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by: Peter Gilmour
by: Sue Johnson
Supreme Court to Decide on CFPB Constitutionality
Will we finally settle whether the single-director structure is unconstitutional?On October 18, the U.S. Supreme Court agreed to hear the case of Seila Law LLC v. Consumer Financial Protection Bureau. The outcome of this case will finally settle the question that captured headlines in the 2018 case of PHH v. CFPB—is the single-director structure of the CFPB unconstitutional, and, if so, how will its past decisions and future activities be affected?
The Seila Law CaseSeila Law, a firm involved in consumer debt cases, refused to comply with a CFPB civil investigative demand (CID) because the CFPB’s structure violates the Constitution’s separation of powers doctrine because it was headed by a single director who can only be removed by the President for cause. A California federal district court rejected Seila Law’s claim, and the Ninth Circuit Court of Appeals affirmed that ruling. Seila Law then appealed to the Supreme Court. Interestingly, the CFPB, which had defended the constitutionality of its structure in the PHH case and before the lower Court in Seila Law, has reversed its position and will argue before the Supreme Court that the for-cause restriction on the President’s authority to remove the CFPB’s single-director is unconstitutional.
The Possible OutcomesThere potentially will be two issues before the Court: Is the CFPB’s single-director structure constitutional? Seila Law’s argument is as follows: The CFPB, which has unprecedented regulatory and enforcement authority over 19 federal consumer protection laws, has powers similar to those exercised by the heads of the Executive Departments. However, it is run by a single, unelected Director who, unlike Executive Department heads, only can be removed by the President for “inefficiency, neglect of duty, or malfeasance in office.” Removing the CFPB even further from accountability to any branch of government is the fact that its funds are approved by the Federal Reserve Board instead of through the Congressional appropriations process. Therefore, the CFPB leadership structure violates the separation of powers in the U.S. Constitution, which divides the different functions of government among the executive, judicial, and legislative branches. The opposition likely will argue in amici briefs that limitations on the President’s at-will removal of the CFPB director are not central to the functioning of the Executive Branch; that the Supreme Court has long given financial agencies political independence, and that the Supreme Court has upheld restrictions on at-will removal of independent agencies in the past. The Supreme Court’s ruling on the issue of the CFPB’s constitutionality may be close, but many attorneys point out that its 5-4 conservative majority makes a finding of unconstitutionality more likely. Justice Brett Kavanaugh’s vote is a safe bet since he wrote the three-judge panel D.C. Circuit Court of Appeals’ opinion in the PHH case that found the CFPB to be unconstitutional and dissented in the Full Court’s decision to overturn that ruling.
If it is unconstitutional, what is the remedy?The Supreme Court has asked the parties in Seila Law a second question: If it finds the CFPB to be unconstitutional, can the for-cause removal provision be severed from the rest of Dodd-Frank, the law that created the CFPB? The Court’s ruling on this issue (if it does rule) could significantly impact the future of the CFPB. If the Supreme Court decides that the for-cause removal provision is severable from Dodd-Frank, the CFPB Director would be supervised, directed, and removable at will by the President in the future. If the Supreme Court rules that the for-cause removal provision is not severable from the Dodd-Frank Act, it could invalidate the CFPB’s actions over the last nine years as being beyond its legal authority. It could even invalidate Title X of Dodd-Frank, which created the CFPB. Most observers predict that the Court would sever the for-cause removal provision in Dodd-Frank, making the CFPB Director directly accountable to the President. Dodd-Frank contains a severability clause stating that if any provision of the Act is held to be unconstitutional that the remainder of the Act shall not be affected, and even Justice Kavanaugh adopted the narrower remedy of severability in his PHH decision.
What Lies AheadSeila Law likely will be scheduled for oral argument in early 2020, with a decision expected in the summer. In the short term, many lawyers have pointed out that companies will have an advantage when negotiating terms of settlements while the case is pending. Some federal judges already have stayed or even closed CFPB enforcement litigation while they wait for a Supreme Court ruling on the Bureau’s structure. In the end, the Supreme Court’s ruling in Seila Law will affect every entity now regulated by the CFPB. It will set a significant precedent for future cases involving other independent federal agencies in the financial sector.
Author BioSue Johnson is the former executive director of RESPRO, the Real Estate Services Providers Council Inc. She retired in 2015 and is now a strategic alliance consultant.
by: Larry Kendall
The Role of a Sales Manager is to Drive Gross Commission Income
It’s straightforward: recruit, retain, and coach.A company owner recently asked me if I had a job description for a sales manager. “Yes,” I replied. “It’s two words. Drive GCI (Gross Commission Income).” It’s as simple as that. The specifics of the job description are three activities: Recruit, Retain, and Coach. If you’re excellent in these three activities, you will Drive GCI and have a successful company. I’ve found this to be true whether you have a productivity business model or a recruiting business model. Let’s look at the specific ingredients in each of the three activities.
RecruitYou will Drive GCI if you have a full house of happy, productive sales associates. Unfortunately, some will retire, quit the business, or feel the grass is greener someplace else. You must recruit to refill these slots as well as to grow the company (and GCI). Recruiting must be a focused, daily activity. Recruiting is a simple three-step process.
- Build a database of the people you want to have in your organization. There are three types: Rising stars. Associates in the business 1 to 3 years and showing promise. Rookies. Top producers and veteran associates. These are easy to identify with their production. Establish a vision for the kind of new people you want and hire to that vision. Get to know them and get them to know you. It is difficult to recruit someone who doesn’t know you.
- Set up Live-Flow (face-to-face and voice-to-voice) and Auto-Flow (mailings, text, email, and social media) interactions. Set activity goals (number of contacts per week/month).
- Live Interviews. Resist the temptation to present your case. Instead, ask questions and identify their goals and challenges. Then, offer a solution to help them get from the life they have to the life about which they dream. Again, set activity goals (number of interviews per week).
RetainYou won’t be driving GCI if your office/company is a revolving door with as many leaving as are coming. Retention is key to driving GCI. Retention is mainly about culture. Have you created a culture of attraction? Are your people happy and productive? If so, your current associates will stay, and others will want to join you. A great way to retain is to recruit from within. In other words, to retain associates, do the same three steps mentioned above in recruiting.
- Database. Now your database is your people (as well as their families).
- Live-Flow and Auto-Flow are now with your people. Get to know them.
- Live interviews are now with your associates. Do you know their goals and challenges? Look for ways to help them get from the lives they have to the lives about which they dream. They will love you for caring!
