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Tuesday, 18 June 2019
Agent Resource Center
This Old House - Do-it-Yourself

Your "Vision" Statement indicates a future state, as opposed to your "Mission" Statement, which can be defined as your purpose.

At the point in the future when your Vision is running on all cylinders, how would you describe your company. A Vision Statement is in the present tense..."We are" or "our comapny is..."

Jim Collins (Good to Great author) proposes that a company vision has two principal components...a core ideology, and an envisioned future.

Core ideology is the glue that holds an organization together through time. Core values are the essential and enduring tenants of your organization.

Posted On Monday, 17 June 2019 05:00 Written by

Whether you have been in the business 20 years, or if you just received your license yesterday, some thoughts for your consideration about selling a real estate sales practice...

Selling a real estate practice is easier said than done. Few I have ever met, at the agent level, have been successful in doing what I have heard advocated over the years by some instructors (often instructors who have little experience in listing and selling themselves and who did not build and sell a real estate practice themselves).

I successfully sold a tax practice, a financial planning practice, a property management practice...and continue to receive referrals on sale transactions.

If you develop a steady flow of leads from your web presence, that is a marketable asset. Structuring the deal itself is always a chore...will you be selling too cheap?

If you are thinking that you will be able to sell your real estate sales business, start planning now. The bottom line requires quantifying the bottom line. Here are a few thoughts.

Look at a property management practice...should be easy enough to sell as the revenue can be quantified. Having said that, what do property management practices sell for? One times the annual gross revenue? 1.5 times the annual gross revenue? (a property management practice can also be a great source for future commissions).

When one sells a commercial property, it is usually priced by a factor of the net income and the income is examined in three areas:

Quantity - the amount collected
Quality - financial stability of the tenant Durability - term of tenancy (long term leases are generally preferred as they should make for lower future vacancy and thus, higher overall quantity)
A real estate sales business is a little more difficult to quantify. I think however, it is important to have more than a digital database of names and contact information. Other facts about the client base should be important factors as well.

Amount of new business is part of the "value equation" as well as repeat business from your database. Look at the idea of "Quantity, Quality, and Durability."

As for the software you use to do this...Top Producer and Online Agent are not the only options and often, because of their steep learning curve, are not the best choices (and just because someone is 14 years old does not mean they are better at learning software than you are, especially industry specific software).

The concept of bringing in your successor over time also makes some sense to optimize the transfer of your business because you are in a personal service business and your database alone is not very personal.

A "turn over process" will maximize the success of the person buying your business which should mean a greater value for you in the sale.

And let's not forget the terms of the sale...how much down, amount and number of payments, etc.

I am an advocate of preparing to maximize the asset one builds in their business over the years and to do so requires, imho, a lot more thought, preparation and detail than I have heard discussed by many who advocate the "idea," which is a sound "idea." If one wants to truly maximize this opportunity, the more you can determine long in advance of the sale will help you with the process and the pricing when the time comes to "cash in"

(or cash out :-).

Posted On Friday, 14 June 2019 05:00 Written by

Expand Your Offerings...The real estate world is changing, commissions may be at risk moving forward...be prepared.

Marketing - Advertising

How are you going to cost effectively get the word out to prospective tenants?

1. The most effective means of advertising a rental property is a sign, located so as to achieve maximum exposure to the walking or riding public. It should be easy to read, number of bedrooms and baths and a phone number is all that is required.

2. Community bulletin boards are free and often times effective in advertising your rental. They should be neatly prepared and placed in grocery stores, laundromats, department stores, hospitals, etc. Be sure to get permission before placing the notice.

3. Personnel departments of large companies may be appropriate. Many large companies and military organizations have departments which seek out housing for newly arriving personnel. You should find out which individual in the organization is tasked with the responsibility of assisting new arrivals and send them a resume of your rental, reviewing what is being offered and how much you are asking. Also include a picture.

4. Resident managers of nearby apartment buildings can be helpful. Establish rapport with several and always let them know when you have a vacancy coming up. May be you can offer them a monetary incentive for referrals. Before you offer any money, check local laws and customs.

5. Newspaper classified advertising is expensive if not done correctly. The categories are usually furnished and unfurnished, with the lowest priced rent being at the head of the column. You will pay by the line so be brief yet descriptive. Be sure to list the address and your phone number. If you are not at home to take calls, invest in an answering machine. Weekends and close to the beginning of the month are usually the best time to advertise. If you have just replaced the carpets, say so. Anything which makes your unit stand out from the competition should be mentioned. If you accept pets, state such. Many owners do not allow their tenants to keep animals.

6. Hotel and motel managers have contact with new arrivals to the area. Distribute information to a network you establish.

Now that the word is out, how do you handle calls and show the unit?

