John Giffen's Blog

6 Tips to Win Over FSBO's: Know What Makes Them Tick!

John Giffen, CRB, CRS, CDEI, GRI, SRES, BROKER, REALTOR® (Benchmark Realty, LLC) — Tue, 10 Sep 2019 16:13:24 -0700

I once was one of those homeowners who thought they could sell their house on their own without utilizing the services of a real estate professional. Yes, I was a FSBO (For Sale by Owner). In fact, my experience as a FSBO was one of the reasons I decided to get my real estate license and become an agent. Many years ago, we had a horrible experience selling our home ourselves. A few of the issues we faced as private sellers included not properly “vetting” prospective buyers, inadequate property marketing and poor home staging. In addition, I overpriced the home when we first listed it creating a long wait for a qualified buyer to submit an acceptable offer. I finally “threw in the towel” after we received the offer and hired an experienced REALTOR® to shepherd us through the counter offers and “contract to close” period. I know, from first-hand experience, that we could have avoided many issues in selling our home if we had worked with someone from the beginning of the listing process who was knowledgeable, who represented our interests, who was there when problems arose, and who negotiated and advocated for us. Undoubtedly, we would have sold our home quicker and received additional money at the closing table if we had used an agent when we elected to sell the home. Once I had my real estate license, FSBOs became one of my target markets in my real estate business. Selling our property on our own allowed me to have a unique perspective on FSBOs that most real estate professionals do not understand. On the many occasions I approached unrepresented sellers, I was able to gain their trust, and more times than not, eventually list their home or assist them in purchasing their next one. FSBOs are a unique group of players in the real estate market, and most agents attempt to avoid them. Don’t overlook them because they can be a viable client prospect group for you. Going after unrepresented sellers requires strategy and patience. Consider the following: 1. Understand the mindset of the For Sale by Owner. There are two types of FSBOs: the “trying to save money” seller and the “do-it-yourself” seller. The first one believes they will save thousands of dollars by not using an agent. They focus on the money paid to agents and not the value they bring to the table. The second type may have the same desire as the first, but they believe they can sell their home without our assistance because they know everything about the process. Unfortunately, both of these types of FSBOs rarely accomplish their original objective, due to the complexity of today’s real estate transactions and the ever-changing housing market. FSBOs consistently sell their homes for about 15 to 18 percent less than homeowners who list with an agent (according to the National Association of REALTORS® [NAR] Profile of Home Buyers and Sellers). One reason why is that FSBOs do not competitively price their homes, nor do they have the necessary time to devote to the entire transaction process including marketing, showing the property, handling offers, and completing the required paperwork. They discover the amount of work to get their house sold is much more than they anticipated when they decided to do it themselves. 2. FSBOs have preconceived notions about real estate agents. Most For Sale by Owners dislike real estate agents because of a bad past experience with an agent, or their friends or family have influenced them not to use one. In order to overcome these objections, you must ask specific questions to determine if they have merit or are just products of misinformation. Present your value proposition in a way that erases any prejudices about us and demonstrates the benefit of using our services. Remember, you possess the experience and expertise to market their home and guide them through the transaction to a successful closing. As a real estate agent, your value proposition for FSBOs includes:• You can sell their home for more money.• You understand the paperwork and all the forms needed in a real estate transaction.• You are a full-time real estate agent. Marketing and selling homes is your job.• You know the local real estate market, so the home can be priced competitively.• You can be objective. FSBOs have a difficult time being objective because they areemotionally tied to the home.• You can qualify prospective buyers.• You have negotiating skills.• You can get the deal closed. 3. The FSBO doesn’t understand the risk and liability of selling their home themselves. Mistakes can be made in any transaction. Both unrepresented sellers and their buyers can make errors that can be costly. An attorney can close a transaction for a FSBO, but they don’t carry errors and omissions (E&O) insurance for mistakes made by the seller or the buyer before closing. For example, if the seller advertises their property as a four-bedroom home, but the septic system construction permit specifies it can only accommodate three bedrooms, chances are the seller is going to have to pay for that error. A professional real estate agent would have caught the mistake, or their E&O insurance would cover it. We live and work in a litigious society. What seller wants to be a target of a lawsuit? FSBOs need to be reminded of the perilous waters they will be sailing when they try to go at it alone. 4. FSBOs don’t realize transaction paperwork can be overwhelming. According to the NAR Profile of Home Buyers and Sellers, managing the paperwork in a real estate transaction is one of the most challenging tasks for a FSBO. The days of signing one or two documents to get the property under contract are in the past. Today, the average contract package contains close to thirty to forty pages of complex and lengthy documents. Many FSBOs don’t realize they will need to complete disclosures concerning the condition of the property, the presence of possible lead-based paint, capacity and operation of their septic system, past water leaks, etc. By not completing the required documents, sellers can find themselves in violation of state and federal laws. 5. The marketing a FSBO does for their property is limited. Most FSBOs will advertise their home on Craigslist, Facebook, the local newspaper, and possibly the MLS, if they use an MLS discount brokerage. FSBOs do not have the experience or expertise to market their home like a real estate professional. According to the 2018 NAR Survey of Home Sellers and Buyers, 42 percent of FSBOs rely on a yard sign, 32 percent depend on friends and family, and about 15 percent use social media. Expecting neighbors and family members to spread the word has its limitations. Even paying for the house to be listed in the MLS won’t be enough because there is no incentive for an agent to show a FSBO property to a prospective buyer because the seller may not offer the agent minimal compensation to bring them a buyer. What agent wants those hassles? 6. The words you use and the questions you ask when speaking to a seller can make or break your ability to work with them. Inman News published an article listing the four things never say to a FSBO: • “You’ll never sell your house on your own.”• “I can help you improve your marketing.”• “I’m not like other agents,” and• “Wow, how did you come up with that price?” Instead, you should ask: • “What made you decide to sell your home on your own?”• “What are the best features of your home?”• “What type of service do you expect from your agent?”• “What method did you use to price your home?” 7. Consider helping a FSBO with a “FSBO First Aid Kit.” One of the best ideas someone shared with me when I was trying to get FSBO listings was to develop and hand out a “FSBO First Aid Kit.” This “kit” is full of resources for the seller to use in selling their home. It includes tips on how to prepare a home for sale, a guide to qualifying prospective buyers for a mortgage, how to host a successful open house, free templates for in-house brochures and flyer boxes, safety guidelines, and more. The real benefit of providing this packet to a FSBO is to let them know I am there to help them, not hinder them. My approach is never to try to get the listing. If they reach the point where they cannot sell their home on their own, I hope I will be the first one they turn to when they seek the help of a real estate professional. And, maybe they will also use me to help them purchase their next home. Several FSBO sellers did turn to me for help over the years in selling their home. Once they discovered how difficult it was to sell the property themselves, they asked me tolist the property so they could get it sold. 8. If your buyer is interested in a FSBO property, show it to them. If you have a buyer who wants to look at a FSBO property, don’t be afraid to approach the seller because their goal is to sell their home. A seller may or may not be willing to compensate you if your buyer elects to make an offer to purchase the home. If they are willing to pay you a commission, you should provide them with a written agreement confirming the compensation between them and your broker. This agreement should be signed prior to showing the seller’s property to your buyer. There will always be sellers who will want to try to sell their home on their own. However, I believe there are real opportunities for agents to work with unrepresented sellers in either helping them sell their home or bringing them a ready, willing, and able buyer. Remember, if you work with FSBOs in the right way, you can provide yourself with another revenue stream and possibly an excellent source for referrals. John Giffen is Director of Broker Operations for Benchmark Realty, LLC in Tennessee. He is the author of “Do You Have a Minute? An Award-Winning Real Estate Managing Broker Reveals Keys for Industry Success.” John M. Giffen, CRB, CRS, CDEI, GRI Director, Broker Operations (615) 371-1544 Blog: www.JohnGiffen.com Author of “Do You Have a Minute? An Award-Winning Real Estate Managing Broker Reveals Keys for Industry Success”

