Advice for individuals contemplating entering the RE Business!!!
Questions you should ask the firms before choosing the one you wish to locate with are:
Do they have a training program?
How do they handle referrals?
What expenses are charged to the agents?
How is advertising handled?
Do agents get assigned floor time and what are the responsibilities fostered upon them?
Any other questions which may come to your mind as a concern of yours?
What a good firm should look for in an agent are:
Do they have a business plan to achieve their success?
Are they open for education?
Are they wiling to work hard to achieve their success?
What is equally important is are they Honest, Have good credit, empathetic, and intelligent. (Can they learn)
Here is some more advice which I will share with you. Forgive me if I am redundant. The advice represents responses to previous SCORE Clients.
There is no way in the world one person can determine if another party is going to be successful or not selling Real Estate. Some people's turnoff are others turn on. I practiced Real Estate for over 50 years and have witnessed every conceivable variable and agree.
I will submit to you a few responses, I have made to others, which will give you a better feel for the business so you can determine for yourself whether you are interested. It took me fifty years to determine what it was I chose to do and not everyone who is successful saw it the way I did.
· I looked upon myself as a Teacher not a Salesperson in the sense that I was trying to talk someone into buying something they didn't want.
I felt everyone should and wanted to own Real Estate, but not everyone was aware of the fact that they could afford to buy a home or how to find the best loan to help them complete the purchase. etc.
So I took it upon myself to teach others where they could find what was available, how to negotiate a fair transaction for both seller and buyer, the various financial packages which were available at the time and how to find the best loan for them.
With sellers: I accepted the responsibility of marketing their home so they could get the best price and experience the least discomfort during the marketing period. I helped them negotiate a fair transaction and held their hand during the lengthy escrow process.
A difficulty is understanding that which comes easy to you, doesn't necessarily come easy to others. I witnessed a recital by young musicians yesterday and their talent was unbelievable. I am sure some of them would feel it should come easy for others but it truly doesn't. Once you understand jargon, never use it.
Here is more advice I gave to others so you can determine for yourself if you have the emotional where with all to stomach the business.
Selling is nothing more than communicating enough information for people to make intelligent decisions.
Look upon a close as nothing more than the natural solution to other people's problems.
Buyers and sellers do not act in a normal manner because they are not normal when they have to buy and sell a home. Being crazy at this time in their lives is normal for them.
What I will share with you may sound too ideal for your environment. If others lie, remember it is their problem. You never have to lie or compromise a moral belief in order to make it in the real estate business.
Here are a few tips:
I know there are agents who buy listings by letting their sellers feel they have a chance to obtain an unobtainable price for their property. Having lost several listings which later sold at exactly the price I predicted they would sell for, I changed my strategy when talking to sellers.
Here is how it works. When a seller asks me today "What price will my property sell for?" I respond, How soon do you want to sell?
Then I explain there is a relationship between time and price. I would continue the only persons who can determine what a property will sell for are the buyer and the seller. The price they arrive at will be what each of them consider to be the right price based upon their emotional, psychological and financial needs at that moment in time.
You are in a position to tell them what current conditions are in the neighborhood. (The number of properties available, the asking prices, the current selling price etc.) But they, as the sellers, control what their home will sell for. I would add, I owe it to you to try to get your price for a reasonable period of time. I would alert them to the danger of their home becoming shop worn, how overpriced homes invite lookylous (An expression identifying people who enjoy looking at RE) and if they become discouraged, it may lead to their accepting a less than fair market valued offer later.
One day a seller called me and explained they had an offer, and they didn't know whether to accept it or not.
I told them to go to bed thinking they had sold their home: the price being what the offer was. I continued. If they felt comfortable in the morning they should sign the offer. If they didn't feel comfortable in the morning they should counter the offer for what they felt would be a better price for them.
Think of your self as being a teacher. Your role is to stay current with the market and know what is available. You will educate them on the various ways they can buy a home, You will educate them on where to get the best loan. How to maintain their credit so they qualify for a loan at the east interest. Remember you are a professional and you are not a salesperson in the common understanding of the word.
