Planning For Growth In Your Business

Every business needs a business plan, and your real estate business is no exception. Your business plan is a clear and detailed picture of your business. This is where you plan your strategy for success and plot the numbers that will show you how you are doing. This means knowing the numbers of houses and units that sell in your marketplace every year over a ten-year period, and deciding how many transactions you must complete in order to achieve the market share you want. You need to know the average sale prices and stock turnover in your marketplaces so you can focus your efforts on those that average both the highest numbers of sales and the highest prices.

The best times to review your business plan are at the end of the calendar year and the end of the financial year. You do this twice a year to make sure you are always in a pattern of growth and not sliding backward during any quarter. Reviewing this often also gives you a clear idea of what is working for you so that you can keep doing those things, or can change your strategies if they stop working. Your basic tools for growth include increasing your fees, selling more properties, or increasing your average sale price.

When you review your business plan, start by reviewing your current numbers over the past year – listings, sales and income generated. Review each month in detail and look for patterns of activity. Which months were slower, which were more successful, and what elements contributed to those levels of activity? You want to really understand what is working for you – or against you – and why.

In order to help you review your financials more effectively click here for our 2014Financials tool where you can enter your own numbers for current fees and income you want to generate, and get an estimate for the numbers of listings and sales you need to produce over ten months in order to reach your goals. We use a ten month calendar because you need two months worth of vacation, holidays and other time off. This time off is vital for you to rest, regroup, and stay healthy and motivated for the hard work you do the rest of the year. Set dates for your proposed days off a full 12 months ahead so that you can plan your working schedule to make sure you get that time off you need and deserve. Knowing you have a little time off every 8 to 10 weeks is motivational as well as rejuvenating, and also helps you to appreciate the quality of life your hard work is allowing you to enjoy.

Other factors you can control that directly affect your business growth include adjusting your days on market, hiring more and/or better support people, implementing and maintaining reliable and scalable systems, and staying on top of your personal fitness. Growing your business does not happen by luck. It happens because you plan for it, adjust the plan when necessary, and consistently follow through on your business plan.

I hope that you’ve enjoyed today’s Coaching Tip, and I look forward to seeing you here again next week.

Target Your Best Prospects With Lead Sourcing

You already know how important your database is as a resource for expanding your business. Inside your database you have lists of buyers, potential sellers, market appraisals, existing clients, past clients, key referrers, landlords and tenants. All of those lists would be far more useful if you learn to use lead scoring to target certain clients within those groups and create primary “hit lists” for working them – specifically, active buyers and potential sellers.

Most agents have a “fat database” that contains hundreds or even thousands of buyers, but most of those buyers are not active in the marketplace. With lead scoring, which is a method of evaluating and categorizing clients, you can identify which of those buyers are most likely to be buying property in the near future and place them on your buyer hit list to contact. These will be high-quality prospects who have registered to bid at a recent auction, placed a bid, have come back for a second appointment or attended open-for-inspections for several weekends in a row, and may even have requested legal documentation on a property and sent it in to a conveyancer for review – these are all indicators that they are currently active in the marketplace. The more of these indicators a prospect fulfills, the higher on your buyer hit list they should be placed.

You can also divide those prospects further into price ranges and time to buy ranges. By reviewing individual property files you can identify potential buyers who are requesting contracts, returning for second appointments, etc. and put them in your buyer hit list for concentrated phone and email contact. With lead scoring you can put your valuable time and effort into your most likely prospects instead of contacting everybody in the database.

Lead scoring also works for evaluating and quantifying potential sellers, and creating a seller hit list. Using the same relative criteria, you can focus your attention on contacting and meeting with the prospects most likely to be signing agency agreements for upcoming sales and auctions.

The point is to refine your entire database into smaller target segments of potential buyers and sellers who are most likely to complete transactions. You want to build and maintain momentum by consistently working ahead of the market by six to twelve weeks, and you also want your efforts to be targeted for your best results.

