In the spirit of transparency, let’s get something out on the table. I’m a rake. I’ve spent a total of 3 years full time in Real Estate, and another 4 in mortgages. Today? I’m using the phone to bang out deals as a freelancer. I was dually licensed for about a year. My first full year was 2003, and I sold 31 sides. My second year, I sold 38, and in 2005, I sold 42. Context. I’m saying this not to brag. But I didn’t spend one dime on a display ad. My website was stupid and ineffective. And, I had an horrific cancel/expired rate as an agent (not for my market, but I hadda know better). I probably sold only about 65% of my listings, during the ‘boom times.’
Before you laugh, Columbus, OH has had a head start on the depreciating market. We had foreclosures and other stuff thanks to the stupidity of the “2/1 FHA Buydown,” that qualifies you for the payment based on the first year. Columbus is a noted test market, and I guess the government wanted to test market foreclosures here before they rolled it out nation wide. (The buydown isn’t stupid, the qualifications are, and that made it easy for me to see and predict accurately what was to come down the pike w/r the shortsale mess). Columbus, I don’t think ever had a year with a lower DOM average than 110, and we’ve never had more than 70% of our initial contracts end in a closing. Not since 1997, at least. HUD wanted to get people in homes, sure, I get it, but qualifying a house on the first year’s bought down payment under FHA guidelines is insane. Not nearly as insane as wagging your finger at brokers for bellying up to the slop trough that you put out for them, but I digress–this isn’t a political post.
I got my business by using three basic tools: Haines Criss Cross Plus, a C# do not call scrubber that my buddy Rob built for me and Microsoft Excel. I’d grab a list of people with some apparent equity that hadn’t sold in 4 years. I’d call around a ‘just sold,’ or just listed. Every morning, I’d call people for about 2.5 hours, and go list their houses. I averaged several leads a day, and I’d call back to make sure they were good. I used a combination of post it notes and act 6.0 to follow up. More than occasionally, people thought that my call was a sign from God (ah, yes, the Bible Belt), cause they WERE thinkin‘ about getting a new house. God bless you, I’d say, as we’d set a time.
But I said I am a rake. I cared about my clients–to a point. To the point that they didn’t trouble me, expect anything, or need sympathy, I really cared. I’d return phone calls, and the noisy ones could compel me to make a flyer or whatever. I looked around and the sheer volume of work that other agents were doing astonished me. I figured–deliberately–that a higher churn was acceptable if I didn’t have to mess around with e-neighborhoods and stuff like that. The path, then, was to burn through people.
Now: at some point, I’ll post how to use a Rake to be part of a team. Best use of me would have been to join a mega agent and prospect more. If that had fed a team somewhere, or if I’d built service people…the love of prospecting is a lethal way to sell.
I love the drama and conflict and the fun that comes from prospecting. Love it. Can’t get enough. I love connecting with and seducing strangers. I love painting a picture and having my enthusiasm reflected back to me. Honestly though? Couldn’t care less about service issues. Nofliers in your box? Wah wah wah. Cry me a river. Who cares, not like they did anything but build paper planes for your neighbor’s kids. You want an ad in the paper? Go ahead, take it out. Someone tracked mud in your house? And you want me to call the other agent and scold ’em? Right on that. No, really. Sofa king important to me. That insanity drove me out of the business. You get bitter when people have an entitlementality that consumes them. At least if your me you do.
Let Me Bottom Line It For You:
Here’s the thing: if you’re doing less than 40 deals a year, you gotta be on the phone 2 hours a day. MINIMUM. Use Joes Goals to track it, or build my google doc thingie. Or do both. You gotta connect with 10 people that know you, 10 people that don’t, and 10 people that you wanna know, MINIMUM. 40 deals a year. 2 hours to connect with 30 people.
2.0, 3.0 and 4.0 are coming. But I’m 32. Young. And only half my friends are wired and well connected. The other half pick up the phone and are glad to hear from me. They have landlines. Landlines! They look in amusement at FB and my Blog and says ‘who has time.’ Those people are the BEST market. Why? They’ve never heard of Dan Green, or Dan Melson, and I don’t have to compete that hard for ’em. Easy deals, grateful people. Betcha you know 400 people. Betcha if you work 20 days a month (weekends/vaca/holidays), and connected with 10 a day, you’d get through 200 a month. Betcha you can benefit from staying connected….just like you do on FB/Twitter/Linked In. So give it a whirl. Call clients in between the Tweets you make to impress other Realtors. Your daddy issues won’t go away, so keep tweeting, by all means. I still do. 40 deals. That’s about a deal every 9 days. You can’t call 70 people without getting a deal. It used to be 35 people.
