Success in Residential Real Estate: Seven Success Fundamentals
After a combined 80 years in the real estate trade my business partner of the last 22 years, John Reilly and I are pleased to share Seven Success Fundamentals in Real Estate. These are key points we have practiced and observed in many successful real estate professionals over the years.
To a large degree, success in residential real estate sales can be yours if you understand, accept, and are guided by some basic fundamentals. This article includes seven of ours.
John and I are fans of “Large Visible Charts.” Ideas left in a computer often stay on the computer. We suggest printing these Seven Fundamentals and place them where you can see them every day. Just looking at them makes you think about them, consciously or subconsciously. Thinking about them will move them from your head to your heart. It is from your heart that action begins.
Fundamental 1: Build a “Book of Business” Mindset.
Your “book of business” begins as your address book of friends, relatives, and acquaintances, and should grow daily. Building your book of business requires conscious and conscientious effort (and a good Content Relationship Manager).
Why is building a book of business mindset important? Because real estate sales is a numbers game. The average term of home ownership is some 5 to 8 years. No everyone you encounter each will need your services today, but they will need your services someday; or they may know someone who needs your services in the near future.
Ask everyone their name and if you can get it, their contact information. It is important to recognize that you are in the business for the long haul — a sacrifice today may create a reward in the future. Treat everyone as if they will someday close a deal with you. Realize that much of the population fits into one of the following categories and that most people you encounter daily will not need to list or buy anytime soon:
- Suspects – Every one you meet. They may not be in the market to buy or sell today, but they will be someday, and they may know people who would benefit from knowing you.
- Prospects – People looking to buy or sell with no set time horizon
- Customer – People who are buying or selling in the next 12 months.
Your “book of business,” (Also known as your customer database or pipeline) is a source of much of your future revenue and financial security. Build it methodically and as data rich as possible. Keep in mind that “Information is the currency of the 21st century” (Toffler)
Remember, Contacts Create Contracts.
The software you choose to build and capitalize on your growing Book of Business (customer database asset) is referred to as CRM, (Customer Relationship Management software). There are many choices. The question, “What is the best software?” leads us to the next Fundamental: Discussions of lead capture and lead conversion.
Fundamental 2: Pick a CRM software solution and learn how to use it. Don’t worry about which software is best. The best software is the software you use.
Make a choice and dedicate yourself to getting as much out of the software as possible, by learning how to use its functionality as you integrate your CRM into your sales and marketing practices.
Since the average term of home ownership is long, part of your daily sales and marketing efforts requires you to attempt to be top of mind so that when the need to buy or sell occurs for a consumer, your name pops up first. This is best accomplished with frequent, relevant, anticipated, and personal communications and engagements.
Fundamental 3: Residential Real Estate Sales is a “Business of Relationships.”
Relationships are built and maintained through engagement. Engagements move you one step closer to or away from the next phase in the sales cycle. Understand when to engage and the methods of engagement.
Relationships progress or decay, all based on “engagements.” There is a well-documented path from stranger to satisfied home seller or buyer. Follow the path.
We used to joke that we were “real estate morticians.” We threw strangers into the back seat of our cars and “drove them around until they were dead.” While the internet has changed this to a degree, the fact is the dream of many a real estate professional is to build a relationship with a stranger and help them become a homeowner/seller. This is the essence of what we once referred to as an “up call.”
Fundamental 4: Master as Many Forms of Engagement as Required for Your Success.
Relationships are built, and destroyed if you are not careful, through engagements. Engagements take you one step closer to the next phase of the sales cycle. Do what computers cannot do.
Engagement methods have grown in number over the years. Engagement types have different degrees of influence and power. Consistency in offline and online engagements is key. Examples of engagement types are:
- Personal contact – usually the most powerful form of engagement.
- Phone calls – sometimes leaving a message will suffice.
- Letters – in the not too distant past, relationships were built and maintained through letter writing.
- Email – Today, not all email is being delivered, a fact that you must always consider.
- Texting – Perfect for some people and certain circumstances.
- Messaging – platforms designed to centralize agent communications.
- Social Media – today we have many opportunities to engage on a daily basis. A “Like” is an engagement, as is a “Share” and a “Comment.” Use multiple engagements to strengthen your relationships. Social media allows for continuous engagement.
There are many new engagement tools and people do have their preferences. Differentiate yourself from your competition simply by asking new contacts their preferred method of communication. Most agents fail to ask this basic communication question.
Fundamental 5: Understand the Sales Relationship Cycle.
Taking a contact from Stranger to Satisfied Home Seller or Buyer requires building a relationship, expressed here in phases.
- Phase 1: Build Rapport – It is as simple as smiling and tone of voice. Ask questions to find those points of common interest and personal connection. Asking questions allows you to probe deeper and build a feeling of comfort with the person interacting with you. EvWhere are you from? Where did you go to high school/college? Were you ever in the military? Which branch? Where have you lived? How many children do you have? How old are they? Where do they go to school? Etc).
- Phase 2: Gain Trust and Confidence – you must reach the level of trust and confidence if you expect a buyer or seller to sign a contract. There are different ways to build credibility and to build trust and confidence. Make a promise, and keep it. This will demonstrate expertise.
- Phase 3: Sale – Prepare the contract for buyer and/or seller execution. When working with buyers, it is best to introduce them to the contract early in the relationship rather than later. This also is a demonstration of your expertise and builds trust and confidence. Items to discuss early with a buyer include Agency Disclosure, Arbitration and Mediation, and Liquidated Damages.
- Phase 4: Referral – This is the life blood of long term successful agents. Create a strategy for cultivating referrals.
Fundamental 6: Real Estate is a “Me Too Business,” differentiate yourself from the competition.
- As Seth Godin said, “Be different or charge less.” There is no mystery to selling real estate, and about 85% of what one REALTOR® will do to sell a home, others will do as well. Real Estate is a “Me Too” Business. Think about what you typically do to market a listing:
- Listing placed in the MLS – Sometimes multiple MLSs.
- Listings are accessed by REALTOR.com – Most MLSs provide a direct listing data feed to REALTOR.com
- Listing Syndication – MLSs have Listing Syndication capabilities which means when you place the listing in the MLS, it can also be sent to real estate portal sites such as Zillow, Trulia, Homes, Realtor.com, and other Listing Portals. A rule of thumb (until you know better) is “Distribution Trumps Destination.”
Since differentiating with a big splash is difficult in a Me Too business, differentiation comes through the inclusion of little things in your business. It’s the little things that make a difference.
Use everyday tools of the trade, like the Real Estate Purchase Contract and Receipt for Deposit to differentiate, to demonstrate expertise, which builds trust and confidence, which leads you down the path to sale. Explain certain elements early in your relationship and not later in the relationship. Items such as the Liquidated Damages Provision, the Arbitration and Mediation Clause, and Agency Disclosure explained early, is a major differentiator, as many agents are clueless in this regard.
Fundamental 7: Put Your Name in Front of People Over and Over Again.
One way to do this is to own your domain and use it not only for your website address but your permanent email address as well.
For any questions and elaboration on these Fundamentals, visit us on our soon to re-launch RealTown.com.
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