I hope you enjoyed today’s Coaching Tip. I look forward to seeing you here again next week.

The Importance Of The Qualifying Process

One of the most important skills in real estate is the ability to qualify clients. You need to know each client’s experience in real estate, their level of involvement, and their reasons for buying or selling right now. A lot of agents fail to ask the proper questions to get them the vital information they need, but there are really only three basic bits of information you need to know to qualify your client: Why, How, and When.

Most agents ask a lot of “When” questions such as, “When do you want to go to market?” or “When do you need to be moved into your new place?” or “When would you like for me to come by?” Then at the listing presentation level agents switch to “How” questions: “How do you want to see your property marketed?” or “How do you want to proceed with me as your agent?” The most important questions, however, are the “Why” questions.

“Why” questions tell you what your client’s motivation is to do a deal, whether buying or selling. Why are they buying/selling their property? Why did they choose to live where they are moving? “Why” questions are about death, marriage, divorce, relocation, financial gain, financial loss, or the client’s chosen lifestyle. Once you know “Why” then you know exactly which other questions you need to ask and what information you need to know in order to qualify your client. For example, you can easily ask your client, “Do you need to sell in order to be able to buy?” They will tell you yes or no, but you still need to know what their actual reasoning is and whether they might potentially be a seller or even a landlord.

Here is an example line of questioning you can use, beginning with “Why”;

Why are you moving? This tells you the client’s motivation.
When do you need to be moved into your new place? This gives you their timeline.
Where are you looking to live? This tells you about your client’s target marketplace.
Have you inquired about any properties, or been to any other opens? This tells you how involved they have been thus far in their process.
Have you bid on anything, or made any offers? This tells you how far they are in the sales process.

And possibly the most important question you have been working toward is,

Is this your first, second or third purchase in the area? If this is their second or third deal, then you know you are working with a higher-level client, possibly at property management level, and you definitely want to meet with them personally to view their property.

Whether you are writing fees of $50,000 a year or $2.13 million, you must understand the best ways to execute the qualification process. It’s all about establishing relationships with your clients that will build your business over time and make you the best real estate agent you can be.

I hope you’ve enjoyed today’s Coaching Tip, and I look forward to seeing you here again next week.

First impressions last…

It is critical to your business that you project professionalism in the way you present yourself. You may think you have this handled, but the reality is that you probably have no idea how your clients and colleagues really see you. Following are some actions you can take to assure that you present yourself the way you want to be seen.

Your personal style defines you, so it’s a good idea to establish a “uniform” for yourself, such as a suit/shirt combination that fits properly and wears well. This attire makes you immediately identifiable, plus you don’t have to make decisions about what to wear every day. Also, if you know you look good you are more confident and perform more effectively. Make sure your hair is trimmed, your shoes are shined, you are fit, and you are fresh.

Video recordings of some of your interactions may alert you to personal patterns of behavior that may be limiting your appeal. Your customers will have much more confidence in your ability to handle their properties if you handle yourself well.

Your voicemail greeting message is often your first point of contact for new clients. Nobody needs to know what’s happening in your personal life or what your schedule is like, so keep it short, simple and professional. An even better option is to employ a live answering service so that your clients can speak with an actual human who can ask and answer questions directly, make notes on the exchange, and update your database with relevant information.

The way you conduct your email communications is also important. Be cordial, but short, direct, and to the point. Your emails only need to address these questions:

What do you want your client to know?
What do you want your client to feel?
What do you want your client to do?

As you can see, working with bullet points makes information easier to understand, and it helps you to be brief and definitive in your delivery. Be sure to employ simple, descriptive headings that summarize the message you wish to convey. Finally, make sure you review every email before you hit “Send.” Check for spelling, grammar, and sentence structure issues. Also make certain the content clearly communicates the message you intend to convey.

