Exclusive Mike Ferry Addresses NAR VerdictTrevor Black
Mike Ferry Addresses the NAR Verdict
(Burnett questions answered; Burnett v. NAR et al,)
Most of you, and I’m sure all your brokers have heard about the startling and big news that came from Kansas City, Missouri, last Tuesday, where the verdict came in on the big lawsuit that has been pending regarding commissions for virtually probably 8 or 10 years. So I want to suggest to you that if you want to update yourself on it, and I quite honestly recommend that everybody should be updating themselves on major legal issues that are taking place in our great industry. I would go to Inman News because they seem to have the most updated and good opinions as to what this is all about. NAR, our National Association of Realtors, Berkshire Hathaway Home Services and Keller Williams, two of the largest Real Estate companies in the world, were found guilty by a jury and they were given a fine of $1.7 billion in a class action lawsuit about commissions.
I wrote the following. Don’t panic. It has nothing to do with what is you’re going to do today. All these organizations have already stated they’re going to appeal this case, which is certainly understandable. And I wrote it could take several months, up to even several years for this to be settled. So it’s business as usual. And I think one of the hardest parts about being a professional realtor is that we get caught up in high emotions and a lot of panic and drama, in most cases, doesn’t apply to what we’re trying to accomplish, which is to help a buyer buy a house or a seller sell a home.
I’d like to read to you, if I may, a message I sent last Tuesday when the verdict came in, I sent this message out virtually, probably within two hours, to all of our coaching clients. And I think the message applies to almost all of us. But I’ll start with saying to you, you know, we have a very productive and important industry that is a major factor in keeping the North American economy, US and Canada’s economies running at a vibrant pace and in most cases quite smoothly. So we are very important to the world in terms of what we do. I know at times I’m sure that there are Real Estate agents that are not doing as well as they would like. And I think the times we’re involved in today is a reflection of that.
I have never been a big believer in Real Estate recessions. What I believe is that there are periods of time when we, as an industry, are affected by economic factors that we have no control of. We can’t control the interest rates. We can’t control what our governments in US and Canada decide to do. What we can do, though, is do our job at the highest level possible every day, in spite of some of the decisions that affect the economy. But I also believe, and I want you to think about this. I also have believed for years that if we activate a big group of great people, in this case, 1.5 million or so Real Estate agents in the US, and we all upgrade and do our job at even a little bit higher level. We’re going to change the face of the economy, because we will be finding the people that have to buy, and we’ll be finding the people that have to sell.
I saw a video that was sent to me yesterday, and it was an interesting video because the fellow speaking said, “I’ve been involved in five different coaching situations.” He said, “I’m involved with Tom Ferry today.” which is my son, as most of you know, and what I love about it is the social media and technology which allows me to work less and do more. I used to be involved with Mike Ferry, who I loved as a speaker and as a coach, but he taught traditional things like I should go out and find buyers and sellers.
Well, you look at the economic times we have today. If you’re on social media and relying on technology to bring you business, it’s going to be a tough several months because there’s nothing in the horizon that says that it’s starting the first quarter of next year. It’s going to be dramatically better than what we’ve experienced for the last 12 months. So my attitude has always been the same.
There’s three ways to get business. We can wait for it to find you. And if it’s not finding you, guess what? You’re in trouble. Or we can buy the business through advertising, promotions, branding, buying leads off the internet where the conversion rates are generally very, very low. Or we can take that old-fashioned traditional approach of Mike Ferry and go out and find business, because there is business in every community in North America being done every day.
But the problem is, the major portion of all the agents in the US are buyer-oriented, and the buyers are tougher to sell today because of the economy, interest rates, the uncertainty of what’s going on.