When clients mislead you, you must always assume they are telling the truth. Once a buyer said to one of my agents they were not serious about buying immediately. They were just educating themselves as to what was available and they were not in a position to buy. They bought the first home he showed them. Their explanation for their behavior was that they didn't want to be pressured into buying something they didn't like. They were preparing the agent to accept rejection easily.
How many buyers have told you never to show them a home in a certain area and then you find out they bought a dog (Unattractive property) in the same neighborhood.
Interpret everything they say as " If you show me something I feel crazy about I don't care where it is".
So you don't offend anyone, acknowledge that you understand they don't choose to live in a particular area. Explain you have a home which suits their needs other wise, and you would like to be sure you on the right track. Never act in a manner which makes them feel pressured to buy the home you show them.
Always acknowledge you hear what they say. Always make it easy for them to say no. If they say no and it doesn't make sense to you respond "I know you have a great reason for feeling the way you do. Would you like to share it with me?" Never argue with your client. Just ask them to explain themselves so it is understood by you.
A great closing line is "Would you like me to help you find a way to buy this property?" How can they be offended?.
(This was addressed to one SCORE Client) Please don't take offense but you sound a little angry about how you have been treated by buyers and sellers. This can be a great barrier to creating a relationship with them. With out a relationship there will be no communication and no transactions.
To over come any objection there is a simple formula. Repeat the objection so the client understands you have heard them properly. Then ask if there are any other reasons for them not taking action? When they agree you understand where they are coming from, ask them what you can do to eliminate the problem.
To get others to do business with you, you must convey to them that you are trustworthy. You will never compromise honesty for a quick deal. You know what you are doing in terms of helping them achieve their objectives and that you understand how they feel in certain situations (in other words you have empathy).
Don't wait for a weekend to hold open houses. Choose a clean looking property, well located in an area of high traffic and then place a few signs out and wait for buyers. If a serious buyer comes through, pack up and take them around to see other properties. (You will have explained to the seller before hand that you will do this because buyers want to see all that is available before they make a decision to buy). Showing them other properties keeps you in control of the buyer. When you sit on open houses don't try to sell the house you are sitting on. Qualify those that come through and get all their names and phone numbers. Later that evening you can file those who are most motivated and work with them until they buy, and then go on to the next one. More people will be offended because they never hear from you again than if you call too often.
These are comments a new agent shared with me which I responded to.
Thanks for your answer. As far as real estate sales training, its an interesting conundrum. My trainer is as knowledgeable as anyone I've met, and has an easy answer to any situation. She knows her stuff, but there is not a lot of "sales training" in terms of how to overcome objections, how to get people thinking that what I'm saying conveys a knowledge and a desire to do business with me. People give me lame reasons why they are doing everything wrong, and then reject my attempts to guide them appropriately.
Compound that with my frustration that I can tell when they are lying, and my lack of track record as far as keeping control of the situation and an inability to close people, and YES I am real concerned. I am full of knowledge and yet its worthless to anyone. I know I'm being treated as the guy that people can grab a few ideas from, and put those to work with their actual realtor...the one they said they didn't have.
The only common positive in my business that keeps coming up is that people seem to be highly receptive, and their ears perk up when I talk to them about buying properly, in order, and being prepared for what the reality of the first buy is.
As a result I have written offers for 2 different families, neither of which were accepted. They were decent offers, but the So. California market is as short of inventory as ever. And every house gets numerous multiple offers. I hold open houses every single weekend. EVERY ONE!! People traipse thru, lie to me, take my flyers and BS me with things like "Yeah, we're just starting to explore and get a feel for the market."
I went to one family's home after my open house to work up a price evaluation on their house, and they are already overpricing their home by about $130,000.00 and expecting to find a fantasy home at the same price. I have no problem gently explaining reality to them, but I KNOW that there will be another real estate person that can schmooze and lie way better than I will ever be able to, and sign them right up.