The necessity to quickly record information such as contacts and property details is vital, but you are guaranteed to lose vital information scribbling notes on random slips of paper or the palm of your hand. Adopt and use a capture system for recording information – it can be a pen-and-paper daybook, or an app for your smartphone, but it has to be a system you are comfortable with and will actually use.

The simplest points of contact can be the most pivotal to your success. From the way you answer your phone, to the way you present in person, to addressing each client by name, professionalism matters.

I hope you’ve enjoyed today’s Coaching Tip and can move ahead in your business with some of what we’ve presented today. I look forward to seeing you again next week!

How to get much more out of your open for inspections

You could be getting much more out of your open for inspections by making sure information you already have is easy to find and use every day. By implementing a simple, teachable system for structuring your open for inspection packages you can assure that you and your agents are using your resources to the fullest.

Start by thinking about what you actually do with your property files. How much use do you get out of them? Are they just a collection of random data about a property sitting in your database in case you need it? Or do you actively use your property files during the entire process of handling a property? For best results, your property files should give you a complete, organized picture of the property and all of the prospects who can be brought to it.

Here is how your property files can be packaged for active daily use:
– Have a folder for each individual property you bring to market.
– The first file in the folder is the property brochure.
– Next, have a page that lists all potential sellers and landlords located near the property, current landlords, properties currently under management, past market appraisals, past clients, and key referrers who live in the area.
– Next is a list of all the people who have inquired about the property and shown a real interest in purchasing it at some point.
– Next, include a list of all prospects who have walked through the property, either by private appointment or open for inspection.
– Finally, have a list of people who have come back for second appointments, requested copies of the legal documentation on the property, or have made offers on the home.

What you have now is a compact, organized and immediately accessible action pack for prospecting the right people for just listed and just sold marketing to your most relevant market. When the property sells you can use the same packet to prospect for other properties in the same market.

You can see now how easy it is to put together a useful and versatile open for inspection packet for each of the properties you handle, and the many opportunities you can explore by using it actively. You will stand out from your competition by being exceptionally relevant to your marketplace and establishing your brand as one of high frequency and consistent success.

I hope you’ve enjoyed today’s coaching session, and I look forward to seeing you again next week.

The Power of Routine

Having a daily routine and following it establishes the consistency and accountability necessary for you to be successful in your business. Build a good routine and everything you do each day will get results.

To structure your daily routine, first establish a time to wake up in the morning and the time you go to sleep at night. Once you know that, then you know how many productive hours you have in your day. Your next step is to prioritize your most important tasks, starting with prospecting. Whether you arrive at 9:00 am or 4:00 am, your main priority when you get to your office will be to get on the phone and start calling people as soon as you know they are awake. Around that, look at what is happening in the marketplace, especially new listings and sales. This will help you direct your prospecting for greater results. Also think in terms of scheduling up to three 45 minute call sessions per day, and set a target for yourself – say 16 to 24 calls resulting in 8 to 12 connections and 1 to 3 appointments.

You should also have a structure for your phone calls that addresses the three things your prospects will want to know:

Who are you?
Why are you calling them?
What can you do for them?

Address these questions directly and you will have their attention, because you will be speaking to them from their point of view.

Having a routine includes scheduling around work to meet all your daily personal needs. Set a time for breakfast, lunch and dinner, and make sure you honor those times because you require rest and fuel at intervals in order to stay sharp and on top of your work. Also maintain an exercise regimen, because you really do need to be fit and strong to do your best work. Remember, too, that regular exercise helps keep your stress level low.

You should also plan a weekly schedule and devote each day to a specific task around prospecting. For example, Mondays can be your day to do open for inspection callbacks. Tuesday, concentrate on calling potential sellers. Wednesdays do your 10-day callbacks. Thursdays, call past clients. And Fridays, focus on calling buyers about upcoming auctions and opens. With all of your work scheduled you will find you don’t have to waste time and energy juggling tasks and thinking about what needs to be done next.

