Tracking the Trending

The latest issue of REALTOR magazine touched on “What’s Trending in Real Estate” and a couple of the items really struck home. 

First, the stats showing which generations are buying the most homes:  turns out Generation X, the folks from 33 to 47, are now the largest group of home buyers according to the latest data, at 31 percent.  Probably not a huge surprise, since folks in that age range are those most likely to be changing jobs or getting promotions or adding to their families, those life changes that most often spur a change in one’s housing.  But the next largest age group of buyers is Generation Y, those 32 or younger, at 28 percent, not that far behind.  Younger baby boomers (born between 1955 and 1964) came in at 18 percent and older boomers (born between 1946 and 1954) at 14 percent.  One of the more startling items in the study is that younger buyers also tend to use the same agent for repeat services at a far higher rate than older groups, something worth keeping in mind!  The complete details are covered in an NAR study you can find through a link under the Resources area on The Coach’s Playbook blog just to the left.

The other trend noted in the REALTOR article that struck me was the move toward paperless business.  Given the shift toward younger buyers, that paperless trend shouldn’t be surprising, and it will become even more crucial in the future.  Some of the elements of paperless operations are still fairly new and bring with them their own trials, of course, but Apps like Fusion, Zipforms, Digital Ink or Docusign, and Evernote, all of which work on—and sync between—your laptop AND your iPad/Android, seem to be the tools of the future, especially given those generational trends.

As you consider your business planning for 2014 and beyond, are you making certain your marketing targets and your paperless business tools are up to date—and that you’re comfortable integrating them consistently—so you can maintain and grow your business and not be left behind?  Your coach will be there to help you assess your tools and capabilities, and to chart a course toward integrating those elements so you can make more money per hour!

David M. Hassler

Director of Coaching

Reporting to Whom?

Most of us remember our high school and college days with some fondness and nostalgia.  Of course, in our nostalgia, we often forget the main reason for attending those beloved institutions:  to learn and grow.  On campus, the focal point for most of us, at least some of the time, was all those classes we took and hopefully enjoyed, even when we had tons of homework.  And yet, somehow we managed to do it and it paid off.  Now we’re striving to maintain and increase our success in our own real estate businesses in a competitive market.  Of course, one of our benefits, as independent agents, is that we report to no one but ourselves, so we enjoy great freedom and flexibility.  But that coin has another side—a potential lack of accountability. 

And now back to the campus.  Can you imagine how much we would have learned if the profs had assigned all that homework but said that turning it in was optional?  Would we have made all the prospecting calls we needed?  Would we have updated our Exact Target list regularly?  Would we have sent out all those closing anniversary cards and added new entries on our blogs?  Maybe.  However, studies show that we are generally more successful in completing tasks when we have to report the results, but as independent agents we have no such requirement, other than to ourselves.  So how do we report to ourselves?  Do you have a solid system in place for holding yourself accountable, not only for meeting an annual volume goal, but for handling all those monthly, weekly, daily, and hourly tasks needed, step by step, to meet that volume goal in your annual business plan?  If not, chances are you have the potential to improve your business results considerably--and probably to also reduce your stress level.  Your coach can help you develop your own unique templates and systems to make sure you’re doing all the little things you want and need to do to meet your goals and insure that ongoing success.  Now back to the game!

David M. Hassler

Director of Coaching

The Tar Pit of Inspections

Recently, we’ve been hearing from agents that, while the market has improved, prices have increased, and inventory remains low, many buyers and sellers have grown surly and assumed a black and white posture as if they had one hundred percent of the leverage on every issue in a transaction.  Of course, over the years we’ve all had client or two like that, people all being unique, but for whatever reason, the percentage of such “win at all cost” folks seems to have grown over the last couple years.

And one of the primary areas of problems these days is that tried and true tar pit of our business:  the inspection negotiation.  Real estate wisdom—or at least real estate urban legend—tells us that far more contracts fall apart due to inspection disputes than any other issue, and from what we’re hearing it’s gotten even worse.  Transactions seem to be breaking up on the rocks of dripping faucets and closet doors that don’t close, or even on major system problems where a seller refuses to address an air conditioning unit that no longer works to spec, or mold problems that might easily be contained.  And worse yet, both sides are claiming the earnest money when the deal falls apart, no matter, it seems, the merits of their position.  Bad news.