How close did I get to a listing? I had one listing appt from door knocking, and the husband kept focusing on broker %, followed by a "well, we're going to think about it". That has led to a never returning my phone calls trend. Don't worry, I've only called 3 times in 3 weeks. Fact is I feel completely weak, and yet I see arrogant A-holes around me making huge money effortlessly and its eating me alive. I cant believe that selling homes is not really selling homes but rather navigating thru the storm of lie after lie after lie. A game of who's tricking who and who's going to "be the monkey". Well, thank you for your guidance. I appreciate it. Sorry for the rant. --Jason
I think an understanding of what I am saying will help you overcome this clients fear.
*********************************************************************** *************** silviodd@cox.net wrote:
Dear Jason:
I know of no loan program which will help you to acquire financing to buy time until you become successful in the business.
Some brokers I know lend their line of credit to some of their agents if they show promise. No it is not common for Realtors to borrow money to get started. 6 months in the business without a sale raises these questions in my mind.
What training if any have you had in RE Sales? How close have you come to a sale or a listing? Describe your normal day for me. Ask your self what would you want someone to do for you if you were paying them what you would like to earn. Are you doing it? Are you waiting for business to come to you or are you out hustling for it every moment of the day.
It is true 10 per cent of the people share 90 per cent of the income . It is also true it is the best paying hard work and the worst paying easy work.
There are late starters in the business and there those that start fast and then zilch they do nothing.
Tommy Hopkins got started in the Simi Valley by using the teddy bear approach. He killed all the for sale by owners with tools and kindness and kept in constant touch with them until they decided they wanted him to help them sell their property.
Real Estate Salesperson // My question is: Is it common for new Realtors to seek financing to build their business? With so many real estate people out there, the number one challenge is reaching customers. As a result, the business is tremendously difficult to build. There is a saying in the real estate profession...90% of the
business is transacted by 10% of the agents...
I don't want to fall into the wrong category. I have been practicing the business for 5 months and have closed zero in sales.
Thank you for your help.
When a hot customer comes along, they will never play second fiddle to your personal needs. When someone who is use to housing, is temporarily faced without housing, they will not act in a sane normal manner. They will not be considerate of your position. They will rationalize their crazy behavior as normal.
If you can pull it off and become a success with the obstacles you have to overcome, you could very well be asked how you did it on the speaking circuit.
Here are some comments I shared with another person who wanted to become a success in real Estate.
Working with For Sale by Owners can be fun and profitable. It depends on maintaining a healthy attitude towards them and the process.
The problem is how to communicate truth to them without destroying their ego.
It is a two step process. First you have to earn their trust and then capture their attention.
The best way to do this is to offer all the help you can muster to have them try the process of selling their own home. The sooner they learn how difficult it is, the faster they are going to solicit your help. They will remember you when they give up if you have been there helping them kindly.
Don't be afraid to have a couple of Professional For Sale By Owner Signs made, which you can loan out. If they ask why you are doing this, be honest with them. You are not in business to do what people can do for themselves. You are in business to help people achieve their objectives as fast as possible. You are in the Real Estate business because you have chosen it to be your life. They also have a life and you want to help them get on with it. You can also mention that if they like and trust you they might refer all the people who look at their home who don't buy their house to you. (For Sale By Owners can be a great source of buyers)
Offer to leave a deposit receipt with them so if a serious buyer comes along they can determine how serious they are by their desire to commit to the purchase. (Once a buyer leaves a home they are interested in buying they begin to think of all the negative factors of a home purchase and many times never come back) A For sale by owner can't call a potential buyer back without weakening his selling position. A broker can do it without compromising the seller's price. When an anxious buyer doesn't come back it contributes much to the unhappiness of the for sale by owner who thought the property was sold.
Giving the sellers the deposit receipt is a wonderful opening for offering to go through it with them so they understand its importance. It is also an opportunity to communicate to them how much more you know without destroying their ego.