One more significant reward for planning a routine, sticking to it, and working with greater intensity is that when you do go on holiday, you get an 8 to 10 week holiday, and you won’t need to think about work the entire time you are off. Because you follow a well-planned and balanced routine everything has been taken care of, so you can relax and enjoy your well-deserved vacation knowing your business is solid.

I hope you’ve enjoyed today’s Coaching Tip and I look forward to seeing you again next week.

The Importance of Market Knowledge

One thing that will really set you apart from other agents is your level of market knowledge. No one knows more about this than Shannon Whitney of BresicWhitney.

Shannon says, in order to be a great agent you need to go through as many of your competitors’ open for inspections as you possibly can. This is the best way to know what is selling in your market and for what prices. This is also the best way to learn the details of properties that add value for buyers, such as the view from a top floor vs. a bottom floor, access to golf courses and other areas of interest, and how details like these influence pricing in various locations.

Whenever you are not conducting your own open for inspections you need to be going out and looking at other open for inspections. This is an ongoing process because the market changes constantly and it is vitally important for you to keep current on those changes. Maintaining timely and thorough market knowledge helps you to price your own stock more competitively, and also increases your expertise in advising and negotiating with your clients. Market knowledge includes volume of transactions, sales prices, and activity in the different sectors of your market. Market knowledge establishes you as a trusted advisor to your clients. Your competence in this area will gain you loyal clients as well as new business.

You may be tempted to simply view other properties online, but there is no substitute for actually walking through a property. You need to see details and experience the nuances that make a property more attractive to buyers in order to make the best evaluation of how pricing is influenced by those aspects. The more accurate you become at evaluating pricing on an ongoing basis, the more accurate you will be in pricing your own properties for your best possible sales. It is better to set market trends than to merely follow them, so train yourself to become a market leader. Good market knowledge drives active market momentum, and that momentum will grow your business.

I hope you’ve enjoyed today’s Coaching Tip, and look forward to seeing you next week.

The Million Dollar Mindset and Scalable Growth

Do you have a “million dollar mindset”? That’s great! But – Are you working in a million dollar market?

You may have the right attitude and work ethic to make 100 sales a year and reach a million dollars in sales – but your market may not be big enough to accommodate you, even if you had no competition. There is a way to reach your goals, though, through planning for scalable growth. But first you have to know the numbers for your market before you can expand beyond them. We call this the “size of the pie.” A lot of agents base their projections on a farm area of around 1000 homes. You have to look deeper, though, and see what percentage of those homes actually sell per year. It’s the number of sales that actually defines your marketplace. And your expectations must be based on calculations of how many properties are in your area, how many of those sell every year, what is the average sale price, and how much of a fee you will earn per sale.

In order to work towards producing a million dollars in fees you will begin with a 10-month calendar, because that allows for 2 months of holiday per year – for you and for the market. Within that 10-month framework you will build your plan for systematic scalable growth. This will take you to your goal in manageable increments that work with your real market situation. You can’t start out aiming for 100 sales a year if your market only supports 50 to 60. So you start out aiming for a milestone of 30 sales. Once you reach that and maintain it you will need to hire an assistant to do all the basic administrative tasks so that you can focus on prospecting, listing and clearance. Now you can stretch up to 60 transactions a year. When you reach that milestone, hire another assistant so you can continue to work your way to 100 sales per year. With a good system in place, you can teach that to your assistants so they can reliably and consistently provide the support you need from them.

Successfully reaching your incremental goals through planning and following through on this scalable growth plan will build your reputation as a go-to real estate agent, and that will bring in more business for you.

I hope you’ve enjoyed today’s coaching tip. We look forward to seeing you again next week.

Why Sticking To A Plan Works

Some aspects of success in real estate are universally basic and necessary. Recently the four finalists for our Australia’s Changed Agents Awards gave presentations at our Real Estate Blue-Print Conference. Not surprisingly, all of these agents did the exact same basic things that allowed them to radically improve their business.

