Increase Your Profits In 2017

OutFront article by: Ruben Gonzalez, Keller Williams Realty Staff Economist

With the market hitting highs in 2016 and potentially moving toward a peak, questions have been coming up about what agents should do when the market slows down and, specifically, how to manage expenses. To help with this important conversation, I interviewed Garrett Lenderman, lead writer and researcher of KW Publishing.

Lenderman, who works directly with Jay Papasan and Gary Keller, has spent a lot of time studying the Budget Model as well as the accounting and spending habits of agents to provide some insight for others on how they can manage expenses and increase profits, even in a shift.

Gonzalez: I want to talk about how agents should manage their budgets during shifts. But first, I want to start just by asking you, what is the single biggest observation you have had while looking at agent budgets?

Lenderman: The biggest observation I’ve had is that agents need to stay committed to having a budget and maintaining a P&L. Not many agents enjoy looking at numbers, and who can blame them? It’s important for agents to keep score and take into account things like their ROI when making decisions about spending money. Doing so creates accountability and is a diagnostic tool because it’s difficult to continually make smart decisions when you go with your gut.

One tool recently introduced to KW associates to help them with this process is the Profit Dash app. Profit Dash offers agents holistic finance management using KW’s exclusive listing and transmittal data right from their phone. It helps make managing expenses easier.

Gonzalez: On to the topic of shifts, what do you think are the things agents need to watch out for if they are headed into a slower market?

Lenderman: The first place I’d start with are expenses that sit below the line, and by that I mean expenses that aren’t necessary to the operation of your business. It’s tempting to treat your business as a personal account, but it’s important to separate that from your business expenses. If you do a good job of that already, the next place I’d look are expenses that aren’t vital for generating revenue. It’s easy, especially when things are going well, to take on extra expenses that aren’t directly driving revenue. But in a hard shift, those expenses can take you underwater.

It’s also important that you don’t make decisions you can’t outlast if things take a turn for the worst. This means either building up reserves that will prop you up in a shift or taking a good look at the affordability of long-term fixed expenses – especially those that would impact lead generation. When revenue starts to drop, you want to have minimal commitment to fixed expenses.

Gonzalez: What about teams? Are there some specific things that could get a team in trouble when things start to slow down?

Lenderman: The same rules apply for teams. However, I would say one of the biggest issues for teams now is their cost of sales. When things are booming and competitive, it can be a challenge to keep splits and salaries in check, but those are things that could make or break a team and will be a lot harder to negotiate down than it will be to keep them in line. Make sure you are making decisions that your business can survive when things get more difficult.

Gonzalez: Any final thoughts?

Lenderman: Watch out for shiny objects. It’s really easy when things are going well to start spending money on cool new systems, apps, fashionable furniture, sleek logos and watercoolers, but you need to really make investments that give you back multiple dollars in return. Hold your money accountable and have specific goals set for your investments. If you aren’t getting the return you want on something, cut the cord.

By: Ruben Gonzalez, Keller Williams Realty Staff Economist

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How To Grow Your Database

Building small communities in your city, school district, neighborhood and workplace is one of the best ways to reach every potential contact in your sphere of influence. And who doesn’t want to expand their sphere and add to their database? While communicating with friends, family and acquaintances online is easier and more efficient, it is still important to interact in person and make personal connections. The more connected you are, the more leads you will get.


 

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USE FACEBOOK AND SOCIAL MEDIA

Facebook groups are an excellent way to target small groups within your community. They are easy to create and maintain, and they bring new contacts straight to your database. Members of your Facebook group can add friends who have an interest in the group and who are active members in the community. The larger the Facebook group, the more people you will contact. However, only add people to the group who are actually in the community you want to build.

Some good Facebook groups to create include:

Local groups

Use your proximity to people as a resource for building a community.

  • School. Your kids’ school is a great way to meet other parents. PTA, room moms, and extracurriculars are awesome groups to get involved with in your local school district.
  • Work. Create a Facebook group for your department or introduce yourself to your significant other’s coworkers and spouses.
  • Parent. Take your parent-of-the-kid group message to social media! Facebook groups for moms and dads allow you to create events and send out invitations that don’t get lost in a sea of text messages.
  • Neighborhood. If your homeowners association or neighborhood association doesn’t have a Facebook group already, start one! This is possibly the most important community to be a part of because the members care about local real estate … and you are the local real estate expert.