If you’re not banging it, what the hell are you doing? Even today, there are scads of people that wanna buy and sell. Short sales, REOS (yes, I’ve watched people break into the REO business). Loan mods. Regular sales. The buffet of opportunities is enough to build a kickass business. And all of these people have phones. Asset managers have telephones. TELEPHONES.
If you doubt me, there are phones in every market. There are loose deals just sitting there. Sitting there. Usually, they wind up walking in their bank, maybe getting a referral. Usually the CUSTOMER has to find the agent. 1.0 is far from dead. FAR from it. And I’ll betcha if you’ve got the guts for it, you bang get more deals per hour if you’re willing to wade through the resistance. 2.0 is more resistance free, for some, more pleasant. And less profitable per hour. It gives you the ‘all daybreak time,’ mentality, and then you wear out from always ‘working,’ but never trying.
What if, then you took 1.0 skills and fed the machine? I.E. You called a buncha people, and put them into a slick, sophisticated marketing engine that fed ’em your blog? What if you did that, and got your house list up to a couple thousand people?
It’s probably a good idea to have a sconch more empathy than I do. You don’t have to take the bad, but surely don’t throw the baby out with the bathwater. Connect–with people that are hankering to get some help. Be their bailout. Your friends would love to hear from you, and they might need a few real estate answers, right now. And we all know what conversations with real estate lead$ to.
And Teri? Consider Your Ass Kicked.
Teri L says:
ouch. 😀
Between you, BawldGuy’s cat skinning, Brian’s “pick up the damn phone!” and Greg’s “I won’t let it lie to me” resolution… There are no excuses for 2009.
January 10, 2009 — 10:46 am
Brian Brady says:
“What if, then you took 1.0 skills and fed the machine? I.E. You called a buncha people, and put them into a slick, sophisticated marketing engine that fed ‘em your blog? What if you did that, and got your house list up to a couple thousand people?”
You figured it out, Chris. Now, to find the machine that automatically integrates all social media contacts, with a CRM.
Vendors? Deliver that and you get a good review (and I’ll pay lots of money for it)
January 10, 2009 — 11:01 am
Suzanne Gantner says:
I love the get back to basics approach. It works!! After a beautiful Holiday and after hearing from old friends out of the blue, my mantra became “Call people, they are so happy to hear from you” as I was from others…Great post, I like your no nonsense thinking.
January 10, 2009 — 3:40 pm
MARK Z says:
Chris,
This post really hit home for me! I am big on calling expireds and FSBO’s. Whats funny is we are the only sales industry on the planet that thinks we can make a living without prospecting. Call and ask any stockbroker what they did the first couple years to build a book of business. Call any insurance agent and ask them what they did to build their business. Yet time and time again we see agents come into the office, sit behind their desk and WAIT.
The highest producing agents in the country are the biggest prospectors. Whether they call their sphere of influence, past clients, expireds, or FSBO’s, they are calling somebody. Maybe someone can prove me wrong, but I don’t know anyone cracking over 100 deals a year all sourced from their website. The best part about what you’re saying is the cost per lead is ZERO, $0.00, NOTHING, but time.
Great post, it’s reality, but yet nobody wants to do it. It works for me, I closed 102 sides last year, made a lot of money, had a lot of fun and I’m still laughing all the way to the bank.
January 11, 2009 — 7:30 am
Teri L says:
In metro Detroit, Mark? Holy cow.
Okay you guys, please pass the kool-aid…
January 11, 2009 — 8:01 am
MARK Z says:
Yes Teri in Metro Detroit. I know hard to believe. I can’t take all the credit myself I do have a real estate coach who has keeps me accountable to my goals, but the coaching is all about prospecting. It’s not for everyone, just people who want to want make a lot of money. I’m talking half a million plus. No joke.
January 11, 2009 — 8:05 am
Brian Brady says:
“Okay you guys, please pass the kool-aid…”
Here’s the recipe, Teri (for weak Kool-Aid):
1- Talk to five new people daily, ask if you can be their “back-up REALTOR” (most won’t have a”primary” REALTOR”)
2- Get permission to put them in your database or subscribe to your RSS feed
3- Call your database every 90 days, explain what’s happening in Dayton real estate and ask for referrals
Here’s the recipe for strong Kool-Aid, Teri:
Double the number in step 1
January 11, 2009 — 8:44 am
Chris Johnson says:
Brian-
Then once you get comfy talking to joe regular, you start talking to Joe Human Resource about moving. You can and should kick ass/take names.
-CJ
January 11, 2009 — 9:41 am
John Kalinowski says:
OK, the prospecting part I get, and it makes total sense, but the rest of the article seems to go against everything the Bloodhounds stand for, and the changes they’re trying to make.
Are you saying we should basically list anything and everything we can, then pretty much ignore our clients and basically not care about anything? Just let the law of averages kick in and sell a certain percentage of the listings and let the rest expire, leaving those sellers feeling like they were cheated and abused by a fast-talking salesman who then ingnored them and just hoped the home would sell?