Can’t We Just Get Along? 5 Tips to Handle the "Other" Agent

John Giffen, CRB, CRS, CDEI, GRI, SRES, BROKER, REALTOR® (Benchmark Realty, LLC) — Fri, 23 Aug 2019 07:25:50 -0700

Real estate is one of the few industries that relies on communicating and cooperating with other competitors in the profession to earn a living. A cooperative spirit is at the heart of what it means to be a professional real estate agent. In order to work with each other cooperatively, we must keep communication lines opens, respect one another as professionals, and encourage one another to maintain the integrity of what we do to meet the needs of our clients. To survive in this business, you must be able to work with other agents on an ongoing basis.The number one complaint lodged against real estate agents by consumers and other agents is the lack of communication. In fact, our industry has a black eye with the general public when it comes to how we handle communication.There is no question we dislike giving bad news or providing information to the other side of a transaction that may result in confrontation. No one likes confrontation. We want to avoid it. We want it to go away. Unfortunately, most times, it will not disappear.By avoiding an important issue, a difficult subject, or complaint with the cooperating agent in your transaction, you are guaranteed to see the problem worsen. You must take care of the issue sooner rather than later so your path to closing the deal will be less cluttered with obstacles and any unnecessary drama. Here are five helpful reminders to make sure you’re doing your part as a communicative and cooperative real estate agent. 1. Communicate, communicate, communicate. Common grievances include poor communication involving important issues at the offer stage, during the inspection and repair/replacement resolution periods, and before the property closes. Sometimes the news at these critical points in the transaction is not always good news, but agents must communicate with one another, no matter what the issue might be. Remember, another key to good communication in our business is responding to other agents’ calls and e-mails promptly and courteously.How do you deal with an agent not responding to your telephone call, text message, or email? One of my biggest frustrations as a REALTOR® and as a principal broker is when I cannot reach the cooperating agent or, if necessary, their principal broker. This drives me crazy! To this day, I still get frustrated when someone does not get back to me in a timely manner.Here is a script I developed for my agents when talking to the cooperating principal broker when you can’t reach the other agent: “ Mr.(or Ms.) Broker, I’ve been trying to reach Betty Agent to present an offer we have on her listing at 123 Elm Street. I was wondering how to proceed. I’ve tried reaching Betty on her cell via voice mail and text as well as leaving multiple messages at her office. I’m wondering if she is OK. My buyers are eager to have their offer presented. What do you recommend?”I’ve had great results with this approach. It is non-threatening and will make the other broker track the agent down.2. Do not assume the other agent is doing their job. Never assume the cooperating agent is doing something they are responsible for in the transaction affecting performance dates, contingency releases, closing and possession dates, contract extensions, etc. Many times, when we assume someone else is handling an issue, nothing happens or gets resolved. You must always follow-up with the other agent to make sure things are happening on the other side of the transaction, so the deal is not jeopardized, and the interests of your client are protected. Show professional respect for your peers. To make it in this business, agents must have mutual respect for one another. Article 15 of the Code of Ethics states: “REALTORS® shall not knowingly or recklessly make false or misleading statements about other real estate professionals, their businesses, or their business practices.” Article 15 is probably the most violated article in the entire Code. We tend to speak ill of another agent when something goes wrong, or they do something that affects our client, our transaction, or us. Bad-mouthing another person has become a common problem in society, but it does not have to be in our industry. The professionalism we espouse through the Code and within our real estate practice depends on managing the words and actions towards each other. Hold your tongue and keep your personal feelings about another agent to yourself when they have caused issues or problems.3. Don’t poach another agent’s clients. I once fired an agent from our firm when I learned she was prospecting at other agents’ open houses. She was trying to get information about the sellers, so she could contact the seller to try to steal the listing from the listing agent.Agents need to realize there is enough business out there for everyone. Real estate agents need to procure clients through legal and ethical means and not by tactics that are incongruent with who we are as professionals. Article 16 of the Code provides several standards of practice outlining the importance of not encroaching on signed exclusive agency agreements.4. Don’t change the cooperative agent’s compensation as noted in the MLS. One of the most frequent complaints I hear about other agents involves altering compensation before or after a contract is signed. A listing agent will enter the cooperating broker compensation in the Multiple Listing Service as “X,” but when the agent discusses compensation at the time of the offer, the compensation is “Y.” Most MLS systems have established detailed rules on commissions and compensation. Changes to compensation get messy and sometimes ends up in an arbitration hearing at the local REALTOR® association. You should submit a cooperative compensation agreement to the listing broker before submitting an offer to purchase so there are no questions about how much you will be paid at closing.5. Change your mindset. When there is an uncooperative agent on the other side of the deal who is not doing what they should be doing, you will end up doing most of the work in the transaction.Why? The reason is pretty simple: you must always protect your client and work in their best interest. Remember, they need to sell or purchase a home. If the other side is not cooperating or doing their part in the transaction, you will have to do it. You will need to change your mindset and take control of the situation. The other agent has dropped the ball, and now you need to pick it up and possibly carry it to the finish line. The bottom line is you cannot let your client down. We must always remember we are working in an industry that requires cooperation. Most of the homes listed in this country are sold not by the listing agent, but by a cooperating buyer’s agent. We all are working toward one goal – take care of the parties in the transaction so the seller sells their house and the buyer purchases their dream home. Good communication and professional and ethical behavior will make this happen. John Giffen is Director of Broker Operations for Benchmark Realty, LLC in Tennessee. He is the author of “Do You Have a Minute? An Award-Winning Real Estate Managing Broker Reveals Keys for Industry Success.”John M. Giffen, CRB, CRS, CDEI, GRI Director, Broker Operations (615) 371-1544 Blog: www.JohnGiffen.com Author of “Do You Have a Minute? An Award-Winning Real Estate Managing Broker Reveals Keys for Industry Success”

