Archive for the ‘The Millionaire Real Estate Agent’ Category
Here is the entire seminar
And here is the handout http://www.number1homeagent.com/FindOutWhyHandout.pdf
Here is a video link for a seminar I gave to agents. It is just under 90 minutes long. It is a remarkable tool for predicting the behavior of others. I think you will really like it.
Here is the on line link to the booklet I passed out: http://www.scientologyhandbook.org/SH4.HTM
Here are some factual statements:
Most people who enter the real estate business are gone in just a few years. Most real estate agents, who stay in the business, are not very successful. To be in the top 1% of all agents in the U.S. would require about 50 – 60 sales a year. Most agents, who are successful, (50 – 60 sales per year) do not really know why they are successful. They think they know but they are usually wrong.
Only about 25% – 30% of the top 1% of all agents actually know why they are successful and most of those don’t know it very well. So success can seem mysterious or elusive. It needn’t be. If one were to apply the same exactness to the subject of real estate sales that any well trained engineer would apply to his discipline it wouldn’t seem mysterious at all.
But applying that exactness would mean – really – looking, not listening. Look at what people do. Look at how they do it. Exactly. Look at what results they get from doing it. It makes little to no difference what they think is causing their stats to rise. What is causing their stats to rise? Anyone who says he (or she) knows why they are successful would be able to teach it – and teach it in such a simple manner that the other person could apply what was being taught and get a similar result. There would be no special cases, no exceptions. Not if a scientific approach was being used. Anyone who knew why they were successful would be able to increase their level of success. If they could not do that one thing then what they are thinking is the "reason" isn’t the real reason for the success they have had. That last one is so obvious it is usually missed. Is there really any "highly successful" person who left real estate sales so they could teach it? Even one?
There are few subjects on earth (possible exceptions are mathematics, physics, chemistry, etc. – and the other so-called "exact sciences" – that don’t just reek with false data. The subjects of sales and marketing (those are two different subjects, by the way) have so much asinine, stupid and unworkable gibberish being pawned off as "the way to do things" that it is a minor miracle anyone who actually studies either of those subjects ever succeeds at all. Just as an example, about 20 years ago it was validated that, in some fields, women who were trained by male sales managers did not do nearly as well as women salespeople who had no sales training of any kind. Amazing. The "sales training" had an actual negative value. This is just one example. So the thing to do is: LOOK, DON’T LISTEN. I don’t care what someone says they are doing to bring about sales results (and highly successful real estate sales people will sometimes actually invent things to tell others because it "sounds better" than what they are actually doing).
There was a scale developed many years ago (originator is uncertain) that has been altered (for the worse, in my opinion) from what I learned in 1971.
From the bottom up, the original scale went:
1. Unconsciously incompetent. Doesn’t know and doesn’t know he doesn’t know.
2. Consciously incompetent. Knows he doesn’t know. (note that NOT knowing is a step UP!)
3. Unconsciously competent. Knows how to do it, but doesn’t really know why it works.
4. Consciously Competent. Knows how to do it and knows why it works, so can increase it and validly teach it.
The secret to becoming a top listing agent? First become a really crappy listing agent. Become a really crappy one, then a bit less crappy, and so on. That is the actual path. There is no substitute for "stage time". None. Fail. Fail more and go right on doing it. Having the right attitude is probably more important than any other factor. A complete willingness to do whatever is necessary and to have the viewpoint that you are going to persist until you have arrived. Sort of like it mattered.
What is a "top producer"? How is it defined? Why would anyone care?
Some would say if you are in the top 10% you qualify. I set the bar higher because the bottom 90% is doing so poorly. To be in the top 1% – of all agents in the United States – you would need to sell about 40- 50 houses a year. The first year I qualified I sold 38 houses. At 40 – 50 sales in a year you would probably always be in the top 1% in your area and in the country.