Here is a sample of what your conversation can be like. When you show them the line about received from you explain "It is important to get the name of the buyer correct. If there is a difference between the names as they appear here and the signatures the courts could construe that you don't have a contract."
When you point to the sum of, explain the importance of a sizeable deposit. Once the seller affixes his signature to the contract, the buyer has a lien against the property. If the buyer had a small deposit and skips. It might take a long legal process to clear the title before the property could be resold. It is unfair for a buyer to tie up a home worth Hundreds of Thousands of Dollars for a pitifully small deposit. Explain the difference between the common address and a legal description. A common address is sufficient for a deposit receipt but a legal description is necessary for the escrow.
I am sure you have an idea of what I have in mind. As you are explaining the deposit receipt to them, you are making them aware of what they don't know about the business. You come across as a person willing to help rather than a know it all that will harden their heart about doing business with you. I have never been able to give myself away when helping sellers and I am sure you won't be able to also.
Tommy Hopkins who was a good friend of mine made a fortune working with for sale by owners He used this Teddy Bear approach. He would call on the For Sale By Owners in his farm and sit with them and offer all sort of help. He would sincerely express disappointment that their home hadn't sold that weekend. He would let them know how many homes the profession had sold, he would offer to look at their ad and make suggestions for its improvement without offending the seller. He would then ask them if they wanted him to get involved as their sales representative, rather than have them waste more money on advertising. Many times they would say yes go ahead.
When you are talking to sellers, it is important, never to ask for a listing. I may have said this to you before. Talk about you wanting to help them sell their home about them hiring you as their marketing agent. Never never ask for a listing. It conveys a negative connotation.
Once a seller said to one of my agents "I don't want to tie myself up for a period of time". The very successful Realtor turned to them and said, "you don't understand what I am trying to convey to you" he continued " Once you hire me, you are free to get on with your life" he added "I am freeing you, You can go to the beach on weekends, enjoy time with your family etc. I will be busy marketing your property because this is my life."
There are only four reasons a For Sale By Owner will try to sell a home themselves
? They don't understand the selling process
? They think they can do a better job
? They are trying to save a commission
? They hate all Realtors.
The sooner you find out why they are marketing their home without Realtor, the easier it will be to communicate to them the truth which pertains to them and their position.
If they don't understand the selling process, just explain what it is you do and how you are paid and not paid if the property doesn't sell
If they think they can do a better job, invite them to become a Realtor because it is much easier to sell someone else's home than their own. I once got a listing by telling the seller I knew he could do a better job but then asking him why a successful person like him would even waste the time doing it. Once a retired Realtor put is home on the market as a for Sale by Owner. When I asked him why he was coming back into the business the hard way he hired me to sell his home.
If they want to save a commission. I ask why do they think a buyer is dealing direct and avoiding the help of a Realtor. Generally they understand it is to save the same commission.
The most unique experience I ever had was when a friend asked me to set a fair price for the property. The friend then explained he wanted to give the commission to the buyer so he reduced the price by the amount of the commission and put the property on the market. A potential buyer called and made an appointment to see the property after work one day. The sellers waited and waited for the buyers to show up and they never did. The seller's dinner got cold and they were angry. They called me and I began to market the property. The original buyers, who never showed the first time, came back and paid the full fair price, which included the commission.
If they hate all Realtors, Make it your mission to change their opinion. Ask them if they ever had a bad meal out. Have they stopped eating out or just stopped eating at the place they had the bad meal. Mention you owe it to the profession to change their mind about Realtors and you will work harder to overcome their negative feelings.
Remember it is persistence, which will set you apart from your competitors.
Real Estate us the best paying hard work and the worst paying easy work that there is.
Hope this isn't too much to digest all at once. Go to it and good luck
Silvio
Another response to a different SCORE client might also help you.
It would be difficult to understand any response to your request due to the fact that investing in real estate can be good or bad depending on what individual property you are thinking of investing in. There are also exceptions to all rules. Nevertheless I will share some wisdom with you which I have found to be generally true in almost all situations.