9 Ideas to Manage Clients in Your Real Estate Business

John Giffen, CRB, CRS, CDEI, GRI, SRES, BROKER, REALTOR® (Benchmark Realty, LLC) — Mon, 15 Jul 2019 07:11:47 -0700

Managing the relationship with a client can become challenging at times. Most sellers and buyers are stressed to the max because they are embarking on a significant benchmark in life: the sale or purchase of a home. Our role in a relationship with a client is crucial. We have a responsibility to shepherd the deal and the parties involved in the transaction in a way that results in a positive outcome — a successful closing. An agent must possess the tools that can always keep everything in forward motion and reduce as much trauma and drama as possible for the client. Relationships, in general, have very interesting dynamics. Some are easy, and some are very, very hard. The same is true with our relationships with our clients. I discovered early on in my career that no two clients are alike. To manage any client relationship, you need to know how to navigate the relationship in a way that eventually brings you to the closing table. Here are 9 ideas to consider as you manage your clients in selling or purchasing a home. 1. Build a relationship that goes beyond agent and client. People want to work with those they like, trust, and respect. Creating a healthy personal connection goes a long way in establishing a healthy business relationship. Get to know the client, their family situation, how they like to spend their free time, their hobbies, their motivations, their interests, etc. 2. Regularly communicate with the client and address any and all problems immediately! A lack of communication is the number one complaint consumers have with real estate agents. If you take a proactive approach to communicating, instead of a reactive one, it will build trust with the client. They will rely on your professional expertise in assisting them with their real estate needs. Answer their calls, texts, and emails promptly. 3. Ask the right questions. Even before listing a property or taking a buyer out to view properties, seek to learn more about the client’s expectations. Some questions to ask include: “Do you think the real estate market is working in your best interest or against you? What do you think your home isworth? What are you looking for in a house? In what area of town do you see yourself living?” 4. Agree on strategy, objectives, and timelines. Until you and your client agree on tactics, goals, and schedules, you are always at risk of them not understanding what success is and how it should be measured. Create a document that outlines details, budget, and metrics. This document will alleviate any confusion over expectations and hopefully eliminate an awkward conversation. 5. Be a counselor. When you offer clients advice, direction, input, and business counsel, you are supporting your unique value proposition. This style of open dialogue helps to establish respect necessary to ensure better client and transaction management. Clients need your point of view and do not want a “yes” person who will act as a clone of them. 6. Be a good listener. Listening is one of the most underused tools in managing client expectations. Many clients are unsure of what they are trying to accomplish or not very good at articulating it. You must have excellent listening skills and intuition to identify critical messages communicated. One of the best ways to compensate for a client who communicates poorly is to repeat what you have heard and ask them to confirm the accuracy of critical points, which will ultimately impact expectations. 7. Always keep the interests of your clients first in your mind. One of the primary reasons clients want us to represent them is so we can protect their interests. Remember your fiduciary duties as their agent. 8. Establish boundaries in the relationship. Make sure you know when and where to speak into the relationship and don’t overstep boundaries. Do not interject your opinion unless it will produce a positive result for the client. Make sure the personal relationship does not impact the business relationship. Remember, you are working with the client to support your business and you and your family. 9. Protect the client’s privacy and provide them with a sense of security. You need to practice discretion when representing a client, especially if they are well known in the public’s eye. Make sure you convey your firm’s privacy policies as well as security measures you and your broker have in place when you are out in the field with the client. Client management is one of the most challenging aspects of an agent’s job. It requires skill and hard work. Keeping a healthy relationship with a buyer or seller is probably the most crucial aspect of what we do as real estate professionals. If it needs improvement, work hard to strengthen it. You will be glad you did. John Giffen is Director of Broker Operations for Benchmark Realty, LLC in Franklin, Tennessee. He is the author of “Do You Have a Minute? An Award-Winning Real Estate Managing Broker Reveals Keys for Industry Success.” John M. Giffen, CRB, CRS, CDEI, GRI Director, Broker Operations (615) 371-1544 Blog: www.JohnGiffen.com Author of “Do You Have a Minute? An Award-Winning Real Estate Managing Broker Reveals Keys for Industry Success”

Digital Signatures: The Good, the Bad, and the Ugly!

