In This Issue...
Words of a Champion
Dirk Zeller
CEO
There is always a small difference between massive success and being dissatisfied with your circumstances. Successful people do the little things more consistently and with more excellence than people who have not achieved the same level of success.
This can often be demonstrated in how we utilize the resources we currently have available to us. We have more resources than we can possibly imagine. Many people believe that lack of money creates a barrier to success. Lack of capital has never created a barrier to success; only lack of effort and utilization of the resources you have can affect the outcome.
My wife, Joan, and I had cleaned out a family vacation home that had been a rental for a number of years. We were going through the remnants from previous tenants, as well as drawers of stuff that had accumulated since our family first started to build the home forty years ago. We discarded most of what we found. There was also a lot that we took to Goodwill, so someone else could benefit from the items.
In dropping off these items, I was fascinated when I entered the Goodwill store. Right there, in the very front of the store, was a tape series by Brian Tracy. It was his series on Thinking Big, which, by the way, is excellent. It was right there, in perfect condition, still shrink-wrapped. Someone had bought it and never even opened it. They had the resource in their hands and never bothered to use it. They made the financial investment, but they never made the emotional investment or the time investment. How can we make one investment but fail to make the necessary other two investments needed to achieve success?
I wondered why this person didn’t make the right choice. I wondered what type of a life they had. All these things were running through my head. In the end, I will never know. My guess is the person who donated these tapes was someone who has not achieved success. The reason I suspect this is because the shrink-wrap was still on.
How many times in life do we keep the shrink-wrap on? We don’t use and access the resources we have. I am asking you to make a commitment to take the shrink-wrap off today!
To Your Achievement of Greater Success in 2009,
Dirk Zeller, CEO
RealEstateChampions.com
If you're tired of bouncing through your Real Estate Career with Yo-Yo Production Numbers and finally want to take control of your own Real Estate Success, it’s time that you check out:
I am really excited about this program for two reasons...
#1) Most Agents (less than 5% of the several thousand I’ve met) never construct a firm business plan to execute in their business. That’s right! A majority of agents only have a few loosely held goals, wants, or even just dreams of what they hope to do with their business. I now have a chance to solve the #1 reason why most Agents fail to achieve a high level of success in their businesses...
#2) The second (and my favorite reason) is that I've teamed up on this program with one of the best minds in real estate. This man (who I'll reveal to you in the program) is truly one of the best real estate agents and business owners in the world!
When he and I met about eight years ago... Click Here.
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• How you can build your Real Estate Business into an asset that can be sold in the future
• How to play the odds in your favor like a casino - you too can become the house
•Why spinning the lead generation odds will lead to better income, results, and time off with your family
• How to determine & then double your hourly rate which in turn will reduce the number of hours you have to work to make the same amount of money
• The #1 way to change the odds of success in your Real Estate Business
• Why most agents suffer from “lead bulimia”
• 3 Keys to overcoming the hurdles that litter the small, narrow, rocky pathway to super success
• 4 Rules of Business Expansion and how to apply them to your business
• The largest opportunity in Real Estate today that 87% of Agents completely missed last year
• How one simple strategy increased my client’s market share by over 49% in the toughest real estate market in 10 years.
• How you can transform your thinking, actions, execution and planning to the level of a successful business person
• Three steps to easing the rapid process of real estate market change
• The right way to plan your own financial independence |
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• 6 CDs - Audio Training (7+ Hours)
• 1 CD-ROM Workbook |
Find Out How To Grow 313% &
Reduce Costs Per Transaction By 40% Now
Facing New Challenges
I have always believed that new challenges in life present new opportunities. We are given opportunities to grow, improve, and learn new skills and abilities, which we might not learn otherwise.
It is easy to get comfortable and complacent when the going is easy. We often just ride the wave of success, rather than learning how to paddle better. We miss the opportunities to learn, grow, and gain greater strength.
I have come to realize that there is always a greater challenge around the corner. The obstacles that you are facing right now are preparing you for the future. I did not always embrace this attitude of gratitude for challenges and obstacles. I used to say, “If I could only solve this problem, I would have everything else handled.” That’s not the way that life and business works. The most successful people are problem solvers. Rather than CEO, President, Sales Manager, or Salesperson on your business card, it should read Chief Problem Solver.
One technique to build your confidence and competence in facing new challenges is to record them. Record the challenge then think on paper to create the solution. Too often, we don’t concisely write out the new challenge. Then we fail to think solutions through on paper. Completing this process gives us two benefits:
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Greater access to our mind to create solutions: By writing your challenge down, you activate your whole mind (the conscious and subconscious) to work on the challenge even when you are asleep. You will light a mental fire that will burn bright until you have extinguished the problem for good.
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A record of success: By writing things down, you create a blueprint for greater success. You allow yourself to go from one victory to the next, applying your gained knowledge quickly and efficiently. Making the right decision is essential to success, but making it quickly is nearly as important. Sometimes, we might make the right decision, but we have waited too long. We have missed the opportunity that was before us. Many times, opportunity merely knocks once. You must be prepared to seize the opportunity when presented.
