Posts Tagged ‘Jake’

posted by on Reflections From a Difficult Market

About a year ago, my friend Loreena Yeo unintentionally challenged me. I had just written a series of blogs about a nice new real estate agent named Jake who went from the verge of failure to the heights of success, based on his effective sphere of influence campaign. On the second to last installment of the Jake story, Loreena asked the question: “Was Jake lucky? Did Jake begin his career during a boom time and therefore was able to experience success more easily than today’s agent?”jake

Okay, so Loreena probably didn’t mean it as a challenge, but I took it that way. Within a few months, I decided to return to the wonderful world of real estate sales to prove to … well… myself if no one else… that the Selling Soulfully philosophies weren’t just a bunch of fluff that will work fine in a strong market… but not-so-fine in a difficult one.

So, in February of this year, I re-activated my license and started selling real estate again. Honestly, I didn’t know what to expect and yes, I was a little nervous. What if I failed? What if the methods and philosophies I’ve been preaching all this time were just a bunch of fluff & hooey in today’s market? What if… egads… the only way to succeed selling real estate is to aggressively prospect to strangers and pester your friends to death with your thinly-disguised sales pitches?

Thankfully, I have discovered that the methods I used to build my business back in the booming mid-90’s work just dandily today. No need to spend a gazillion dollars marketing myself to strangers or to hassle my friends on a regular basis to “PLEASE SEND ME REFERRALS ‘CAUSE I LOVE THEM.” I have a steady stream of business that comes to me as a result of my SOI efforts, and my commitment to Being Out There in the World with My Antenna Up and a bundle of market expertise in my back-pocket.

However, I will admit and acknowledge that, indeed, it IS harder today. Many trainers will give you a pep talk and convince you that if you aren’t seeing the success of yesteryear, then you just aren’t trying hard enough. That may be so, and I certainly won’t stop anyone from working longer hours to get thru these lean times, but what I want to say is this…

Whether you’re a green bean newbie or an experienced old fogie… if you’re feeling discouraged by your YTD production or what’s (not) in your pipeline… you are not alone. Even the most pompous, confident, arrogant top producers are feeling those feelings, I promise you.  They may not admit it and they may even tell you that they’re having their best year ever, but that’s probably a bunch of hooey.

The good news is, as you’ve heard a hundred times, those who survive will likely thrive when this crisis passes. If you’re new and have never experienced a strong or even stable market, you have something truly awesome to look forward to. For those of us who’ve been around awhile, we can look forward to again enjoying that career we fell in love with.

There will be lots of agents who make it through to the next market. Hundreds of thousands of them, even. Is there any reason it won’t be you?

posted by on Especially for Rookies

Say Hello to Jake!

One fine day, Jake entered the wonderful world of real estate sales. He went to school at night, passed his test and found an office to bless with his presence.

On his first day as a licensed salesperson, his new broker greeted him heartily and said “Welcome Aboard! Here’s your desk, here’s your phone, best of luck to you!”

Jake was a little befuddled by this, but he did his best to do as he was told. He spent the first few months of his real estate career learning about cold-calling strangers, door-knocking neighbors, holding open houses for other agents and convincing For Sale by Owners (FSBO) sellers that they couldn’t possibly succeed without him.

By Jake’s third month in the business, he was working with two marginally-qualified buyers who refused to commit to him exclusively, one FSBO who said he’d be happy to pay Jake a co-op if he brought a buyer, and a seller who planned to list his home “sometime next year.” He was farming his neighborhood and half-heartedly calling a few expired listings every week.

Jake was discouraged, to put it mildly. His bank account was dwindling, his enthusiasm was fading and he didn’t see anything fun about being self-employed. In fact, the daily drudgery of the 9-5 was looking pretty good to him right about now (and, frankly, to his wife as well who was having a hard time putting on her happy face every day.)

In short, Jake was on the verge of failure.

Stay tuned

posted by on Especially for Rookies

jakeFast Forward another three years, into Jake’s fifth year selling real estate.

(Jake’s story begins here.)

Jake is the perennial top producer in his office and is considering going out on his own. He works about 30 hours a week and sells around 70 properties a year. Last year his gross commissions topped $300,000 and it looks as if he’ll do it again this year.

