For Help-U-Sell Brokers: Listing Consultation Clarification

In my conversations with you, I’ve noticed an occasional quirk in the way you present the Help-U-Sell program to sellers.  I call it a quirk – but it’s really a misunderstanding, one that can create problems for you.

You don’t have three programs for the seller to choose from.*  You have one; and it is FULL SERVICE, including MLS.

We acknowledge that, even with FULL SERVICE, there are three ways your home could sell and each one comes with a different cost.  We charge the seller at closing based on how the home actually sells.

Your Set Fee is the same no matter how the home sells, so you don’t really care which way it goes (although we love it when there is no outside broker/agent involved because then the seller saves more and leaves the transaction very happy.  Happy sellers are the most powerful part of our marketing).

If a seller is willing to partipate aggressively in the marketing of the property (open houses, outreach to neighbors and co-workers, sharing on social media, etc) they may CHOOSE to stay out of the MLS, thus increasing their chances of saving the most.  But it is a choice they make within your Full Service program.

The message is:  don’t over-complicate your listing consultation by forcing the seller to choose this program over that program over the other program.  Present your program for what it is: Full Service with savings. Show the seller how s/he can save and how they can save the most.  Then be what you are, a consultant, and help them make a good decision (choice).

This is very important because it is one of the things that separates us from most of the new compeitiors who are emerging.  These high tech/low touch offers are not designed for choice, not designed for consultation.  It’s one size fits all and take-it-or- leave- it approach.  The expertise that sellers seek is not there or not available to aid them in decision making.  That’s your edge.  You are HIGH TOUCH with technology.  You bring human interaction to the process, helping home sellers understand what’s going on, and functioning as a trusted consultant.

Today’s sellers have been trained to believe they have only one choice:  go with a percentage based dinosaur who may or may not do the mechanical part of the process and advise them through it – OR – go with one of the new machines that only does the mechanical.  YOU are the logical choice in the middle.  You are the new way to sell your home and save, making ample use of existing technologies to get the job done while maintaining the personal, consulting posture that sellers need and want. Your task is the same as it has always been: Educate home owners in your Target Market that you are HERE, people use you, it works and they save thousands.

*It’s ok to end a sentence with a preposition today.  Look it up.  It’s not my favorite form of syntax but if it aids in clear communication, I’m all for it.

A Good Chuckle

Beverly Sonnier, a Help-U-Sell Broker in Tucson, AZ, forwarded me this email yesterday:

smartagents

(Note:  this is a screen capture of the message so the links don’t work.)

I think this is the funniest thing I’ve seen in awhile! He’s talking about ‘Discount’ brokers, but he means Help-U-Sell (even though we are NOT a discount broker)*.

But he’s saying the only way to compete with us is to go somewhere where we aren’t! The only way to beat us is to go somewhere else!

That’s funny enough.  But then he says, about his ‘Niche’ sellers, ‘These sellers pay a fair commission – day in and day out.’

There is nothing fair about percentage based commissions.  6% of your home’s value is obscene, sure, but even 2% would be unfair! What does a percentage of your home’s value have to do with what it takes to get it sold?  (Absolutely Nothing!) And, if your real estate broker is charging a percentage, that mean the person with the less expensive home is going to pay LESS than you for the exact same service! There’s NOTHING fair about that!

Listen:  the ordinary real estate world runs on a business model that hasn’t changed in 70 years.  It’s old and stale and consumers are rapidly figuring that out.  One thing this 21st Century has shown us is that consumers will quickly jump to anything they perceive to be faster, better, more modern or more logical.  Consider the rise of Amazon and the decline of Macys, J C Penney and Sears.  Faster, better, more modern, more logical:  that pretty well describes Help-U-Sell Real Estate, except that you can also add in Less Expensive!

*A discounter finds ways to cut the expense associated with providing goods or services.  They might use less expensive material or provide fewer customer service personnel.  In real estate, a discounter would cut something – and it would probably be marketing and service.  That’s not Help-U-Sell.  We charge less because our business model is different:  it is modern and efficient.  Our sellers get all of the marketing and personal service ordinary brokers deliver and actually more . . . they just pay less. 

Must Read If You Are Marketing By Carrier Route

We all got so granular over the past few years!  And that’s a good thing!

Rather than shotgunning our message all over God’s Green Earth (and paying a hefty toll for the privilege), we started looking at our marketplaces through a magnifying glass.  Instead of marketing by Zip Code, we started breaking down the Zips by Carrier Route.

Most Help-U-Sell offices refined their marketing targets down to 5 to 10 Carrier Routes, depending on turnover rate and budget (That usually works out to 3,000 to 8,000 households).   The problem is, since every Carrier Route has its own turnover rate, it became difficult to know what the OVERALL turnover rate was in your complete target.  Most Brokers just kinda guessed.