John Giffen, CRB, CRS, CDEI, GRI, SRES, BROKER, REALTOR® (Benchmark Realty, LLC) — Tue, 02 Jul 2019 04:00:01 -0700

One of the best things to ever happen in the real estate industry is the introduction of the digital signature. Digital signatures are used by real estate professionals throughout the U.S. and Canada. Signing real estate agency agreements, sales contract forms, disclosures, disclaimers, and other forms electronically provides a great benefit to both agents and clients. Unfortunately, there can be serious problems if a client or prospect doesn’t clearly understand how the online signing process works. A state real estate commission/board complaint may be filed against an agent and their broker for not properly managing digital signatures in a real estate transaction. In my home state of Tennessee, our state law, as well as the rules of the Tennessee Real Estate Commission, are unambiguous on how a licensed real estate agent and broker should guide a client through a real estate transaction. Our “Broker’s Act,” the legislation established in 1973 creating the laws Tennessee real estate licensees must follow in their real estate practice, says explicitly “a licensee who provides real estate services in a real estate transaction shall diligently exercise reasonable skill and care in providing services to all parties to the transaction.” In my opinion, ensuring a client clearly understands the digital signature process is part of our “skill and care” responsibilities as professionals. Most states have similar rules or guidelines licensees must follow to make sure they clearly explain everything associated with a real estate transaction including digital signatures on paperwork.Beyond the licensing law, our state REALTOR® association listing and contract forms specifically contain language concerning electronic/digital signatures. In the Purchase and Sale Agreement form, it states “the parties agree that signatures and initials transmitted by...digital signature as defined by State or Federal law will be acceptable and may be treated as originals.” I see other states incorporate similar language in their state contracts as well. It is imperative an agent explains this particular section of the agreement to the client so they will know what they sign or initial electronically has a binding effect on the legality of the contract.A couple of years ago, I taught a class that had a section on digital signatures. I created a handout that contained a list of five crucial vital elements to discuss with a seller or buyer client before they participate in a digital signing. Each of these should be thoroughly explained to your client. You, as their agent, must be prepared to answer any question they might have about digital signatures. 1. Carefully explain the digital signing process with the client. Tell the client(s) as you work with him or her on their real estate transaction, he or she may receive one or more emails containing an invitation to review and sign electronic documents from a digital document signing system. Emphasize that by using digital signatures, real estate transaction documents can be processed more quickly and efficiently - especially when a particular deadline/performance date must be met in the sales contract. Include in your conversation, the digital signing allows the client to receive a complete, fully executed set of documents for their files when the signing is complete.2. Inform the client that digital signatures are recognized to be legal and enforceable signatures. The Uniform Electronic Transactions Act (UETA) was adopted in 1999 and Congress passed the United States Electronic Signatures in Global and National Commerce (ESIGN) Act in 2000 grants legal recognition to electronic signatures. These two acts made electronic signatures legally binding and enforceable for nearly every business or personal transaction in the U.S. and around the globe. No agreement, signature, or record shall be denied legal effect solely because it is in electronic form. A contract relating to a real estate transaction cannot be denied legal effect solely because an electronic signature or record was used in its formation. The client should also be aware of the corresponding certificate and serial number assigned to each signing. They can be assured there is a “paper trail” associated with the signing.3. Make sure you review each document with your client before they sign them. This can eliminate any confusion the client might have about a document, as well as ensure the signing is expedited so a transaction can move forward. Consider providing “blank” copies of all forms the client will electronically sign in advance. When I send a document, or set of documents, to clients for signature via my digital signing program, the experience is much smoother if the client has an opportunity to read the document before clicking the “sign here” button.4. Tell the client they do have an opportunity to review the document by scrolling through it prior to signing it. Most online digital signing programs are designed to prompt the signer to go directly to the signature or initial blocks immediately after they hit the “begin signing” button. The lawsuit I previously referenced was based on the signee not knowing what they were signing because the signing program bypassed (or “flew by”) the content of the document and automatically directed the signee to the signature line. It is critical for an agent to tell their client they can read the entire document in a digital signing prior to signature.5. Communicate with the client before and after the digital signing. Before sending a request for an electronic signature, call or text your client to let them know you are sending a document for them to sign via your digital signature platform. Then, after the signing has been submitted, follow-up with them to make sure they received it. Most online signing platforms will communicate via email to the sender and the recipient(s) that a signing has been sent, reviewed, and signed by all parties. However, if you didn’t receive an email or text from your particular digital signing program that a signing action occurred, you should follow-up with the client to determine if they received the signature notification in their email. It could be in their junk mail or spam folder.Also, make sure the client understands that when the system receives all of the necessary signatures, a final and fully executed document will be available for their records via a PDF document. This is a significant benefit of using digital signing as it saves a tremendous amount of time at the office copier or scanner.Whether you like them or not, digital signatures are here to stay in the real estate industry. They have been a tremendous tool for agents, brokers, and clients by guaranteeing documents are signed and returned expeditiously. They have made my life much easier since I began using my electronic signature program several years ago – both as a managing broker and agent.If you are not using digital signatures in your real estate practice, I encourage you to consider doing so today. Follow the key points I suggest, and your paperwork and transaction experience will be a better one for you and your client. John Giffen is Director of Broker Operations for Benchmark Realty, LLC in Franklin, Tennessee. He is the author of “Do You Have a Minute? An Award-Winning Real Estate Managing Broker Reveals Keys for Industry Success.”John M. Giffen, CRB, CRS, CDEI, GRI Director, Broker Operations (615) 371-1544 Blog: www.JohnGiffen.com Author of “Do You Have a Minute? An Award-Winning Real Estate Managing Broker Reveals Keys for Industry Success”

Don't Let Those iBuyers Scare You!

John Giffen, CRB, CRS, CDEI, GRI, SRES, BROKER, REALTOR® (Benchmark Realty, LLC) — Thu, 27 Jun 2019 06:29:04 -0700

