In This Issue...
Words of a Champion
Dirk Zeller
CEO
The key in today’s market is consistency. We must be consistent in our actions to attract the results that we desire. In my travels last week I ran into Bob Proctor, one of the co-authors of “The Secret” in the red carpet room in Dulles airport in Washington DC.
We had an interesting discussion about the connection between the law of attraction and the role that consistency plays in producing the results that we achieve through the law of attractions. We both agreed that too many people simply set goals or objectives or attraction points and hope by merely thinking, praying, meditating or just plain hoping for these goals to materialize.
You must have clarity of what you want. That is the first step to alignment and achievement through the law of attraction. Once you have clarity then you must take action consistently to realize your goals and dreams.
As I work with Agents who are growing their business even in the face of today’s market challenges, the difference in results for an Agent that is consistent for example, with their prospecting, lead generation, practicing sales skills, marketing, and even their learning, is dramatic compared to the Agents that were not.
I have seen Agents in the last six months in our JumpStart™ Program in eight weeks become consistent that did 6, 7, 8, and even 10 transactions in those 8 weeks that had done only 2 in the previous six months of production.
Focus on what you need to be consistent on. What in your business needs constant and regular attention? Do you have a deliberate plan you are executing to improve your skill and learn? If you don’t you might want to check out our new and improved 365 Club Program. It will allow you a free trial to check it out while also create a consistent access to training material for a low monthly investment. I encourage you to click on this link to learn more...
To Your Achievement of GREATER success,
Dirk Zeller, CEO
RealEstateChampions.com
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Conditions Versus Objections
A problem arises when Agents mistake conditions for objections. Agents often treat a condition as an objection and beat themselves up when they don’t get the transaction or contract signed. The definition of a condition is a valid reason for the prospect to not move forward. You still need to try all the techniques of handling the objection. You just need to realize that a condition is usually linked to their ability or authority to act now.
They might have the desire to move forward with you but lack the ability or authority to do so. Ability relates to financial capacity, credit score, and down payment. Those types of issues relate to their ability to act. Authority relates to the ultimate decision maker. Is there anyone else who will be influencing this decision? Young couples and first-time home Buyers often do not have the authority to make a decision without outside guidance, which is usually a parent.
The most common condition is lack of money, lack of credit worthiness, and (in the case of a Seller) lack of equity. You might not be able to overcome these to make a sale. It is better to know early, before you invest the time in the presentation, if your efforts are guaranteed to not result in a signed contract.
Another condition we are seeing more frequently is a pre-payment penalty on a mortgage for a Buyer. This clearly could be a condition. My best advise is don’t waste your time trying to overcome impossible conditions. Sometimes, you can invest more time than it’s worth trying to be the hero. If you are prospecting consistently, you will have more than enough opportunities without overly burdensome conditions.
A word of caution, don’t become so emotionally involved that the line between an objection and condition gets blurred. We can want to help someone so much that we blur the line. We start investing large amounts of time negotiating short pays, pre-payment penalties, waivers, and an abundance of other items. We lose sight of our business.
I realize that going that extra mile for the client can give you really warm feelings. It can build an extremely loyal and appreciative client. That “sold out” client can send you referrals for years because of your extra service. However, let me give you a word of caution about these situations. Where Agents get into trouble is not recognizing these types of opportunities for what they really are. These types of clients allow you to generate large amounts of goodwill. You feel good helping people who are struggling.
I did a number of these types of, what I call, donation deals annually. I didn’t donate my commission, but the value of my time against the time, effort, energy, and money spent was a net loss against the commission earned. I am not saying don’t do them. I am saying a Champion Agent recognizes them for what they really are – a donation transaction to benefit someone in trouble. Your reward will never be monetary, especially in the short-run. Where Agents get into trouble is when they quit halfway through the transaction because the conditions of the transaction hint that they aren’t going to make any money. Now, they are embittered and frustrated. If you can’t financially or emotionally do a donation deal, pass.
The last point I want to make regarding donation deals is that you can’t do too many. Even a Champion Agent can still afford to do a lot of these each year. If you do too many, it affects your income, attitude, and family. Limit the number of these you take on. I took a couple a year. That was all I could engage in and still reach my business and life goals.