His expenses? Not bad at all. Because his business is almost 100% SOI, his marketing budget is quite low, perhaps only 5% of his gross. And that 5% is spent mostly on entertainment (lunch dates and dinner parties, afternoon BBQ’s and impromptu happy hours.) The rest of his marketing budget goes toward business cards, newsletters, annual calendars and postage. He spends no money on geographic farming, newspaper advertising or even web leads. Yeah, he has a website, but it’s not a big source of business for him. He doesn’t need it to be.

Let’s look at Jake’s sales statistics thru the years:

Year One: 25 homes sold (22 to SOI) Gross Commission: $71,000

Year Two: 38 homes sold (32 to SOI) Gross Commission: $138,000

Year Three: 47 homes sold (40 to SOI) Gross Commission $215,000

Year Four: 57 homes sold (51 to SOI) Gross Commission $305,000

Year Five: YTD in July: 33 closings, 12 active listings, 5 in escrow, 5 active buyers

Projected gross commission – well over $300,000

So, do you think Jake is a BELIEVER in the power of SOI? (more about Jake here)

Real Estate Doesn’t Have to be a Number’s Game

posted by on Especially for Rookies

This is the fourth episode of Jake’s journey… To read previous episodes, start here

Fast forward to year-end…
Jake was the rookie of the year in his rookie “class” of nearly 100 agents. He sold 25 homes; 22 with people he knew or people he met socially. His other three clients came from floor duty and an open house. All three of these people have since referred him to their friends and family.

Here’s where Jake’s first 25 sales came from:

Grandma – referral from his old boss’s assistant
Jim and Patricia (2 sales) – Met a the wedding of a mutual friend
Kenny – wife’s massage therapist
Paul (1 sale and 1 referral) – Patricia’s brother
Steve – Met at the dog park
Amanda – referral from Jake’s wife
Deanna – referral from Jake’s wife
Mrs. Palmer – The mother-in-law of a vendor from Jake’s past life, pre-real estate
Grandpa Palmer – The grandfather of the same vendor
Stan and Colleen – Referral from Amanda
Mary – Referral from Patricia
Frank (3 sales) – Referral from an agent Jake met in a GRI class
Don & Cindy (2 sales) – Met at an open house
Catherine – referral from Jake’s insurance agent
Wayne – Met on floor duty; turns out they had a mutual friend
Joan & Marie (2 sales) – Referral from Frank
Rachel – the office receptionist at Jake’s real estate office!
Cari – Met at a housewarming party for Stan and Colleen
Cindy – Referral from a new home on-site salesperson Jake met while showing homes to Deanna

Fast Forward two years…
Jake’s real estate career is rocking. He was rookie of the year his first year, doubled his income the next, and is well on his way to doubling it again. Does he prospect to FSBO’s and Expireds? Nah, not often.

Does he send out Just Listed! and Just Sold! cards to his farm area? Nope. Too much trouble.

Does he advertise in the newspaper or on bus benches? No. He tried it for a while, but quickly realized that he was throwing his money away.

No, Jake focuses on his ever-growing SOI. He’s up to around 250 people, and adds more every week. The vast majority of his business comes directly or indirectly from his contact database, through the people he actually knows, or the people he meets through the people he knows or in the course of his daily travels.

Jake loves selling real estate. He’s perplexed when he hears other agents complaining about disloyal buyers, unproductive open houses and deadly boring floor duty. He’s really too busy to worry about such things.

He has an investor he works with who keeps him hopping. He was introduced to the investor toward the end of his rookie year by an out-of-town real estate agent he met at a GRI class. Over lunch, the out-of-town agent mentioned that he was working with an investor who was becoming increasingly frustrated with the market the agent specialized in. Jake jokingly offered to take the investor off the agent’s hands and introduce him to the market in Jake’s town.

Long story short, that’s exactly what happened, and this investor (Frank) has turned into a gold mine of business and referrals for Jake. To date, Frank has bought 7 properties and listed and sold three of them. Frank is currently looking at multi-family apartment buildings to convert to condominiums for sale. We’re talking Big Bucks here.

Frank has also referred three other people to Jake, one of whom has referred two more. During the course of listing one of Frank’s properties, Jake met Danielle who owns an upscale construction company and has used Jake to market two of her $1M spec homes. She uses other agents too, sometimes, but Jake is her favorite.