This line said it best: “The path, then, was to burn through people” Hmmm, doesn’t seem like the kind of agent who will ever see a referral from one of these people he “burned through”.
Yes, prospect in whatever way works for you, but ignoring your clients and basically being a lazy, do-nothing agent who sticks a sign in the ground and waits for an offer just doesn’t seem to be what we’re supposed to be working toward. At least that’s not what I’ve been led to believe from reading this site.
Maybe with a little good-old-fashioned customer service, and (gasp!) a little bit of concern for what’s best for your client, those 40 deals could become 80.
January 11, 2009 — 5:48 pm
Jamey Bridges says:
Neat post Chris. I like the fact of using your “1.0” skills of picking up the phone. I think too often we are scared of using those core skills and that’s where the lack of sales comes in.
I will say though that using 2.0+ skills is a great way to generate serious leads that you can then use classic 1.0 skills on. Honestly then you are speaking with people who have some sort of interest in the real estate process (buy, sell, whatever) and you can keep feeding your machine on a daily basis.
January 11, 2009 — 6:06 pm
Chris Johnson says:
@John. Heaven forbid in the new and transparent world we ever dast admit a mistake. I *did* burn through people. Where was I advocating THAT?
January 11, 2009 — 6:45 pm
John Kalinowski says:
Chris- guess I missed the part where you were feeling remorse. Seemed more like a brag session on a night out with the drinking buddies.
The reality is there are many different ways to skin a cat, and cold-call phone prospecting isn’t the only way. I was licensed in Feb 2004 and have averaged over 40 listings sold per year and have never phone prospected a single person. I’m just not comfortable doing it so I found my success through direct mail to expireds. Not the typical “I’m #1, your last agent stunk” expired mailing, but something unique. I average a response rate of over 3%, list over 2%, and close over 1%, all without a single phone call. Would I do even better by adding phone calls, maybe, but I just don’t enjoy that part.
What I’m getting at is that you’re not a loser if you don’t cold-call or use the phone to prospect. There are other ways, and I do believe people are becoming more resistant to the salesman phone call.
@Mark Z- Russell Shaw out of Phoenix sells 400-500 homes per year, and I don’t believe he phone prospects at all. Might have at some point but not now. Again, more than one way to skin a cat
January 11, 2009 — 7:38 pm
Teri L says:
Hi John-
I think Chris is perfectly capable of speaking for himself, so I’m not here to defend him.
This post was prompted by a chat we were having about goals and he told me my goals were not high enough. When I tried to make excuses, he posted this- not to me- but to everyone, all of us, who might be hesitant to step outside their comfort zone.
I read this post as more of a kick in the pants not to sell yourself short and in fact to look at different ways to skin a cat- perhaps because I knew the back story.
I am, in many respects, starting out. I find it uncomfortable to cold call. I find it expensive to get a 1% return on expired mailings. I don’t have the resources Russell had when he started out to put spots on radio. I don’t want to do PPC right now. So where does that leave me? What are my options? I’ve got some terrific branding and I’ve got some brilliant ideas- all taken from the folks who post here, however, without clients it’s all just nice business cards to look at and exciting stuff to think about.
January 12, 2009 — 5:28 am
John Kalinowski says:
Hi Teri! Thanks for the info. That helps explain where it was all coming from. I may have misread and misunderstood what it all meant, but I guess I was tired of hearing the old rant that if you don’t cold-call and interrupt people by phone, you’re a loser. My point was just that everyone has their own way, and no one is right or wrong.
A 1% return on expired can be hugely profitable. In my area, you can easily send 30 per day, so let’s do the numbers:
My hard cost for each mailing, including materials, printing, and postage is about $3.
30 per day = 900 mailings per month. x $3= $2700 cost/mth.
1% closed = 9 per month
Even at Cleveland’s low average sale price of about $140k, with a 3% listing-side commission, that’s $37,800 per month.
A $37,800 return from spending $2700, seems like a pretty good investment to me. Of course, this doesn’t include my time to process the mailings, but even if you hired someone to do it, the return is still huge.
I find expired mailings to be the most obvious source of people who need to sell there home NOW, and for some reason most agents don’t even try. The trick is that you can’t send what everyone else sends, which is usually a cheesy postcard or letter. I send an 18 page full-color mailing describing what I do, that fits inside a brochure-style cover we print ourselves on 11×17 paper folded in half. The cover is custom printed to match each home, which is why we get such a high response rate. Is it a lot of work? Yes, and that’s why we see such great results.
I think with your experience and branding, you could easily do the same. With expireds, though, you have to do it every day, month after month, as many people will keep your mailing and call you 3-6 months later after they expire again.
