There’s a paradox in today’s housing industry: The real estate marketplace is showing signs of potential, but the real estate business is still falling apart. Home affordability is the best in decades; mortgage rates the lowest in modern times. Sellers and buyers are starting to get it. Yet after hundreds of thousands of REALTORS have left the industry, the news continues to be about bankruptcies, layoffs and implosions at brokerages nationwide. Agents are demoralized; managers are shaken; brokers sweating. This, even at a time when online operational costs such as marketing have plummeted and technology-driven success stories are soaring. Why, then, is the industry stuck in the mud? Perhaps it’s because we’re focused on the problems – and not the opportunities. Peter Drucker, the management guru whose works inspire the consulting ideas at Matthew Ferrara & Company, once said: “Unless there is a true catastrophe, problems are not discussed in management meetings until opportunities have been analyzed and properly dealt with.” In part because of their risk management orientation, [managers] are exceptionally good at detailing why a new initiative will not work. This includes both employee and customer issues.”
Recently we pointed out that the next generation of REALTORS will come from non-traditional sources. As brokers focus more on productivity than body-count, and the recession will ultimately teach them this business lesson. A more rational, performance-based method of building real estate companies will emerge. Traditional “Ponzi” schemes of filling the bottom with as many people with a license-and-heartbeat will fade away. It will become less frequent, not more, than inexperienced sales people will be thrown into the office mix. This positive lesson, while long awaited, will help brokers reconfigure their strategies for the future. But what about salespeople? How will they know whether it’s right for them to join a particular company? Let’s look at the other side of the recruiting question for a change. In the future, real estate salespeople will still be independent contractors; As long as brokers and agents can milk the tax loophole, they will. Whether or not that has any impact on performance, however, is a non-argument. The best agents in the business are the best, not because of their tax status, but because they surround themselves with the right productivity environment. Entrepreneurial salespeople know that the key to their success is to make [...]
Everyone knows about the 90/10 rule: 90% of the business is done by about 10% of REALTORS. Translated to a consumer experience, this means that most buyers and sellers have about a 1-in-10 chance of getting the “best performing” agent to sell their home or represent them in a purchase. Even a generous assessment of the business – quartiled for the top 25% of agents who generate more than $200,000 in commissions annually – leave the underperforming-bottom 75% of the business to muck up the works. And while banks, lenders, Fannie, Freddie, Frank and Dodd all share some blame for causing the current crisis, could it be that the “other” broken real estate market is the soft-underbelly of the brokerage industry itself? Do we really need to answer that?
April 2 – Camp Verde, AZ April 15 – Wichita, KS April 16 – Overland Park, KS Our workshop will teach you how to maximize the potential of social networks, including: Identifying the “business case” for social networking as a primary prospecting tool Examining the research of how modern consumers are using social networking every day Creating a plan to use the most important social networks as prospecting platforms like Facebook. LinkedIn, MySpace and other key sites Leverage Hispanic social networking sites – like MySpace en Espanol and MiGente to tap into the growing Hispanic marketplace in real estate Creating an online presence using key features of social networking – status updates, sharing links, video, testimonials and more Develop a Daily Action Plan to update and influence your sphere of influence Managing your social networking presence using mobile wireless tools Master the the “do’s and don’t’s” of social networking Expanding your Sphere of Influence with recommendations and connections Replacing traditional “database, mass emailing, postcard mailings and classified ads” with social networking tools Developing a short- and long-term sales pipeline with these modern Customer for Life systems
A recent quote from Walter Percy Chrysler has been stuck in my head lately: Most people never get ahead in life because when opportunity knocks, they are out back looking for four leaf clovers. These days, it seems like Chrysler’s perspective is particularly appropriate to the real estate industry crisis. In addition to merely waiting around for Uncle Sam, Freddie, Fannie and even China to revive the housing industry, most brokers are busy scurrying around looking for lucky charms to help them survive the downturn. In fact, it’s even worse than usual – beyond burying statues and rearranging furniture – when we see brokers doing the absolute worst possible thing they should be doing right now: Recruiting the agents from failing firms. Did anyone every wonder to ask just why that firm was failing in the first place? History has shown us that good companies gain market share during downturns. Usually, that means they sell more of their goods or expand into new territories. Of course, the real estate industry has never used traditional business concepts to measure success, so for them, having more agents than the competition is supposedly a sign of success. Never mind that majorities of their [...]
Months ago, we reported to you that internet marketing was dead. That was August 2008, when MySpace overtook Yahoo in display ads totals for the month. Our argument then was that people prefer to interact with other people, even online, and that the original internet age of “blindly searching” the portals was dead. They just didn’t know it then. And for another seven months the world of SEO, PPC, page ranking and site relevancy made a few valiant attempts to remain relevant themselves. Yet today, David has finally slain Goliath: Advertising Age reports that Facebook has become a bigger source of traffic for some websites than Google. How the mighty have fallen. How we got to this point in internet evolution is not entirely unexepcted. In fact, it’s almost like the modern history of the Western world. The original web was a wonderful but overwhelming magical place where lots of information was stored “somewhere” online. Only a chosen few knew the secret words and algorithms that could lead you to it. The Pope of IP addresses, of course, was Google, whose methods of search-ranking madness were known only to the inner circle. Mere mortals could only dabble at guessing how [...]
For the past few years, one trend in the real estate industry has increasingly worried me. Without hesitation, most REALTORS in our workshops can tell us all about their local market: the number of homes available, listed and sold this month, the average days on market, even the top agents by inventory or revenue. They know the market share by dollar, number of agents and most yard signs. They can rattle off housing statistics like they were a search engine, organized by price, bedrooms and baths. For all appearances, REALTORS seem to know a whole lot about the marketplace. Unless you ask them about consumers. This point occurs in every class, every marketplace, with REALTORS old and new. It’s proven itself to be a major knowledge gap in a sales industry that has steadily lost consumer loyalty every year. When you ask REALTORS what they know about the consumer, the come up blank. Guesses, estimates and defenses against facts – because when the research is presented, it’s never accurate to “their market.” But overall, it’s fairly clear that REALTORS know more about the physical houses than the actual people they work with every day. And it’s proving to be a [...]