Common interest groups

Use a shared love or passion to connect with people in a community.

  • Hobbies. Running, crafting, Netflix-binging, wine tasting. Things you love doing in your free time.
  • Sports. College or professional football, soccer, baseball, volleyball. Whatever gets the crowd cheering.
  • Events. Concerts, musicals, plays, screenings. Anything going on around town.

ORGANIZE WEEKLY/MONTHLY MEETUPS

Now that you’ve built these communities and touched your growing database on social media, go one step further and make a personal connection with the group members. Plan and organize frequent meetups that allow your community to connect your face with your brand. Happy hours, playdates, watch parties and sporting events are all fun and creative ways to get to know your database on a personal level.


The benefit of building communities online and in person is knowing the people around you that you otherwise could overlook as potential clients or lead sources. Build trust and your reputation as a resource in the community, get the message out that you want to help them and the people they know with their real estate needs, and market yourself as the local real estate expert.

Now that you’ve got a strong foundation, go out and build a community!

Tips For Navigating The Home Inspections Process

Getting the listing is just the first step.

As a listing agent, there are ways you can help your client prepare their home for sale.  And as the buyer agent, you might be asked by your client to addend the home inspection. But should you? Read these real estate agent tips for navigating the home inspection process with their clients.

How Listing Agents Help Sellers Prepare for the Home Inspection

Most sellers understand that there are at least a few things that need to be done to prepare their home to go on the market. Staging and cosmetic improvements may be some of the issues that come to mind first, but in order for the selling process to go smoothly, sellers should also consider preparing their homes for the inspection.

The inspection can play a pivotal role, with buyers taking the opportunity to use issues that arise as leverage to negotiate for a lower price. In some cases, the deal may fall apart because of the results of the home inspection.

As the listing agent, you can help mitigate the need for these negotiations by helping your seller properly prepare for the home inspection. One way to make this easier for your client is to provide guidance for preparing the home for inspection as well as a list of repairs that must or should be completed prior to the inspection.

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Preparation

-Ensure inspector has easy access to all areas of the home, including attics, basements and crawlspaces.

-Create a clear path to mechanical items, such as the furnace, electrical panel and water heater.

-Move furniture away from exterior walls so they can be assessed for cracks.

-Clear closet clutter so all walls inside a closet can be seen and examined.

Must-Fix

-Remove all ceiling stains. Regardless of origin, ceiling stains make people think of water damage, whether or not the source of the issue has been taken care of.

-Check the attic for mold. Improper venting for bath or exhaust fans can create a breeding ground in the attic if not properly vented to the outside.

Should-Fix

-If the seller has done any electrical work on their own, hire an electrician to ensure all electrical work is up to code and includes the appropriate GFI outlets in the kitchen and bathrooms while eliminating hazards such as double-tapped electrical breakers.

-Repair leaky faucets, slow drains and running toilets.

-Locate, repair and paint any rotting exterior wood. Even if it isn’t a structural defect, it may give the appearance of one.

 

Agents Attending Inspections

If you are the buyer agent, you might be asked by your client to addend the home inspection. Should you?

All involved in the real estate industry agree that the home inspection checks in as a crucial step in the home-buying and selling process.

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What many can’t agree on is which parties should attend the inspection. Between the inspector, the buyer, the buyer agent, the seller and the listing agent, that can make up for quite the full house during the inspection. Who should be there?

So is it best for everyone involved to let the inspector handle the inspection alone—so the job at hand commands full attention—or should the real estate agent be present to advocate for their clients? In each case, it comes down to the comfort level of the parties involved, but in order to make an educated decision, check out the list below where we discuss the pros and cons of the agent attending the home inspection.

Pros

-The agent can act as an intermediary between the inspector and the buyer by asking for clarifications on issues that arise.

-The agent may be more aware of home inspection red flags than the buyer and can point those out to the buyer.

-The agent can see the things the inspector mentions in the report firsthand so they are better able to discuss them with the buyer later.

-By attending more inspections, the agent add to their overall knowledge base and can better answer questions from future clients when issues arise. Eventually, the agent may also be able to distinguish which inspection issues are more common in specific areas and neighborhoods.

Cons

-The home inspector may feel the agent gets in the way during the inspection.

-The agent inadvertently may influence clients for or against an issue that comes up during the inspection, when ultimately, the call should come down to the buyer and what they are comfortable taking on or dealing with.

-Inspections are often completed more quickly when the agent does not attend.