Does that make any sense?  You just spent all this time and energy carefully tearing your marketplace apart so that you could construct a productive target.  Instead of doing what most Brokers do (which is to guess or make the decision based on hearsay or gut), you based the whole process on FACTS.  Cold hard FACTS.  And now, you’re going to guess at the turnover rate within your target?  I think NOT!

So, here’s what you do:

tor2-1

Add up all of the households in all of your Carrier Routs, then add all of the houses that sold in the past 12 months in all of the Carrier Routes . . . . Then just divide Homes Sold (the small number) by Households (the large number).

Those of you in a Coaching Group can use this AMAZING number in the Market Analysis tab of your 12 Month Goal Setting Worksheet, here:

torate22b

I sincerely hope this keeps you guys from guessing about your business!  And maybe the whole process will intrigue some into investigating the Coaching Group opportunity.  I hope so.  We’ve got openings.

How to Generate Leads (a message for ordinary real estate brokers)

The lifeblood of our business is leads . . . but how do you get them?  

It’s harder today to generate a lead than it ever has been.  As the real estate business has grown up, the flow of easy leads into the office has dried up!  And while the Internet has lowered the cost of marketing a listing, the cost of generating a lead has gone UP.  Offices with active marketing programs easily spend $100 – $150 to generate a single lead.  When you factor in typical conversion rates – something like 8 to 1 – the cost to generate a bona fide buyer or seller can approach $1,000.  

Before delving deeper, let’s define terms.  An Inquiry is a call for information.  It may come on the phone, in an email or in response to an Internet ad.  Inquiries do not become Leads until that person surrenders his or her contact information.  So a Lead is a person we have the ability to contact.  

Most potential Leads are lost right there: in the conversion from Inquiry to Lead.  Real estate salespeople are so notoriously bad at this that at least half of all Inquiries simply evaporate without ever becoming leads.  Smart brokers demand performance in the conversion process, insist on practice and role play, and track it over time.  Smarter brokers hire specific personnel whose sole function is to respond to Inquiries and convert them to Leads.

There are several cultural factors that have caused that great river of real estate buyer and seller leads to go dry.  They include:

An explosion of readily available information.  With the Internet, Zillow, REALTOR.com and dozens of other portals, there’s very little a potential customer can’t find on his or her own.  In short:  they don’t call you anymore, because they don’t need to.

A steadily waning trust factor.  We have become obsessed with privacy and anonymity.  So often, the innocent sharing of an email address of phone number has led to endless scamming and unwanted solicitations.  People today are far less willing to give up their contact information than they were even 10 years ago.  

The genericization of the real estate industry.  A couple of decades ago, there was a perceived difference in the consumer offering of some real estate companies.  That perception is gone with the last millennium!  Today, there is not one whit of difference in the consumer offering of almost any real estate brand.  There is endless innovation in how real estate companies attract and retain agents, but for the consumer it’s basically 6% (or 5% or 7%), put you in the MLS, put you on Zillow, hold an open house and pray.  When everyone is offering the same thing, something extraordinary has to come through in an inquiry response before contact information is exchanged.

So how do you become a lead generating machine in this environment?  It’s actually pretty easy.

Step One: look at your consumer offering.  What are you offering that is utterly different from what everyone else is offering?  And, forget the industry buzz terms like ‘Excellent Customer Service,’ and ‘Professionalism.’  Those things are important, but to the consumer, they are an expectation, not a differentiator.  

Remember that one of the first things any consumer shops is price.  If your pricing model is the same as the 3,000 other Realtors in your Board . . . well, that’s hardly standing out in the crowd, now is it?  And does your pricing model make sense?  Does the person in the $250,000 house pay less to sell it than the person in the $300,000 house?  If so, why?  Spoiler alert:  answers like, ‘That’s just the way we do it,’ don’t fly.

The pricing of any consumer good or service is a value-for-value exchange.  In a value-for-value universe, your fee should have some relation to the cost of the goods or services you are providing.  So, if the person in the $250,000 house pays, say, $15,000 to sell but the person in the $300,000 house pays $18,000, where are you spending the extra $3,000 in the home marketing process?  You’re not?  Well, then, both of those homeowners should be paying the same thing, don’t you think?

Assuming you do step one correctly – meaning you devise a superior pricing model for your company and a dynamite consumer offer – you move on to:

Step Two:  which is to market the heck out of it.

Bear in mind that it is your company that makes the consumer offer; it’s not the agents.  They may make the offer on the company’s behalf, but it is the company’s offer.  

Over the past 40 years, residential real estate companies have shifted the cost of marketing (which is how we communicate the consumer offer) in large measure to agents who demanded increasingly lofty commission splits.  The logic was solid:  I can’t afford to pay you 80% unless you start paying for your own marketing.  But we’ve learned that, generally speaking, agents won’t invest in marketing regardless of split.  The end result of shifting marketing to agents is agents running around willy-nilly, making this promise here and that pledge there, with no coordination from the broker and no clear or consistent offer being made to consumers.

So, you have to take control of your marketing, which means you’re going to have to budget a significant portion of your gross for it.  Then you go into your target market strategically and consistently with your marketing message . . . and soon, like the swallows returning to Capistrano, the inquiries start to flow in.  