Realize that conditions are often temporary. Their circumstances or the market conditions can change. Their credit can improve; they can save more money; new loan programs are created; new children arrive, pre-payments can be negotiated. Many of the conditional roadblocks can be removed over time. Don’t fail to keep in touch with people who have conditions as to why they can’t move forward now.
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Questions For Success
I was looking at the three most important questions winners ask themselves on a daily basis. These are the questions we need to evaluate for short-term and long-term success. They will help us produce the fruits of life.
Question #1: What do I want?
This question truly is the most difficult one out of the three. This question stops most people from moving forward in their life. They have never determined what they want in concrete terms. Therefore they never achieve it. What is it you want? This question should be answered well by your life plan. Do you have a life plan? When was the last time you reviewed your life plan?
Every one of you can have what you want in life. You have the God given talent and abilities to achieve it. The question is what do you want? Benjamin Disraeli said, “A human being with a settled purpose must accomplish it, and that nothing can resist a will which will stake even existence upon its fulfillment.”
Question #2: How am I going to get it?
Once you know what you want the next step is to create a plan to achieve it. Planning is an important step towards efficiency. We must focus on efficiency of our time and resources. By planning we save a great amount of time in executions. There is an old saying: For every one-minute of planning, we save ten minutes in execution.
Don’t move back and forth from planning to execution. Complete the planning process and then move into execution. The constant shift between the two often bogs us down. I have watched a good friend of mine do this for the five years that I have known him. He is always looking for the magic answer, the latest get rich quick scheme. If he would have set a path and then made a plan to stay on the path; he would be financially set by now. Remember, set the plan then work the plan.
Question #3: When am I going to do something about it?
When do we start? Start…NOW! Don’t delay, start today. There will never be the perfect time to start. To coin a phrase, just do it! The biggest waste of time in life is from the moment we know we need to start to when we actually start. Implementation separates massive success from the result.
Make sure you are deciding what you want and then defining the plan to get there. Once you have defined the plan, do the necessary tasks to achieve the desired results. You will be amazed at the massive changes over a short period of time.
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Wisdom with Finances
Most Agents begin their real estate career with the hope of gaining financial independence. They are attracted by the possibility of earning large sums of money. Even when Agents make more than a six-figure income, the vast majority have not dramatically improved their financial balance sheet. After looking at hundreds of Agents’ Profit and Loss statements and personal spending habits, I’ve determined that real estate Agents are poorly prepared for financial independence. Why should real estate Agents be any different from the American population in general?
According to the Social Security Administration, statistics indicate that out of a randomly selected one thousand people from age twenty-five to age sixty-five:
- 150 would have incomes over $30,000—15%
- 660 would have incomes less than $30,000—66%
Let’s look at these numbers. There are more people deceased than earning something close to a decent quality of life. Of the people still alive, 66% of them exist on less than $30,000 per year. My question is: Which group do you want to be in? Which group are you heading for based on your financial plan, investment choices, and savings plan? These are the top three reasons people fail in their finances:
- They never create a financial plan.
- They make poor investment choices.
- They put off starting a savings plan.
Let me share with you a few simple rules that will ensure that you don’t join the 66% of the group. I have used these rules with hundreds of Agents to transform their financial picture in a short period of time.
Rule #1: Track your expenses, both business and personal.
You must know where the money is going. Separate your business from personal expenses. Establish a business checking account and pay all business bills through it. Too many Agents co-mingle their business commission checks and business bills with personal and household expenses. It is more difficult to control your money when you can’t track it. Enter all your expenses and revenue in an accounting software program. I think the easiest is Quicken. Quicken will allow you to accurately track your costs to run the business, then you can run a monthly Profit and Loss statement to see where you are spending your money. The money you earn in real estate can come in bunches. It can become very easy to spend that large commission check that’s burning a hole in your pocket.
When we have money, a want looks like a need because we have the ability to buy it. We begin to rationalize our wants into needs. For most of us, a want that our neighbor already owns becomes a need.
