Knowledge Trumps Information

Recently, I skimmed an interview in Fortune where Warren Buffett talked about the best advice he’d ever been given, along with his secrets to success.  The thing that struck me most was Uncle Warren’s comment that his “big secret” was that he was good at “lifelong learning.”  Wow, what a simple idea, and one we so often forget as we get caught up in our day-to-day spin!

So, taking a page from Warren’s book, I decided to do some reading and turned to the Inman News website and was of course delighted to see that a new Facebook app “let’s homeowners tweak valuations” so they can “adjust their published online home value….”  As Charlie Brown likes to say, “Good grief!”

But then I found another article that lowered my blood pressure a bit.  The writer’s lead line had to do with “knowledge-driven services,” and since I love knowledge and I love services, I dove right in.  The article pointed out the widespread public availability of a vast amount of real estate information that has become staggering compared to what was out there even ten years ago.  The consumer can be overwhelmed by not only the amount of information, but the wide variety of sources. 

Unfortunately, having access to information can be confusing and misleading—or downright zestimately wrong—and is no substitute for knowledge! 

And that’s where we real estate professionals come in.  Our expertise and experience allow us to analyze the information and recognize subtle patterns and quirks that make one element of that information more important, for example, than others.  Our understanding gets us to the “how” and the “why” of the information that are crucial in making decisions.  Voila, value added!

The article goes on to remind us that not only is knowledge power, but that given the near instantaneous generation of information, such knowledge had better be delivered quickly.  Enter technology!  The writer urges us professionals to make sure we’re fully integrating the latest tech tools—tablets, digital contracts and signature, etc—and that we’re comfortable and professional in their use when we’re with a client. 

So, where are you with the integration of contemporary technology so you can leverage those tools and showcase your high level of knowledge to win and impress your clients every day?  Your coach will be there to help you assess your integration of the various tools, and we’ll continue to hold roundtable discussions on the Tablet Revolution, so you can spend some time on the practice field honing those Evernote and Docusign skills and add more of the latest Apps to your toolkit.  Get ready to showcase your knowledge to its best advantage and to impress those Millennials as they move into the market!

David M. Hassler

Director of Coaching

Going Pro

At our recent Prudential Indiana Business Conference, we enjoyed one of the most inspirational and motivating keynote speaker we’d seen in years. Ashton Gustafson, one of Realtor Magazine’s recent “30 Under 30” rising stars in our business, wowed the attendees with his presentation “Making Music in a Noisy World.”  His overall point was that it is too easy for us to get lost in the commotion of an industry constantly inundated with new technologies, new ways to communicate, and new ways to interact, so how can we best shape our mindset for the modern marketplace?

Ashton’s response to this question was his “Ten Truths” for surprising and delighting consumers and clients, and integrating “old school” tactics with the latest digital platforms to leverage the power of those new tools.  Craig West emailed everyone the outline of those Ten Truths yesterday right after the conference, and there will be more from the training and the coaching programs about Ashton’s approach as we look to help agents incorporate more of this young star’s ideas into their business.

His emphasis on the word Truths was important in that he contrasted Truth—with its underlying essence of being rock solid and unchanging—with Trend, those latest and hottest new approaches and fads and techniques we’re bombarded with daily, if not hourly.  He pointed out that, much as we’d love to find one, there are no magic elixirs in our business, no perfect system that one can simply implement, flip the switch, and then ride to a career of ease and riches.  It takes work, and lots of it.  But how can we make that work more efficient and effective, so we can make more money per hour and enjoy the truly important things in our lives?

Toward that end, we were especially struck by one of Ashton’s Truths and its importance in helping agents succeed in their business and at the same time to better control it and their lives.  He called it “Turning Pro is Greater Than Being an Amateur.”   By “turning pro,” Ashton meant what we all inherently understand:  approaching our business solidly as a business, making our full commitment to it, and to establishing solid goals and a disciplined plan and process for reaching those goals, and then tracking our progress along the way.

Ashton illustrated his own “turning pro” commitment in the afternoon session where he spoke about “Time Management and Lead Generation: Systems, Tools, and Disciplines.”  He shocked probably 99.9% of the folks around the room by telling us that from 8:30am to 11:00am each day—yes, EVERY SINGLE DAY—he takes no appointments and he works his daily routine that is his key to generating and cultivating leads—planting seeds, as he called it—so he can harvest the good work he sows each day.  He uses a system of scoring “points” for each activity he performs, and his goal is to rack up 55 points by 11am, so he then has the rest of the day for appointments with clients and the execution of his business.  And yes, Ashton will be sending us his point system so we can share it with everyone!

So, there will be more to come from this inspirational young man who brings excitement and old school, homespun connection, coupled with integration of the latest tools—yes, he uses Evernote—and who is so willing to share his success with others so we can make our music in this noisy world.

