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With the hectic nature of our business, sometimes it’s easy to lose focus on what’s important. There are certain fundamentals and activities that most successful agents focus on to ensure continuous and systematic growth.
If your business is drifting or spinning out of control, it’s always a good idea to get back to the basics. The following is a list of 10 fundamentals that lead to success in real estate.
1. Establish a clear set of goals
If you don’t know where you’re trying to go in your business, you’ll never know if you’re headed in the right direction. On the other hand, if you establish goals that are simple to understand, that have a clear timeframe and that are measurable, you’ll have a better idea of the steps to take to achieve those goals.
Here’s an example of how to break your goals down to basic daily activities:
Imagine your goal is to make $120,000 for the year. Now imagine (to make the numbers easy for this example) that your average net commission is $6,000 per transaction. This means you will need to close roughly 20 transactions this year to meet your goal.
If your averages are that 50 real estate-related conversations lead to one transaction, then you know that you will need roughly 1,000 conversations (20 transactions x 50 conversations per transaction) this year to reach your goal of 20 transactions and $120,000 for the year.
Dividing the 1,000 conversations by 12 months, then we will need roughly 84 conversations for the month, 21 per week, and just over 4 real estate-related conversations per day based on calling 5 days per week.
The first fundamental of real estate is having a clearly defined set of goals and objectives for your business. Start here.
2. Be the market expert
Your business is real estate, so make sure you know everything possible about the factors affecting the market. Immerse yourself in understanding the key metrics of your area.
Understanding and being able to communicate sales and market details like the following will give you the ability to add the most value to your current and potential future clients. Make it your goal to know:
- The average sales price in your area
- The average price-per-square-foot in your area
- The average days on market for sales in your area
- The current inventory of homes for sale in your area compared to the previous month/year
- The homes that have recently come on the market or been sold in your area
- Upcoming development project details
When you are able to help your customers understand the market and interpret how it might impact their transaction, you give them the confidence to trust you and to make an informed decision.
Study your market on a regular basis to position yourself as the expert.
3. Build a lead generation strategy
Leads are the lifeblood of our business, and if you don’t have opportunities coming from multiple sources and directions, your business will struggle to grow. Your leads can originate from:
- Your sphere of influence
- For sale-by-owner listings
- Expired listings
- Circle prospecting
- Open houses
- Direct mail
- Email campaigns
- Paid online leads
- Other prospecting methods
Whichever method you use — and ideally you’ll use several of them — you must establish a consistent flow of new customers into your business to develop new client relationships and close more deals.
4. Nurture your leads
Once you’ve developed a strategy for attracting new leads, you must follow up with those leads to move them from a cold lead to a sold client.
Set up drip campaigns that will automatically email information about the kinds of properties they are interested in and keep them updated about new listings or sold properties that might impact their decision to buy or sell.
Systemize your communication with these leads through the use of a CRM to notify you when it’s time to follow up with a customer. Having a consistent and automated process of adding value and communication with your leads is vitally important if you are looking to grow your business.
5. Communicate consistently with your past clients
More than 90 percent of homebuyers, surveyed at the time of their home purchase, say they would use their buyer’s agent when they decide to sell in the future. Surprisingly, though, only about 13 percent of sellers list their homes with the same Realtor they bought from when they decide to sell in the future. Why is this?
It’s because the selling agent stops communicating with the buyers, and when the time comes for the previous buyer to sell her home, she has either forgotten the agent from the purchase or the lack of communication has soured the relationship.
Set to-do’s up in your CRM or calendar to remind you to check in with past clients. Give them updated valuations of their home at least annually. Stay connected, and you will be the agent of choice when the time comes for them to sell.
6. Build a database and consistently communicate with the people in it
Your database is the core of your business, and consistently communicating via email to your database is essential for growth. Build your database with past clients, potential future clients, sphere of influence people, service people, and anyone else who can benefit from the value you’ll provide.
Once you’ve built the list, email a newsletter with information on upcoming community activities and featured properties at least monthly — but ideally weekly.
The consistent communication to your database will keep you top-of-mind not only for their real estate needs but also when the potential to send you a referral arises.
7. Focus on real estate-related conversations
If your business is not where you want it to be, then having more real estate-related conversations is the answer. Many times, we get caught up in settling for email communication to our database. Although it is important, nothing replaces one-on-one conversations.
Conversations lead to conversion. Initiate conversations with new leads, past clients, friends, people you’re nurturing, the people who provide services for you and anyone else you encounter in your daily routine.
If you boil business growth down to one activity, having real estate-related conversations is the most important activity for business growth.
8. Prioritize relationships
When I started in the industry, real estate was transactionally focused. Today, however, relationships are key, because if people know, like and trust you, they’ll want to do business with you, and they’ll gladly refer other people to you.
Spend some extra time at lunch with a past client. Send a thank-you note for entrusting you with their business. Make a donation to a charity they love in their honor. Call just to check in on them.
Relationships matter. Focus on deepening relationships, and the fruits of those relationships will take your business wide.
9. Reward people who give you referrals
Top producers usually point to referrals as a crucial part of their success, so generating referrals must be a key part of your business.
Start by rewarding those people who share a referral with you so they’ll be more likely to provide additional referrals in the future. Send a handwritten thank-you note that acknowledges the referral and communicates your appreciation. Here’s an example of a thank you note to someone who refers a customer to you:
Thank you so much for the trust you’ve placed in me by referring (Name) to me. I’ll make sure I treat them like family by providing the best service possible. I appreciate you keeping me in mind when your friends want to buy or sell real estate, and please let me know if there is anything I can ever do for you or your family.
Gifts are always memorable as well. Send gift cards, event tickets or any other unexpected items to let your referrers know how much you appreciate their efforts on your behalf, and they’ll be much more likely to do it again in the future.
10. Focus on sellers
The day you shift from primarily working with buyers to primarily working with sellers is the day you shift from being a salesperson to running a business. What we focus on expands. Are you focusing on buyers or sellers?
Remember, if you control the inventory, you control the market. Understand that if you have listings, you will have a steady flow of buyers coming into your business as you market the listings. The shift of focus to sellers versus buyers is fundamental for your long-term success.
Determine whether you’re currently addressing these fundamentals and whether you’re spending enough time on each of them. If you’re missing any of them, work on them one at a time to put them in place. As you focus on these 10 fundamentals, you’ll improve your focus, and you’ll consistently grow your business.
For a few more handwritten note examples and templates, click here.