Why does it matter? Why have you seen me mention so many times, "what top agents do"? It certainly isn’t to suggest that someone doing less or something different is in any way "wrong". There are many many ways to approach this business and anything that is working can be defined as "good". To me it has to do with systems (successful methods). There are some top agents that have very poor systems and handle their business by taking each particular situation, each escrow and just "glowing it right". Through sheer intention and desire, making it close. Forcing the deal together. These agents do not have a stable business but have a temporary perch they will soon fall from. When I think of "top agents", for me, it is really shorthand for "has workable systems". Most importantly, top agents who are stable top agents spend very little energy "glowing things right" with regard to procuring new business. Without exception, they have exact and specific methods they apply again and again and again – and get the same predictable results each time. They have a system for getting business. They do not depend on: lucky breaks, caught a good one, happened to meet a guy who is ready to buy, didn’t expect it to happen but it did sell and close. As I personally spent the first twelve years of my real estate career depending exclusively on lucky breaks, happening to catch a good one, etc. – I am very familiar with how that works, as well.
During my first twelve years in real estate all of my deals – each and every one – came about as sort of a fluke. If I had arrived just 15 minutes later, I might have missed it. If I hadn’t driven down that street I wouldn’t have seen the guy in his front yard by a FSBO sign and wouldn’t have stopped to talk to him. I discovered that I could get business from almost any activity. Just about anything could produce a deal or two. But while striking up a conversation with the guy behind me – while playing goofy golf, or chatting with someone in line at the drugstore or a movie theater could produce business, it wasn’t a very predictable method. It is this point alone – a predictable method of producing new customers – that separates the top agents from the pack. This is what makes the difference between having a business and having a job. It was in 1990 I started to really make that transition from hoping for a deal to the continuous creation of deals (developing workable systems).
So when I hear someone say, "I got a deal from twittering", "I met the client at a Kiwanis meeting", "I knew them from church", "We golf together", "The neighbor really liked my custom yard sign", etc., to me that sale is in the category of a fluke. I mean no disrespect. That is not to say it didn’t happen or will never happen again but that it is not a controllable event. I can’t go to enough Kiwanis meetings to get all of the business I want. I can’t happen by enough golfers to support myself. During those lean years I did have "miracle escrows" that truly seemed like a gift from heaven at the time. And I was grateful too. But I was also determined to eventually get to the miracles as usual level. That required workable systems.
Let’s talk about commissions. Realtor to Realtor. We do it everyday with potential customers. Reporters can ask us how much we charge and then print our answers for other agents to read. You can call any real estate office and simply ask them or just look on their website (if they are willing to put their fees there as most discount companies are – and I am, as well). Would it be okay if you read how much another agent or company charges but not okay if you heard them physically say it?
A few years ago when I was speaking at Sell-A-Bration, in front of a few hundred people – which I will be again in a few days – I mentioned commissions and several people started openly protesting that I could not keep talking about it or they would have to leave the room. I patiently explained that I was not breaking any law, violating the spirit of any law or doing anything wrong. In fact, I was doing something very right: I was helping fellow agents to see that they didn’t need to "match commissions" with the limited service companies (the we-do-nothing-for-less-crowd), that there were services they provided and skills that every single person in the room possessed that factually mattered; that the running dog press had "their story" prior to "researching the article" and that ingesting a steady diet of poison would make anybody sick.
A few morons continued to loudly bray that if I did not stop talking about commissions they would leave the room. Fortunately for me the main entrance to that room was to my immediate left and was a very large opening. So it was quite easy for me to gesture towards that doorway so someone that unobservant wouldn’t have any difficulty finding their way out. Two or three people got up and left. Several of the CRS instructors in the audience had also tried to explain that there was nothing I was saying (including how much my fees were) that violated any law.
What is against the law (as it should be) is PRICE FIXING. Agreeing to all "charge a certain price".
Is it possible that someone honestly believes that I could make an announcement via a blog post (or speaking to an audience of a few hundred people) and "fix commission amounts"? "I charge ‘X’ amount because Russell Shaw told me to"; "Once the order from Russell arrived, we couldn’t charge any less"; "All of us now charge this amount, it’s the way Russell wants it now". Really? If I was truly that powerful I wouldn’t waste my power on something that stupid. And if I was going "fix commissions", I would have everyone in the country charging a lot more than me so I could get all of the business without having to try very hard.
