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Talking is Action!

I've decided to "weigh in" on the issue of providing unanticipated services from the perspective of a real estate agent because I'm sure that many of you are working harder than you have in the past. Much of the weekend was spent in preparation for an upcoming presentation to title professionals. The title industry is facing profitability issues caused by reduced business levels and increased competition. The "knee jerk" reaction is to do anything and everything to bring difficult and possibly unprofitable deals to the table.

Providing unanticipated services in difficult deals

Real estate agents need to pay close attention to every associated cost of a transaction to sustain profitability, especially the incremental costs associated with providing unanticipated services. It's not enough to say that you're making $x,xxxx in commissions without considering the operating and opportunity costs of added services. You're unable to charge supplemental fees making personal productivity the only viable option to prevent losses.

All time comes with tangible costs and consequences

Every time that you make a phone call or drive somewhere to facilitate a deal that wouldn't close otherwise, you're expending a valuable resource in the form of time. Don't think only in terms of overall compensation. Think in terms of enhanced production capacity or personal fulfillment if you were to spend your time differently. It doesn't matter if you used the time to blog for future contacts (business related) or watch your kid's ballgame (personal).

Are you a professional order taker or a professional decision maker?

Order takers:

Tend to focus only on short term goals or gratification
Will continuously offer additional services to appease others
Will work 24/7 without concern for costs, consequences to industry, or profitability
Perceive marketing as the most important business activity
Shun the role of education in professional development

Decision makers:

Implement a comprehensive strategy that emphasizes long term success
Understand the importance of professional boundaries and compensation
Recognize the need for personal time as part of a bigger picture
Integrate marketing as one of many vital business activities
Embrace every opportunity to expand professional, business, and interpersonal skills

What's this mean?

By giving services away for free, you create unrealistic future expectations and devalue your work-product. I know that it's a difficult reality to accept, but it's true. Buyers and sellers are likely to use you in the future, or refer your services to others, only if they respect your decision making abilities. Decision makers offer real value to a transaction; order takers do not. There's nothing wrong with explaining your time availability and the scope of your services at the very onset of a professional relationship. All other professionals do it.

So can you!

There's more

Your value as a professional lies not only in your ability to make decisions, but in your ability to use words to commit others to productive activity. It's all about the way that you communicate with buyers, sellers, and the other professionals in a transaction. This rule applies to your personal productivity and profitability in general and becomes particularly important when facing additional work-loads caused by difficult deals.

The key is to get things done with words. Talking is action.

Effective communication = Profitability!

For follow up posts see: Professional Boundaries: Two real world examples and Radical Professionalism.

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Note: On Tuesday morning at 10:00 AM I'll be speaking at:

The Management Education Center

Eli Broad Graduate School of Management (Michigan State University)

811 West Square Lake Road, Troy, MI 48098

If anyone works nearby and has spare time that afternoon, let me know.

It would be great to meet other members of Active Rain.

Click here for general information about lecture.

Posted by Ed Rybczynski on 04/30/2007 12:55 AM

Comments (30)

best practices, professional demeanor, professional boundaries

30 Comments on Talking is Action!

APR

2007

If you had asked me prior to reading this if I was a decision maker or a order taker I would have answered DECISION MAKER - after reading this - I fall half way in both - so.... picking my jaw up off the desk - re-evaluating my business and working towards being a DECISION MAKER- thanks for a great post and making me a better person

Brilliant!

I've experienced tremendous difficulties with my last two closings (two different title companies). I wondered how they could afford to do business so poorly with this market. The answer is, they can't. I am having a hard time finding a qualified title closer in this area that can communicate and organize. Most should be flipping burgers somewhere, but that's just my little old opinion...

It took me an aweful lot of organization and communication to get that deal to their table and I think "they" forget that.

Thesa

Thank you and I'm really glad that you found the post useful. All us are both decision maker and order taker. The key is to use language to coordinate productive efforts among others. It's a management skill that can be learned and enhanced. It's keeps us from spinning wheels, wasting time and money, when we don't have to.