CoachIncrease GCI by increasing productivity. Be a coach, not a manager. Associates love having a coach. The key to effective coaching is to focus on activities rather than production. When associates do productive activities, their production takes care of itself. In our Ninja Selling classes, we teach the Ninja Nine. These are nine activities that will lead to increased production. These activities become habits. Five are daily habits, and four are weekly habits. 5 Daily Habits (first thing in the morning):
- Gratitude, affirmations, and positive reading.
- Time block your day and your week. Stay on your agenda—don’t open email first.
- Write two personal notes.
- Focus on your Hot List (people who want to buy or sell within 90 days).
- Focus on your Warm List (people who want to buy or sell within one year).
- Customer service calls (call all sellers, buyers, and referrals weekly)
- Schedule two live real estate reviews
- Conduct 50 live interviews (Ninjas don’t prospect. They interview.)
- Update your database and look for property matches.
by: Guest Contributor
It’s a Fiercely Competitive Mortgage Industry: Here’s Why JV Partnerships Win Out for Companies of Any Size
For brokerage firms to survive and thrive, having a long-term reoccurring revenue stream is no longer a nice-to-have, but a must-have. A mortgage joint venture may be the answer.Doing it alone in the real estate market isn’t easy anymore. Competition is fierce, and profit margins are thinning, making it almost impenetrable for many real estate firms to enter the market. Today, it’s not enough to offer clients access to exclusive listings and top-notch marketing services. Real estate companies need to expand their services to include mortgage, escrow services, insurance, home warranties, relocation services, or all of the above. This requires levels of capital and technology investments that aren’t realistic in today’s market for many real estate firms.
A Solid Book of Business Equals SuccessFor real estate brokerage firms to survive and thrive, having long-term reoccurring revenue stream is no longer a nice-to-have, but a must-have. Today, options are yielding varying degrees of success. The traditional approach is through a mortgage-related marketing service agreement (MSA), also called an advertising services agreement. In this type of agreement, a lender hires a real estate company to market its services to the customer base. Over the years, these types of arrangements have faced increased scrutiny by regulators, particularly the Consumer Finance Protection Bureau (CFPB), which enforces the laws of the Real Estate Settlement Procedures Act (RESPA). Aside from the regulatory risk, lenders may come and go in the relationship, leaving the brokerage susceptible to the loss of that revenue. Compliance with MSAs can also be a dicey path to navigate. Run afoul of regulations, and your business could face fines and potentially devastating negative PR. Staying in compliance can be an arduous process, requiring money and time spent filling out paperwork and proving and verifying that you did what you are being paid for. Ink multiple MSAs, and you can spend more time on compliance than closing real estate transactions.
Power in NumbersAnother way of building this revenue stream is through a mortgage joint venture with a company that has the experience, infrastructure, and technology. Together, both companies share in the resulting profits. In our opinion, this has proven to be far more lucrative than a marketing agreement. There are significant benefits to this way of doing business for everyone involved in the real estate transaction. The joint venture partners close more loans, which means more profit; agents can expand their offerings, and buyers have access to more services. Real estate firms that go it alone in a true mortgage banking platform have to either invest a great deal of capital in the business or be a mortgage broker where they lose material revenues and direct control over the customer experience and services. A joint venture model requires much less capital, which frees up money to pursue other growth opportunities. Partnering with a firm that has deep pockets also means the ability to offer customers unique mortgage programs that can expand a firm into new markets and their agents to sell more homes. Those who choose to go the joint venture route also get access to cutting-edge technology that can speed up the entire transaction, which means agents are paid more quickly. Consumers have grown accustomed to easy applications, quick answers, and top-notch customer service, whether it’s via digital or human means. Loyalty is now earned, not a given. Real estate firms that can deliver all of the above stands to benefit more than their go-it-alone rivals.
Own the Transaction to WinReal estate is transactional, meaning repeat business is the holy grail for many real estate professionals. By engaging in a joint venture, real estate professionals can access digital origination, co-branded customer relationship management tools, and marketing resources. While a joint venture can’t wholly mitigate risk, the expertise all of the parties bring to the business certainly can minimize it. A variation on the joint venture model is the consortium venture. Geared toward firms that don’t have enough scale or capital or don’t want to go the full joint venture route initially, a consortium venture is created when a few real estate companies combine and share in the profit based on their percentage of shares owned. Players can be located across town or the country, all accessing the same tools and support of a standalone joint venture, while still maximizing the returns without having to invest large amounts. This model can be an option for a brokerage of almost any size. Real estate transactions are complicated, but when they start to move sideways, it is often related to the mortgage. Unless you are the direct lender, you have little to no control. That’s long been a problem in the industry: you’re always at the mercy of someone else. With a joint venture, that’s not an issue. The real estate firm gets to control the transaction from start to finish. That usually translates into higher retention and conversion of leads and a better customer experience which increases referrals and repeat engagements. This can be the key to a thriving real estate business. Randy VandenHouten is Senior Vice President Joint Venture/Retail for NewRez. VandenHouten joined NewRez in 2014 as Chief Financial Officer of Shelter Mortgage Company Retail division. He’s been with the Shelter companies since 1998 and has extensive knowledge of this industry and the Joint Venture segment. Al Miller is the Vice President, Business Development - Strategic Relationships for NewRez. Miller joined NewRez in 2016 as part of the NewRez/Shelter Mortgage Company team focused on growing our Joint Venture business channel. Miller has been a broker-owner of a residential real estate firm and is a frequent speaker at industry conferences.