Truth is, I am not in competition with any agents outside of my area (yes, yes, I know we really need a national MLS so all companies and agents will be free to prove they have no real knowledge or value) and I go way out of my way to help and train the agents who are here. Customers aren’t scarce. Regardless of what is currently happening (this day, this month, this year) I will continue to survive. I am not afraid of any competitor, in fact, I can now see that it is because of them I have arrived at my level of competence. Their ability to win what I wanted forced me to get better.
It does not matter to me what you charge. Charge the amount that seems right to you (based on your area, your price range, your competition, market conditions and your ability to effectively communicate your level of value. If you feel you must charge less because of the internet, the existence of discount companies, articles in the media, "ethical explanations" from other agents who are hell-bent on having less (for themselves and everyone else), or any other important reason to work on reduced prosperity for yourself and your fellows – I understand that nothing I am going to say or write is going to change your mind. This is strictly for those who haven’t already gone too far down the rabbit hole.
If I have seen further it is by standing on the shoulders of giants.
- Isaac Newton
Last week Matt wrote:
I might have missed something in the post, but to say that all listings for the discounter were $299 is probably not correct. “58 X 299 = $17,342.”I see a lot of “Discounters” using low selling price as a tool to get people in the door, or on phone. $299 is usually a no support price…and then they tack on a-la-carte items to raise that price up. True, it will never be full commission, but I doubt all 58 sold for only $299. How would he still be in business only making $17K per quarter?Russell, How hard was it to get to the level you are at today? Many realtors never get to this level, because it is very, very hard. I would bet that it is a lot easier to throw up a bunch of ads, that say you will sell a home for $299, and get a ton on people in your office. It can’t be that hard…
I don’t know how much selling up occurs at his site. But assume he only sells half of the listings he takes and gets paid on twice as many as he closes and manages to up sell every possible option he has – I still don’t like the numbers. I am still saying it is NOT that easy to make money by lowering one’s prices. Please understand I am not saying it can’t be done – just that making money doing it is not easy.
But the question of yours that really caught my eye was, “Russell, How hard was it to get to the level you are at today? Many realtors never get to this level, because it is very, very hard.”
I don’t believe that is even the correct framework for understanding what is involved. To think of it as “hard” or “difficult” is trying to grasp it in terms of how much effort is involved vs. charging less and “getting a lot of business” that way. One of the huge advantages I have over most highly successful Realtors (this year we will take over 600 listings, close over 400 escrows – for over 100 million in volume) is that I was an “ordinary” agent my first twelve years in real estate. My first 12 years I sold between 18 – 24 houses a year. I was heavily in debt, lived from deal to deal and was not exactly happy with my “real estate life”. Compare this to Craig Proctor – who at age 29, his third year in the business, was the number one agent in the world for Re/Max. My first TWELVE YEARS were a struggle. So my perspective about achieving an extremely high level of success isn’t all “book learning”. This understanding has enabled me to not only create a completely stable level of success in my own business but also to share my wisdom on this subject with others and help to make them successful, as well. To get to the level I am at (and there are hundreds of other agents making the kind of money I make or more) isn’t a matter of “difficulty” at all. Does it take a lot of effort and dedication? More than an ordinary person can even imagine. But the work isn’t “hard” – it is almost a non-stop joy, a reward in itself. I smoked for 29 years and quit smoking in 1989. For some years after I quit smoking I would get asked if it was “hard to quit”. My answer was always, “No, it wasn’t hard to quit”. I had a few days of unbelievable cravings (I took off work and spent two days non-stop TALKING about smoking – my wife got to listen to all this). I had about three weeks where I had to have Nicorette gum. But it wasn’t “hard”. I had DECIDED. Now deciding – oh my GOD was that difficult. I “thought about” quitting for TWENTY NINE YEARS. People who get to my level DECIDE to get to this level. There will be numerous times along the way where it will seem right to “coast” – I did for three years at 60 deals a year, again at 130 deals (2 years there), again at 200 deals a year (3 years at that level). You get the idea. The operative word here is: DRIVE. It isn’t “hard”, it requires drive. The person has to really want it.