-If the buyer attends the inspection without the agent, it gives them an opportunity to hear about issues straight from the home inspector, whereas adding the opinion of another person (the agent) to the mix may confuse things.

 

 

Build Your Unique Selling Proposition

Information is immediately accessible on the Internet, regardless of its validity or confirmability. It can leave little room for interpretation and even be disadvantageous.

As great as some Internet information is, the fact remains that the value of a real estate agent and their services cannot be replaced by the Internet. Buyers and sellers will always benefit from having a personal real estate agent.

By creating and building your unique selling proposition (USP), you ensure that your value is not only communicated, but well represented.

Your USP is created in a five-step process, built upon knowledge, attitude, skills and beliefs that you already possess! Your USP is your unique, memorable and persuasive statement that expresses the true value of working with you. It’s your advance presentation. It’s what gets your foot in the door so that you’re sitting at the table. It should set you apart, allowing you to position yourself in the market.

Also referred to as the “agent message,” your USP is unique to you. You want it to resonate with your clients in a meaningful way, while representing your personal validity and abilities. This is what defines and distinguishes you.

5_steps.png The five-step process to creating your unique selling proposition is:

  • Step 1: The words and phrases you use to describe yourself
  • Step 2: The words and phrases others use to describe you
  • Step 3: Define your customer service
  • Step 4: Create your value proposition
  • Step 5: Create your unique selling proposition

 


STEP 1: The words and Phrases you use to describe yourself

Examine and describe yourself . Each one of us is a story. Throughout your life, you have accumulated experiences, knowledge, skills and beliefs that weave together to tell that story. Your life story is what makes you unique and distinguishes you. A good place to start when telling your story is to examine your résumé. Jot down notes as you scroll back upon your life story. What experiences stand out to you? What lessons define your mettle? What challenged your knowledge base? What changes taught you growth? Don’t be modest about your accomplishments nor avoid your tribulations. These are all facets of the whole.

Make it relevant to real estate. How do your life story, skills, knowledge, traits and experiences pertain to real estate? How do they benefit your persona as an agent and how do they benefit your client?

When considering how to make it real estate relevant, think about what buyers and sellers say are the most important factors to them when choosing a real estate agent.

 

STEP 2: The words and phrases others use to describe you

Testimonials are a great starting point to get this process flowing. Testimonials and third-party endorsements reflect the knowledge, attitudes, skills and beliefs that others think you offer. They are an index of your strengths and services.

Ideas to get you thinking about how to craft this part of your USP:
– How do the people you are closest to describe you?

– How do the people you respect (teachers, mentors, employers) describe you?

– How do your business colleagues, relationships and vendors describe you?

– What notable thing did you do for your clients that they would remember?

 

STEP 3: Define your customer service and the quality you offer

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What unique services and personal touches do you extend to your clients? Define what clients say they want from an agent and target where you meet those needs. What are the areas of real estate that you find are important for your clients to know and understand? What lengths do you go to in certain areas to make sure your client remains satisfied with your service? What do you do that makes you unique and speaks to your personal added value?  What are your strengths that directly benefit your clients (i.e., assessing your clients’ needs and motivations, negotiation prowess, documentation and legalities, selling strategies).

 

STEP 4: Create your value proposition

Once your service offerings are established and written down, you can take them and transform them into client benefits. These benefits explain your value, underline your commission and accentuate the dynamics of what it is that you do.

Your sales skills are unique to you and define your character in real estate. Do you excel at listening and analyzing your clients’ needs? Do you possess superior negotiating tactics? Is elicitation your strong point? When creating your value proposition, keep in mind that this is to illustrate what your client “gets” as a result of your value offered. This is what they get from you that they could never get from the internet or working alone. Ask yourself, “What do I offer that in turn benefits my client?”

 

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STEP 5: Create your unique selling proposition
Once you have completed steps 1 – 4, you are ready to create your USP – your personal “brand identity.” As an agent, you are not only selling homes: you are selling yourself as a qualified person to get your client the best deal in the best time. Having a well-defined self-statement will set you apart from the crowd and reinforce your validity as the agent they should hire.

Congratulations! Once you have your USP, you have a foundation for your personal validity, and you are grounded in why you are uniquely qualified to be a real estate professional. You have started building your wall of value.

This information is derived from the KWU course Lead Generation 36:12:3 To find out when the next course is being offered in your market center, visit KWUConnect.