I’m very confident that the clients we work with are going to continue to do better than ever, and I send out reports on a regular basis to our clients saying, here’s the names of five agents and here’s what they did in the last 30 days during this quote unquote, recession we’re experiencing. So here’s the letter I sent to our coaching clients. I’ll read it to you. “I’m sure all of you have heard the big news about the verdict yesterday in Kansas City.” And then I wrote in capital letters, “THERE’S NO REASON TO PANIC”. This case will be appealed and could take months and months before it’s finally determined or even ever settled. In the meantime, I’m going to suggest the following to all of our coaching clients.
1) Consider training 2 or 3 of your team on how to become strong listing agents.
First, if you’re a team leader or you’re a team member, a buyer’s agent, I would consider as a team leader.” (And a lot of you are team leaders) “Consider training 2 or 3 of your team on how to become strong listing agents.”
Why? Well, the number of buyers in the market that can afford to buy with high prices, high interest rates is less and less. So let’s train some of the agents that are representing buyers on a team to go out and become listing agents because sign calls, ad calls, etc are a less expensive and a better method of receiving leads than buying them off the internet. And then I said, if you have, for example, four buyer’s agents, maybe consider selecting one or two and start training them the process to add to your listing inventory.
The most important thing that I tell agents and have for the last probably 25 years, you need to be a strong listing agent to have a long-term career in Real Estate. It’s almost impossible representing buyers to have a long-term career, because every fluctuation of the economy affects a potential buyer buying. But those of us that control the inventory, there’s always going to be a need for that inventory we have called listings. There’s always going to be demand of some type. If you have five to seven listings in inventory at this time, and there’s a limited number of buyers in the market, and you control the major portion of the good homes that are for sale, they got to come through you to make a purchase.
2) Everybody signs a buyer-broker agreement EVERY TIME
Then I wrote down second, in 1970, my broker had everybody in the company sign a buyer-broker agreement every time before we were allowed to put a buyer in the car. That was 1970, and I talked to probably 25 agents in the last week and say, “You do use a buyer-broker agreement, don’t you? Please? I hope you say yes.” And they all said “No.” And I said, “Well, if you want to be compensated and have a much better chance of closing the buyer, you have an agreement between you and the buyer.”
Now, remember, when you get a buyer-broker agreement signed, it obligates them to work with you, but it also obligates you to work with them, which is why prequalifying a buyer is so important. Do you want to spend several hours to several days with this person? So I wrote down, before you put a buyer in your car or take them into a home, get a buyer-broker agreement signed. I’m sure if you’re an agent working for a broker today, your brokers will smile and agree. It’s called good business and it’s called common sense. My suggestion to each of you and your buyer’s agent is that you have a buyer-broker agreement signed every time before the property is shown. It adds a level of professionalism to the transaction, and it gives you a certain degree of protection in terms of the commission that you’re trying to earn. But then I said to my clients.
3) Have buyers agents on your teams, but train them to prequalify 100% of the time
Third, if you have buyer’s agents on your team, I would start training all the buyer’s agents that represent buyers in your company. So if this is a broker or a team leader, anybody that works with buyers start training them. How to prequalify a buyer. We don’t go on listing presentations without prequalifying a seller. We wouldn’t consider it. We wouldn’t do it. We have to take that same process to a buyer. I would then start training them on showing techniques. Outside of this is the living room, which is not a technique. It’s in most cases, it’s just really a poor thing to say to a potential buyer. And then we have to show them and teach them how to handle objections and close effectively for the buyer. Training buyers agents. Training agents that represent your company with buyers is as important as anything we do.
And then I wrote down last on this little email I send out. If you want to keep yourself updated as to this court case, I have found, and I mentioned this earlier in my news, seems to be the best and most reliable source for keeping all of us updated and aware of what’s going on. Then I wrote down once again in capital letters “DON’T PANIC, it’s going to be contested. It will take a long time for this thing to be ironed out. Keep doing your job at the highest level. And remember, no matter what the circumstances are in your marketplace today, keep going … there’s a lot of business and a lot of listings to be taken.” Thanks for watching Mike Ferry TV. See you again next week.