Chris

I happen to agree with you completely. In Baltimore, there isn't a single title company that I can refer business to in good conscience. Sorry to hear that things are so dire in Florida. I had a suspicion though, because I start a couple of consulting projects there in a month or so. The title industry is in worse shape than many want to accept.

On another note, thank you for commenting. You are really a loyal friend and I appreciate you.

Ed, I guess it would be nice if we could always be Decision Makers, but I believe that we also so have to have some of the qualities of an Order Taker in this business. This has proven to be a good investment for me, and has resulted in several referrals (the return on my investment).

I do agree with you completely on the value of our time and that we need to be compensated for it.

Hey George

I agree with you about the referrals being the ROI. This post definitely tanked on me as I introduced too many concepts and didn't fully develop any of them. Thanks for commenting and have a good night.

No problem Ed, I often let my thoughts shift into high gear myself, but I would rather have that then no thoughts at all. A lot of what you wrote about was great food for thought.

I make every effort to set boundries at the very beginning af every business relationship!

It does keep any resentment (on my part) and unrealistic expectations (on their part) in check!

APR

2007

Your post is very timely for me. I have been at odds with myself over a recent listing appointment. The seller emailed me with a list of demands which included an extreme level of service at discount broker rates and terms. I had to battle with myself, but responded in a way which will likely cost me the listing, but will keep my boundaries in place and my dignity intact. So, thank you for reinforcing my decisions.

This is an excellent article, I hope many pay attention to.

...and profitability has so much to do with being "into" the work you're doing...as problem-solver.

Hi Joan

It's very true, as a real estate agent you can avoid future misunderstandings with buyers and sellers by clearly explaining the scope of your professional boundaries at the onset of the relationship. If your unavailable on Tuesday and Thursday evenings and Sunday afternoons ... it's your business. You owe an explanation to no one. People will understand, and respect you, and decide to work with you for being so honest. Try to view each transaction as a separate project with you as Sr. level management and the project team leader. I really appreciate your thoughts on this matter.

Laurie

I really appreciate that you found value in this post. I can tell from your comments that you knew the answer to you dilemma all along. I sometimes tell clients that the answers are readily apparent if they find themselves awake in the middle thinking about certain situations. Your seller would have continued to demand more, and more, from you. By creating boundaries, you now have your own self respect and have protected the integrity of your profession. All decisions have consequences. You might have lost out on one listing, but there is a safety net and many more will follow because a decision was made that makes you comfortable in the long run. Thank you very much for stopping by and sharing your thoughts.

janeAnne

That's the essence of the work that I do with corporate clients. Fraud prevention is best accomplished by improving internal processes and enhancing efficiency. Fraud, due to it's nature, can't flourish in an efficient environment. The byproduct of my fraud preventive efforts is increased profitability internally and often we find an enormous bump in customer satisfaction. Thank you for commenting.

Hi, Ed! I can think of two very good local title companies, I didn't realize that was a luxury these days!

I would have thought I was more of an Oder Taker (feels like it some days!) but after reading this I'm more to the Decision Maker side. I'm always trying to get a little more education or at least keep my mind sharp. I enjoy marketing but it needs to be fun. I am able to walk away rather than take on something that is just not going to be workable in terms of my time or services.

Good stuff, Ed! Wish I could come hear you speak, Michigan's a bit of a stretch though!

Hi Sarah

WV is different than other states because attorneys control title companies. I'm not at all surprised to hear that you know of a couple of great title companies. From your posts, I had a suspicion that you leaned more towards decision maker than order taker. FYI: The post written recently by your mom was probably, at some level, the inspiration for this post.

About presentations: I'm only in Michigan for 2 more weeks. I seem to recall a couple of dates later this year in Nashville and Knoxville, Tennessee. I'll share more about these and others when I have a little time in my office to look at the calender.

Thank you for sharing your thoughts.