But the worst news is when we, as agents, get stuck in the middle and our clients become unhappy with our services and even blame us and maybe consider taking stronger action against us.  Ugly news.

So how do we provide excellent service to our clients and help them steer through that tar pit?

Stephen R. Covey, of course, gives us a potential roadmap around that pit in his The 7 Habits of Highly Effective People.  Remember Covey’s guidance on time management and his pointing us to focus on Quadrant II activities—those things that are IMPORTANT but not yet URGENT.  While we all probably mention some aspects of the inspection process to our clients before we reach that stage, I wonder if we can take a more proactive and detailed approach—something important but not urgent yet—that will both educate our clients as to the legal rights they have—and don’t have—under the terms of the purchase agreement, as well as educating us in advance as to the personality type we’re dealing with.

Bottom line, we all know the term Major Defect is the key, and yet, in many cases it’s a rather gray area as to exactly what constitutes major!  None of us are attorneys—well, at least I’m not—so we won’t attempt a legal definition other than what’s already in the contract.  However, one thing we’ve heard folks mention to clients in explaining this conundrum is that a Major Defect is something that an objective third party would consider as such; NOT something the buyer just personally doesn’t like or, worse yet, feels the seller owes them.  Something, in other words, that’s a subjective opinion.

We like to think that most clients will recognize the difference in those terms, and the more we prepare them to think that way, giving a few careful examples, the less likely, perhaps, will be a trip into the tar pit for everyone involved.  So put on your Quadrant II hat and keep your boots clean!

David M. Hassler

Director of Coaching

Perfect Pricing

“Price is what you pay; value is what you get.”

--Warren Buffett

Recently in a coaching session with one of our agents, we reviewed their stats for the year to date.  The agent had been on fire and had already closed a volume higher than all of last year, and they were on target to far exceed their goals and achieve their best year ever.  Their average side was far above market and their sold listing DOM was well below it.  All great news!

Then we looked at the average commission rate per side and found it was just a touch over 2.5% instead of their targeted 3.0% average.  The agent had done a few relo transactions with their lower fee in return for a near guarantee of a closing, but overall, based on their average sale price, that 2.5% was on the low side.  In fact, when we looked at the numbers, the agent could have added another $25,000 to their bottom line if they could have kept the average rate at 3%.  That’s some real money!

We talked about many of the market pressures on our pricing and yet the agent realized they could take a more proactive approach to their goals.  That’s when I heard Uncle Warren’s voice whispering in my ear:  “Price is what you pay; value is what you get.”  Wise words, since all too often we allow ourselves to be dragged into discussing price instead of value.

In his excellent work, Book Yourself Solid, Michael Port talks about Perfect Pricing and he focuses on value versus price.  He encourages us to think always about the value our services provide and to ask ourselves—and the client—some questions:

·      How much financial benefit will our service create/provide?

·      How much pain will our service relieve?

·      How much pleasure will our service create?

·      How will our service create substantial peace of mind?

While some of these may sound like “soft” benefits, they’re what really separate excellent service from the mediocre.  And just as importantly, we have to ask how we value ourselves.  Remember, as Port says, people rarely buy professional services based solely on price.  They actually express their own values through what they buy!  So let them!

At the very least, most people love to feel they’ve gotten a deal, so when we believe it necessary or appropriate to discount our fees—yes, we need to consider it as such—we should be sure to help them feel how successful they’ve been in their negotiation and how much we’re giving them.  If we don’t think there’s value in what we’re giving away, why would our clients?

Of course, a discount with a client should produce or strengthen a referral source that brings us more clients and more revenue, so we can sometimes view such discounts as an investment in marketing.  Just make sure that when we make such an investment, the prospects of the return are high!

Remember, “price is what you pay; value is what you get.”

David M. Hassler

Director of Coaching