Take care! – John
January 12, 2009 — 7:09 am
J Boyer Harding NJ says:
ouch, that was a fairly painful read. I guess the main point of it was get out there and bust it. Someone hates you for calling, who cares. Someone yells at you who cares, help them or move on, Just do it!!!!
January 12, 2009 — 7:11 am
Thomas Johnson says:
Thanks Chris!
Every now and again, I find myself leaning on my rake. You know, like the highway dept. guys. No time for that now. We need to make the dust fly!
January 12, 2009 — 8:54 am
Jeff Brown says:
Brian — the vendor you’re lookin’ for is Matthew Hardy, CEO of REST.
Imagine buying a Ferrari that doesn’t break down, gets 30 miles a gallon, goes 200 mph, corners like a dream, and costs $20,000. That’s REST. It may be the only software I ever thought was underpriced.
And that’s no exaggeration either. We literally spent the last quarter of ’07 through the second quarter of ’08 comparing & contrasting database software, all of which promised infinite flexibility, capacity, user friendliness, and muscle while not breakin’ the bank AND providing the kind of support we all dream of.
REST was it. I’ll be writing about it in nuts and bolts terms on these pages soon. There aren’t any competitors we could find who weren’t classic pretenders, posers, or wannabes.
Chris — This post is such a rich vein of gold it deserves an answering post. Your sandpapery self irritates me no end sometimes, but your grasp of what works has been nothing if not consistently on the mark.
Teri — Apparently I wasn’t mean enough. 🙂
January 12, 2009 — 10:24 am
Teri L says:
John-
Thanks! I was hoping you would share some more information about what you do. In truth, expired mailings appeal to me and your approach shows up front that you go above and beyond the usual.
BawldGuy-
>Chris — Your sandpapery self irritates me no end sometimes,
HAHA! His immediate response to my whining? “WHAT THE F*** ELSE ARE GOING TO BE DOING!?”
>Apparently I wasn’t mean enough.
Obviously. 😉
But in reality Jeff, I wasn’t hungry enough. Being hungry solves problems.
January 12, 2009 — 2:02 pm
Mark Madsen says:
“2.0 is more resistance free, for some, more pleasant.”
Agreed, which is why I’m spending most of my time trying to build sites that will generate enough business in the future to make up for lost time in the past.
“And less profitable per hour. ”
Please don’t tell my wife.
“It gives you the ‘all daybreak time,’ mentality, and then you wear out from always ‘working,’ but never trying.”
Right on, couldn’t of said it better.
Great post Chris. I’m almost finished with a major blog project and your article just got me over the final hump. I’ve been spending too much time worrying about the details instead of just getting some good info up that we can share with our clients and referral partners.
Even though I know better, I still approach each blog project as though it will be that magic bullet. How is that for transparency…. 🙂
January 12, 2009 — 4:37 pm
Matthew Hardy says:
Roll up all the gurus and talkmeisters together and it’s pennies on the dollar-value of Chris’ advice.
This used to be called hard work. While I am grateful for the tools that make my work more leveraged, it doesn’t mean I work less or even less hard. My favorite work is seldom “resistance free”; that is, it’s challenging. My first “important” job was traveling with Tom Hopkins, then a real estate sales trainer. From there, I was the number 1 or 2 ranked salesperson in nearly every sales position I held. I was committed to my card file because each card in my little metal box meant a possible future sale. It always worked because it always kept me focused on my work. If I wanted x sales, I needed to have a minimum number of appointments which required some average minimum number of calls…
I knew lots of salespeople who “burned through” people. Most people in real estate do exactly that. It’s easy (especially in good economic times) to keep focused on cashing checks and not looking back. However, this avails no reservoir for leaner periods. One of the most common things I hear from real estate agents who have been in the business for some time is their lament for not having kept the names, addresses and phone numbers for everyone they ever did business with.
What Chris is saying is all so rudimentary for those who understand it. Current market conditions are clarifying it for those who, as yet, don’t.
—
Thank you Jeff Brown for your kind words for REST real estate software; I am truly grateful to have earned your trust. Making a contribution to the success of your business is our raison d’etre.
January 12, 2009 — 6:55 pm
Matthew Hardy says:
> Teri – “Being hungry solves problems.”
Let me try…
“Being hungry brings clarity. Clarity makes any problem infinitely more solvable.”
January 12, 2009 — 9:35 pm
Teri L says:
Matthew-
Being hungry also removes objections. 🙂
January 12, 2009 — 10:16 pm
Greg Tracy says:
Surprising and delighting clients with incredible service builds a following of people who will tell your story and get you more business.
Doing a “good job” is nothing, it’s expected, but don’t underestimate the prospecting power of excellent service and follow up.
Having the right technology can help with this. Yes, some 2.0 technology really does help you get business AND help you enhance your service so you can build advocates of your client base.
January 13, 2009 — 12:39 pm