Practicing real estate is a second career for many. It is for me. Prior to getting my real estate license, I was in the printed paperboard packaging industry selling folding cartons to national consumer products companies.
I sold boxes to companies who manufactured everything from auto parts to toothbrushes. It was a pretty demanding job, but I learned a great deal about selling and building strong customer relationships. However, it was not going to last forever.
In the early 2000s, due to changes in the economy (and my desire to find a more challenging and fulfilling professional opportunity), I decided to change careers and entered the real estate profession.
Fortunately, the selling skills I learned in my previous occupation allowed me to pretty much “hit the ground running.” Unfortunately, possessing the ability to sell is not one of the prerequisites to obtain a real estate license in this country.
Selling: The heart of the real estate professional
I want you to understand that the heart of what we do as real estate professionals is selling. Not only do we sell real estate, but we also sell our expertise, our education, our experience and ourselves to clients.
Clients benefit from our know-how and can-do attitude, and they lean on us to guide them through their real estate transaction. Regrettably, not all real estate agents are successful, and a large number leave the profession after their second year in the business.
The real estate industry is notorious for its turnover. It may be because agents don’t realize what they are getting themselves into and the work required to be successful, or they are unable to survive on a low income after they receive their real estate license.
According to the 2019 National Association of Realtors Member Profile, the median gross income for a Realtor has remained at less than $50,000 for the past several years ($41,800 in 2018).
Fifty thousand dollars is the median income, meaning that more than 1.1 million agents are making less than that amount. Some are making below the U.S. poverty level ($12,760 for a household of one; a household of four is $26,200, per the U.S. Department of Health and Human Services 2019 numbers).
This statistic is pretty scary when you think about it. So, why is the industry turnover so high and the income level so low? I truly believe the real reason is that a large number of real estate agents have no idea how to sell.
Selling is both a science and an art. The basic concepts of how to approach prospects, identify wants and needs, effectively demonstrate how to meet those wants and needs, and closing the deal are at the heart of real estate.
Many call this the “A.I.D.C.” — approach, identify, demonstrate and close. I could not have reached the level of success in residential real estate sales if I didn’t know how to frame the selling process. I still use these four principles in recruiting agents to our company and in hiring new management talent in our brokerage operations.
Early on in my selling career I found a great sales training company as well as a sales coach who taught me not only the A.I.D.C. method, but, more importantly, how to make it an integral part of my system to procure new business. I learned methods in cold calling, lead generation, client management and after-the-sale follow-up that still benefit me to this day. I would not be where I am today if I had not taken those classes many years ago.
In my third year as a real estate agent, I went through a comprehensive sales training program geared toward selling real estate in a highly competitive market. The program I chose was specifically designed for residential real estate agents and provided specific ways to increase business through a systematic approach. What I gained from that program became the backbone of how I found opportunities for new business.
I have also seen and listened to other selling experts at national, state and local Realtor association conferences and other industry events. It is pretty amazing what you can learn sitting in a one- or two-hour meeting or class taught by someone with a new perspective selling properties or working with buyers. Look online, or ask your fellow agents or managing broker for training opportunities where you can sharpen your sales skills. You can never have too much training!
In my book, “Do You Have a Minute? An Award-Winning Real Estate Managing Broker Reveals Keys for Industry Success,” I outline eight key points on selling in our industry and how each one can help you grow your business. Let me share these with you:
1. Recognize today’s real estate selling environment
Selling is not an event, but a process. It also is not an art, but a science. So many factors come into play in selling. The real estate industry is ever-changing. Being well versed in current national and local real estate market conditions, industry trends, technology, federal and state governmental regulations, and other issues allows agents to be in the best possible position to sell their value proposition to the client.
My subscription to Inman is one way I stay informed on the latest industry news, reports and tools that can grow my personal real estate practice and expand our brokerage in the local area.
2. Know your sales goals, and measure your performance
You need to set specific goals to get where you want to be, and you must track your progress along the way and make improvements where needed. You should have a section in your business plan that quantifies your sales goals for the next 12 months. You can read my Inman column from late last year on creating a winning business plan here.
