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How to Attract Clients in Residential Real EstateBy Alan RiggI recently read a newspaper article that said there are approximately 997,000 licensed real estate agents in the United States. (If you are in a highly competitive industry, that statistic might make you feel a little better.) Doesn't it seem like everyone you know has a friend, relative, or acquaintance who is a realtor? How could anyone, especially someone new to the industry, possibly achieve success when faced with this much competition? To answer this question, let's begin by examining why there are so many licensed real estate agents in the first place. One big reason is there are relatively low barriers to entry (just like in most of the sales profession). No matter where you live, there are businesses that will be happy (for a price) to train you so that you can sit for a real estate licensing exam. Plus, there is no shortage of real estate brokerages that are willing to hire rookie realtors to sell for them. After all, in most cases their investment is nominal (a desk and a phone), and they only pay commissions if a realtor actually sells something. Other factors that attract people to residential real estate include big per-transaction commissions, which are typically between 4% and 7% of the home purchase price. (In most cases the realtor only gets 40% to 60% of the commission. Given average home prices, that's still a nice chunk of change.) Plus, residential real estate offers the tempting possibility of working when you want to, though most successful realtors put in a lot of evenings and weekends. This perceived flexibility is very attractive to many people. So, how is it possible for a new realtor to achieve success in the face of the 997,000 competitors? The answer begins to appear when we consider the following questions: How many licensed real estate agents have the core talents that are required for success in sales? How many have been trained (or have trained themselves) in effective selling techniques? How many know how to prospect effectively? How many know which questions to ask to determine the factors that are most important to each individual prospect's buying decision? How many take their profession seriously and are willing to put in the effort and hours that are required to build a successful business? How many are actually active in real estate? How many of them have sold anything? How many of them regularly sell multiple houses per month? The 80/20 rule certainly applies to residential real estate. In fact, I have seen statistics that suggest that the ratio is more like 90/10 (90% of home sales are made by just 10% of realtors), and that the vast majority of home sales are made by the top 1%! So, how does a novice realtor attract clients? In a nutshell, it requires credibility and relationships. Let's explore each of these topics separately. 1. How to Build Credibility Let's imagine that you are a brand new realtor who has just passed the licensing exam. Why would someone turn to YOU to help them make what may be the largest investment that they will ever make during their lifetime? What makes you stand out from all of the other licensed real estate agents? If you are new to the profession, you won't have success stories or testimonials that will help you address these questions. However, there are a host of things you can do to build your credibility. Here are a few examples: You could do in-depth research on a specific aspect of your local real estate market and write a "white paper" or "special report" that you can share with prospects. Examples of potential topics include "The Hottest Markets In (a specific area)", and "Resale Home Prices for the Past 12 Months In (a particular community)". You could compile a "New Resident Resource List" that educates your prospects on local stores, service companies, fun activities, family-friendly restaurants, etc. You could write articles and deliver free speeches or seminars that are based upon the results of your research. There is tremendous power in authorship. If you can put a useful document that YOU created in front of potential prospects, or if you can deliver useful information to them verbally, you will earn credibility. 2. How to Start Relationships Your other focus should be on activities that create opportunities for you to earn trust. When people trust you, they don't usually ask for the same "evidence of credibility" that is required from a stranger. How do you build trust? By building relationships! A good starting point is making sure that everyone you know (friends, family, acquaintances, past business contacts, etc.) is aware that you have become a licensed real estate agent. It doesn't matter where they live - they may have a friend or associate who will decide to move to your target market. Don't be too aggressive when you do this, as it could make your contacts uncomfortable. Deliver a simple, "soft sell" message such as, "If you hear of anyone who might be interested in buying or selling a house, please let them know that I would be delighted to help them." When you are sure that everyone you know is aware of your new role, start pursuing NEW relationships. Don't limit yourself to sourcing people who may themselves be prospects. Also look for opportunities to develop relationships with people who can REFER prospects to you. This includes mortgage brokers, bankers, people who are in non-competitive areas of home sales (if you focus on resales, develop relationships with "new home" salespeople, and vice versa), property management companies, people who manage corporate relocations, etc. You might also pursue relationships with people who have large customer lists, such as accountants, financial advisors, and insurance agents. What are the best ways to pursue new relationships? A number of strategies are covered in a free mini-course named, "Cold Calling Alternatives", so I won't cover them here. (If you have not already subscribed to this course, you can do so at http://www.8020performance.com/subscribe.htm.) Regardless of the strategies that you choose to pursue, your success will be determined by your approach. It is critical that you focus on getting to know potential prospects and referral sources as PEOPLE, and that you focus your conversations on THEIR needs and wants, NOT YOURS. What do THEY do for a living? What constitutes an opportunity for THEM? What are THEIR issues and concerns? What are THEIR personal interests and passions? If you constantly have your "radar" up, you just never know when you will run across a resource that will be helpful to someone else. If you focus on helping other people accomplish their goals and fulfill their needs and wants, with no expectation of receiving anything in return, you will be astonished by the number of referrals that come your way. 3. How to Nurture Relationships A single meeting does not constitute a relationship! To nurture relationships, look for opportunities to regularly and consistently provide value-added information to the people you meet. What kinds of information are of interest to them? What articles could you include in a (monthly or weekly) newsletter that you send to them via e-mail or "snail mail"? Also, keep an eye out for articles that might be of interest to specific individuals, and forward them with brief personal notes attached. Consider how you can use technology to expand your reach and enhance your credibility. Do you have a website that positions you as an expert in your field? Does it encourage visitors to sign up for value-added communications, perhaps by offering a free white paper or a special report? Conclusion Look for creative ways to build your credibility. Do some research into topics that are of interest to potential prospects and referral sources, then compile the results into written documents and/or speeches. Also, look for opportunities to earn others' trust, as that will lead to relationships that produce sales AND referrals. Over time, as you build your list of satisfied customers, you can expand your sales success through referrals and testimonials. However, the strategies described above will ALWAYS provide a boost to your opportunity pipeline! Copyright 2004 -- Alan Rigg Alan Rigg is the author of "How to Beat the 80/20 Rule in Selling: Why Most Salespeople Don't Perform and What to Do About It." He is also the founder and president of 80/20 Performance, Inc., a company dedicated to helping organizations beat "the 80/20 rule" in sales performance. For more information, or to sign up for free mini-courses and e-zines, visit http://www.8020performance.com. 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 | 11 | 12 | 13 | 14 | 15 | 16 | 17 | 18 | 19 | 20 | 21 | 22 | 23 | 24 | 25 | 26 | 27 | 28 | 29 | 30 31 | 32 | 33 | 34 | 35 | 36 | 37 | 38 | 39 | 40 41 | 42 | 43 | 44 | 45 | 46 | 47 | 48 | 49 | 50 51 | 52 | 53 | 54 | 55 | 56 | 57 | 58 | 59 | 60 | 61 | 62 | 63 | 64 | 65 | 66 | 67 | 68 | 69 | 70 | 71 | 72 | 73 | 74 | 75 | 76 | 77 | 78 | 79 | 80 81 | 82 | 83 | 84 | 85 | 86 | 87 | 88 | 89 | 90 91 | 92 | 93 | 94 | 95 | 96 | 97 | 98 | 99 | 100 |