Methods to Build a Real Estate Business

Welcome and good morning to Mike Ferry TV … it is the week of January 27th. One month down … we have 11 to go to make 2020 … hopefully … your best and most productive career year to date.

I really believe that anybody watching our Mike Ferry TV … and we’re very lucky to have thousands and thousands of people watching … anybody that’s watching that makes their decision here that they’re going to have a great year.

What I want to do today is take a few minutes and talk to you about our Production Retreat that we did 2 weeks ago in San Diego. We had … again … I think we had 1,890 people there … just a few under our goal of 1,900, which the room holds, and we started that Retreat on a little different note. What I did on day one … about 10:00 in the morning … I said … and I want to read to you … Let’s look at some of the methods that you and I can use to build a Real Estate sales career and business. They all work to a certain degree … some work a lot better than others … and you have to choose, first of all, the goal you’ve set for productivity. I’m assuming every one of you has a goal for productivity set and in place.

“I want to do X number of deals, which translates into X amount of dollars.” You have to choose the goal you’ve set … be very specific about that goal … then a line … the methods of doing business with that goal.

If we look backwards, say 5 … 10 … 15 … 20 years … the number of options you had for attaining business were somewhat limited. Those have changed. Whether it be technology … or good thoughts … or competition … creating momentum for us to do new ways of doing business … now I’ve come up with about 10 or 12 different paths you can take.

I want you to watch this carefully. I want you to listen carefully. I want you to take a lot of notes. I want you to rewind and watch this again … maybe a couple times today … and then I want you to define the path of material that you’re using … and does that path match up with the goals that you’ve set? Very, very important.

No order of importance … but let’s go through what I told the crowd about at the Production Retreat 2 weeks ago.

The most common thing often used in our industry today and has been in the last probably 50 years … the most common of doing business is waiting for someone to find you … to call you … to locate you … and that is because you don’t know how to find them. This is based on the word “hope” … “I hope somebody is looking for me” … “I hope somebody responds to something that I’ve put out there into the universe” … “I hope somebody chooses to walk in and ask for me, Mike Ferry, to list or represent them on purchasing a home.”

The most common thing in Real Estate is waiting. It’s also the least productive thing you can ever do, which is sit and wait. So, if we are thinking that people are looking for you … you’re probably dreaming a lot … and that dream is going to become a nightmare financially in terms of production. So, the most common thing often using in our industry … waiting for someone to find you because you don’t know how to find them. Let’s focus the next 60 days on looking at the different skills we need to learn how to find people to want to buy and sell Real Estate. Our job is to help people buy and sell Real Estate … anything else we do is outside of the parameters of what our job is.

Number two … taking the normal … and I’ll use the word “normal” … passive … nonrejection oriented approach to finding business. Salespeople live for the rejection … Real Estate people don’t live for rejection … they can’t handle it because they’re not salespeople. You’re a salesperson first … second … third … fourth … and fifth … and if you don’t believe that, say to a Buyer and say to a Seller, “What is my job?” and they’ll say, “To sell me something … to sell my house … to sell me a house.” They’re looking for salespeople.

Salespeople understand the amount of rejection that goes with the job. In our industry, we often teach a lot of passive … very passive … nonrejection oriented approaches … open houses. I mean … let’s be honest … how often do you get severely rejected holding open house? Your geographic farm … passing out flyers … passing out pumpkins … giving away a free bike … you get very little rejection. Doing mass mailings … very little rejection.

Here’s what I wrote … “They’re very time consuming … generally a very low return. Great for agents who want to maintain production below 8 to 10 transactions per year.”

Third method of getting business … putting together a massive branding and/or marketing campaign … so everybody knows who you are with the hopes that they will, of course, call you. It’s expensive … time-consuming … and very difficult to measure the results of a massive branding and marketing campaign. I strongly recommend that you stay away from that … unless you’re making $500,000 or $600,000 a year and want to allot 10% to a branding/marketing campaign.

Fourth … purchasing leads off the internet … very common … very normal in today’s market … very low conversion rates on most of these leads … at a very high cost … generally Buyer-oriented versus Seller. Now, you have two choices … you can list property, or you can sell homes to Buyers. Many of you cross back and forth and can’t decide … you take what’s available that pops up in front of you.

The agents that are earning the highest amount of business in Real Estate are Listing Agents. During the Production Retreat, I put together … and this was very difficult, so I will smile when I say it … what we called our “Top 10 Agents from the Last Decade” … 2010 to 2020. There were 10 wonderful salespeople … 8 of them were at the Retreat … 1 was on vacation with her boyfriend in Australia … 1 was caring for her husband at home.

What’s interesting is … they all do buy some Buyer leads off the internet that they give to their Buyer’s Agents, but they teach them how to convert … and they all have a 10% … 11% conversion rate … versus most of the big companies that offer leads off the internet … 1% conversion rate … very expensive.