A few weeks ago, Jake called Patricia just to say hello, as he does periodically with all of his social SOI. Patricia told Jake that she and Jim are splitting up, so they’ll be putting their home on the market soon. Jake scheduled an appointment to meet with the unhappy couple and now has their home on the market. Both Jim and Patricia will be purchasing smaller replacement homes, and Jake will their buyer’s agent.

Remember Kenny? The massage therapist who couldn’t afford his dream neighborhood quite yet? Well, Kenny is getting married in a few months to a local celebrity and they’ll be buying a home in an even BETTER neighborhood than the one Kenny was earlier priced out of! Not only that, but Kenny’s current home has appreciated nicely and when Jake lists it for sale next summer, Kenny is gonna thank Jake for introducing him to his “affordable” neighborhood.

And, of course, continue to tell everyone he knows what an awesome guy Jake is.

We’re not finished with Jake yet… tune in tomorrow.

posted by on Especially for Rookies

As you may recall, when we last saw Jake, he was three months into his real estate career and pretty darn close to quitting. He wasn’t having any fun or making any money.

So, one day, Jake Googled the term “How not to become discouraged in real estate” and stumbled upon an article by Jennifer Allan, author of Sell with Soul. The article was about something she called an “SOI” which, upon further reading, Jake discovered stood for “Sphere of Influence” and meant “The people who know you.”

Jennifer claimed that if you devote your prospecting efforts toward the people who know you instead of the people who have never heard of you, not only will you have a heck of a lot more FUN, but you’ll stand a much confusedbetter chance of success.

How can this be?” Jake asked himself. “I don’t know anyone who wants to buy or sell a house right now! How could I possibly generate enough business from my friends to pay the bills and keep the wife’s toenails polished? This doesn’t make any sense!”

Well, Jake kept digging and reading and found a whole bunch of articles Jennifer had written on the topic. As he read, he realized that what he was seeing contradicted almost everything he’d ever heard about self-promotion and marketing for a self-employed person.

Jennifer advised against pursuing strangers for business… against offering incentives for referrals… against, even, ASKING for referrals at all!

Jake felt a tug deep inside as he continued to read. He felt a glimmer of hope. Even though her approach was “wrong”, according to his corporate training, it felt very very right. It made sense to Jake. Bothering strangers and mailing out hundreds of postcards never felt right to him, but his broker insisted that it the best way. And Jake believed him.

But he was starting to have his doubts. Maybe, just maybe… this SOI stuff was the magic bullet he’d been hoping for.

So Jake began his own SOI Seduction campaign. He made a list of everyone he knew, grouped them into two categories, and sent out a respectful, interesting, non-salesy letter to them all. He started reaching out to his friends and acquaintances, not as a real estate agent, but as a genuinely nice guy with a good head on his shoulders… who happened to sell homes for a living.

 
Stay tuned, we’ll check back in with Jake soon to see how it’s going.

 

Was Jake Lucky?

Jul
2011
02

posted by on Especially for Rookies

lucky

In my last blog, I left you with the question posed to me by Loreena Yeo about Jake’s success:

“Is Jake running on a stream of good luck? Say, he started in the mid-90s and had his 5 years into early 2001? I do not deny that Jake probably worked very hard. But do you feel that a good momentum for an agent also depends on timing of when he enters into real estate? Would you say that in a down market, that it is probably harder to get the gears rolling? Even for an experienced agent, getting 25 transactions is not easy. What say you?”

Bless your heart, Loreena, you touched a lot of people with your question…

Here is my response:

  • The market is certainly different now compared to 1996. Perhaps SELLING 25 homes will be difficult in a world where mortgages are harder to get and far too many homeowners are upside down in their mortgages to price their homes competitively. In Denver in 1996, homes appreciated 15% – 20% a year and any home with a pulse could sell with multiple offers.However, I distinctly remember rookie agents complaining loudly about how hard it was for newbies to break into the business because all we could get were buyers and there was nothing to sell them. Old fogies, remember those times? Where you checked the MLS hourly to stay on top of the new listings and then fought like hell to get an offer accepted? That wasn’t fun either (although it sure kept us busy)!