by: Steve Murray
Consumer Federation of America Study: New Research Study Analyzes Hidden Real Estate Commissions
With a slew of lawsuits attacking the way commissions are charged, it’s not surprising the Consumer Federation of America has a new report out. We analyze the results.October 28, the Consumer Federation of America released a new research report entitled “Hidden Real Estate Commissions: Consumer Costs and Improved Transparency,” wherein they share the findings of their research buttressed by other historical findings of this topic. Their timing is not surprising given the state and national lawsuits attacking the way commissions are charged and the actual level of commissions. Consumer Federation of America (CFA): For most major consumer services, consumers can easily access information about prices. A large number of services disclose their prices online. REAL Trends (RT): Well, many do, except other professional services like doctors, hospitals, accountants, and lawyers. Go ahead and find their prices online. CFA: Traditional firms that dominate the residential real estate brokerage industry choose not to advertise their commission levels or disclose these levels on their websites. RT: That is because commissions are negotiable between an agent and the consumer. They always have been. And, they are being negotiated at increasing levels as confirmed by the decline in the national average commission rate of between 40 to 45 basis points in the last six years. Also, Redfin, HelpUSell, Assist2Sell, and thousands of other discount brokerage firms make offers of low-cost commission prices every day in a large number of markets, yet they have less than a collective 2% market share in the country. What does that tell us? CFA: Not surprisingly, many consumers do not know that commissions are typically 5-6% of the sale price. In a national survey of a representative sample of 2,009 adult Americans, only 32 percent said they thought that agents typically charged this amount. Even among the 453 who had sold or purchased a home in the past five years, only 44 percent believed that the typical commission rate was either 5% or 6%. RT: Again, how often does someone buy or sell a home? Research says they do it every 8-10 years for most families. Yet, somehow, they are supposed to remember what the commission rate is or was or might be. What was the charge you paid the last time you had your teeth cleaned, or had your taxes done? Do you recall what you paid? CFA: In the United States, consumers pay an estimated 0 billion annually in commissions. RT: That number is too high by about billion, or 42% higher than the likely real number–but heck who cares about doing real research? CFA: In the more recent 2019 CFA survey, the question was asked, “How frequently, if at all, do you think that real estate agents are willing to negotiate their commissions?” Some 33% said, always or most of the time, 46% reported some of the time, and 21% said never or almost never.” This survey also showed that for those who bought or sold a home using an agent in the past five years, 45% would always or most of the time, negotiate, and 37% said they would negotiate some of the time. RT: Their survey debunks their high-level statement. While few brokerage firms or agents publicize their commission rates, a majority of agents do negotiate the commission they charge. This is a fact well known to most brokerage firms and agents. They deal with it every day.
ConclusionI’m sure that the Consumer Federation of America does good work in many areas. But, their historical antipathy towards the residential brokerage industry shows through once again in this release. Their 2019 survey shows that a majority of consumers are aware that commissions are negotiable. And, while it’s true that many consumer product firms publish their prices, most professional practices do not and never have. Again, while it’s clear that real estate commissions are negotiable, when was the last time you negotiated with your doctor, lawyer, accountant or dentist?
by: Steve Murray
Analyzing the Five Publicly Held Real Estate Company Earnings Reports
The five largest publicly held real estate services companies all reported earnings for the third quarter of 2019 and their year-to-date results through September 30, 2019. There were no big surprises. The one interesting thing is that virtually all of them rely on creative non-GAAP (Generally Accepted Accounting Principles) to provide clarity to their results.A high-level look reveals the following:
- Zillow had substantial growth rates in its revenues and its losses due to its home buying program. When one takes out the incremental revenues from the home buying program, Zillow’s core businesses, including mortgage, saw a growth rate of about 8.3% comparing September 30, 2019, to September 30, 2018. That’s not bad, but it’s not a high growth number.
- RE/MAX grew its agent count worldwide by 3.5%, comparing the third quarter of 2019 to the third quarter of 2018. All of this growth was overseas as the count for the U.S. and Canada declined during the same period by 1.9%. The revenues were mostly flat on a year-over-year basis, but cost reductions resulted in an increase in earnings for the period.
- Redfin reported a 70% increase in its total revenues, but this included revenues from its home-buying business. Looking at its core brokerage and services business, revenues grew 19.3%, which is also in line with its growth in closed transactions, which grew 19.7% from September 30, 2018, to September 30, 2019.
- Realogy reported declines in virtually every category of performance, both in closed transactions, revenues, and earnings. They did report an increase of 3% in agent count at its NRT unit, which is an important indicator of the durability of their recruiting strategies. Realogy still had significant positive cash flow during the period, as well. The firm also announced the sale of its Cartus unit while retaining all of its affinity group business.
- eXp World Holdings reported strength across the company with increases in agent and transaction counts, both increasing 66% for both measurements comparing September 30, 2018 results against September 30, 2019. Revenue increased somewhat faster, at 79%. After reflecting non-cash expenses, the firm reported a free cash flow of million for the third quarter of 2019 versus .3 million in free cash flow in the same period a year ago.
What does any of this tell us?Zillow and Redfin are relying heavily on their home buying business to generate above-average growth results. Whether they can scale these up and find a path to profitability and leverage this business with their mortgage and other related settlement services remains to be seen. eXp is still growing its core business faster than any of its competitors. The big questions here are: Can they continue to grow at the current rates of growth, and for how long? And, will they generate enough free cash flow to stay competitive in the race to build the global tech platform in which their main competitors are now engaged? Realogy appears to be turning a corner at NRT, and, with the sale of Cartus, seems to be focused on lead generation activities. Will this lead to regaining growth in their core brokerage franchised operations? RE/MAX has launched a significant effort to build a global tech platform and believes that this development will enable it to regain growth in its most important markets in the U.S. and Canada—whether this works or not is yet to be seen. In an environment of flat housing sales, shrinking inventory, and rising prices along with near-record low mortgage rates will each of them be able to maintain their current growth rates given their current plans? Each faces challenges particular to their business models, but the downward pressure on commission levels, gross margins, and profit margins affect each of them in some direct way.
by: Peter Gilmour
Australia and New Zealand Worry About DownturnWith house prices falling significantly in the major cities in Australia, the inevitable question is, “will the downturn spread to New Zealand in 2019.” The two real estate markets are very different, so we need to examine the fundamentals to see what is likely to happen in each country. In Australia, population growth is strong and supports the demand for real estate. On the supply side, the number of new homes built this year in Australia is expected to drop, which will lead to demand not being met by new construction. This will lead to a shortage of homes for sale and upward pressure on real estate prices. In contrast, there is a growing oversupply of apartments in the upmarket cities of Sydney and Melbourne, which have seen prices drop sharply over the last 18 months. The year-over-year median price decline in Sydney is close to 6% and in Melbourne, around 2%. Unemployment in Australia is declining, and this is expected to support the stabilization of the market and negate any prospect of a crash. Interest rates are always a critical factor in the real estate market, and, as the Australian economy shows signs of softening, historically low interest rates will provide support for property prices.