There is Enought Business for Everyone!Agents in my company are continuing to poke their head in my office or call me on the telephone anxious to discuss the increased presence of iBuyers in our market here in Nashville and Middle Tennessee. Many of the agents who speak with me are still somewhat confused or uninformed about the iBuyer home buying business model. After I explain to them how iBuyers operate, they then become somewhat fearful these direct online buyers will be taking potential property listings away from them. I encourage them to take a deep breath and calm down. I reassure them that it is going to be ok because the iBuyer route is not for every homeowner who is considering selling their home.iBuyers, such as Opendoor, Zillow Offers, Offerpad, Homego, and others received a tremendous amount of publicity over the past year or so due to their “step out of the box” concept in home buying. I tell my agents these companies are connecting a relatively small group of large, qualified investors to prospective home sellers for a “service” fee that is usually higher than what a traditional broker would charge a seller to sell the home. And, the price an iBuyer will offer a seller for their property is generally less than market price.The iBuyer “hook” is a simplified and expedited offer and “contract to close” transaction process, unlike the standard thirty to forty-day escrow period. An iBuyer transaction allows a seller to move on to their next home or the next chapter in their life. Again, it is a good fit for some sellers, but not all sellers.I explain to agents a seller must decide whether speed and convenience trump potential increase net returns on the sale of the home. In our current good economic times, I feel most homeowners want to realize as much money as possible at the closing table and are patient to wait for a ready, willing, and qualified buyer. Most homeowners are “up sizing” and need as much equity as possible to transfer to their home purchase. To alleviate any anxiety, fear, and concern agents might have about iBuyers competing with them in the marketplace, I have five very important points for an agent to remember if ever faced going up against an iBuyer company:1. Educate yourself thoroughly on the iBuyer model. It will be very challenging to defend your value proposition to a seller if you do not know how the iBuyer operates in today’s real estate market. Their marketing is exceptionally good by conveying a very simple message to their prospective clients. I guess you could equate how they market to “Madison Avenue meets Main Street.” Know the iBuyer competition in your market as well as being well versed in the advantages and disadvantages of a homeowner working with these direct buyer,2. Understand the offer from an iBuyer will most likely not be similar to an offer from a traditional buyer. Though the “quick close” benefit can be attractive to some sellers, most sellers will not like the higher listing fees and lower proceeds at closing. (Note: more times than not, they are lower no matter what the iBuyers say.) Stress the importance of how you, as a real estate professional, can sell a seller’s home in a timely manner at the highest price – resulting in higher proceeds at the closing table. It might take you a little longer to sell the house, but in the end, the result will be a positive one for your client.3. The iBuyer process is impersonal. One of the most significant advantages of utilizing an agent to market a home and procure a buyer is that the seller will always know who they are working with and will have access to a real person for counsel and advice during the entire home selling process. As professionals, the personal attention we give our clients has been a foundation of who we are and how we have operated for over a century. Most clients want the personal touch and iBuyers cannot offer this to them.4. An iBuyer may be an option your seller should consider. As much as you don’t want a seller to use an iBuyer, you must remember that today’s consumer wants options. This holds true for home sellers as well. A quick sell might be something your client needs so he or she can relocate to another city to begin a new job. Or, your clients may be beneficiaries of an estate with a home, and they want to sell the property quickly. In either case, an iBuyer might be a solution. As a licensed real estate professional, most iBuyer companies will offer you some compensation if you refer a client or prospect to them. It may not be what you are used to making on a home sale, but something is better than nothing.5. Don’t let iBuyers be a distraction to you and your business. If Opendoor, Zillow Offers, Knock or other iBuyer companies are showing up in your market, do not let them distract you from your prospecting efforts and the goals you have set for your real estate business. I learned long ago disruptors who enter any industry can cause angst and uproar for those who are already in the business. However, you will survive any disruption if you stay focused each day, work your business plan, prospect consistently, maintain personal contact with your prospects and clients and continue a level of customer service that goes beyond your client's expectations. If you have been successful in the past, you will continue to be successful in the future – with or without iBuyers competing for your listings. You may lose a few opportunities to these companies, but you will gain more if you build on your past accomplishments.There is no question our profession will continue to evolve. The iBuyer concept is indicative of one of many changes happening in our industry. I don’t believe they are going anywhere anytime soon. However, remember, as the industry evolution takes place, embrace the change coming your way. I guarantee you your role as a real estate professional will be different in the years ahead, but I am confident you will still have an important role to play. Most sellers and buyers will continue to always need someone they can turn to who can shepherd them through the complexity of a real estate transaction. Always remember the fundamentals of the profession and hone your selling and relationship skills like you never have before! These basics principles of what we do will still be around even when our industry morphs into something different than what we see today. All of us will need to be prepared to take our expertise and adapt them to the new way of selling real estate that lies ahead.Now, get out there and sell something and don’t let those iBuyers frighten you because there is enough business for everyone!-JMG John Giffen is Director of Broker Operations for Benchmark Realty, LLC in Tennessee. He is the author of “Do You Have a Minute? An Award-Winning Real Estate Managing Broker Reveals Keys for Industry Success.” John M. Giffen, CRB, CRS, CDEI, GRI Director, Broker Operations (615) 371-1544 Blog: www.JohnGiffen.com Author of “Do You Have a Minute? An Award-Winning Real Estate Managing Broker Reveals Keys for Industry Success”

Let’s Keep It Civil: Seven ways to manage your social media posts

John Giffen, CRB, CRS, CDEI, GRI, SRES, BROKER, REALTOR® (Benchmark Realty, LLC) — Sat, 22 Jun 2019 07:52:26 -0700