    Also, remember that in 1996 we didn’t have 100% loans, FHA was king and buyers didn’t qualify for nearly the loan they could qualify for later. Investors typically had to put 20% down, too. Back then, you actually had to be able to afford a home before you could buy it! 

    Anyway, I digress from my point which was that it MAY be harder to SELL 25 homes in one’s first year simply because homes aren’t moving. But you should be able to drum up enough business from your SOI to at least put you in the position of potentially making those sales! In other words, you should be able to find 25 motivated sellers and serious buyers to work with. Actually making it to closing might be more difficult (although I’m not convinced – it was tough back then too, for different reasons).

  • If not SOI, then what? Are there other methods that you believe will produce a more consistent, reliable stream of business? As you are choosing your prospecting strategies and building a foundation for your future success, do you think that you’ll do better with strangers? Whether you sell 10 houses your rookie year or 70, what prospecting techniques FEEL RIGHT to you? It’s not a matter of SOI being a luxury for a strong market. It’s a strategy that works, period. 

Will you, as a rookie, sell 25 homes this year? Probably not. Remember, Jake was the Rookie of the Year with 25 sales, in a stronger market. So don’t fret over that number. 

Will an SOI strategy assure every agent who uses it success? Nope. The question is… is it right for you?

I’ll answer that next time.

posted by on Especially for Rookies

Let’s see how Jake is doing.

In case you’re just joining us, read about Jake here and here.

About a week after Jake sent out his respectful, interesting, non-salesy letter to his SOI, he got a call from Sam, his old boss’s assistant. Sam’s grandmother was moving to town and would be looking to purchase a one-story, ground level condominium near Sam’s house. Could Jake help?happy

“Heck yeah!” Jake exclaimed. And he did. He helped Grandma find the perfect handicapped-accessible condominium, negotiate a good price for it and get her to the closing (literally — Grandma doesn’t drive!). Grandma loves Jake – he’s such a nice young man.

Sam was also thrilled with Jake. Sam knows a lot of successful real estate agents, but was afraid his grandma would get lost in the shuffle of a Top Producer’s busy schedule. He was pleasantly surprised at how attentive Jake was to Grandma. He treated her like a queen.

Sam told everyone he knew what a good job Jake did.

Six weeks after he received the call from Sam, he has his first commission check in his hand for $4,236. Jake and the Missus celebrate in style.

During this same time period, Jake and his wife met a young couple (Jim and Patricia) at the wedding of a mutual friend. Jake was riding high that day, due to the successful negotiation of Grandma’s condo inspection. Enthusiasm was oozing from every pore.

They found themselves chatting comfortably with Jim and Patricia about this and that. Of course, the conversation naturally turned to careers and when Jim asked what Jake did for a living, Jake beamed and said:

I’m a real estate agent!”

Well, wouldn’t you know it, Jim and Patricia were just starting the process of looking for an investment property; maybe two! They had been working with an agent, but the guy was… well… kind of blowing them off. They weren’t happy with him and hadn’t signed any exclusive agreement.

A week later, Jake took Jim and Patricia out to look at investment properties. No luck, so they went out again. Didn’t find anything this time either, so they kept at it. It took ten trips to find the perfect investment property. They put it under contract and closed 30 days later.

They commented that most agents would have given up after the first three trips with no offers made, but Jake hung in there. 

Two months later, Jim and Patricia contracted for a second investment home, one they found themselves online. But because they were so impressed with the effort Jake made in helping them the first time around, they called him in to represent them in the sale. 

Jim and Patricia told everyone they knew how awesome Jake was.

One day, Jake received a call from Kenny, his wife’s massage therapist who knew about Jake’s new career from his casual conversations with Jake’s wife during her massages. Kenny’s lease was almost up and he had just been pre-qualified to purchase a home. He asked if Jake could help him out.

“Of course!” said Jake. And he did. They found Kenny a wonderful little Tudor home on the fringes of a killer neighborhood.

It was a struggle at first because Kenny’s eyes were bigger than his pocketbook and he insisted on looking smack in the middle of one of his city’s most expensive areas. Jake did his best to find homes that met Kenny’s needs for location, features and price, but it simply wasn’t possible.

However, Jake waited patiently for Kenny to realize the truth on his own… that Kenny couldn’t afford the location he wanted just yet. As soon as Kenny figured this out (without Jake beating him over the head with it), he happily shifted his focus to other, more affordable neighborhoods. (Jake, by the way, was happy to take this opportunity to improve his knowledge of the market, always a good thing for a new real estate agent.)