Hi, Ed! My Mom's in Knoxville and we'll be there a few times the next few months. Let me know about those! I'll let her know she helped inspire another post, she'll like that. I'd like to have her join so she can read Members Only posts, like this one and some of mine. I told her some of my favorite work is Members Only and she feels left out.

And yes, the good title companies I can think of are so good because of the lawyers at the helm. (One of them is my broker!)

I would love to see a follow up blog to this detailing how an agent can implement this.

Isn't this the truth! I finally broke down and allowed myself to take listings at a lower rate sometimes, but these sellers aren't as willing to accept a lower level of service. They really expect to pay less, yet receive the same time, advertising, etc. I just have to stick to my guns because it is inherently unfair to charge different rates for the same services. "Free" is just not fair, when other people are paying for above and beyond services.

Daniel

That's an excellent idea. I'll work on it as soon as I can. Thanks for stopping by.

Margaret

Stick to your guns. Your sellers and buyers are looking to you for leadership and knowledge ... and compassion too. It's all about professional demeanor. People will respect you if you earn ... and expect ... their respect. Thanks for sharing your thoughts and opinions.

Great Post!!! I like to go the extra mile for clients but I have found that my clients realize I am going the extra mile when I provide a good business name to them or help them find a reliable business to work with to get a job done. I had a client several years ago who wanted me to water his lawn for the summer until he got moved down. Thank goodness he changed his mind. I agreed (due to my green-ness at the time) and that would have added a 22 mile round trip, twice a week, to my summer!!! Instead, I gave him a business card for someone I believe in. Everything worked out great!

Ed- Wonderful post. Thank you. I know that being a Decision Maker is the best way to operate.. but I still find myself on the Order Taker side about 24/7 and not taking into account the costs associated with that.. As Laurie noted above I also have likely just lost a listing because I won't give away my services .. the seller didn't want a good agent just a cheap one..

Virginia

I loved your story. Thank you for sharing it with me.

Kaye

I know exactly what you're talking about. In my office, we have a tradition at deconstructing each others projects to make sure that they make sense and are profitable. The lines get very fuzzy at times. Thanks for commenting.

I think communication, education and preparation are key. It sometimes is difficult when things get hectic to put things into perspective. I think it is important to choose the people you decide to work with to make sure their expectations meet your own professionalism.

Ed,

This morning when I wrote my comment I mentioned that I was resigned to not getting this listing. My response to the seller was as demanding as his was to me, and then some.

I just received an email from the seller that he has chosen me to be his listing agent with no further negotiations. He accepted all of my terms, and they were strong. His response was pleasant and respectful.

You could have blown me over with a feather.

Laurie

Doesn't surprise me one bit. I almost mentioned in my comment to you that you would probably get this listing on your terms. It's about boundaries and respect. It works every time.

Way to go!

Joan

The key is to do business only with people that you trust and respect. Choose your clients with the utmost of care says Tom Peters and he's right. But, I agree, it's difficult for any one person to stay one top of every detail. I have people from different backgrounds that I trust greatly and talk to constantly about contracts that are coming together for the consulting firm. We are working on a lot of different things now that are very complicated and too much for any one person to deal with without help. Thanks for commenting.

Great topic! and so timely.

I just had a potential buyer call on one of my listings - with a list of demands! Well, I had to set up the tone fast. I did something I had never done in my 4 years of business, that is send him a Buyer Representation Agreement. I could not see myself running crazy for someone I did not know, I did know his intentions and I had a hard time trusting him. It was a bad start.

This business like another business should be based on knowledge, common goals and it should be a mutually respectful relationship. And if it is not framed at the begining, bad times will be real bad. We will pay with many hours of unproductive time and frustration. Better lose a potential client.

So am I order taker or a decision maker? Well I suppose both, but definitely striving to be a decision maker.

MAY

2007

Christine

Great story. It's much better to lose a single deal and retain your self respect. Why do a deal ... just for the sake of doing a deal ... when you know that your going to lose money and hate yourself in the morning. All business people struggle with the order taker vs decision maker dilemma until they've taken a few knocks. Then it easier to do what needs to be done. Thanks for sharing your story.

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