Since the creation of Facebook in 2004 and Twitter in 2006, social media has grown exponentially with millions of people posting stories, pictures, videos, advertisements, and other media online. For most of us, checking our social media accounts is part of the daily routine, and the use of social media platforms continues to grow.Social media plays a big role in real estate agents’ marketing and advertising efforts. It has become a primary advertising tool for listings, as well as for promoting an agent’s business. Social media sites such as Facebook and Twitter offer private pages for agents to post about issues they are facing in the local real estate market, as well as request recommendations for home inspectors, structural engineers, handymen, and other service providers. Social media has replaced the water cooler, picture album, and office bulletin boards of years past.I scroll through my social media accounts every day. I try not to spend an excessive amount of time on them as I discovered early on they are “time suckers” taking me away from more meaningful and productive activities. I participate in social media sites used for personal and family postings and several professional sites used to acquire and disseminate information from other real estate professionals and industry leaders. Sometimes I find the viewing enjoyable and entertaining and other times troubling.There is no question that all aspects of social media are part of our everyday lives — so much so that people’s daily routines and experiences are being played out on social media sites like never before. This is all well and good, but some degree of caution should be exercised before we put something out there for all to see.Some of the threads I regularly see on these sites are from a wide variety of people, including close friends, acquaintances, and fellow agents, as well as complete strangers. Many of the comments contain strong opinions on social, political, and ideological issues that may be viewed by some as inappropriate and insulting and may possibly harm long-standing relationships. On a regular basis, I read threads full of arguments and heated discussions that go on and on with insults and insinuations that genuinely “cross the line.” Some of these come from my fellow real estate agents.Here are some seven tips to keep your social media postings from negatively impacting your business:1. Think about what you want to say before you write or respond to a post. As you scroll through and read posts fromyour friends or connections on your Facebook, LinkedIn, Twitter or other social media timelines, think about how – or if – you want to respond to a post. In your mind, the words you write may not be considered controversial or offensive, but you never know how the words or “expressions” contained in your response may be received by the one who wrote the post. For example, I have seen the word “unbelievable” used in a social media response interpreted as both positive and negative. The following two phrases, using the word “unbelievable,” have different meanings: “Completely unbelievable! Most agents are smart enough to remember to close the lockbox!”; “It’s unbelievable he has reached that level of production in a short period!” I know this sounds like a little thing, but one word or phrase can be taken the wrong way.2. Keep all of your posts non-controversial and neutral. You need to keep in mind that your posts will be seen by many people, including your current and past clients, prospects, and friends who might refer future business to you. If one of your posts appears to be on a controversial subject with a disagreeing or differing point of view from your client, it could easily backfire and cause damage to your relationship with the client and possibly do damage to your business. I feel there are two areas to steer clear of: politics and religions. Both of these are “hot topics,” and I have seen threads in response to a post on these issues get pretty offensive. Stay away from these!3. Don’t attack or berate other REALTORS® using social media. The National Association of REALTORS® Code of Ethics and Standards of Practice clearly states we are not to make disparaging remarks toward one another. Article 15 reads: “REALTORS® shall not knowingly or recklessly make false or misleading statements about other real estate professionals, their businesses, or their business practices.” You might find yourself in front of your local REALTOR® association Professional Standards committee if you post something about a fellow agent on a social media site that could be construed as defamatory or insulting. If you have an issue or problem with a fellow professional, talk to him or her face-to-face to seek a resolution. Their managing broker should be consulted if you find discussions between you and the other agent are not progressing productively and positively. The bottom line: keep opinions and comments of other agents to yourself.4. A controversial post could cost you your affiliation with your firm. As a managing broker, I review social media accounts before and after hiring agents. I have a great concern when I see something incongruent with the values of our company. If a current agent is posting inappropriately, I will have a serious discussion with them and, depending on the situation, take corrective action or release their real estate license from the firm. And I am not alone. Almost all employers in every industry now review social media before deciding to hire an employee. Ensure all of your posts keep your broker happy.5. Remember what you post on social media can advance or hinder your career. Social media can be a huge asset to your real estate business. Agents and brokers continuously share property listings, market analysis, and real estate news with those they know. I grew my business over the years by posting to all of the significant social media sites on a regular schedule. It takes organization and discipline to regularly post, but it is worth it. But, keep in mind poor judgment in what you write on social media can also hinder your real estate careerI know we all have opinions and want to share those opinions with others. However, consider who is looking at your posts: past clients, prospects, neighbors, club members, friends, family, etc. Our real estate practices depend on getting referrals from those we know — and many of these folks are on social media. Once it is out there, it’s out there. Yes, you can take your post down, but remember anyone can take a screenshot of what you posted. The old saying, “closing the stable door after the horse has bolted,” applies here. People will always remember the negative posts more than any positive post. If they share your negative posts with others, it will be difficult to repair the damage.6. Social media is one tool in your toolbox. Social media should be one of the many tools you have in your real estate business “toolbox.” As I previously mentioned, social media is an excellent avenue for marketing your property listings, conveying the latest news in your neighborhood or community as well as local and national real estate market updates. Educate and inform your prospects and clients through what you post on social media. Watch any response you compose to posts written by others. Don’t use social media to be your bully pulpit on issues that could land you in hot water. Keep it at a professional level. Social media can be a successful communication and marketing component of your business plan. It should be managed carefully, sensibly, and responsibly.7. Do not let social media devour your time. I learned a long time ago, scrolling through the various posts on my Facebook timeline can be all-consuming. There are so many hours in the day for you to be productive in selling real estate. Do not let the attraction of fascinating articles, pictures, and video distract you from the vital work on your daily “to do” list. Spend a maximum of ten to fifteen minutes each morning and evening reviewing your social media posts. I know it doesn’t seem like a great deal of time, but you don’t have time to lose. Be disciplined and plan your social media time in a useful way.Again, as a real estate professional, keep your posts neutral and non-controversial. Always assume your clients and fellow agents are reading your posts and viewing your videos. In today’s cyber-savvy consumer world, prospects and past clients might make a decision on choosing you as their agent based on what they read on your social media sites. If you create a fire on social media with opinions and conversations that are contentious, you might find yourself trying to fix the damage that could be irreparable.John Giffen is Director of Broker Operations for Benchmark Realty, LLC in Tennessee. He is the author of “Do You Have a Minute? An Award-Winning Real Estate Managing Broker Reveals Keys for Industry Success.” John M. Giffen, CRB, CRS, CDEI, GRI Director, Broker Operations (615) 371-1544 Blog: www.JohnGiffen.com Author of “Do You Have a Minute? An Award-Winning Real Estate Managing Broker Reveals Keys for Industry Success”

Don't Be A Stealth Agent: 8 Easy Ways to Stay in Front of Clients

John Giffen, CRB, CRS, CDEI, GRI, SRES, BROKER, REALTOR® (Benchmark Realty, LLC) — Fri, 14 Jun 2019 07:07:48 -0700