When a prospect calls, be pleasant and also alert. This gives you a chance to gather information about the tenant and also lets you "sell" the unit to the tenant. Speak clearly and distinctly. Be courteous and establish rapport. Make sure you get their name, determine if they have the financial means to rent the property (this includes an appropriate security deposit) and be ready to give directions to the property from almost any location. Give the EASIEST way, which is not necessarily the shortest way or the way you go. If possible, route the past points of interest, shopping centers, schools, churches, recreational areas, parks, major transportation routes and the like. Mention the amenities, but be careful not to oversell. If you build it up too much, they may be disappointed when the get there. Always try to make an appointment to show and try not to do it at night. It may even be a good idea to have someone go with you if you must show it in the evening. If the power is off, schedule the showing for the next day.

The property should have "curb appeal". There should be no deferred maintenance on the front of the building. Keep the driveways, patios, and walkways clean. Take care of the landscaping. If you take care of the property, there is a good chance that the tenant will also take care of the property. Make sure it smells fresh and clean, if you need to use a room deodorizer or spray, use it.

Posted On Wednesday, 12 June 2019 05:00 Written by

"Today is the First Day of the rest of YOUR life"

In the 1960s this was a popular slogan/quote which was made into posters..."Today is the first day of the rest of your life."

At the Naval Academy in June of 1972, there were posters put up in the passageways (halls) that stated:

June 7th...The first day of the rest of your life."

June 7, 1972, as that old slogan goes, really was “the first day of the rest of my life.” It was the Day I graduated from the United States Naval Academy, Annapolis, and headed west to go to sea as the Repair Officer of USS Mount Vernon (LSD39).

Each year, since 2002, (the 30 year anniversary of our graduation), I send a "reminder" letter (post) to my Classmates of Seventeenth Company.

What I learned through my Naval Academy experience, came into focus the morning of June 7, 1972, a day we had all been preparing for for four long years.

Here is that letter, going out again today on the 47th Anniversary of the beginning of our lives:

>>

Classmates

I remember very vividly the March to the Stadium on June 7, 1972. It was a march we had made together as Members of Seventeenth Company about 20 times in the previous 4 years (3 to 4 home football games a year and 3 graduations come to mind). As we approached that bridge where we crossed a creek (was it Weems Creek?) I heard the familiar command “break step on the bridge.” (Resonant Frequency, Tacoma Narrows Bridge, etc.) .

At that moment, on that sunny Annapolis morning of June 7, 1972…at that instant…as I looked down at the pavement as we all “broke step on the bridge”…the thought that began to run through my mind:

“I made it.”

The moment was surreal. My lifelong ambition had been accomplished. Everything else from that point forward in life, was going to be gravy. To this day, this event remains the most vivid “aha moment” of my life, and one upon which I called upon at various times over the last 47 years.

As the thought, “I made it,” echoed in my mind, I also felt an incredible surge of confidence which has served me well throughout my adult life. A confidence which let me report aboard ship some 90 days later as the Repair Officer onboard Mt Vernon (LSD 39), not knowing how to repair anything mechanical, now in charge of all things mechanical except main propulsion on a US Combatant…and knowing that my lack of experience didn’t matter, because I could handle it, I would figure it out…USNA had taught me to be confident…and I was too naïve to know any better at that point. My graduation itself was proof to me, that I could do anything I wanted to do, if I just wanted to do it bad enough. I know the primary reason I graduated from USNA is because I wanted to graduate from USNA.

Admiral Calvert once told us that graduating from the Naval Academy would be one of the most significant events in our life, and that has been the case in my life experience. Hardly a day goes by that I don’t have at least a fleeting thought of the time we spent together at Annapolis.

I still dream every few days or so about being at the Academy. I think it is a mild form of Post-Traumatic Stress Disorder. The dreams are almost always about returning to Bancroft Hall after some period of leave or break (Christmas, Summer, Spring)…and almost always, I am about to be late for formation and I can’t find my uniforms…I used to think that maybe it’s a good thing that I could not find them because I think those uniforms might be a little tight…not that I weigh that much more (I actually weigh about 2 pounds less), but the pounds have shifted a little. Lately I have had a few dreams where I had to report to a ship to deploy, thinking…how is my business going to make it without me for 6 months?

It was my dad’s dream for me, that I graduate from the Naval Academy. He himself had wanted to attend the Academy, but ended up enlisting in 1940 and retiring in 1970 as a Chief Machinist, CWO-4. He loved the Navy and he loved the Academy. In our home growing up, we all knew the Navy came first. On June 7, 1972…Harry gave my Dad a hat to toss in the air as we tossed ours. Right up until my Dad passed away, I talked to him every year about how on June 7, 1972, he tossed a hat into the air with all of us. And now, after 47 years, Harry is a retired 4 Star Admiral…who would have thought, those 47 long years ago?

Good friends and good memories of days long since gone, and youth fairly well spent! Yes, Seven June, was the First Day of the rest of my life, and yours too I would wager (have you ever known me to wager, beyond an Army B-Robe?).

To all of you and yours, have a great June 7th Classmates. I’ll be thinking of all of you.

