Insider Secrets: The Best Kept Secrets to Success in Real Estate

It's a dog-eat-dog world out there, and few industries can claim to function with the same ruthless, cut throat tenacity of Real Estate. Anyone who tells you that success in real estate can be learned simply by reading the right books, or taking the right courses is lying to you. A good sense of the industry is not something anyone is born with- and is something that most real estate agents never quite reach. It takes a life time to learn the intricate, and delicate dance of the deal- how to close, how to maximize profits, how to end up on the other side of your life with your nest egg stuffed fat and your integrity intact. This article will not claim to do the impossible - it will not make you a good real estate agent. However, what it will do is lay out some of the best kept secrets that the most successful people in the industry have spent a life time learning; and have subsequently guarded from the new kids on the block behind tightly sealed lips. 

First Things First: The Rookie Mistakes

We will ease into this journey by starting off with the mistakes almost every real estate agent with the ink freshly drying on their license inevitably makes. The big ones - the mistakes seasoned agents will tell you about, but you'll be hard headed and make anyway. 

Not asking, "Are you working with another real estate agent?"

The scenario: You just got hired to your first firm. You have been doing pretty well - settling in with a few mid-range sales and you're starting to gain your footing. You don't sweat quite as much when your phone rings, and you have learned to quiet those butterflies in your stomach when you sit down to start the process of making a deal.

Your phone rings, and on the other side of the line is a potential buyer who says all the right things, is clearly well researched, and wants to look at one of the most expensive properties your firm is listing. You can't believe it! You start thinking about the commission you could make, and the trip you'll take your fresh faced fiancé on. Then they say the magic words, "Can you come and show us the property now?" 

You grab your coat and rush out the door. You get to the property, and have the perfect showing. You don't say too much, don't over sell, and they smile the entire time. In your head you're thinking "yes! I’ve got this in the bag"....

And then they shake your hand with a huge smile and say "We absolutely love it. We will call our agent tomorrow and make an offer"

......"call OUR agent tomorrow".....

That's right. You just spent your afternoon rushing across town and putting on your best game face to put a huge commission in another agent's pocket. All because you didn't ask one, simple, tiny, question... "Are you working with any other agent?” Rookie mistake. Luckily- all you lose in this situation is a little pride, and an afternoon of your time. 

Not Planning For Everything to ALWAYS Run Behind

We've all heard the phrase "hope for the best, prepare for the worst" in no other industry is that adage more true than in real estate. Why? Because closing the sale on a house is ridiculously tedious, and all it takes is one person to miss ONE tiny little signature or slip of paper and BAM your commission check is backed up by 3-4 weeks. Sometimes everyone can do absolutely everything right, but houses are selling rapidly enough in your area to stop up the beaurocratic offices for a couple weeks. The bottom line is, if you don't plan for these inevitable mishaps by having a financial cushion of about 3 months worth of earnings, then you are setting yourself up for disaster. 

As much as we all want to have faith that the system works, and that it works well- that view is just unrealistic. It’s a pitfall that happens to countless real estate hopefuls around the world. Don't forget that at least a dozen hands touch that contract, and any one of them not dotting an "i" or crossing a "t" slows the process for everyone.

Side Stepping Chain of Command 

You may have the best of intentions, but a failure to respect certain boundaries is a critical mistake that can end up costing you not only a sale, but potentially your success as a future real estate agent. One of the ultimate lessons many rookie agents learn the hard way is to respect, and understand their place in any transaction, and to honor  protocol.

Protocol is protocol for a reason. Trust us.

You have to honor the agency relationship between listing agent and seller. Although it can be tempting to strike up a conversation directly if the seller is present during showings or a final walk through, doing so can bring tremendous risk and hostility to the transaction. Real estate transactions benefit from the emotional filtering representation brings to the table. Professionals recognize and respect boundaries and understand that good timing and protocol can diffuse and/or eliminate needless drama and chaos.