I am convinced one reason real estate agents fail in this business is they do not stay in touch with their past clients on an ongoing basis. We work extremely hard in our prospecting efforts to procure buyers and sellers, but we do very little to make sure they remember us after the transaction closes. Why?I believe we become too involved in taking care of current prospects, clients, and transactions, and forget the importance of staying in touch with those whom we served in the past and who will more than likely need our services in the future.A year or two into this business I learned the importance of staying in touch with clients. One Saturday morning, I was driving in a Nashville neighborhood where I assisted a young couple a year earlier purchase their first home. As I passed their home, I saw a “For Sale” sign in the front yard. Sadly, it was not one of my signs. I was shocked and very disappointed. Why didn’t they call me? Didn’t they know I was their agent? Apparently, not. Why would they use someone else? The reason was simple. I did not stay in touch with them after they moved into their home. It was my fault.According to the 2018 National Association of REALTORS® Profile of Home Buyers and Sellers, only 12 percent of buyers and sellers use the agent who represented them in their last real estate transaction. That means 88 percent did not. This statistic confirms the fact the majority of real estate professionals have become “stealth” agents and disappear from their past client’s radar and find themselves “out of sight, out of mind.” I believe it is vital agents regularly stay connected with their clients after everyone leaves the title attorney’s closing table. A good client appreciation program including periodic mailings, telephone calls, emails, in-person “drop by” visits, etc. will ensure you stay in front of clients on an ongoing basis.Clients are the number one source for referrals – especially past clients! These folks are in the best position to refer a buyer or seller because they experienced the service and attention their agent provided them when they sold or purchased a home. Ongoing relationships with clients allows the referral pipeline to flow on a consistent basis.Remembering your client’s birthdays and anniversaries as well as births of children, job promotions, and other special occasions will be remembered by them. This is a great way to let them know you still care about them and are always available if they ever need you. Put a reminder system in place in your contact management program or calendar so you know when you should reach out to a past client.Here are eight inexpensive ways you can stay in front of your clients and prospects to prevent from becoming a stealth agent:Develop a post-closing, one-year follow-up program for your clients. You spent a considerable amount of time – possibly weeks, months, or years - with a client assisting them in selling their property or finding their next home. The relationship you developed during your time together is the foundation for an ongoing association and becoming a trusted source for everything relating to real estate. An active one-year client follow-up program of handwritten notes, telephone calls, face-to-face contacts, and miscellaneous client appreciation mailings will tell your client you have not forgotten about them. You should have each client “touch point” on a precise schedule and spaced apart, so it doesn’t inundate them but keeps your name in front of them. I tried to “touch” my clients every thirty to forty-five days in the first year after they closed on their home.Host a “client gratitude dinner” in your home or local restaurant. People love to eat! Why not bring a group of your clients together for dinner around your dining room table or at your favorite restaurant? A meal is an excellent way for you to show your appreciation to each of them for allowing you to be their one and only REALTOR®. It is also an opportunity for clients to get to know one another and build new friendships. Remember, they all have something in common - YOU! I would encourage you to consider holding two to three of these dinners throughout the year.Sponsor a local youth sports team. One of the best ways to get your name in front of clients and prospects is through the sponsorship of a local youth sports team. I discovered many years ago, having my name on a banner or t-shirt of a youth T-ball or soccer team is a good investment. Your name and logo on uniforms, t-shirts, signs, fence banners and other collateral materials are very effective for brand recognition. Your support also creates goodwill for you and your brokerage in the community. You may want to think about sponsoring a couple of teams during the year – one in the summer and one in the winter, so your name and brand remain consistently visible to those who might consider utilizing your services.Invite a past client or someone in your sphere of influence (SOI) to coffee. A cup of coffee (or some other favorite beverage) is a cheap way to have a face-to-face meeting. The local coffee shop provides me with an excellent opportunity to sit down and spend some quality time with a past client, prospect, or “referring” friend. Also, more times than not, I usually run into someone else I know in my sphere during a coffee meeting. Over the years, I’ve received many buyer and seller referrals from past clients, friends, and colleagues over coffee. The return on a small investment for a “cup of Joe” can be tremendous if it leads to a prospective seller or buyer in your business pipeline.Write several handwritten notes each day to clients and prospects. I believe one of the most impactful and least expensive ways to deepen a relationship with a client or prospect is to send them a handwritten, personal note. Handwritten notes are always read, and they leave a lasting impression with the person who reads them. Your note does not need to be too long. It can be two to three brief sentences expressing your appreciation for the relationship between you and the client or prospect. Many times, I will attach to a note an interesting magazine or newspaper article I want the client to read; a recent comparative market analysis of their home for them to review; or a favorite recipe from my wife for them to try. The message in a handwritten note can be almost anything. And, don’t forget to include your business card!Call five to ten prospects or past clients every business day. The telephone is a fantastic and accessible communication tool. Unfortunately, we do not utilize it as much as we did in years past. Email and texting have become the preferred choice for many today – especially the younger generations. The messages contained within these electronic methods are limited and take a certain amount of time to compose. On the other hand, a telephone call can convey information in a much more personalized way. Hearing a live voice on the other end of the line allows for better and clear communication as well as numerous opportunities for subjects on which to discuss. I always enjoy checking in with clients and prospects to see how they and their family are doing. Also, it is another chance for me to ask if they know of anyone who might be considering selling or purchasing a home.Plan personal “drop-by” visits to clients and top tier prospects around holidays, birthdays, and anniversaries carrying an item of value. The best way to have a steady stream of referrals is to consistently deliver an item of value on holidays, birthdays, anniversaries and other occasions to your current and past clients as well as your “A-list” prospects. These visits provide you with a few minutes to speak with the person and catch up on what is happening in their lives. I always receive a positive response when I deliver flowers at Easter, a box of sparklers on July 4th, a pumpkin in early October, or a small poinsettia at Christmas to those who have worked with me in the past, in the future, or who may provide me with a referral. A cupcake or special sweet treat on birthdays and anniversaries are always remembered and can demonstrate the importance of the relationship you have with your client. People appreciate the gesture of these small tokens of acknowledgment and are more likely to contact you if they need to sell or purchase a home or know of someone who needs a top-notch REALTOR®.Host a neighborhood block party. Everyone likes a party! Grilling out hamburgers and hot dogs for those in your neighborhood or farm area(s) is a great way to bring people together. These events can be done very economically and without too much work. In your invitation, ask everyone to bring their favorite dish to share as well as a lawn chair or two. Go to your local discount or party store to purchase an assortment of drinks, condiments, plates, napkins and other items for the party. Have personal promotion pieces on hand that will keep your name in front of everyone for an extended period. Several weeks before the event, order some plastic tumbler cups or foam koozies with your name, logo, or brand printed on them. Consider providing custom imprinted Frisbees or small footballs for the kids to enjoy while the parents socialize. And, make sure they know you are in real estate and are never too busy for their referrals! Block parties can become annual events and, if done well, can lead to new business and friendships.Make it a priority in your daily prospecting activity to connect with a previous seller or buyer client. Stay in front of them on a regular basis as you never know when they or someone they know may need your services. You always want to be the “REALTOR® for life” for your clients. Good follow-up after the sale will make this happen! Don’t be a stealth agent!-JMG John Giffen is Director of Broker Operations for Benchmark Realty, LLC in Tennessee. He is the author of “Do You Have a Minute? An Award-Winning Real Estate Managing Broker Reveals Keys for Industry Success.”John M. Giffen, CRB, CRS, CDEI, GRI Director, Broker Operations (615) 371-1544 Blog: www.JohnGiffen.com Author of “Do You Have a Minute? An Award-Winning Real Estate Managing Broker Reveals Keys for Industry Success”