Comparison: New ZealandIn New Zealand, banks have been offering several competitive fixed-rate deals. About 80% of mortgage debt in New Zealand is on fixed rates, which allows them to structure their finances ahead of any future increase in rates, unlike Australia, where fluctuating rates dominate. Cities of Brisbane, Canberra, and The Gold Coast are showing consistent growth in prices as Sydney investors look elsewhere for better returns. Sydney and Melbourne’s markets are still expected to weaken further in 2019 with tightening lending criteria and the abolition of negative gearing on resale properties. According to the CoreLogic House Price Index, property values in New Zealand have grown over the last year by 3%. Values in Auckland, the major city, have dropped due to high property values, and sellers are adjusting prices downward to get a sale. A key topic is The New Zealand Tax Working Group’s report, which recommends the introduction of a more competitive Capital Gains Tax for residential investment properties. Investors are waiting for the Government to respond to the recommendations. The New Zealand market, however, looks strong with significant value declines less likely. Australia’s GDP has eased slightly in 2019 but is still one of the highest of the international economies at a 2.8% forecast for 2019. The country has not been in recession for 28 years, and the indicators are that this market will continue for another two years, at least.
by: Sue Johnson
Real Estate Industry Faces New Telemarketing Class Actions
A recent slew of class action lawsuits may impact real estate telemarketing.Real estate brokerage firms should be aware of a recent wave of class-action lawsuits under the Telephone Consumer Protection Act (TCPA), which restricts unwanted telemarketing calls and texts to consumers.
The Telephone Consumer Protection Act (TCPA)The TCPA prohibits telemarketing calls and text messages to personal phone numbers listed on the National Do Not Call (DNC) Registry without prior express written consent. It also requires a caller to obtain prior express written consent before using an autodialer to send telemarketing calls or texts, even when the number is not on the DNC registry. The law covers any call or text that solicits the purchase of goods or services, including those asking consumers to buy or list a home or property. These lawsuits can be expensive since the TCPA allows statutory damages of 0-,500 for each call or text made in violation of the act. Plaintiffs often target real estate brokerage firms over individual agents, and a class action lawsuit potentially could cover anyone who has received a call or text from the company over the last four years.
Recent Class Action LawsuitsThe following are a few recent lawsuits filed against real estate brokerage firms under the TCPA:
- RE/MAX Presidential: A Florida resident sued RE/MAX Presidential in a Miami federal court on August 1, 2019, for using an autodialer to send text messages with phrases such as “Save Save Save Now” and “Is your home still for sale?” without her prior express written consent. She is seeking class-action status for her complaint. Her lawsuit follows three other TCPA lawsuits filed against Florida-based real estate brokerages for unwanted text messages through an automated telephone dialing system, one of which has been stayed and another settled.
- Keller Williams Realty: On August 6, 2018, a class action complaint was filed in a California federal district court against Keller Williams Realty, Inc. alleging TCPA violations for contacting the plaintiff on the plaintiff’s home and cell phones in an attempt to market Keller Williams services, without prior express written consent and after the plaintiff repeatedly asked to be removed from the call list. The lawsuit stretches to anyone who has also received unsolicited calls over the past four years from the company.
- Coldwell Banker and NRT: A TCPA class-action lawsuit was filed in a California federal district court on April 3, 2019, against Coldwell Banker Real Estate and NRT, alleging that the plaintiff received unwanted auto-dialed calls from three different Coldwell Banker and NRT real estate professionals on his cell phone, which is registered on the Do Not Call Registry. It alleged that the companies instructed the real estate professionals to make the unsolicited cold calls and provided them with telephone numbers and scripts.
Here are some ways to protect your business against the growing threat of these potentially costly lawsuits:
- Have in place written do-not-call procedures: The procedures should specifically detail how to handle and process DNC requests from consumers and how your company uses both national and company-specific DNC lists.
- Conduct employee training: You should train your personnel on these written procedures, and there should be a process in place to monitor and enforce compliance.
- Purchase and maintain the national DNC list: The national DNC list (telemarketing.donotcall.gov) should be purchased, downloaded, and scrubbed against your database every 31 days. If your company uses outside vendors, you should obtain written verification that the vendor purchases, downloads, and regularly scrubs the national DNC list.
- Purchase and maintain state DNC lists: Many states have elected to use the national Do Not Call list as their statewide registry, but 12 states (Colorado, Florida, Indiana, Louisiana, Massachusetts, Mississippi, Missouri, Oklahoma, Pennsylvania, Tennessee, Texas, and Wyoming) maintain separate registries. You also should become familiar with any state telemarketing laws that may be more restrictive than federal standards.
- Maintain an internal DNC list: Maintain a company-specific list of telephone numbers that your sales personnel may not contact, which should be checked every 30 days against the national and state DNC lists. You should promptly record and honor do-not-call requests.
- Understand what is considered written consent: The Federal Communications Commission has adopted TCPA regulations that defines “prior express written consent” as a written, signed agreement identifying the phone number and notifying the consumer that they are not required to sign as a condition of purchasing any property, goods, or services.
Author BioSue Johnson is the former executive director of RESPRO, the Real Estate Services Providers Council Inc. She retired in 2015 and is now a strategic alliance consultant.
by: Tracey Velt
Back-to-Back Months of Growth Within All Regions a First Since December 2017 – January 2018
- U.S. showing traffic increased by 4.6 percent year over year, the most significant national increase since April 2018
- Homebuyer traffic in all four regions rose for a second straight month
- The West Region saw the greatest increase, its most significant year-over-year jump since December 2017
“September’s activity continued where August’s left off as the beginning of the fall season has gotten off to a slightly busier start compared to last year,” said ShowingTime Chief Analytics Officer Daniil Cherkasskiy. “Although the year-over-year boost for September seems high in the South Region, this can be largely attributed to tropical storm Florence’s presence in the area in September of last year. The Northeast and West regions continue to show higher levels of activity compared to last year, even in the face of the expected seasonal slowdown.”The ShowingTime Showing Index, the first of its kind in the residential real estate industry, is compiled using data from property showings scheduled across the country on listings using ShowingTime products and services, providing a benchmark to track buyer demand. ShowingTime facilitates more than four million showings each month. Released monthly, the Showing Index tracks the average number of appointments received on active listings during the month. Local MLS indices are also available for select markets and are distributed to MLS and association leadership.
To view the full report, visit http://www.showingtime.com/showingtime-showing-index.