Not Investing In Further Education

Do you notice how different your iPhone is now from say...5 years ago? Real estate may be an old industry, but it is certainly not a slow one. Real Estate is the science of people, and consequently will change as fast as people do. Keep up or get left behind- it’s that simple. 

Every agent fresh out of training will have an edge over you if you aren't keeping up with the latest technologies, policies, ideas, methods and advertising. 

GET YOUR DESIGNATIONS AND DONT STOP THERE.

Real estate changes, and spending that $200 on attending a conference instead of having a night out with "the guys" is an investment that you will never regret. 

Classes are a place to earn referral networks, build rapport and recognition with your peers. It is invaluable and will set the bottom line for you and will determine your eventual chances of success. You take the class to acquire the skills to increase your sales and earn more. The skills you learn and the referral relationships you develop with other students you meet will dramatically affect your bottom line and your potential for success.

Now that we have gotten the basics out of the way, let's dig in.

The following suggestions and tips are open to interpretation. How you utilize (or don't) utilize this information is entirely up to you. Much like everything else in life- this is an exercise in radical self-reliance. The information is in front of you- use it how you will.

You Care too much

Don't fall into the most obvious trap of all in Real Estate - Don't get too personally involved. The moment you interject any emotion into a negotiation, you lose. End of story.

It’s a hard lesson to learn; especially when you're still starry eyed and teaming with the overzealous energy of youth. You simply cannot take anything personally. You cannot care so much about the outcome of negotiation that you end up with tunnel vision so narrow you end up losing any leverage you could have had. You have to learn to not take it personally when someone comments on the shortcomings of a property or neighborhood. You have to learn to not be offended or bothered by a buyer picking apart a house, pointing out every single inconsequential flaw.

You have to learn to be professional and avoid showing any emotion. This includes making snide comments about anyone else involved in the deal. Whether during showings, or in the midst of a transaction, negative speculation about the seller or listing agent can only work to create harm in the transaction. An insecure agent may be tempted to leverage her position in her buyer's eyes, but posturing in this manner usually returns either directly or indirectly to create ill will and poison an otherwise healthy transaction.  Beware the sword in your hand. The head you sever may be your own. You may *think* your impressing your buyer with those little verbal jabs to the opposition; but in fact- you're making a fool of yourself.

You will always care about how a deal goes down, or fails. It is natural to have feelings about situations which concern your very livelihood, but you cannot let that bleed all over your deal; otherwise you'll end up cutting off your own nose to spite your face. 

You need to care about the outcome of the negotiation, but not so much that you make a bad decision because you feel unable to walk away. In other words, keep your emotions in check, treat the process as a game, and decide when to call it a day.

You think that you have friends in real estate

You don't. Real Estate is competitive- to the point that people begin to feel that any success by someone else is taking food out of their own mouths. That is not to say that there are not good people out there- there definitely are, but never let your guard down. Know that just because you have known someone for ten years, doesn't mean they are incapable of poaching a sale right under your nose while you're caught up trying to be friends. You have to learn to separate work and friendships and know that when you step into that office, you have no friends, only peers and coworkers, all seeking a slice of the pie. And lately, that pie has been a small one, and everyone is just as hungry as you.

Learn to ask the RIGHT questions

Closing the deal is a chess game, a dance, a mental obstacle course you’re playing against someone just as cunning and smart as you. You have to think like a predator- study your prey, know what to ask to find those weak spots in the armor and how to get to them. You have to know the true value of your product, and more importantly, you have to know how to read between the lines of what a potential buyer says in order to discover what they're really asking. 

A potential buyer may say to you, "One of the reason's we're moving is because we want an extra bedroom", and you (being the great people detective you are) recognize that what they’re actually saying is "we want an extra room to have kids, tell us about the kid friendly features of the house and neighborhood". 

You need to know not only the inherent value of your property, but the value to your potential buyer to make the change.

Everything you will ever need to know to successfully close a deal you can learn in the first 5 questions you ask. 