What I know now is that every person has a “set point” for just about everything. On any subject there is a certain amount of “X”that is considered “good”. Any amount less than “that amount” is not enough. Any amount over that amount is too much. Although this concept applies to anything; motion, speed, food, sex, free time, affection, etc – I’ll use the example of money. There is a certain amount of savings, for example, that is “right” for a person. Less than that amount and they must get it back up to the correct level. More than that and they feel like they have “a surplus” and will find a way to get rid of it. Same with income – make less than the “right amount” and the person will find a way to get their income back up to that “correct amount”. For some years the amount of money I was “allowed” (by myself) to keep was a minus number. As you can imagine, this made for some very interesting checkbook balancing from time to time. So the first “rule” to know if one intends to change the amount of money they will earn or have would be for the person to change their ideas about “how much they need”. Many people may think of this as “positive thinking” – but it is the VITAL first step and can not be omitted.
Here is a link to a positively wonderful short video that a friend sent to me. It is called 212 degrees. Please turn your sound on and take a few minutes to enjoy it.
There is also a movie out on DVD called “The Secret“. You can watch it on line for about $5 or order the DVD for $30. If you have not experienced it you are missing out on something quite special.
A truly key point is covered in the following, and if you understand and grasp it – you will never see your business potential the same again.
Excerpt from policy letter 28 Aug 1973, Organization Executive Course, Volume 7:
WHAT DETERMINES STATS
“It is also true that the volume an organization handles is NOT dependent upon public demand. The volume it gets and handles is solely determined by its internal organization. This sounds so strange that many an Executive Director has had great trouble until he believed and and used it. You can always internally shoot the stats up and keep them up. It is THAT, across all divisions, which determines the volume an organization gets and handles. This is sometimes hard to teach people but once they see the results of it they become converts to that principal —- that it is internal, not external actions that determine stats.”
- L. Ron Hubbard
So long as I believed (my first 12 years in real estate) that “the market” had something to do with my income I was like a cork floating in the ocean – my destiny controlled by forces that were – for the most part – completely out of my control. What I know now is that agents who are “geared up” for 50 – 60 deals a year are not going to do much more than that. They may have little spikes up here and there but they will get it “back to normal” quite soon – whatever it takes to accomplish that.
In Gary Keller’s outstanding book, “The Millionaire Real Estate Agent” this (although not stated explicitly like above with the Hubbard quote) is covered in the correct sequence for hiring assistants. Any real estate agent who plans on ever moving past “having a job” into having a business needs to read this book. At least twice.
It is not just the most important book ever written on the subject – it is the only book ever written on the subject. Imagine if you could get author, Michael Gerber, “The E-Myth Revisited” to stop by and write up for you what to do in your business to build it up into a stable operation so you would not ever have a problem that money would solve. The proceeding sentence is my book review for The Millionaire
Real Estate Agent (known to affectionados as the “MREA”).
To get to the next level (life is improved on a gradient) your organization would need to be set up for actually handling the level of business you want to do. This, of course, would include promotion. Advertising and marketing would not be for the level you are doing now – but for the level you plan to do. If, for example, you did not have an assistant (then you factually ARE one) to do “all the little things” for you – the growth ceiling is to some degree set right there.
