AND EVEN PROSPER IN ALL “CONDITIONS”
by Neil Jenman
Article written and provided by Neil Jenman from Jenman.com.au . To see the original source of this article please click here. https://jenman.com.au/how-agents-can-avoid-going-broke/. Neil Jenman is Australia’s trusted consumer crusader. He can support you, all the way, from choosing an agent who will get you the highest price guaranteed to when your removalist comes! You get an unprecedented level of total support. All for free. To find out more visit jenman.com.au
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This is a true story.
Many years ago – in the first year of opening my real estate office – I mailed Christmas Cards to all agents in my area.
I have always considered Christmas a special time. By sending cards to competitors, I was not being facetious. I was genuinely wishing them happiness.
A few responded in kind.
But one did something horrible. He returned my card with a nasty message scrawled over the envelope.
To be sure, I barely knew this agent. I had done nothing intentionally to harm his business. Despite being part of a large franchise, he was decidedly unpleasant. Never mind nobody doing it better, nobody insulted me more. I was offended, even hurt.
So, what did I do?
I placed the envelope with his nasty message high on a wall in my office. I glowered at it often.
A few years later, this agent closed-up. His demise did not cheer me. On the contrary, I felt sorry for him. Not only did he lose his business, his reputation was in tatters.
Meanwhile my business prospered.
And then hard times came. Interest rates soared, the economy was in chaos and business everywhere seemed to struggle.
My business continued to prosper. Indeed, every year – regardless of market conditions – my business improved.
It wasn’t long before other agents began visiting me. They wanted to know what I was doing to create constant prosperity.
It was simple. From my first day, I made a two-fold promise to myself. I vowed to work really hard and to take really good care of my clients.
Those two factors – hard work and client care – gave me more success than I ever imagined.
AGENTS IN 2023
Fast forward to 2023.
In early February, another real estate agency went broke. The owner was reported to be “shattered”. But he added that his business will “not be the last to fall”.
This agency, which opened in 2019, enjoyed great success at first. The “market was on fire” according to the owner. But now it’s quiet.
The agent says that the reason for his failing is “market conditions”.
Again, it gives me no pleasure to see a business fail. I know the stress of business. I know the dreams that are likely shattered if the business fails. I had similar dreams. Fortunately, in my case, the dreams came true.
So sure, despite my antipathy towards agents, I get no pleasure seeing their businesses fail.
This real estate owner is likely correct to predict that more agents will fail. But he is incorrect when it comes to his stated reason for his failure – and the future failure of other agents.
Real estate agents do not fail primarily because of “market conditions”. They fail because of client conditions.
Most agents have three characteristics: They are greedy, they are lazy, and they are stupid.
I understand greed. To some extent, we are all guilty of greed at times. Who hasn’t wanted a decent pay rise? Or relished saving a few dollars?
I also understand laziness. At times, we are all a bit lazy. I understand the desire to relax.
But the one characteristic I can never understand, especially in business, is stupidity.
I believe it is incredibly stupid to do anything in business that’s bad for your clients. Worse, to deliberately work against your clients, is near-insanity.
Most agents do what’s best for agents, not their clients. Okay, sure, agents do not depend on repeat business the same way that, say, a coffee shop needs to keep customers. Lucky for agents, because if most ever opened a coffee shop, they’d only sell one cup. One taste and the customers would spit it out. Never to return.
To protect themselves from the constant fear of closing the business – or losing their family home – agents need to smarten up.
Agents should put less focus on market conditions and more focus on conditions for clients.
I could – indeed, I once did – speak for five days on how to operate a successful real estate office. But, here now, are five tips which can be read in five minutes.
BOOKS: Learn how to care for clients by reading books on how to care for clients. When I started my business, I discovered this: If a person reads for one hour a day they will become the leader in their field and an acknowledged expert, within 10 years. That happened to me. I strongly suggest you read for at least a half hour daily. Devote yourself to reading great books on businesses. Read Michael Le-Boeuf’s classic – GMP (The Greatest Management Principle). Devote yourself to the attitude of giving. Read a book called The Go-Giver. Devote yourself to at least 30 minutes of reading per day.
BE DIFFERENT: When it comes to systems and methods, agents copy each other. They say: “This is the way it’s done in this area.”
Yet, if all agents are the same, the only way for any agent to get an edge is by cutting fees. This is why agents now accept as little as one per cent commission – even less.
If you don’t like reading, here is one book where all you need to do is remember the three words of the title. It’s called Differentiate or Die. Think of the meaning of that title – If you aren’t different to your competitors, your business will die.
OFFER A GUARANTEE: There are some ideas I implemented in my real estate office that accelerated my success. The greatest was the introduction of a guarantee.
Make it a genuine guarantee. The more it scares you, as the business owner, the more it will appeal to your clients, the sellers whose homes you are desperate to list.
Remove “locked-in contracts”. Trust your clients to do the right thing by you, instead of forcing them legally to stick with you.
When you offer a great guarantee – including no locked-in contracts and an accurate quotation guarantee, you will annihilate your competitors.
Think yourself lucky that your competitors are too stupid to offer a guarantee.
ABOLISH VPA: Asking sellers for upfront advertising money is the most common scam in today’s real estate world. Stop doing it.
Tell sellers the truth about advertising and VPA. Confess that most advertising is done to promote agents not homes. Admit that, as well as using sellers’ money to promote themselves, most agents find leads because of money paid by sellers.
To get sellers to pay to promote you and to pay for your leads is highly unethical. As is placing sellers in the position where, if their homes fail to sell, they can lose thousands of dollars. To profit from the losses of your clients is disgracefully dishonest.
Finally, when it comes to VPA, consider this: There are 195 countries in the world. Australia is the only country where the VPA scam is rife. In 194 countries, marketing is included in the commission.
No one is denying you a decent fee, or the reimbursement of genuine costs, just make sure that you only charge clients when their homes are sold. Do a great job and then charge a great fee.
All business involves risk. Do not pass your risk to your sellers. That’s dishonest. When you tell clients that they only pay after they receive great service – you will attract far more clients.
OPEN 7 DAYS: Stop using your family as an excuse for your laziness. Most sellers and buyers are available after 5pm each day and on Saturday and Sunday.
Incredibly, most agents close their doors at 5pm. They rarely open on weekends – and never on Sunday. That makes as much sense as having a restaurant and closing it on Saturday nights.
Figure out how to spend time with your family and how to spend time with sellers and buyers after-hours and weekends.
As an agent – especially if you are one of the majority who puts your own interests ahead of the interests of your clients – you will despise these ideas. Which means that, one day, you will surely go broke. Yes, you may be able to ‘disguise’ your demise by saying you are “merging” with another agency or you have “decided to spend more time with your family”. Only you’ll know the real truth.
There is one sure truth about the real estate business: If you work hard and you really look after your clients, then, unless you steal from your trust account, you will never go broke.
Working hard and offering great conditions for clients is the greatest way to make a great profit in a real estate business.
Oh, and one more benefit of offering great client conditions: You will feel great too.