The speed at which a good decision is made is essential. Place yourself in the cockpit of an F16, one of the highest advanced aircraft in the world. You have been instructed to attack another military force. You have a series of missiles bearing down on you. Do you let the speed at which you make the decision have a bearing on your success…of course! If you don’t move quickly, you’re dead.
We have to take the right perspective and attitude to achieve success. We have to acquire the focus and intensity of a great problem solver. We have to act decisively and quickly to achieve our desired result.
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Ten Biggest Mistakes and How to Avoid Them - Part 2
As the saying goes, an ounce of prevention saves a pound of cure. Consider this article, in two-part, your prevention formula. Just watch for and avoid the following ten frequent real estate agent mistakes to steer clear of trouble and success-eroding errors. Here, in Part 2, I will cover the second five.
Making Yourself Available to Prospects and Clients 24-7
The most respected professionals are not available to their clients round-the-clock. They set normal professional work hours, they conduct business in their offices where clients come to meet them, and they make after-hours appointments a rare exception.
Doctors, Dentists, Attorneys, Accountants, and Financial Planners are service professionals, yet none make themselves available 24 hours a day 7 days a week. In contrast, most Real Estate Agents follow a work schedule that runs practically round the clock. What results from this workaholic approach is a loss of momentum and eventual burnout.
Give yourself a break. Take back control of your time. Set working hours, manage your days, schedule personal and family time each day and week, and commit to vacations that allow you to restore your energy and enthusiasm. Remember, real estate isn’t your life. Rather it’s what you do to fund your life.
Failing to Communicate Frequently
The biggest complaint by customers of Real Estate Agents is lack of communication. The antidote is to establish a great communication system that you and your clients buy into.
As you launch the Client-Agent relationship, explain the frequency of communication you will have with your clients and check to make sure that level of communication meets their needs.
As your clients’ deal becomes a pending transaction, reconfirm the level of frequency and method of communication they prefer. Some people only need e-mail updates; others, like me, prefer the personal connection that a phone call offers.
Lastly, don’t quit communicating with your clients after your commission check is cashed. Ongoing communication will win you clients for life and the kind of endorsements that lead to new clients and sales.
Being Inconsistent
This is the old tortoise versus the hare lesson. In real estate, as in most other endeavors, if you’re consistent your efforts will lead to larger-than-expected rewards; if you’re inconsistent your results will be notably disappointing. Inconsistency derails success faster than any other factor.
To a Real Estate Agent, the consistent activities of daily prospecting, daily lead follow-up, daily practice of sales skills, daily personal development, weekly planning, and scheduled evaluation time will create exponential return compared to the effort invested. On the other hand, occasional bursts of activity create work with little payoff.
As an easy analogy, say that you want to lose five pounds next month and that you need to increase your physical exercise by moving your body 60 miles over the upcoming 30 days in order to achieve your goal. You could put in the miles over a few muscle-aching days (after which you revert to ice cream sundaes and afternoons on the sofa) or you could commit to walk or run two miles a day for each of the next 30 days. Which approach do you think offers the greater probability of success? The consistent approach will always win out.
Ignoring the Fundamentals
The fundamentals of real estate sales success aren’t exciting or exhilarating and for that reason it’s easy to get sidetracked by new ideas that seem more interesting and innovative.
Consistent prospecting, client communication, transaction management, and flawless property marketing are hardly flashy and they never make headlines or draw crowds. In fact, on some days they feel downright boring. Meanwhile, sales gimmicks generate enthusiasm, attention, and publicity spotlights – even if for just a quick moment in time.
Agents seeking public recognition can count on being rewarded by flashy promotions, but they can’t count on making more money. Remember this line like a mantra: You can build your business for your ego or you can build it for your income, but you can’t do both at the same time. If financial success is your objective, stick to the fundamentals.
Talking Too Much, Listening Too Little, and Then Going Silent
We were given two ears and one mouth . . . God is brilliant! Unfortunately, most of us use our mouths twice or three times more than we use our ears.
When working with prospects and clients, follow this advice: Use your mouth primarily to ask questions. Contrary to popular belief, the person who asks the questions is really the person in control, not the person who is talking or answering questions. Then once you ask a question, accept and enjoy the pause and silence that precedes the response. Your power as a salesperson is intensified if you are willing to withstand the temptation to barge into the silence that follows your question.
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Making Sure You Are Profitable With a Team
One of the most challenging aspects with a team is having the right balance in sales, revenue, and expenses to achieve a reasonable net profit. The vast majority of teams’ profit and loss balance sheets are far from being balanced. The problem for most Lead Agents is lack of financial control and knowledge of the key numbers that must be monitored to ensure your control and net profit.