The first thing each of these agents did was to commit to taking their business seriously. They basically removed their safety nets and backup plans, decided that this is their career for life, and did the necessary work to make it all happen. Next, they evaluated their existing skills and upgraded them. They learned what they did not know, and fixed what needed repair, starting with structuring the listing presentation. The third thing each agent did was to hire an assistant. They each realized that they were wasting valuable time doing mundane office tasks that kept them from doing actual real estate work – prospecting, listing and selling. By hiring an assistant to do the office tasks, the agents could then spend all their time doing real estate.

The overall winner of the Changed Agents Award, Simon Perry, succeeded in taking his business from $36,000 to $360,000 within a year. He did this by becoming an outstanding listing agent. When you have a lot of listings, some of those are going to sell. The more you list, the more sales you will realize. Simple.

All of the finalists for the Award had a plan. They set goals. They set up schedules for accomplishing those goals, for implementing new operations, reinvesting new income into the company, and scheduled vacation time. Most importantly, they stuck with the plan and worked with it long-term. They decided where they wanted to be in a month, a year, even five to ten years; they wrote it all down and made a commitment to follow it.

It is vital to have vision and clarity for the future of your business. If you don’t have an idea of where you want to go, how are you going to get there? Know what you want to achieve, set short-term goals to move you forward step by step, and watch your business expand and prosper.

Here at the Josh Phegan Company we’d love to help you get a great start toward success in your own real estate business. Please contact me if you’re interested in training or coaching with us.

Let's get controversial…

Negotiating fees with clients is a necessary part of your business. It is much easier to set your fees and justify them if you are confident of your worth. Ask yourself what you are doing relative to your competition that sets you apart as a client’s best choice. What are you worth in your marketplace, and why?

You should know how your competitors set their fees, how market regions differ, and how much some of your competition may be undercutting you. How is it that some agents may charge as much as 4% on a sale, while others charge as little as 1%? Where should your own professional worth be set on that kind of scale? It may seem like the difference between, say, 1% and 2% is small – but in reality 1% is half of 2%. That’s a 50% difference, not just 1%. Your client would not agree to sell their home at 50% less than it is worth – why would you agree to accept half of the fee you should command?

First, understand that the less time spent negotiating fees, the less of an issue it has to be and the more quickly you can move forward with the sale of the property. Make your case for your fees quickly and convincingly.

You know what you are worth, but if your client can’t see the difference between what you and your competition offer, then they won’t want to pay you more than they could pay elsewhere. So how do you demonstrate your value to your client?

Before even mentioning your rates you should be able to demonstrate why, if all fees were the same, your client should choose you over any competitor. What would make you the better choice if money was removed from the picture? One example would be to demonstrate your access to buyers – as in, how many potential buyers you can produce to see the property – by documenting recent open for inspections, total number of buyers you meet there, and how many of those buyers you can send through the client’s property even before marketing begins.

Keep in mind that clients are driven by two simple concepts: Convenience and Safety. How quickly and easily would they like to see their property sold, in minimal time and at a great price? And can they trust you to handle their sale capably? This is where your track record comes in, because it is solid evidence of what you have done successfully over time – your sales percentages, list and sale prices, days on market, marketing costs, your auction bidding record, etc. You can also compare your records with your competitor’s records to demonstrate how much time and money you will actually save your client as opposed to what they would likely lose by choosing a discounted fee elsewhere.

Make sure you have solid current tactical documentation, because that could make a 25% to 50% difference in the fee level you can justifiably command. It could mean an extra quarter of a million dollars a year for learning how to successfully negotiate for the fee level you deserve.

I hope you’ve enjoyed today’s Coaching Tip.  If you have ideas for other topics you’d like to see as a Coaching Tip, please feel free to email me: josh@joshphegan.com.au.