They say the easiest way to succeed in real estate is to find something to sell to agents because, given the chance, we’ll buy anything that might help us get a little leverage. Here are four things that, against what seems like conventional wisdom, we need to stop buying.
They say the easiest way to succeed in real estate is to find something to sell to real estate agents. We will buy anything that has a chance to get us another sale or help us “leverage.”
But here are the four things you don’t need to buy in 2020:
1. Custom-branded closing gifts
Per the IRS you can only deduct $25 on a closing gift. So, you stick a logo on it and now it’s advertising — you can deduct the whole cost! What a crafty loophole. Unfortunately, it also makes you forfeit all authenticity and sincerity when you give someone a “gift” that has your logo on it, and when you give the same standardized gift to everyone.
If someone is at the point of purchasing a house, they’ve probably already got arrangements for a cutting board handled.
One of the most expensive things you can buy is someone else’s opinion.
A coach‘s value is largely in their organization of the ideas and strategies that are already out there.
If you think you need a coach for their ideas, read some books, listen to some podcasts, watch some vide os — that’s where they got their ideas. If you think you need a coach for accountability, get an accountability partner or tell your spouse to help you save $1000 a month by busting your chops when you don’t do the things you need to do.
If you think you need a coach for structure in your business, find a mentor or look to other successful agents to model their setup.
If you’re willing to do your homework and set up true accountability for yourself (understanding and believing in your why) you can give yourself better advice than any coach — and you’re free!
3. Referral leads
OK, this is an addiction you’ll need to “ween off” instead of going cold turkey. Selling leads must be the most profitable line of work in our industry right now.
Let’s say you need 10 sales next year to hit your income goals. You don’t have a plan, or a sphere, or money. Your choices are to grind it out the old fashioned way (open houses, FSBOs, door knocking, networking, etc) or take on a bunch of referral leads. The latter seems easier.
But you don’t need 10 of those, you need 15 because you pay out a third. And it’s not really 15, it’s 20 because they’re a lower price point than the market average.
Then, you hit that goal and sell 20 homes and try to expand your business next year. But you just hit your income goal, and you didn’t make enough to get investable money — so you just up the lead flow and try to hit 30.
The problem is, now you’re too busy (these leads still close at about a 2-3 percent clip, so there’s a ton of lost time) to convert as well as the hungry agent you were a year ago. You’re not as quick on the phone or as starved for the business.
You’re missing leads, and you struggle to reach that 30 mark. You can’t take on more business, you can’t afford to hire an admin or cold caller, you can’t afford to market — you’re officially stuck on a plateau.
Grind it out, invest in yourself whatever you can, whenever you can, and control your own destiny. Don’t take on a strategy you can’t grow with. If you have to take some referral leads to get started out, that’s OK — but if it’s a substitute for building your own business it won’t work out well.
The term is almost as overused as “disruption” in real estate. Don’t get me wrong — there is value to being able to scale your business by not doing everything yourself.
Just take a hard look at the “leverage” you’re buying. Many agents are buying lifestyle when they believe they’re buying business leverage.
It’s taught to us very early in the business. “If you can make $100 an hour selling real estate, why would you mow your lawn when you can pay someone else $20 an hour to do it for you?”
It’s a great principle, but that follows the assumption that every time you pay for help, you’d replace that time with active selling hours. Are agents really paying for lawn care, cleaning services, delivery meals and groceries so they can add 20 hours of work to their week and not have any obligations to their families?
No, they’re not — they’re using that extra time to do a little more work, but mostly to enjoy their life and sleep more.
Don’t leverage your personal life in exchange for working hours. Leverage your business activities to become scalable and leverage your personal life to improve its quality.
If you spend your money wisely in 2020, you’ll find your goals become more achievable, and you’ll be better set up for growth.
Make your year about being more of a business and less of a customer.
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