The MREA, which was on the Business Week best seller list for over a year, features numerous quotes from me and they featured me in the book, along with about a dozen other top agents in the United States. Vice President of Keller Williams International, Dave Jenks, along with a camera crew, flew from Austin to Phoenix and came to my office (currently a building attached to my home) and spent a day here filming me and my staff. It was the first video they ever did of a mega producer. It was and still is used to train KW agents at their KW Mega Camp. Their video production techniques are SO much better now but that crude video is still used today and I get told (by KW agents and brokers) it is still the one they like the most. Why am I telling you this? There are KW agents whose incomes dwarf mine. They have direct access to some of the most successful agents in the world. The year they interviewed me for the book we closed just a bit over 50,000,000 in volume. Respectable, sure. But not amazing “world class”. The year in question was 2001. I wasn’t here much that year. I was diagnosed in July of 2001 with bladder cancer. I had an aggressive stage 3 tumor in the bladder wall. The urologist wanted to (was insisting on) completely removing my bladder and my prostate. The Mayo Clinic would not accept me as a chemo patient – they would only accept me I would agree to have my bladder removed. I decided I would rather not have this body than have that kind of life. I wound up with a nut for my oncologist (her main nurse was an angel), I had a wonderful surgeon – had three surgeries and I spent nine months traveling to Los Angles once a week for Scientology counseling to get rid of the grief and “deathfulness”. I was physically in Phoenix about 3 days a week and with the chemo I could actually do “real work” in my office about 6 -7 hours a week. I was unable to go on listing appointments anymore (I tried it but would space out so much while talking to them it was kind of pointless).
That year we had the best year (at that time) we had ever had. My business went UP with me GONE. As the MREA was all about systems, they liked mine. And there is nothing I do that can not be replicated by anyone who wants to move up. Nothing.
I am totally cancer free – have been “officially” since March of 2002. At the time I even bought myself a Porsche to celebrate (yes, of course it was a 911 convertible. Yes, of course I had to have supercharger added to it later:-).
And I have exactly the same attitude towards helping agents “break through” any barriers they may have between themselves and the success they desire as I do about giving a cancer patient a “lift”. Attitude is EVERYTHING. Everything.
Please read this book:
This is the book I am telling all of my friends in the real estate business to get and read. It is so well researched that those of you who like statistics will be impressed just with some of the stats. Those who may have hit a rough patch and found their business in a bit of a skid will find it to be just what the doctor ordered. Those who are already doing just fine will find a very put together write up of what they are already doing. I haven’t found anyone doing really well who didn’t find something in this book that they could use. Now.
You can find it at just about any book store. Here is a link where you can peek inside and buy it online. You can see some nice excerpts from it here. And, if you like, watch a ten minute video on YouTube from Gary’s tour. The book covers the specific twelve tactics that are needed for survival and success.
The better off and more informed you are the more you will discover things you already "sort of knew". For example, look over this simple illustration showing seasonal sales cycles in any normal year (a small seasonal shift). It is part of a page in the book.
The footnote reads, "Based on a study of over a million closed transactions over a five-year period." To me, this kind of data is priceless. I would have no way of ever compiling it on my own and no one else (at least no one I know who is sharing with agents) has it to hand to me.
Another one – this one is the Seasonal Income Cycle. I wish I had known this sort of thing my first 10 years in the business (the ones where I wasn’t keeping track of my own stats to ever be able to see this sort of thing for myself). The text above the chart is from a page in the book.
Notice how only about a third of all the months are in the "average" range. What would you do differently if you knew that about 2/3 of the time the income you were physically receiving was not your average? It was way above or way below. Would it change anything for you?
One last one. The book has simple wisdom like this in great abundance. This is another one that (at least in my opinion) every agent should have a subjective reality on.
Do well. Buy "Shift". Read it. Get others to read it.
Have you ever had the remarkable pleasure of talking to someone who keeps checking their phone for new text messages while they are talking to you? Naturally, nothing you are saying could matter quite as much as the next fabulous text message they are pretty sure they are going to receive.
The stupid idea of multitasking has spread throughout our society like a contagious disease. It isn’t simply a "bad" idea (as in unsafe, rude, counterproductive), it also happens to be physically impossible.
One does not "multitask". Oh sure, you can think you are multitasking but you are not. What a "multitasking person" is doing is one of the most inefficient things possible (as far as real work output goes): they are stopping doing one thing and starting another, literally jumping from task to task and back again. They aren’t really "there" with regard to the other tasks they are "sort of doing".
Almost all truly successful people in just about every profession and activity (sports, business, entertainment, construction – you name it) have ONE thing in common: THEY DO WHAT THEY ARE DOING WHILE THEY ARE DOING IT.