Go Navy!

Saul

Posted On Monday, 10 June 2019 05:00 Written by

Digital Mortgage...

"In the aftermath of the 2007-2008 financial crisis, massive regulatory changes impacted the residential mortgage industry. Federal regulators rightfully focused on curtailing the crises and protecting consumers. Today, after 10 years of intense revamping of the origination, funding, securitization and servicing processes, a “digital mortgage” has become the central point of innovation for reducing risk, driving profitability and accelerating the time to close a transaction."

Ben Clark

Posted On Wednesday, 05 June 2019 05:00 Written by

Contact with people creates opportunity or, said another way, contacts create contracts. Never forget this basic truth in sales. In the real estate sales business, contacts are also referred to as leads. A lead is someone who is at some point on a continuum to purchase or to list real estate.

The day to day success of your business depends upon a steady flow of leads and your ability to convert the leads into sales. The more efficient you are at doing this, the more successful you will be. Pretty simple.

But not all contacts are created equal. While the day to day success of your business depends upon a steady flow of leads, the long term success of any sales business is referrals. This is especially true in the real estate sales business.

Posted On Monday, 03 June 2019 05:00 Written by

What does Redfin Offer (other than discounted commissions)?

VOWs :

• Are subject to the same MLS Rules as a “bricks and mortar” office (Rules for VOWs have yet to be written)
• Proponents state that a VOW is the same as a “Bricks and Mortar” office (theory)
• The visitor, by virtue of onsite registration, becomes a customer or client
• Allow the public, by providing contact information (non-standardized as to amount and type), to conduct searches of all MLS listings and obtain all the information contained in the MLS.
• VOW Participant can (arguably) display all MLS listings without permission of listing broker as VOW is the distribution of information (much like faxing information to someone or providing a “client copy” of MLS data so the theory goes), and it is not advertising (see regulations on definitions of advertising above, which seem to refute this theory and would thus require the listing broker’s permission to be included in another broker’s VOW).
• All listing information details can be displayed, including comments (theory and practice at this point with few regulations written on VOWs)

Posted On Friday, 31 May 2019 05:00 Written by

In a presentation entitled “When Software Eats The Real (Estate) World,”Alex Rampell, General Partner at the venture capital firm Andreessen Horowitz, speaks of new uses (innovations) of certain types of fixed assets, (real estate being one of them), made possible in great part because of the continual advances in software’s transaction capabilities. This is a phenomena he refers to as “Dynamic Yield Maximization of an otherwise static asset.” Airbnb is an example.

And in a way, that is what Staging and Design Network (a member of the REach Class of 2019) does by allowing for the pooling of resources. The resources in this case are home furnishings used in home staging projects.

Takeaways from this interview with Tricia Tomlinson at the NAR Midyear Meetings in Washington DC, the week of May 12 through May 18 are:

• You can join a network of real estate professionals who share ownership in rental staging assets…assets the owners themselves could put to use on occasion and creating a rental pool for home furnishing.
• As a real estate professional you can earn money on furniture you purchased at a discount for your listing after the sale of the listing and before you use it in another listing. No storage. You own your staging props instead of renting them, and earn when you are not using it and others use it in the rental pool. All furnishings are available for sale and the stager earns a commission.

The Network operates on a platform that allows for investing in furniture inventory and sharing (collaborating) around a physical asset, another good example of “Dynamic Yield Maximization.”

Posted On Wednesday, 29 May 2019 08:47 Written by

Interview #3 Robert Reffkin, CEO, Compass

Compass has raised over $1.2 billion and has been buying agents and market share to grow to one of the largest brokerages in the US.

The companies Compass is purchasing could be described as “traditional” real estate companies, some of the best in the country. There is nothing innovative or different about buying talent and market share, but the plan is to add super technology for the Compass Agents.

A lot of capital allows for a lot of experimentation, which can work to push the rest of the industry in a certain direction (whether the tactic of the spending enterprise is successful or not). Compass is a major player, with lots of money in the bank.

In 2018 Compass had 34,644 Transaction Sides, with 8,155 agents.
Compass sales volume in 2018 was $45.54476 Billion.

“Agents need brokers less and less each year.” (I was not sure how to take his statement)

“One stop shop”
“We need to find ways to work together”
“The future of real estate is the handsome agent.”
“Harmony and simplicity.”
“No need to reinvent the wheel.”
“Building what agents want.”
“You will either be a platform, or compete against one. You don’t want to compete against a platform.”
“What are the things we can do together?”

Posted On Friday, 17 May 2019 05:00 Written by

Data and Information...Information is the currency of the Twenty-first Century

Protect - Control - Monetize

From a major financial services firm:

"...we take a look at every data element in the design, to determine the future benefits of being able to analyze or monetize that data. We also look at every data element not in the plans that we could be capturing, to see what potential benefits we are sacrificing."

Posted On Wednesday, 15 May 2019 05:00 Written by
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