About ShowingTimeShowingTime is the residential real estate industry’s leading showing management and market stats technology provider, with more than 1.2 million active listings subscribed to its services. Its showing products and services simplify the appointment scheduling process for real estate professionals, buyers and sellers, resulting in more showings, more feedback, and more efficient sales. Its MarketStats division provides interactive tools and easy-to-read market reports for MLSs, associations, brokers and other real estate companies, as well as a recruiting tool for brokers. ShowingTime products are used in more than 250 MLSs representing nearly one million real estate professionals across the U.S. and Canada. For more information, contact us at [email protected]
by: Tracey Velt
Latinx Homeownership Rate is Fastest Growing in the NationThe trend is the start of a recovery for Latinx households, which were harder hit by the Great Recession because much more of those households’ wealth is in their homes. Latinxs are buying homes at a higher rate than the overall U.S. population, beginning to close a gap between the Hispanic and white homeownership rate that has tripled since the start of the last century. Affordability and racial inequity combined to compound a disparity throughout the past 12 decades. The typical Latinx household in the U.S. earns 75.7% of the typical white household income, and the typical Latinx household wealth is only 12.2% of the typical white household wealth. That means Latinx households carry a far greater share (64.7% vs. 38.1%) of their wealth in their home, which made those families harder hit when home values nosedived during the Great Recession.
Homeownership RateThe homeownership rate gap sat at 25.8 percentage points just four years ago. Despite recent gains, the gap -- sitting at 24.7 percentage points in 2018 -- will take decades to close if the current pace holds. At the start of the 20th century, the gap was roughly eight percentage points. It widened significantly during and after each World War, and again during the Great Recession. Of all the homes foreclosed upon between January 2007 and December 2015, 19.4% were in Latinx communities – an unusually high number when you consider that only 9.6% of all homes in the country are in Latinx neighborhoods, according to a Zillow® analysis. By contrast, 81.2% of homes are in white communities, and they accounted for 66.4% of foreclosures during that time. In 2007, near the height of the housing bubble, a home accounted for 73.1% of the typical Latinx homeowner’s total wealth, compared with just 46.5% for the typical white homeowner. Because their homes accounted for a much larger share of Latinxs’ household wealth, they had fewer outside assets to draw on when home values plummeted, and they owed more than their homes were worth. Most people who went through foreclosure were not allowed back in the market for seven years, which meant many Latinxs missed out on the post-recession rebound in home values.
by: Guest Contributor
Want New Clients? Gather and Leverage the Right DataThanks to online property searches, you can gather and use a lot of valuable information about prospective buyers – if you know where to look. Most prospective home buyers do at least some internet research when looking for properties. In fact, according to the National Association of Realtors, a full 50 percent of buyers found the home they ultimately purchased through an online search. This trend toward online home research doesn’t just result in savvier, educated buyers. It also generates trackable web searches that provide valuable demographic and behavioral data about potential buyers. As a real estate professional, you can leverage this data to create potential customer profiles and generate leads. However, it only works if you’re getting the right numbers, through the right channels, and using them effectively.
Big data means big business for real estateIn any business, reaching the right client at the right time is essential for landing a sale. This is especially true in real estate, where catching buyers and sellers at the exact moment they need an agent is a key to generating business. There are countless companies out there that collect real estate data and offer helpful analytics on those data points. With demographic data from the people who search using websites like Realtor.com, Trulia, and Zillow, you can predict which of those consumers are most likely to turn into future home buyers. These predictions can then inform lead outreach strategies, website features, and marketing campaigns that target potential buyers.
Distilling the data for lead generationLet’s say you obtain data from a real estate listing website. How do you begin to make sense of this massive amount of information? You could spend hours (or more likely, days) sifting through each line of data to figure out which consumers have the most relevant activity to suggest they’re likely to buy or sell soon. Or, you could take advantage of tools that use big data to help real estate agents target leads. Predictive marketing platforms like Buyside and SmartZip are designed to harness the vast amounts of consumer data and analyze it to predict which homeowners are likely to sell soon. While these tools are compelling, they do come with a price tag. Fortunately, with a little bit of know-how, you can access data analytics from free online resources. U.S. Census Bureau data and City Data can help you create profiles of towns and city neighborhoods, and gather demo-graphic statistics of people who live there. Additionally, public property records can tell you how long an owner has currently lived in a home. Knowing this may help you understand when someone is most likely to sell, based on average homeownership tenures in your area.
Balancing data analytics with relationship-buildingWhile the right data may increase your pool of leads, closing deals is still all about building relationships. You still need to develop your reputation as a trusted local agent and provide excellent client service if you want to keep earning new business. By striking the right balance between data analytics and relationship-building, you’ll be well on your way to finding great leads, generating repeat business, and getting referrals from satisfied clients.
Author BioKathleen Kuhn is President and CEO of HouseMaster, the original home inspection franchise. She oversees an organization with more than 320 franchise locations across the U.S. and Canada.
by: Tracey Velt
Building a Great Real Estate OrganizationIn every real estate organization, you have a hard worker, a likable, efficient person on your leadership team that you have nagging doubts about. However, you prefer to push those thoughts away. After all, you tell yourself, they work hard, and everyone likes them. Great, you’ve got someone who fits your culture, but your brokerage can’t truly get ahead until you position that person in the right seat on the bus. I see this quite frequently at brokerages who struggled through the down market thanks to employees who stuck by them—maybe even took a pay cut. The employee wore multiple hats; after all, brokerages were barely getting by. They didn’t have money to hire, so the people in the office took on more responsibility, and now you’re loyal to them.
First Who, Then What—get the right people on the bus—is a concept developed in the book Good to Great, by Jim Collins. Those who build great organizations make sure they have the right people on the bus and the right people in the key seats before they figure out where to drive the bus. They always think first about who and then about what. When facing chaos and uncertainty, and you cannot possibly predict what’s coming around the corner, your best strategy is to have a busload of people who can adapt to and perform brilliantly no matter what happens next. Great vision without great people is irrelevant.No one can predict the changes that will come our way in the industry. But, you can build a team that is ready to capitalize on those changes. According to the book, Good to Great, “The good-to-great leaders understood three simple truths. First, if you begin with “who,” rather than “what,” you can more easily adapt to a changing world. If people join the bus primarily because of where it is going, what happens if you get ten miles down the road and you need to change direction? You’ve got a problem. But if people are on the bus because of who else is on the bus, then it’s much easier to change direction.” Take a good look at the people who make up your leadership team and support staff. Chances are you know the people who aren’t in the right seats. The only way to truly market proof your business is to analyze the strengths and weaknesses of all leaders to ensure they are adaptable and can bring your business to the next level, no matter what changes are thrown their way.
by: Guest Contributor
8 Ways to Manage Yourself During Stressful, Busy TimesWorkplace stress is a reality. But how leaders manage themselves in the middle of the storm is everything. These insights can help leaders—from CEOs to middle managers—successfully navigate the stressors of the modern work environment. There’s no question about it: Today’s workplace can be stressful. The long work hours, the endless flow of information, the competing demands on our attention—all of these factors can make us feel perpetually overwhelmed and out of control if not managed well. The best leaders learn to deal with the conditions and problems that lead to stress in a way that keeps everyone on track. How you behave when times are bad truly defines you as a leader and sets the tone for how others manage the situation. If you create a culture where people fall to pieces when things get tough, productivity will suffer. Here are a few suggestions for managing yourself with grace under stress:
- Eliminate as much stress as you can by being a well-run organization. Work to create a best-odds environment for eliminating problems. Put proper processes and procedures in place for removing avoidable headaches. For example: Plan for disaster by learning from mistakes and fixing the culprits. Identify stress points and think critically about who they impact. What is causing increased work-loads? Use this evaluation to decide where to delegate work and identify team members who might need additional support. Don’t lower expectations. This will only breed excuses and erode performance over time.