By this time, the next step should have already happened.  It will happen while you are doing step two.  

Step Three:  Take control.  As you take control of your consumer offer and of your marketing, you will take control of your company.  As lead generation becomes your responsibility, as you begin to hold your staff accountable for the disposition of those leads, as your unique consumer offering is constantly and consistently conveyed, your company will shift from being a place where agents work to a thriving business machine with growing market share and value.

Sound like a lot of work?  A lot of risk?  It is.  But if you want to control your business (rather than be controlled by it), it has to be done.  

Thankfully, there is a shortcut.  

For 40 years, Help-U-Sell Real Estate has been perfecting the kind of business model described above.  Our consumer offer – Sell Fast for a Low Set Fee and Save Thousands – is unique and very attractive to consumers.  Our marketing system is a system.  Like the consumer offer, it is unique in the industry and produces stellar results. Nobody markets like we do and nobody generates a steady flow of leads into the office like we do.  

Couple this with a robust technology platform that we built and own and free expert coaching and support; and Help-U-Sell Real Estate could be your path to local market domination.  

If you’d like to know more or simply have questions, feel free to contact us.  Much can be learned at our website, helpusellfranchise.com or at one of our regularly held informational seminars, but nothing is better than picking up the phone and having a conversation.

Caution:  One of the biggest snags brokers encounter when trying to understand how Help-U-Sell Real Estate works happens when they try to imagine the pricing model fitting into their existing operation.  It doesn’t work.  If you did that, you’d fail.  We are not a stripped down version of what any other real estate company does.  We are a completely new and different approach to how to run a real estate company, one that allows us to charge less and make more.  

Just as almost every seller who is aware of us feels they must find out what we do before choosing a listing company, you too should find out what’s different and special about Help-U-Sell Real Estate before you map out another year of your future. Get in touch today.

Should You Be Marketing for Millennials?

If you listen to the big real estate pundits, in fact, if you listen to our own weekly Power Hour, that title looks like a stupid question.  Of course you should be marketing to Millennials!  They are the next great home buying wave!  They represent something like 20% of the American population!  Of course you should be marketing to them!

Well . . . . maybe.

There are some realities about Millennial home buyers – born between roughly 1985 and 2000 – that are often ignored, realities that could inform your decision about pursuing them.  Here are two:

  • While high tech jobs and massive starting salaries do come to this group, the vast majority exit college and enter jobs paying near subsistence wages.  There are a whole lotta Masters Degrees working at Starbucks and the Verizon Store.  But that’s not all;  in most industries, entry level salaries have not kept pace with the cost of living.  In brief, Millennials often don’t have the income they would need to qualify for the entry level home.
  • Millennials and debt seem to go together.  For the college grads, it’s student loans – that $20,000 to $40,000 noose that hampers the creditworthiness of these home buyers.  For others it is the over use of credit cards to finance a lifestyle that is bigger than their entry level salaries.  Between lower income and higher debt, many Millennials present significant qualification challenges.

But so what?  We thrive on challenges!  Nobody is better at solving these kinds of problems than we are, right?  Yes, right, and with dozens of new financing instruments and special programs to help first time buyers, we have the tools in our arsenal.  But there is a third reality that just flattens home buying possibility for  many.  It is rapidly rising home values.

Coupled with the realities of lower salaries and higher debt, the affordability crisis is pushing home ownership out of the reach of many Millennial buyers . . . in fact of many buyers of any generation.  In California today there are many markets where fewer than 28% of the population makes an income sufficient to qualify for a mortgage on the median priced home.  It is a trend that shows no signs of reversing and that is spreading across the country.

My advice to you is to think, focus and aim before you fire your marketing at Millennial home buyers.  Are you in a marketplace where young home buyers can afford to buy?  Do you have inventory – condos or single family homes – that price somewhere in the $150,000 – $250,000 range?  Are you in a location where there are good jobs for college educated young people?

When I consider those questions, I immediately think of Greensboro, North Carolina, home of Jack Bailey and Steve Vincent, two Help-U-Sell brokers doing a great job of putting young people into their first homes.  It is a marketplace where housing is relatively inexpensive: the median sale price is still below $200,000.  It is also a market where employers are expanding, so there are jobs.  This may be a great place to seek out Millennials.

But then I consider David Bartels in Westlake Village, CA.  There, the median sale price is $775,000.  Yes there are some lower priced areas close by, and there are even lower priced condos, but prices still put those properties out of the reach of most Millennials.  You’d think Ventura County with its proximity to the employment mecca of Los Angeles would be a perfect Millennial market . . . but affordability creates huge headaches for this group here (despite what I wrote about Millennials in your blog, David).

Look at your market place and make a logical decision about whether or not to target Millennials.  Consider home prices, employment opportunities and typical starting salaries.  You may discover that it’s not worth pursuing this group at all . . . despite what the pundits may say!