Most Agents don’t have a quick test to see how they are doing in their business. They don’t have a series of numbers to use that show them the health and prosperity of their business. You must realize and accept that sales is a margins game. The margin is between the investment of resources, time, and capital with an expected return in money and satisfaction. We need to have a vehicle we use to test the margins easily and effectively. Why I developed the seven key numbers in a Real Estate Agent’s practice was because so many Agents struggle to control their business, control their time, and control their money with the outcome of a controlled quality of life.
1. Hourly rate
It’s the amount of money you generate with every hour that you invest in your real estate sales business. Multiply your hours you work in a day by the days you work in a week by the weeks you work in a year. You will arrive at a total numbers of hours worked between 1,500 to 4,000 hours. Let me give you a hint – 4,000 hours is a bad number, but I have seen it. Divide gross commission income you earn by the total hours. This would be your hourly rate or hourly value. Be sure to use gross commission income, before expenses or company split. In business terms, gross commission income is equivalent to gross sales or gross revenue. Use the gross because you create that level of income into your company.
2. Average commission check
We need to know our average commission check or average earnings per sale. To write an effective business plan and create sales projections, you must know your average commission check. If we want to test our sales margins or revenue versus expenses on a per transaction basis, we need to understand our average commission check. If you ask any good restaurant owner what is the average spent per person on a meal, they would be able to tell you. The casinos in Las Vegas know what the average person spends when they come to Vegas at the gaming tables. Their goal is to create attractions and promotions that cause more people to come. Take the gross commission income again and divide it by the number of units you close. Be sure if you represent the buyer and the seller in a transaction to count that as two transactions.
3. Average sales price
The average sales price will tell you what one or two segments of the marketplace you generate the most business from. As an example, if your average commission is low, you work most often in the entry level or lower middle of the price point. It will demonstrate where you are currently investing the bulk of your time or where you are investing the most marketing dollars. Once you determine the number by taking your gross sales volume (again counting sales volume twice if you represent the buyer and seller) and dividing that by the number of transactions you do, you will have your average sales price. By knowing your average sales price, you can consciously move it higher or lower depending on the market conditions and the return on investment you desire. This number also will illustrate how effective you are in proving your value to a client. When you divide your average sale price by your average commission check, you will know what you charge on average for your services. It’s a fast and easy way to know how well you are at defending your fee structure. If the average percentage is lower than you want, you will need to take corrective action. Too many Agents are finding out much later that they are giving their fee away in most transactions.
4. Cost per transaction
This is one primary number in an Agent’s practice and over 98% of all Agents haven’t any idea what the number is. The average cost per transaction will tell you how successful you are as a business owner and how much net profit you should expect. To calculate, take total costs of your business, i.e.: your cell phone, marketing, advertising, signs, gas, car, insurance for car, business, and even health (it’s a deductible expense), your Assistant’s compensation, anything that is a legitimate business expense, and add them up. Then, divide the total expenses by the units you do. That will create a cost per transaction. Your cost per transaction will go down as your units increase. You sit down with any McDonald’s franchise owner in the world and they would be able to tell you what it costs to make a Big Mac. They know down to the penny. Now that’s the owner of a business.
5. Marketing cost per transaction
We want to check to make sure that this number isn’t too high. We can’t spend more than a couple hundred dollars exposing a low end property and still turn a reasonable profit. What do you spend in marketing and advertising divided by the number of units you close. A Listing Agent will have a larger number here than an Agent that works predominantly with buyers.
6. Time invested per transaction
What do you invest on average in your time for every transaction? I believe a Real Estate Agent wears two hats in their business. One hat is “Lead Salesperson”- that is the hourly rate you should be paid. It’s what you are worth per hour. You are also “CEO” or owner of the company. That person deserves a profit for their work. The profit is what is left over after everything is paid for including your hourly rate. You will live and spend your hourly rate. It’s in essence, the wage you earn. The creation of wealth and financial independence comes from the profit you generate.
7. Net profit goal per transaction
I believe you must have a goal of what you will net on average for every transaction you enter into. We can’t afford to leave this net profit to chance. My goal was $1,500. It would be higher today because of the average sales price increase. If I couldn’t net $1,500 from a transaction, I referred the opportunity to another Agent. Maybe the client wanted to over-price their home, which would increase my marketing cost per transaction, days on the market, my time invested to talk with them week after week about lowering their price. All those factors would drive my net down dramatically.
The client might be a high maintenance type of client. They want overkill on reporting, calls and customer service. These expectations were outlandish. This again would increase my time invested per transaction, reducing my net profit. I am only going to make about $1,500 net dollars in profit. I have to determine, could my 3 hours of time invested create a higher net profit somewhere else? By referring the prospect, I know that I can generate a 25% referral fee of $975 with about ten to twenty minutes of my time invested with limited other expenses. With a high demand, challenging, even problem client, I am better off to refer rather than represent.
Dirk Zeller
CEO |
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