Kenny really appreciated the fact that Jake hung in there with him while Kenny did his own soul-searching, which allowed him to reach his own conclusions on what he could afford.

Kenny told everyone he knew what a great real estate agent Jake was.

Meanwhile, Grandma isn’t feeling so good. Unfortunately, it looks as if she may have to consider moving to a nursing home in the near future. Sam calls Jake for advice. Jake immediately does some research and determines that the market in Grandma’s area hasn’t appreciated much since she purchased her condo. Jake is honest with Sam and advises him to consider renting out the condo for a few years until the market improves.

Sam told everyone how honest and responsive Jake was.

Patricia’s brother, Paul, has fallen in love with a woman he met online and is moving to Las Vegas. Patricia urges him to call Jake to discuss selling his bachelor pad. Jake lists the loft, and also arranges to refer Paul to an agent in Las Vegas. Ka-Ching! A $1,200 referral fee for a simple phone call!!!

One sunny Sunday afternoon, Jake and his wife take the pups to the dog park. Jake strikes up a conversation with a fellow dog-owner (Steve) and finds out that Steve just moved to town and is living at an extended stay hotel until he buys a home. And he doesn’t have a real estate agent yet… AND… he fancies the neighborhood that Kenny couldn’t quite afford! Since Jake had spent the last month looking at homes in that neighborhood for Kenny, he was able to speak intelligently to the buyer prospect about the inventory there. Eleven weeks later, Jake received a commission check for the purchase of Steve’s $800,000 house.

How do you think Jake is feeling about his real estate career these days???

It just gets better… stay tuned.

posted by on Especially for Rookies

I’m glad so many of you enjoyed the Jake Series. I, myself, have become attached to him, so you’ll probably see him around occasionally.

As you may have figured out, Jake is me. Jake’s story is my story, although of course that I didn’t “discover” SOI on Active Rain back in 1996, and, truth be told, I did struggle with my expenses during my high-production years (although I didn’t spend the money on personal marketing; I spent it going WAY above and beyond what was necessary to service my listings which may have contributed somewhat to my SOI success. Got lots of referrals.) But otherwise, his story pretty much follows my own real estate career.

SOI came naturally to me; in fact, it wasn’t until I discovered the online real estate community that I realized most agents didn’t have a strong SOI business model. I was stunned that agents were beating the streets the way they were, when plenty of business was surely just sitting there, waiting to be plucked! Thus, began my passion for spreading the word.

SOI was natural to me BECAUSE I was/am an introvert, not IN SPITE of that fact. Confused? Well, my fellow Ntros will understand this better than the Extros, probably. We introverts tend to overanalyze everything before we do it. We always look at the situation from the other guy’s perspective (it can be paralyzing sometimes, but often it works to our benefit). We ask ourselves “What’s in it for HIM?” before asking “What’s in it for ME?” Yeah, seriously, we do!

So, therefore, before we implement a marketing strategy or even make a phone call, we ask ourselves how the other person might receive us (our farming postcard or phone call, etc.). For example, my very first broker handed me a stack of Dorky Announcement Cards and told me to mail them out to everyone I knew. I looked at that DAC and was puzzled. It was a glossy, flashy, “professionally” done postcard extolling the virtues of Coldwell Banker and, of course, the professionalism and dedication of the real estate agent whose business card was enclosed.

I thought it was silly. I mean, what would I do if I received this card? Toss it, probably, with barely a second glance. So, I wrote my own announcement letter. Seemed like a no-brainer.

My friend Loreena Yeo wrote to me privately yesterday playing Devil’s Advocate. Here’s what she asked:

Is Jake running on a stream of good luck? Say, he started in the mid-90s and had his 5 years into early 2001? I do not deny that Jake probably work very hard. But do you feel that a good momentum for an agent also depends on timing of when he enters into real estate? Would you say that in a down market, that it is probably harder to get the gears rolling? Even for an experienced agent, getting 25 transactions is not easy. What say you?”

Do you have the same question?

I’ll answer it, from my perspective anyway… in a little bit. (Don’t want to make this blog too long! I tend to do that; trying to quit).

Until then