3. Discover and listen to your client’s needs
You cannot sell anything to a client if they do not have a need for what you are trying to sell to them. Identifying the “pain” a client has regarding their real estate needs can move you ahead of your competition.
If you can show the client you can sell their home for the highest amount in the shortest period, you will probably win them over. The same holds true for a buyer who is looking for a specific type of home or neighborhood.
You also must be able to listen to your client. Many opportunities have been lost when an agent did not hear what the client needed.
4. Present yourself as a consultant, not a salesperson
As a real estate professional, you are a consultant, not a salesperson. In your efforts to acquire a new listing or a new buyer, you need to represent yourself as someone a prospective client can see providing them with advice and wise counsel through the entire real estate transaction process.
You are the expert who can find solutions and guide them from start to finish. You should always come across as non-threatening and easy-going. Be natural in how you relate to the prospect, but be professional in your presentation.
5. Learn your local real estate market
All real estate is local. I cannot over stress the importance of agents knowing the state of the local real estate market. You should be well-versed in areas of your city, county and region that are selling well, as well as the other areas that are underperforming.
What are the trends among the properties sold during the past six months, the past year or two, and what direction is the market heading? A good agent will know absorption rates, current property tax rates and impact fees, the latest new construction projects, proposed residential developments, etc.
6. Know your unique value proposition
Your value proposition is probably the most important element of selling real estate, especially as the market continues to evolve and adapt to numerous technological and generational changes.
You are one of many real estate agents in your market. Your unique value proposition is what makes you stand out in the crowd. It differentiates you from your competitors and demonstrates how you are different, superior, and most skilled in offering buyers and sellers the highest service in the sale or purchase of a home.
Your value proposition lies at the heart of how you market yourself and your services. It is the key to your success as an agent.
If you have a strong value proposition, you will find that your business will grow as others will want you to list their home or have you assist them in finding their next one.
What is your unique value proposition? Think about it. Take the time to develop a very succinct one, and then make sure you communicate it to your prospects as you seek out new business.
7. Don’t promise what you can’t deliver
If you tell a client you can get their house under contract within 30 days, you better have a signed purchase and sale agreement in hand before the clock strikes midnight on the 30th day.
A cardinal sin in selling is when a salesperson promises a client he or she can accomplish something but cannot deliver on that promise. I always obey the adage, “It’s better to under-promise and over-deliver!”
I believe one should always be upfront and honest with clients. Many variables in our industry are out of our control. If you under-promise a client, but over-deliver for them, you will not only keep your clients happy, but you will probably also see them become a client for life.
8. Accept rejection as a part of the selling process
In any type of sales, a salesperson will receive more rejections than orders. The same is true in real estate. Rejection happens and is part of the selling process. Be prepared for it. Train yourself to handle and treat it as a necessary step to get to the next opportunity. Many sales trainers say rejection gets you closer to a “win.”
When a prospective buyer or seller is not willing to work with you, it rarely has anything to do with you personally. Set emotional boundaries, so you are not impacted by the prospect’s rejection. When they do say “no” to you, remember your professionalism, and be courteous to the prospect. You never know; they may seek your services in the future.
After this many years in real estate, I believe that I made a good decision to change vocations.
In my first year, I closed enough transactions to earn the “Rookie of the Year” award at my real estate firm. My production increased year over year, and I was blessed to see the fruits of my labor with millions of dollars of real estate sold, all involving happy and satisfied clients.
There’s no doubt in my mind, though, that I owe much of my success to one crucial skill — my ability to sell. Could I have enjoyed the same level of professional productivity if I had not had the proper sales training early on? Absolutely not. It’s been that important to me.
To safeguard against becoming one of the “many fallen” in the real estate profession, you must be willing to hone your selling skills and do so on an ongoing basis. If your broker is not providing you with the necessary training to “hunt, kill, and drag home” new business, you need to find other avenues to learn how to do it. If you don’t, you will find yourself looking for another line of work.
John Giffen is Director of Broker Operations for Benchmark Realty, LLC in Franklin, Tennessee. He is the author of “Do You Have a Minute? An Award-Winning Real Estate Managing Broker Reveals Keys for Industry Success.”