- Say no to some requests. This way, you don’t have to scurry around trying to do them and then later explain why you didn’t get them done.
- Learn to prioritize and teach others as well. A big to-do list should not freak you out. Just use the checklist to work in a sensible order, evaluating what is most important. Often, we try to close out small tasks to make room for bigger ones, when we should be prioritizing our to-do list and staying focused on the things that matter.
- Simplify when things get stressful. A good leader can make a potentially crushing workload feel manageable. By taking a calm and methodical approach, you can make a huge difference in helping others stay focused and productive and keep their stress reactions in check.
- Create a culture of calm. Be sensitive to the messages you’re sending out — model calmness when things are chaotic. The things leaders do, both positive and negative, get mirrored. And research shows that the ripple effect of negative emotions is considerably more intense than that of positive emotions.
- Don’t pretend to be fearless. A common mistake leaders make is to pretend that everything is fine when it isn’t. Acknowledging that situations or unfavorable circumstances are real is the best way to build trust with your team and get them to invest 110% on solving the problem. This is not the same thing as getting bent out of shape. You can be honest and calm at the same time.
- Master calming tactics and teach others to do the same. If you feel yourself starting to get overwhelmed by stress, here are a few ways you can calm yourself down quickly: • Walk away. Take a 20-minute break. Go for a walk. • Physical activity is a great stress reliever. Most of the time, a little natural sunlight can make a big difference in your mood. • Take a few deep breaths. Try to quiet your mind intentionally. Opening up the body allows for better blood flow, and deep breathing puts more oxygen in the blood and can help minimize the impact of cortisol, the stress hormone. • Count backward from 10. Do it twice if you have to. Shifting your focus from the problem at hand to a relatively simple task can help you come back to your work with a fresh set of eyes. It also helps your brain reset and refocus.
- Create a best-odds plan for staying healthy. This gives you the stamina you need—both physical and mental—to cope with stress and keep going. Sleep well, eat well, stay hydrated, and generally take good care of your body so you’ll be in tip-top shape mentally.
- Be resilient/learn to reset. Setbacks will happen. Leaders must be able to bounce back quickly and continue to move forward even when things appear to be falling apart. Resiliency is essential as leaders need to have the mental wherewithal to offer support and continue to direct their teams. Being resilient comes from having excellent coping skills, supportive environments with a lot of psychological safety, a strong sense of optimism, grit, and the mental and physical stamina to sustain and move through stressful situations.
Author BioQuint Studer is the author of The Busy Leader’s Handbook (http://www.thebusyleadershandbook.com) and a lifelong student of leadership. He is also the founder of Vibrant Community Partners and Pensacola’s Studer Community Institute.
by: Larry Kendall
Brokers and Agents: The Secret to Finishing the Year StrongHow can you finish the year strong and carry momentum into next year? We have found there is One Thing that most quickly produces transactions. If every sales associate in your company is doing it, revenue, market share, and profits soar. What is the One Thing? It’s Real Estate Reviews. Sometimes they are called Annual Real Estate Check-Ups or Annual Real Estate Wealth Reports. They are simple, easy, and powerful. The best time to do them is in November, December, and January. Real Estate Reviews are a simple market overview, not a full market analysis. They can usually be prepared in 15 minutes or less. Here’s the formula. Who? Real estate reviews are prepared for clients, friends, or anyone who owns real estate. When you’re asked, “How’s the market?”, that’s an invitation to do a real estate review. If you notice a listing or a sale in a friend or client’s neighborhood, do a real estate review for them. What? A basic real estate review shows what’s been listed and sold in their neighborhood (or their type of property) over the past 12 months. You can also include market trends such as days on the market, sales price to list price, supply/demand, etc. If they want more detail, you can prepare a full Comparative Market Analysis. What it’s not. Real estate reviews are not a disguised listing presentation or effort to sell anything. You are merely offering a valuable service that helps them with their most valuable asset. When? You can do real estate reviews any time, but we’ve found the best months are November, December, and January. During the holidays, people reflect on their year and set goals for the coming year. They also tend to have more time over the holidays. Where? Ideally, you want to discuss the real estate review face-to-face. So, coffee, lunch, their home, or your office are the most common places. If they’re busy, drop the review in the mail and follow-up later with a call to see if they have any questions. Why? You do real estate reviews to position yourself as their trusted advisor versus a salesperson. You’re now in the same role as their accountant, doctor, and investment advisor. You’re a part of their trusted advisory team. You are also differentiated as one of only 6% of real estate professionals who do real estate reviews. How? Don’t overcomplicate it. It is simple. Call the person and use one of these three approaches:
- “Would you like to have lunch, coffee, etc.?”
- “As part of my service to you, I offer the opportunity to sit down once a year and update you on the value of your real estate. I’ve prepared a packet of information for you. When would be a good time next week for us to get together?” A variation is, “At the party, you asked me about the real estate market, so I’ve prepared a packet of information for you. When would be a good time next week for us to get together?”
- “I noticed a new listing/sale in your neighborhood, and it made me think of you. I’ve prepared a report to give you an update on the value of your home. When would be a good time next week for us to get together, go over the report, and get caught up?”
- Face-to-Face: 33% of the time a transaction results, usually a referral.
- Phone call – Mail – Phone call: 15% of the time it results in a transaction.
- Mail only: 2% of the time it results in a transaction.