1. Why buy and why now? (Gain valuable insight into their reasons for buying a home that will help you tailor your services , and the rest of this conversation to their situation.)
2. What if we found the perfect house tomorrow? (Gauge their readiness to move, and get insight into their ideal timeline. Are they looking to move in the next three months?)
3. What are your 3 favorite things about where you live now? (This will open the door to lifestyle questions, and give insight to important factors that contribute to how they live their life. This question can answer things like, how important are nearby schools, how important is proximity to public transit, are they okay with a younger, potentially louder environment or should you keep your search to secluded nooks. This one questions can help you immediately eliminate potential properties and hone in your search for the perfect place to show. )
4. How many houses have you seen?( This will open the door to see what kind of experience they have in real estate, if they are working with other agents, how picky they may or may not be, and will help you to gain insight into what the buying process with them is like.)
5. Do you rent or own your current residence? (This will tell you if they are familiar with the home buying process, if they are aware of all the hidden surprises like possible necessity to join an HOA, or that they have to be pre-approved before making an offer, or how the escrow process works. Knowing their level of knowledge will give you a good place to start and a way to tailor your plan accordingly.)

Not Knowing Your "BATNA"

The term "BATNA" (which stands for "Best Alternative to a Negotiated Agreement") originated in researchers Roger Fisher and William Uri’s 1987 book, “Getting to Yes: Negotiating Agreement Without Giving In."

Essentially, even though your aim in negotiation is to get what you want, you need to decide what your next-best alternative is. This means that you know when it's best to cut your losses and walk away.

Decide on your BATNA before you enter negotiations, and also make sure you know what a "good" outcome is, even if you don't get exactly what you want.

Having a clear BATNA means you can push harder during negotiations, and potentially get a better deal than you expected, because you've kept your options open.

The Process

The best sales negotiations follow a specific process that includes 4 major components:

1. Prepare and plan to get the best outcome. Almost everything in a negotiation can be predicted. If you've planned well, you can succeed with whatever comes up. Know how to speak to objections beforehand. Come to the table with more knowledge than anyone else playing the game.
2. Engage the buyer properly, paying careful attention to getting the negotiation started right. Build rapport, shake hands, become relatable, be real, and be honest.
3. Facilitate and lead the actual negotiation process well. Those who wait for someone else to lead often don’t get to the best destination. You need to know what you want, and know how to ask for what you want.
4. Commit and get an agreement in place. Know your walk away point, know your back up, and know your boundaries.

Bridge financing

Most buyers want to close their sale and purchase on the same day. More often than not- it doesn’t go smoothly. As an example - if the person buying your home is late closing, your lawyer may not be able to get the money to the lawyer who is acting for the person selling their home to you in time. This can result in the seller cancelling the deal if you are late, or charging a penalty to extend it for another day. In addition, you will likely pay additional moving costs as your seller may not have left the home by the time your movers arrive.

Bridge financing gives you the ability to have the funds on hand if needed and merely pay interest on the money for one or two days. Simple step, huge mark of a seasoned agent. 

ALWAYS Deliver Earnest Money and/or Option Fee in a Timely Manor

A buyer's agent who fails to deliver the option fee robs their client from having an option period, and puts the earnest money at risk. A buyer's agent who fails to deliver earnest money puts both the earnest money and contract at risk.  It is the buyer's agent's responsibility to collect the funds from the buyer and deliver them to the Title Company or seller as instructed.

And last but not least

Know Yourself: Know when to ask for help, know when to say no, know your skills and limitations and act accordingly

The biggest mistake anyone can make in this industry is not knowing their own skill set. You have to know where you stand, what your strengths are, where your weaknesses are, and who to turn to in times when you just don't have the skills or experience. No one is good at everything, and knowing when to ask for help will stop you from making careless mistakes because you were too confident to have a slice of humble pie and ask. 

So there you have it-

No holds barred, gritty truth. Hopefully from this article you can take something that will inspire you to learn more, or try something new. Until then, keep your wits about you and remember, there is no "right way"- you and everyone you know in this industry is just kind of winging it. You will have to define your own path- and once you understand that and break away from the footsteps of others - you will truly succeed.