close in the time frame your seller wants.
Let me give you an example. One of our agents recently sold a great house. An offer came in over asking price — in fact, it was so far over asking that we knew there would be an issue with the appraisal. The agent asked the buyer to add a clause that stated if the appraisal came in up to $25,000 under the offer price, the buyer would write a check for the difference.
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As a listing agent, it is your job to help your sellers choose the best offer in a multiple offer situation.
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The buyer agreed to the clause up front and we went to get the okay from the lender. We needed to verify that the buyer had the funds to cover the difference and that the loan program would allow them to do so. In this instance, the buyer didn’t have the funds, so we took an offer that was a little bit less money but more able to close.
As the listing agent, our job is to fully educate the seller and help them see the upcoming bumps in the road that they might otherwise miss.
If you have any questions about dealing with multiple offers or if there is anything else you want to know about, give me a call or send me an email. I would be happy to help you!
