What exactly do real estate agents sell?
The answer seems obvious, real estate agents are in the business of selling real estate – they always have been and always will be.
But as the real estate industry evolves and adjusts to changes in technology and in consumer expectations, it’s important for us to revisit what we do and how we work to see if the old approach is still relevant. Here, we can turn to Peter Drucker’s seminal Harvard Business Review article titled The Theory of Business for some inspiration.
In it Drucker challenges businesses to constantly question their assumptions on which their business was built to see if they are still relevant. Most importantly, Drucker challenges readers to question their assumptions about what they get paid for.
In a world where today’s consumer has just as much information about real estate and neighborhoods as their agent, do they really need us to sell them a house? Is that the most important thing they want in an agent?
Do they need someone who is going to convince them why the house they’re looking at is the perfect house for them? Does a seller need their agent to convince them why “the first offer is always the best offer”? I don’t believe today’s buyers and sellers want to be sold real estate and yet this is what most agents continue to focus on selling.
If agents shouldn’t sell real estate, what should they be selling?
A recent report by the National Association of Realtors and the Canadian Real Estate Association titled Danger Report highlights the top issues threatening the real estate agent profession.
Of the ten dangers highlighted in the report, the ones I found most important were the ones that centered around the agent client relationship. Specifically:
- Masses of marginal agents destroying reputation
- Commissions spiral downward
- The decline in the relevancy of agents
- The agent is removed from the transaction
While at first glance the risks above seem independent, I believe that they’re actually symptoms of a bigger problem in our industry. That real estate agents today are not adjusting fast enough to a world where:
- Our clients have as much data as us
- Buying and selling their home on their own is easier than it has ever been
- The expectations consumers have of a real estate agent are very different than they were 20 years ago.
It is our industry’s inability to adjust to this changing market that hurts our reputation, puts downward pressure on commissions and makes agents less relevant.
Twenty years ago, home buyers and sellers had no access to any real estate or neighborhood information. We lived in a world where data and information where asymmetric – the realtor had all the information and the consumer knew very little. Fast forward twenty years and many of the value-added benefits that a realtor used to offer have been replaced by websites that enable our clients to do on their own what real estate agents used to do for them.
When I first became a real estate agent I tried and researched a number of different real estate sales training programs offered through various brokerages and through third party coaches, but found all of them to be woefully inadequate for what I was looking for.
The main problem I found with most of the training programs was that virtually all of them focused exclusively on lead generation. Consider this quote from real estate coach Brian Buffini:
“For the first time ever in 19 years of training people I’ve never actually really told people how to sell. Most of what we do at Buffini and Company is teaching people lead generation.”
This approach to training was fundamentally different from how I wanted to approach my career. I was never really worried about where I was going to find my next client, I always knew that if I was excellent at my profession I would never have a problem finding clients.
The start of the new year is a great time to reflect on the year that has passed and to carve out a new set of goals for the year ahead.
As a business owner, I have always enjoyed this annual ritual because it gives me the opportunity to look back at all the great things my team and company have accomplished during the year – big and small. This ritual is particularly important for real estate agents who often work independently and whose hard work and efforts typically go unnoticed by others. It’s critical for them to take the time to celebrate their wins. Equally important is the opportunity to reflect on the things that were not accomplished and the mistakes I made throughout the year. While reflecting on our mistakes is nobody’s idea of a good time, it’s still an important exercise for real estate agents because the mistakes often yield valuable lessons that help shape your future business decisions.
Every year I enjoy working with my sales team to help them refine their goals and develop plans that will help them accomplish the things they want to achieve in the year ahead. Setting and achieving goals is a skill set that I find most of us need some help with. Whether we choose to read books on the subject or find a great mentor, there are always things to learn that can help us become more effective at actually accomplishing the things we set out to do each year.
In the years that I’ve been coaching real estate agents I have found five common mistakes that sales people make year after year.