- Email only: 0%
by: Steve Murray
Lessons Learned Along the Way: The Naive QuestionIn January, REAL Trends will be offering a video series entitled Lessons Learned Along the Way. Here’s one lesson that I think is particularly important right now. The Naïve Principle Paul DePodesta shared this at the 2013 Gathering of Eagles. DePodesta was the young, data-driven exec hired by Billy Bean of the Oakland A’s to restructure that baseball team. The back story that DePodesta shared was that Oakland had several years of losing both baseball games and money. DePodesta said that first, he and Billy Bean looked at each other and asked The Naïve Question—How would we be doing things if we weren’t doing things the way we have been? What if we started our planning from scratch and, using our experience, and access to data, we reformulate how we run the Oakland A’s? Real estate brokerage firms have had to do a lot of adapting these past 40 years. There have been at least four different housing recessions since 1979. There were the entry and growing strength of RE/MAX and the 100% commission concept, and the entrance of financial giants from Merrill Lynch and Sears in the 1980s. Then, we had Realogy and Berkshire Hathaway in the late 1990s, and the rise of the web and online listings and resultant portals from the late 1990s to today. Add to that the emerging strength of the systems of Keller Williams, the growth of the number and size of teams, and the rise of very low-cost brokerage models. That’s a lot to deal with since 1979. For the most part, incumbent traditional brokerage firms and national real estate organizations have tweaked their commission splits and service delivery methods to accommodate these changes. Many also focused more attention on core services, such as mortgage and other settlement services, as a way to grow earnings over the same time. We do sense, however, that firms are going to have to do more than that to prosper in the future. How do incumbent firms thrive given what they know about the market, the changes in agent behavior, and these new forms of competition that have arisen in the last three to four years? We don’t see any evidence that the role of the agent has changed, nor do we see any slackening in the use of agents by housing consumers. However, the economics of how brokerage firms develop and support agents has changed. What does one do now? Perhaps it’s time for brokerage firms to take a page from DePodesta and step back, gather data on what is working around the industry (and there are many emerging, fast-growing broker-age firms today) and ask the question—“If we weren’t doing things the way we are, how would we be doing them?” Look for the video series in January for this and other “Lessons Learned.”
by: Steve Murray
The Housing Market, Company Valuations, & Low Interest Rates
Could the decisions being made in the financial and housing markets be déjà vu all over again?First, we get Zillow, Redfin, and eXp getting huge valuations on businesses that have made no discernable profit in their years of existence. For Zillow and Redfin, it’s been over ten years since their founding. Then, we get the entry of iBuyers, who are on the way to buying tens of thousands of homes each year, now followed by Realogy, Keller Williams, and a host of others offering to purchase homes. We also have Knock and Ribbon advancing funds to assist people in buying their first or move-up homes. Just when we thought there might be some sanity, Compass raises over .5 billion to fund the acquisition of agents, teams, brokerage firms, and an enormous tech platform. In doing so, they get a reported private market valuation of .4 billion—more than Realogy and RE/MAX LLC combined. Now, such firms as Divvy, ZeroDown, and Flyhomes are buying homes for people and pursuing a rent-to-own strategy (with some variations) for families who either can’t qualify for a mortgage or lack a down payment, or both. Let’s not forget how many housing-related shows are being broadcast these days, popularizing the buying and selling of homes, and how cool it is to be a real estate agent. Does it seem like there is the same crazy belief as in the past that housing prices have only one way to go—up? Does it remind you of the way it was in 2005-2006? Someone asked me a great question the other day about interest rates. I didn’t have a good, technical answer. He asked, “Is it possible that we’ll see negative interest rates in the United States, as they are now seeing in Europe and Japan?” I responded that I found it hard to believe we would get there, but that I genuinely did not know whether it was feasible in our country.
Think about these truths for a moment:
- Rates are already lower than anyone can remember, and there are plentiful sources of funds from the regulated side of the banking business, and the less-well regulated.
- Despite the low rates, housing sales are mostly flat. We know that much of this is caused by a lack of inventory and critical levels of affordability. Then again, while everyone knows the solution is more housing construction, many local and state governments are doing their best to depress housing construction through rent controls and other measures.
- Housing price increases have calmed somewhat but are still higher than the increase in average household incomes.
- Investors are now pouring billions into the housing market to help people buy, sell, or rent-to-own homes. Other billions are pouring into housing services, as mentioned above.
by: Steve Murray
The Market for Mergers and Acquisitions
As the markets shift, so do mergers and acquisitions. Here are some trends we’re seeing.In the last two months, we assisted two brokerage firms, Joyner Fine Properties of Richmond, Virg., and Heritage Texas Properties of Houston, to combine with two other local firms. In the case of Joyner, it was with a local, strong credit union. In Houston, it was a merger with another local privately held brokerage, Better Homes and Gardens Gary Greene Realtors®. Both mergers were similar in many respects to how the market for residential brokerage mergers and acquisitions has changed in the past two years. As we wrote nearly two years ago, the market for mergers and acquisitions was likely to shift in a new direction. With NRT deciding to forgo large acquisitions for the time being and Berkshire Hathaway HomeServices slowing its pace, the 20-year boom in acquisitions, the price and the terms of such acquisitions were going to soften as well. Many more mergers and acquisitions would be between local and regional firms with a few hybrid investors such as with credit unions or investment firms with a background in residential brokerage like Peerage Capital out of Toronto.
The Biggest ShiftOne of the most significant changes apart from the absence of NRT and HomeServices is that the prices and terms that the market is willing to pay have also softened. With the biggest acquirers out of the picture (for the most part) active purchasers and investors, such as Pittsburgh-based Howard Hanna, have adjusted to both the lessening of competition for premier brokerage firms and the softening of the U.S. housing market. This is not to say that the market for M&A has softened. REAL Trends has had a record number of clients both seeking to acquire as well as those looking for purchasers or investors for their firms. Our advisory work for both kinds of firms has been at record levels for the past two years at a minimum. For those who are looking to exit equity from their brokerage firms or those looking to acquire for growth, we published a special booklet called, Valuing Small to Medium Sized Brokerage firms which covers the topic in some detail and is based on our experience in the market for mergers and acquisitions.
Prices and TermsIt is also important to note that while the prices and terms being offered in the market today are less than they were two years ago, they remain well above those of the 1990s before the entry of NRT and HomeServices. Smart brokerage firms look at both organic recruiting and carefully orchestrated mergers and acquisitions to grow their businesses. We expect the market to continue to be very active for both those willing to purchase or invest as well as those seeking to sell their companies or perhaps exit a part of their equity.