Location, Location, Location, is still the most important factor to consider in a long-term investment. Of real estate.
It is better to pay a little more for real estate in the right location than it is to think you have acquired a bargain because you have found an identical property in a poorer location at a lesser price.
Real estate is more management intensive than other forms of investment. Having said that you can always hire out the management of a large enough piece of property.
The person who doesn't care usually dominates the negotiation process. Try to be fair when acquiring a real estate investment. More people have lost a fortune by waiting for a good buy than by paying too much for the right property You can loose out in investing in real estate by waiting too long to find the best deal. Appraisers are available for a fee to help you realize what a fair price should be for a property.
Don't wanters are the source of the best buys in real estate and are a major source of nothing down financing if you are shopping for favorable financing. (Don't wanters) is an expression which describes people who want to sell their property so much they will help with financing and make more favorable terms for the buyer.
Develop a relationship with a Realtor in your area that comes recommended from Title companies and others in the Real Estate Business. You will be looking for an individual who is Knowledgeable, Honest and Empathetic. It may take a while to find someone with all those features but once you find them never let them go. They should be knowledgeable in the area of financing, inventory and creative enough to solve problems. They should be honest enough to tell you the truth kindly but firmly even if means not making a sale. They should understand how you feel without asking.
Renting out real estate is a business and has all the inherent risks of being in business. It also has the tax advantages of being in business. All expenses are deducted from the income and on top of that you can depreciate the property and get an additional paper loss even thought the property may be actually appreciating in value.
Try to maintain an impeccable credit rating. Pay your bills and your rent and mortgage payments in a timely manner. A poor credit rating will increase the interest you have to pay and limit the amount you may be able to borrow. Try to locate sellers who will provide more advantageous rates than financial institutions. Some might even be willing to sell for nothing down
If you are talented in the area of fixing up real estate, then buying fixer upper properties may be for you. You can use your talent to develop equity in the property.
Special loan rates may be available if you are buying or developing housing for first time buyers or low income or senior housing. If you are looking at foreclosure properties as an investment be very careful. If the property has many liens, the foreclosure may not wipe out the debt which remains on the property, be sure to retain expert advice if that is your intention.
Investments in real estate may be leveraged. This means you can borrow a substantial amount on the property. If the property generates enough income to satisfy all the indebtedness you can hold on to it until it appreciates in value. If your investment was only 10% down and the property appreciates 10% you have doubled your money. Be aware Leverage also works in reverse. If you invest 10% down and the property loses 10 % in value you have been wiped out if you can't hold on to the property.
This should get you thinking of specific questions. Please email me directly and I will try to respond as well as I can. Good luck in your quest for fortune.
The problem is how to communicate truth to them without destroying their ego.
It is a two step process. First you have to earn their trust and then capture their attention.
The best way to do this is to offer all the help you can muster to have them try the process of selling their own home. The sooner they learn how difficult it is, the faster they are going to solicit your help. They will remember you when they give up if you have been there helping them kindly.
Don't be afraid to have a couple of Professional For Sale By Owner Signs made, which you can loan out. If they ask why you are doing this, be honest with them. You are not in business to do what people can do for themselves. You are in business to help people achieve their objectives as fast as possible. You are in the Real Estate business because you have chosen it to be your life. They also have a life and you want to help them get on with it. You can also mention that if they like and trust you they might refer all the people who look at their home who don't buy their house to you. (For Sale By Owners can be a great source of buyers)
Offer to leave a deposit receipt with them so if a serious buyer comes along they can determine how serious they are by their desire to commit to the purchase. (Once a buyer leaves a home they are interested in buying they begin to think of all the negative factors of a home purchase and many times never come back) A For sale by owner can't call a potential buyer back without weakening his selling position. A broker can do it without compromising the seller's price. When an anxious buyer doesn't come back it contributes much to the unhappiness of the for sale by owner who thought the property was sold.
