At the request of several fellow brokers and salespeople, below, I summarize in 5 steps some of the elements necessary to take your real estate careers to a productive level of excellence.
STEP 1: STRATEGIC PLAN
Every broker, salesperson or company must develop a strategic-PE plan, which must be evaluated and renewed at least once a year. This plan will allow us to obtain a greater return on our efforts and obtain higher profits. One of the objectives of the Plan is to focus on our strengths and minimize our weaknesses. The first step in that direction is to establish and periodically redefine your PROFESSIONAL MISSION AND VISION.
STEP 2: IDENTIFY YOUR PASSION AND STRENGTHS
Determine clearly what you want to be, a top producer, administrator, part of a company’s management team, independent contractor or business owner. Whatever you decide to be, it must be aligned with what you are passionate about and excel at. I know brokers who are excellent salespeople, however, they focus most of their time in the administrative area and not in their strength which is selling, I also know excellent managers who invest most of their time in the sales area, in both cases, the results do not fulfill them since they do not dedicate themselves to what they are passionate about and to tasks in line with their strengths.
I recommend that you carry out the T BAR exercise and perform an analysis of your strengths and weaknesses, so that you can align your action plan around the results of this exercise. For example, a good manager doesn’t necessarily have to be a good salesperson.
A good salesperson should be focused on performing high performance activities (prospecting, market presentations, showings, thus decreasing the time spent on low performance activities). A top producer delegates underperforming tasks. Determine whether you are a person who likes to work in a team or on your own. I believe that we all carry within us the desire to have something of our own, however, in many occasions it is more productive to work together and understand that sharing the vision with another person and/or team can be more productive and rewarding. Rarely do we succeed on our own.
STEP 3: PHILOSOPHY
What is your business philosophy going to be: Are you going to work with exclusive listings or all types of listings including open contracts?
Are you going to work receiving any amount of commission or are you going to set a minimum commission for your services?
Your business philosophy is derived from the added value you offer, that which you represent and which the competition cannot match. For example, knowledge, specialty, in a specific area. When the customer does not perceive value in you or the services you offer, your only option is to compete on price.
STEP 4: BUSINESS MODEL
There are different business models, the following is a brief explanation of the most common and well-known ones:
Traditional Model: Agents are generally paid between 50% to 70% and the company pays traditional market, rent and operating expenses. The more expenses assumed by the company, the lower the agent’s commission and vice versa.
Non-Traditional Model: Payment of up to 100% commission where agents receive all or almost all of the commission, typically between 70% and 100%. In this model, agents generally pay the company’s operating expenses, i.e. rent, electricity, marketing through items commonly known as desk fee, transaction fee and monthly fee, among others.
Fee for Service: In this model the company bills for the type of service provided. Generally the fee increases as a result of the amount of services offered. Instead of charging a commission based on the sales price, the client pays according to the services requested and offered by the company, i.e. MLS marketing, print, web, if any other service is desired, another fee is added.
Hybrid Models: Due to the significant changes experienced in the industry and the different generational behaviors, I project an increase in hybrid models that promote ONE SIZE DOESN’T FIT ALL . In this way they will be able to satisfy a larger universe of agents.
STEP 5: SPECIALIZATION
While coaching with one of the best real estate coaches in the United States, I learned that in a specific world we should not be generalists. What area of the business do you plan to specialize in? Whether by property type, geographic area, market segments, niches and sub-niches, specialization is a prerequisite for success in real estate. Let’s look at several examples of niches and sub-niches:
Commercial: Mixed, land, shopping centers, avenue properties.
Industrial: Warehousing, manufacturing, pharmaceuticals
Residential: Single-family, duplexes, apartments, Walk Ups, Mid-rise, REO
Investment Properties: Residential, commercial, industrial, land, etc.
Second Homes: Resorts, beach property, rural property, time shares
Income Properties: 5 10 Units, complexes 10-25, 50 or more. Assisted living complexes
New Projects: Social interest, single-family, walk up, mid rise, high rise
What you decide to specialize in may vary according to the time you have been in the business, age, experience, sometimes we simply want to change functions and experiment in new areas, seeking intellectual and professional growth.
The shift see, or attrition rate, in our industries is largely due to many of us making decisions predicated on emotion, being driven by impulse without developing a strategic plan, identifying our passion, working on our strengths, establishing a philosophy, developing a business model and the failure to specialize in one of the many disciplines of our dynamic industry.
Once we apply these 5 steps, you will have a better vision of your ideal business operation and create clearer and more reasonable expectations for both you and the team you join.
All these measures should be set out in a Procedures Manual and a Budget, adjusted to the needs of your business.