Valuing Small-to Medium-Sized Brokerage Companies
by: Sue Johnson
HUD Proposal Raising the Bar for Housing Discrimination Claims
The Department of Housing and Urban Development (HUD) proposed a rule on August 16 that would make it harder to bring discrimination claims under the Fair Housing Act for unintentional policies or practices.HUD’s proposal is the latest attempt by the Trump administration to roll back the Obama administration’s extensive use of the disparate impact theory in housing and financial services enforcement. Under this theory, a program can be found to be discriminatory if it has a disproportionate effect on a protected class, even if the defendant did not intend to discriminate.
The Current LawThe 1968 Fair Housing Act makes it unlawful to discriminate in the sale, rental, or financing of homes because of race, color, national origin, religion, sex, familial status, or disability. HUD has the authority to enforce the Act against lenders, housing developers, homeowner insurance companies, real estate professionals, and other participants in the home buying or renting process. HUD’s current disparate impact regulation (adopted in 2013) formalized the Obama Administration’s policy that a disparate impact claim based on a statistical disparity is allowable under the Fair Housing Act. It established a three-part burden-shifting test for determining whether the program has an unjustified discriminatory effect:
- The plaintiff must show evidence of statistical disparities involving a protected class.
- The defendant must then prove that the challenged policy or practice is necessary to achieve a substantial, legitimate, and non-discriminatory interest.
- If the defendant successfully proves a justifiable interest, the plaintiff must show that another policy or practice could serve the interest with a less discriminatory effect.
HUD’s Proposed Disparate Impact TestHUD’s proposed rule would replace the Obama administration’s three-step “burden-shifting” approach with a five-step threshold that plaintiffs must meet to prove unintentional discrimination. Plaintiffs would need to prove the following:
- That the policy or practice is “arbitrary, artificial, and unnecessary to achieve a valid interest or legitimate objective.”
- A “robust causal link” between the policy or practice and the alleged discrimination, and that the policy or practice adversely affects members of the protected class as a group, and not just an individual who happens to be a member of the protected class.
- That the alleged disparity has an “adverse effect” on members of a protected class.
- That the alleged disparity is “significant.”
- A “direct link” between the policy or practice and the discriminatory effect resulting in the plaintiff’s alleged injury.
Impact on Credit Scoring ModelsHUD’s proposed rule also makes it more difficult for plaintiffs to advance disparate impact claims when a scoring model (risk assessment algorithm) is used. When the defendant uses its scoring model, the rule allows a defendant to prevail if it can show that it (or a neutral third party) reviewed the material factors in the model; that the model was empirically derived; that none of the material factors is a “substitute” or “close proxy” for a protected characteristic; and that the model as a whole is predictive of credit risk or another valid objective. When the defendant uses a scoring model of a third party that determines industry standards (such as the automated underwriting systems of Fannie Mae or Freddie Mac), the rule relieves the defendant from liability if it can show that it did not determine the inputs and methods within the model and that it is using the model as intended by the third party.
CFPB Hints at Disparate Impact Rulemaking under ECOAOn a separate front, the Consumer Financial Protection Bureau (CFPB) is considering a regulation to revamp its approach towards disparate impact claims under the Equal Credit Opportunity Act (ECOA), which makes it unlawful for any creditor to discriminate against any credit applicant. The CFPB under former Director Richard Cordray often used the disparate impact theory when exercising its supervisory and enforcement authority under the ECOA. But the CFPB’s Fall 2018 Rulemaking Agenda hinted at future ECOA rule-making activity “in light of recent Supreme Court case law”—an apparent reference to Inclusive Communities. Comments on HUD’s proposed disparate impact rule are due on October 18, 2019. Sue Johnson is the former executive director of RESPRO, the Real Estate Services Providers Council Inc. She retired in 2015 and is now a strategic alliance consultant.
by: Tracey Velt
Nationwide Growth for the First Time in More Than a Year
Midwest, Northeast, South and West Regions all Experience Year-Over-Year Increases, Which Could Mean More Buyer Competition is Likely This Fall.
- U.S. showing traffic saw its first year-over-year increase in more than a year with a 3.5 percent boost in activity.
- All four regions saw positive buyer interest in August compared to the same time last year, the first time all regions have reported increases in traffic since January 2018
- The Northeast Region recorded its most significant year-over-year increase since March 2018
“The trend we saw in year-over-year buyer traffic in previous months continued across the U.S.,” said ShowingTime Chief Analytics Officer Daniil Cherkasskiy. “For all four regions, there were more showings per listing this year compared to last year, making it the most competitive August in the last five years. If this trend continues, we are likely to see even more buyer competition this fall.”The ShowingTime Showing Index, the first of its kind in the residential real estate industry, is compiled using data from property showings scheduled across the country on listings using ShowingTime products and services, providing a benchmark to track buyer demand. ShowingTime facilitates more than four million showings each month. Released monthly, the Showing Index tracks the average number of appointments received on active listings during the month. Local MLS indices are also available for select markets and are distributed to MLS and association leadership.
To view the full report, visit http://www.showingtime.com/showingtime-showing-index.
by: Tracey Velt
The One Thing That Matters in Real Estate is Relationships
A subtle shift back to basics is happening in the industry.In my interviews with team and brokerage leaders and sales professionals, I’ve noticed a move away from discussions about technology and toward relationship building. The shift is subtle; after all, I’m constantly deluged with press releases on new technology and information about what the networks are doing in terms of building and providing a technology platform. Stop me if you’re heard this one: Technology is there to facilitate the offline relationship. But, all too often, real estate professionals use it as a crutch to form “fake” trust. Let me tell you a secret; no one trusts you just because you post on social media and reach out through text messaging. But, social media, text messaging, and online contact can help you build trust quicker once you do meet in person. Brokers work to build trust with their agents. Real estate professionals work to earn trust with consumers. Here are some activities brokers, team leaders, and agents are telling me they are doing to build relationships.
- No lunches alone. For brokers, it means lunch with an agent, manager, ancillary service provider, or recruit every weekday. These one-on-one, or small group lunches, create a culture of sharing, thus building relationships that transcend business.
- Prospecting phone calls. Successful brokers set aside one or two hours each day to recruit new agents. Phone calls lead to in-person meetings which leads to connection. For sale associates, calling five to 10 people from your database each day and offering them information of value shows you care.
- Video emails. I know a broker who sends out personalized BombBomb videos to prospective recruits. In the videos, he addresses the person by name, offers a personal comment, and offers something of value to the recruit. It’s more personal than a phone call and makes it easier to build a relationship.