Giving the sellers the deposit receipt is a wonderful opening for offering to go through it with them so they understand its importance. It is also an opportunity to communicate to them how much more you know without destroying their ego.
Here is a sample of what your conversation can be like. When you show them the line about received from you explain "It is important to get the name of the buyer correct. If there is a difference between the names as they appear here and the signatures the courts could construe that you don't have a contract."
When you point to the sum of, explain the importance of a sizeable deposit. Once the seller affixes his signature to the contract, the buyer has a lien against the property. If the buyer had a small deposit and skips. It might take a long legal process to clear the title before the property could be resold. It is unfair for a buyer to tie up a home worth Hundreds of Thousands of Dollars for a pitifully small deposit. Explain the difference between the common address and a legal description. A common address is sufficient for a deposit receipt but a legal description is necessary for the escrow.
I am sure you have an idea of what I have in mind. As you are explaining the deposit receipt to them, you are making them aware of what they don't know about the business. You come across as a person willing to help rather than a know it all that will harden heir heart about doing business with you. I have never been able to give myself away when helping sellers and I am sure you won't be also.
Tommy Hopkins who was a good friend of mine made a fortune working with for sale by owners He used this Teddy Bear approach. He would call on the For Sale By Owners in his farm and sit with them and offer all sort of help. He would sincerely express disappointment that their home hadn't sold that weekend. He would let them know how many homes the profession had sold, he would offer to look at their ad and make suggestions for its improvement without offending the seller. He would then ask them if they wanted him to get involved as their sales representative, rather than have them waste more money on advertising. Many times they would say yes go ahead.
When you are talking to sellers, it is important, never to ask for a listing. I may have said this to you before. Talk about you wanting to help them sell their home about them hiring you as their marketing agent. Never never ask for a listing. It conveys a negative connotation.
Once a seller said to one of my agents "I don't want to tie myself up for a period of time". The very successful Realtor turned to them and said, "you don't understand what I am trying to convey to you" he continued " Once you hire me, you are free to get on with your life" he added "I am freeing you, You can go to the beach on weekends, enjoy time with your family etc. I will be busy marketing your property because this is my life."
There are only four reasons a For Sale By Owner will try to sell a home themselves
? They don't understand the selling process
? They think they can do a better job
? They are trying to save a commission
? They hate all Realtors.
The sooner you find out why they are marketing their home without Realtor, the easier it will be to communicate to them the truth which pertains to them and their position.
If they don't understand the selling process, just explain what it is you do and how you are paid and not paid if the property doesn't sell
If they think they can do a better job, invite them to become a Realtor because it is much easier to sell someone else's home than their own. I once got a listing by telling the seller I knew he could do a better job but then asking him why a successful person like him would even waste the time doing it. Once a retired Realtor put is home on the market as a for Sale by Owner. When I asked him why he was coming back into the business the hard way he hired me to sell his home.
If they want to save a commission. I ask why do they think a buyer is dealing direct and avoiding the help of a Realtor. Generally they understand it is to save the same commission.
The most unique experience I ever had was when a friend asked me to set a fair price for the property. The friend then explained he wanted to give the commission to the buyer so he reduced the price by the amount of the commission and put the property on the market. A potential buyer called and made an appointment to see the property after work one day. The sellers waited and waited for the buyers to show up and they never did. The seller's dinner got cold and they were angry. They called me and I began to market the property. The original buyers, who never showed the first time, came back and paid the full fair price, which included the commission.
If they hate all Realtors, Make it your mission to change their opinion. Ask them if they ever had a bad meal out. Have they stopped eating out or just stopped eating at the place they had the bad meal. Mention you owe it to the profession to change their mind about Realtors and you will work harder to overcome their negative feelings.
Remember it is persistence, which will set you apart from your competitors.
Real Estate us the best paying hard work and the worst paying easy work that there is.
Hope this isn't too much to digest all at once. Go to it and good luck
Silvio
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