Next, I wrote down letter “e” or number five … using the various social media platforms … primarily used for advertising yourself in some form or fashion. Again, it’s not expensive to use social media platforms. It’s just very difficult to measure any return. So, you can have your face all over LinkedIn and Facebook, but how do you know it’s doing you any good? You notice a lot of the conversations … from 3 to 5 … 7 years ago … about social media was the answer to all your problems. You notice most of those have been dispersed … disappeared … and dwindled on to almost nothing? Because the truth is … it isn’t going to be the answer that most people thought it was.

I wrote down next … working referrals only. Brian Buffini has a great program for working referrals only. It generally requires a substantial database if you expect to get a reasonable return. The good advantage, or the big advantage, or a database type business … low rejection. So, if you have 500 … 750 … 1,000 names in your database … these are people that know who you are and you know them on a first name basis … and you talk to them a lot … and you offer them good information … and you’re a resource for the Real Estate industry in their community. Then you’re going to probably get some pretty good business. We recommend that in 2020 … 30% to 35% of your total revenue should come out of your database.

Next method … building a team … key word … without strong personal production, which is the model that most companies teach today … whether it be build a down-line, build a team, get a group of people, have them do all the work and you’re going to make all this money. I have to tell you … I’ve studied this nonstop … it is one of the most low profit margins that you can get involved in. But it brings you a lot of recognition … because it does … you get 4 … 5 … 8 people on your team … and they’re each doing 5 … 8 … 10 deals a year … or even 15 … and you’re doing 15 or 20 deals yourself … you’re at 100 deals a year … whoop-de-doo … lots of recognition.

Let me tell you something … let’s think about the money involved. You want to go where the money is … so therefore, personal production then with a team makes sense, which we’ll come back to in a minute.

Working agent to agent referrals. A lot of agents will have two databases simultaneous … consumer database … agent database. If you attend Mike Ferry events in 2017 … ’18 … ’19 … and this year in 2020 … and you collect the cards and meet people and shake hands and discuss your businesses … and you ask questions and answer questions people ask … and you build an agent database from around the country … why would you not get referrals? It could be a good method of getting business.

Next … building a team through strong, personal production. It can bring high profits … assist you in developing your leadership skills … and create a big revenue stream through the agents that work underneath you. Remember, the real key to building a strong, productive team is your personal productivity. That is what’s going to bring the names … the leads … the sign calls … etcetera … ad calls … marketing calls … to your team.

Next … simply doing … and I want you to listen now … 10 to 15 deals a year for 5 or 10 years … as good customer service becomes the key to that kind of a business … and the database build up becomes key to that kind of a business along with good, quality time on your side. We have a lot of agents that come to Mike Ferry events … been in the business 5 … 10 … 15 years … do 5 … 10 deals a year … have a nice little database … 300 to 500 names … they get 5 or 10 deals here under their database. They come thinking we’re going to show them how to get rich without working … and then they sit through a couple days of Mike Ferry training and realize the work involved … WOAH … they go right back to where they came from.

Simply doing 5 or 10 deals a year, if that is the goal, I’m going to say “congratulations,” high-five … and giving good service to that 5 or 10 deals a year for 5 or 10 years is going to give you a good return on your investment because time is working in your favor … but how about the next technique I’m going to suggest?

Agents who are leaving the business … and there’s a lot of them all the time … consider buying their database. Think about it … buying the agent’s database. Almost every agent has a database … and the churn among agents is pretty high in most cities in North America … why not show those agents that if they’re going to be gone and leave … turn over their database … 50 … 100 … 300 names … pay them a referral fee on anything you generate.

How about the next one … always changing your work pattern due to the fact that you’re looking for the latest magic formula … or to use today’s expression … you’re looking at all the disruptors that are making our business more fun, productive and profitable. At some point, we have to start creating a better and clearer path from where you are to where you want to be … and the problem you have today versus … say … 2006 to 2012 … when the recession was at it’s deepest … only the strong survived that recession … the people that kept their head down on their path to productivity.

Now, of course, everybody’s waving the flag … “you can get rich without working” … etcetera … if that’s the path you’re on, you’re going to get rich without working, but you’re also not going to be working … and trying to get rich.

Next, working your company’s relocation business … very common today. Generally, at a bit of a reduced commission … but you have to be careful not to become dependent upon that company relocation business in case the company changes their attitude toward relocation business, which then puts you out of business.

Last on our list … learning the skills necessary to be a professional, productive Real Estate Agent … or simply learning and following what we call the Mike Ferry Sales System.

Well, there’s a lot of choices … there’s a lot of options … and in 2020, there’s more options than ever because everybody today wants to be a speaker … wants to be a trainer … wants to be a coach … and is a best-selling author because they wrote a book that their kids bought a copy of. Let’s get you on a path to productivity. Forty-five years in doing the work I’ve been doing … and we have the highest percentage of people succeeding at a mid-level to high-level than anybody else in the industry.

We can help you produce if you choose to be a productive agent. I don’t think you’d be watching Mike Ferry TV unless you had the desire to be productive. Thank you for today … watch this message time and time again … see you next week.

 

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Mike Ferry is the global leader in real estate coaching and training. Watch Mike each week as he discusses a variety of topics to help real estate agents and brokers. Grow your real estate business by improving your mindset, developing your skills and creating a plan of action to increase your production!

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