Remember, as Ashton shared in his presentation, Oliver Wendel Holmes said it best more than a hundred years ago:

“The greatest tragedy in America is not the destruction of our natural resources, though that tragedy is great.  The truly great tragedy is the destruction of our human resources by our failure to fully utilize our abilities, which means that most men and women go to their graves with their music still in them.”  Oliver Wendell Holmes  

David M. Hassler

Director of Coaching

Blame it on Phil

Boy, what a difference a degree makes—or actually about 30 degrees!  From our unscientific survey of various weather experts (LOL!!!) on a multitude of TV channels, it seems that nearly every day so far this year both the high and low temperatures have run about 30 degrees below average!  Oh, and then there was all that white stuff piling up on our driveways and sidewalks and front steps in record breaking amounts, plus those magnificent six foot long icicles dangling from our gutters, wreaking havoc on them and just waiting to skewer the postman or a dog walking too close to the house.

And then Punxsutawney Phil sees his danged shadow and scurries back to hide for another six months…or is that just weeks?

Who out there would be surprised that the volume of home sales and new listings so far this year has been well below the expected?  Phil maybe wasn’t surprised, but he sure was scared, so he dove back into his burrow to shiver some more.

And yet, we DO know—even without the expert guidance of our favorite on-air weather-person—that spring eventually WILL come, the tulips and daffodils will pop, and our bicycles will no longer have to weep alone in the garage.  And, yes, those folks who are thinking of buying or selling a home this year will climb out of their burrows and stretch and finally—finally—take action, delayed by our nasty winter, but undeterred!

So, why is it that we hear so many real estate experts (do they go to the same school as the weather people?) telling us that, because sales were way down in January and only picking up a bit in February, that 2014 is doomed and that we should all, like Phil, scurry back into our burrows as if those buyers and sellers were determined that, since they couldn’t buy or sell in January or February, then the heck with it, forget it?

While none of us can predict exactly what the market will bring us this year, we like what we saw a couple of Saturdays ago when, for a brief tease of what’s to come, the sun shone like a chamber of commerce video and the temperature soared to just below 60!  By mid afternoon, the traffic heading into Indy’s Broad Ripple area was stacked in all directions, as if IU and Purdue and the Colts and the Pacers were all playing in championship contests that very afternoon.  Talk about releasing some pent up demand!!

Okay, beer and wings may not be houses, but weather-bound pent up demand is still pent up demand, so we’d say pay no attention to that gopher in the burrow, and get your game ready to go once the mercury approaches a normal level, so you can grab all those opportunities as they start to pop like those tulips. 

And hopefully you’ll even see your shadow!

David M. Hassler

Director of Coaching

Perfect Pricing II

In another recent coaching session, the topic of a certain competitor and his deeply discounted commission rates—and their impact on the market—came up.  We wondered how the agent could truly serve the many listings in his portfolio, and we decided to do some research.  Of course, we expected to find extra long DOM’s, a low average sale price per transaction, and poor sale to list price ratios, all pointing to a lack of attention and poor service.  In many cases, that’s the result of such discounting.  But for 2013, it turned out that specific agent had an average DOM well below the average, a higher than market average sale price, and a solid sale to list ratio!  How could that happen?

There’s only one way possible.

Total control.

As we think about it, a substantial discount in the commission rate—while protecting the BAC—could only work if it granted the listing agent far more control over the pricing and positioning of the home.  The LISTING AGENT, not the seller, would set the price—at the lower end of a reasonable CMA range.  HE would stipulate price reductions, every two weeks, and they would be included in the listing contract, and would be automatic.  HE would stipulate and approve the seller’s staging of the home.  In other words, if a seller wanted to take advantage of deeply discounted fees, they would have to agree that the goal is to sell the home fast—which some folks may find a positive thing—and they must grant the listing agent the lead in the strategy and tactics of getting that job done.  Good news for the listing agent, but what about for the seller?

Quite probably, money left on the table, as the discounting listing agent’s goal is simple:  sell more and sell ’em fast and sell ’em cheap.

Of course, we don’t recommend or encourage this kind of commission discounting, and, as we said in the previous Playbook—or actually, as Warren Buffett said—“Price is what you pay; value is what you get.”  Bottom line, focus on value so that, when you’re pitching a listing and the seller tells you they want a deeply discounted commission rate, just fill them in on what that really means:  either they will lose control of the pricing strategy and maybe even leave money on the table, in the long run, or, at the very least, they’ll get what they pay for—poor service—and they may find it mighty tough to get that discounting listing agent to respond when they have a question or a problem.  “Mailbox full” is not an ideal way to cultivate your sphere of influence!

And speaking of leaving money on the table, another element to make sure that potential seller understands, if they continue to be pushy about a deep discount, is that any smart agent representing a buyer will likely recognize the firms and/or agents known for their discounting tactics, and, when they prepare a CMA to determine a value for their buyer client to consider in making an offer, they should discount the value of the house in question by maybe 2% since the CMA will be showing other home values where a full commission was likely paid!  Apples to apples, right?  Bottom line, the Seller, in that discounted fee situation, will be—or at least, should be, if the buyer has a savvy agent—getting offers that reflect a true market value of their home, appropriately discounted to reflect the skinny commission they’re paying.  Just as would happen with a FSBO, right?  Yep, probably leaving money on the table.  Again.

So, remember Uncle Warren’s wisdom, and foster the principal of value versus price!  And also remember that NAR survey from a couple weeks ago, where only one percent (YES, ONLY ONE PERCENT) of sellers considered the commission rate the most important element in their choice of a listing agent.

Value, indeed!  Good to know!

David M. Hassler

Director of Coaching