Rule #2: Adjust your Lifestyle.
Spending less than you earn makes up 90% of financial planning. The premise involves saving money and making sacrifices. The ability to pay now in the form of adjusting your lifestyle and saving the difference will allow you to play later. To play later you will need more than the $30,000 per year. Thomas Stanley, who wrote the book, “The Millionaire Next Door”, summed up how the vast majority accumulated their millions: “They lived well below their means.” Living beyond our means is a national epidemic. Consumer credit card debt in the United States is in excess of $528 billion. Roughly two-thirds of Americans who have credit cards do not pay off their monthly balance. We are clearly living beyond our means. Take a close look at your monthly obligations and evaluate where you are spending your money.
Rule #3: Aggressively reduce your debt.
There is an old Proverb that speaks of a borrower being a servant to the lender. The weight and pressure of debt can be crippling. I have seen this happen to Agents for years. I have even seen it manifested in my own life. I have not always made the wisest choices with my money. Fortunately, I have made more wise choices than foolish ones.
If you have credit card debts, make a decision to pay them off. Start with the highest interest rate credit card first. Decide on a monthly amount that you can commit to reducing your debt. If you stretch, you will be able to find a few hundred dollars per month to pay towards your debt. Most credit card companies require you to pay 2% of the balance owed monthly. Let’s look at that practice. Let’s say you have a debt of $2,705 with an interest rate of 18.38%. Your 2% toward the outstanding balance would take you 27 years and 2 months to pay off. You would pay $11,047 of total interest. How do you feel about eating out more often now? If you increased your payment to 8% or to $216.40 per month, it would take 2 years and 1 month to pay it off. You would pay $94.00 in interest. You need to accelerate your payments to reduce your debt. You must adopt a cash mentality. This cash mentality will allow you to charge only what you have funds to pay for.
Rule #4: Create a savings plan now.
The biggest enemy in financial planning is procrastination. People wait too long to start saving. The truth is becoming a millionaire is not very difficult. The power of compounding interest will take care of your needs. According to Investors Business Daily, a 20-year-old person only needs to invest $1,014 per year or $2.78 per day with an annual return of 11% to have $ 1 million saved by the age of 65. Look at the daily number of $2.78. Who couldn’t save that amount per day, even at the age of 20? Even someone working for minimum wage could do that with ease. My mentor, Jim Rohn, used to say, “What is easy to do is also easy not to do”. It’s easy to save the $2.78, but it’s also easy to buy a latte every day at Starbucks instead of saving. That’s all we are talking about here—choosing financial independence planning rather than the latte.
Therefore, we need to create a system to automatically remove the money when we receive it. We need to transform ourselves into savers. Savers pay themselves first. It’s amazing how little you miss money that never comes into your possession. We are not a nation of savers, although we really need to be. On average, Americans save less than 5% of their disposable income. Let’s compare the United States to other countries in regards to income saved:
Germans are saving: 11.5%
Japanese are saving: 12.2%
Belgians are saving: 17.0%
We are behind in our need to pay our savings accounts first.
The secret to saving is writing the check to savings first. Do it before paying other bills and obligations. Savings is a habit to be forged. Here is the formula I used on each of my commission checks for many years:
20% - went to a tax account
10% - went to a retirement savings account
10% - went to a business savings account
These percentages ensured that my taxes were always current and my retirement account was always fully funded. There were also reserves for an investment opportunity or slow closing month. The more you make your money disappear into protected accounts, the more you will have for later.
Creating financial wealth is the process of being diligent with your money. I remember a series of Fram oil filter commercials in the 70’s that were a lot like creating financial independence. The service station attendant, while looking under the hood of the car, was trying to convince the customer to use a Fram oil filter. The premise was that the quality of the Fram filter was better for his engine than the bargain brand. He said to the customer, “You can pay me now or pay me later”. He was implying that the customer could spend a few more dollars now for the Fram oil filter or get the cheaper brand and have his engine rebuilt later. The same is true with your money. You will have to pay either way. The price you pay now is small compared to the price you will have to pay later if you are not diligent in managing your money and financial affairs. Which price do you want to pay?
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