A common problem for Realtors is they never quite "arrive at work" so can never really take time off either. When they are "on vacation" they are still working on deals, sending faxes, taking calls – in other words, they simply changed their location but not what they were doing. I see agents out to dinner and there – sometimes actually on the table – sits their cell phone. Oh no, can’t take a chance on missing an important call!
If you are an on call medical doctor (or some profession where it really is a matter of life and death) perhaps being interrupted during dinner makes sense. If you list and sell houses for a living, I don’t get it.
When working, work. Really work. When not working, don’t. Not even a little bit. BE. HERE. NOW.
Try it sometime. You just might like it.
photo credit: www.rishimodi.com
Management is telling people what to do. Leadership is teaching them how to think. Opinion leaders tell people what to think.
Despite various surveys indicating how low the general public ranks real estate agents, some agents are highly respected by their clients and peers. How does that happen?
To understand how that is accomplished, first let’s look at the concept of influencing the opinions of others. Various studies have shown that media communication intended to change someone’s buying or voting behavior seldom works directly. The communication may be directly received by the person it is intended for but is mediated through their social relationships. There are individuals (depending on the subject) that others consider experts and who are looked to for advice on that particular subject. There are some people who act as Opinion Leaders – they see themselves and are seen by others as having an influence on others.
In politics and fashion, for example, there are TV shows hosted by people who have very large audiences who watch the show in order to find out what to think. Yet, Opinion Leadership is not a trait some people have and others don’t. Every person who has an elevated interest (and thereby knowledge) in an area, can serve as an opinion leader on that subject to those around them. It is a natural part of everyday personal relationships.
Research suggests that, in the US, opinion leaders constitute roughly one in ten Americans, and that as a group they tend to serve as a leading indicator of popular trends, from public issues to new product adoption to social attitudes. Many consumers today place more weight on the word-of-mouth insights of their more influential neighbors than on what they hear on TV or read in the newspaper.
Opinion leaders are people whose opinion on a subject/product is influential on the social group they belong to, although they may or may not have an acknowledged authority over them. Opinion leaders are not necessarily traditional leaders in society, such as politicians and clergy (although they can be). Rather, they are perceived experts in particular domains – which is exactly the position occupied by a successful residential Realtor. When it comes to correct pricing and effective marketing of homes there isn’t any substitute for a competent Realtor. Notice I didn’t say real estate company, as it is the individual agent who is looked to (or not) as the expert. A company may enjoy a wonderful reputation and there are many instances of an individual and his or her company seeming so inseparable that you can’t think of one without the other – but it would always be the individual that is the opinion leader. One could join the largest, most successful real estate company in the world and this would not automatically cause them to be perceived as an expert. Conversely, an individual broker could have a one person shop and be regarded as THE go to person in that area if you had a question concerning real estate. Opinion Leader Realtors are trusted by their clients because the client can see that the agent has their best interests at heart.
There are many real estate instructors who teach “scripts” on how to handle commission objections. The seller doesn’t want to pay “X” commission and they are advocating using a “technique”. Think of someone you trust and go to for services – like a dentist or physician. Isn’t that trust based largely on the belief that they don’t recommend a service you “need” based only on their desire for money? (as opposed to they use "really good scripts" to handle you).
There is a Scale of Motivation, it goes highest to lowest:
For example, when one is communicating to their clients about a needed price reduction from the viewpoint of personal conviction or duty, rather than “I want the money” – that “Care Factor” on the part of the agent is visible to all but the worst off in the society. Please don’t think I am advocating earning less or not reaching all of your financial goals, I’m not. I believe that great agents operate and handle their clients from the level of Personal Conviction or Duty. They tell their potential sellers the whole truth every time and don’t hold something back because they might not get a commission. This isn’t so they can be in compliance with the Code of Ethics, but is just the way they think and operate.
In the next year or so a great many agents will be leaving the real estate industry – but they were really on their way out before this latest crash arrived. And they were primarily motivated by money or personal gain. Not the highest level of motivation. Ever.