The Importance of "Belly-to-Belly" Selling

John Giffen, CRB, CRS, CDEI, GRI, SRES, BROKER, REALTOR® (Benchmark Realty, LLC) — Thu, 06 Jun 2019 12:09:47 -0700

Real Estate Professionals Must Continue to Build Personal RelationshipsSuccess is neither magical nor mystical. Success is the natural consequence of consistently applying basic fundamentals.” – Jim Rohn Selling real estate and managing agents is my second career. Yes, I have been in this business for many years, but I started my professional life “many moons ago” as a box salesman. Soon after I graduated from college, I accepted a job with a company in Louisville, Kentucky, selling printed folding cartons and paperboard packaging. It was a great job, especially for someone in their early 20’s who had a wife with a child on the way. In my position as an account executive, I learned not only how to sell, but I gained knowledge and skill in building strong customer relationships. These relationships were at the heart of my business for all the years I was selling cartons.My boss at the Louisville company was a former all-American college and NFL football player back in the early 1950s. He had significant experience in the industry working for multi-billion dollar corporations. He was a tough and “in your face” sales manager, but I learned so much during those years I worked for him. One of the business concepts he introduced me to was called “belly to belly selling.” When he shared that expression with me, I sat back and laughed. The first thing I thought about was the image of two Japanese sumo wrestlers going at it “belly-to-belly” in the ring. Sumo wrestlers do engage in a close and personal way!“Belly-to-belly” refers to the importance of a salesperson being in front of their prospects and customers, face-to-face instead of using other methods to connect with them. Technology and voice communication does not replace personal contact. It is challenging to build rapport and relationships if you’re not right in front of them, selling them goods or services you offer.My boss continued to use “belly-to-belly” every time he thought we were spending too much time in the office and not enough time out in the field with current and potential customers. As I continued to sell, manage others, and grow and manage a successful real estate business, the three words “belly-to-belly” stuck with me. Like my old boss, I still refer to this phrase many times in classes, company meetings, and other gatherings with agents and brokers. Even with all of the newest online lead generating tools available to buyer agents and iBuyer offers for homeowners, clients are still choosing to work with a real estate professional face-to-face to assist them in selling or purchasing a home. Buyers and sellers are still finding the need for the services of a real estate agent. Let me share some statistics with you from the National Association of REALTORS®. In the NAR 2018 Profile of Home Buyers and Sellers, 87% of buyers recently purchased their home through a real estate agent or broker. 90% of sellers listed their home in the local Multiple Listing Service (MLS), where a vast majority of users are REALTOR® members. Both of these numbers have remained steady over the past few years and are indicators that consumers genuinely do rely on our expertise to guide them through a real estate transaction.Now, for some sobering information from the same NAR survey. As it relates to being in front of prospective clients as well as those clients an agent has served in the past, 68% of buyers interviewed only one real estate agent during their home search. 90% of buyers would use their agent again or recommend their agent to others. However, only 12% used an agent that they had worked with in the past to buy or sell a home. That means 88% of past clients used another REALTOR® to assist them in finding a home. The key words in this statistic are “another REALTOR®.” So, what is causing such a large number of people to use someone else for their real estate services? There is a straightforward answer to this question. The previous agent did not stay in contact with their client and became a “stealth agent.” Have you heard of the term “out of sight, out of mind?” In other words, agents are not keeping connected with past clients or people in their sphere of influence.Real estate professionals can easily prospect for new business by staying in touch with people they have done business with in the past as well as those they know within their sphere of influence. Past clients and others can be an excellent source of reliable and quality referrals. Regrettably, most agents get too busy helping current clients that they forget about those they have represented in the past. They forget how easy it is to pick up the phone and schedule a lunch or a coffee with someone who is in the position to refer a buyer or seller.Recently, I spoke to a group of REALTORS® on how they can quickly and inexpensively build their business pipeline. I encouraged them to consider stopping by a past or future client’s home at certain times of the year to drop off an “item of value.” Items of value can include chocolates at Valentine’s Day, flowers at Easter, a box of sparklers for July 4th, pumpkins in the fall, or poinsettias at Christmas. I also discussed other creative ways to be “belly-to-belly” with clients and prospects. At the end of my presentation, I challenged them to step out of their comfort zone and start making time in their daily schedules with their past clients, friends, neighbors and others who could assist them in growing their business. Personal interaction is something we do every day as we come in contact with those we know well – and, don’t know well. However, we seem to forget that many of the people we come face-to-face with could be prime sources for a referral or, possibly, a future client. Staying in front of prospects is a significant reason so many agents struggle in maintaining business sustainability for long-term financial security. We can have all the technology tools and electronic gadgets in the world to support our businesses but being “belly-to-belly” with people is the best way to prospect for business. It worked for me, and it can work for you.-JMG John Giffen is Director of Broker Operations for Benchmark Realty, LLC in Franklin, Tennessee. He is the author of “Do You Have a Minute? An Award-Winning Real Estate Managing Broker Reveals Keys for Industry Success.” John M. Giffen, CRB, CRS, CDEI, GRI Director, Broker Operations (615) 371-1544 Blog: www.JohnGiffen.com Author of “Do You Have a Minute? An Award-Winning Real Estate Managing Broker Reveals Keys for Industry Success”

Don't Let Those iBuyers Frighten You!

John Giffen, CRB, CRS, CDEI, GRI, SRES, BROKER, REALTOR® (Benchmark Realty, LLC) — Wed, 29 May 2019 11:41:22 -0700

There is a little anxiety in the air! Agents in my company are continuing to drop by my office or call me on the phone anxious to discuss the increased presence of a certain type of home buyer popping up in the Nashville and Middle Tennessee real estate market. These buyers are making cash offers for residential properties, sight unseen and close quickly. Who are these crazy people? Well, they are investor-backed companies called “Direct Buyers” or better known to the real estate industry and consumers as “iBuyers.” Many agents are still confused about the iBuyer home buying business model. iBuyers, such as Opendoor, Offerpad, Homego, and Knock, are companies that use automated valuation models (AVMs) and other technology to make quick offers on properties. They provide a much shorter “contract to close” period – usually in days not weeks. Once they take title to a home, they make the necessary repairs and improvements and place the property back on the market. In fact, many of the iBuyer companies will pay a REALTOR® to assist them in either bringing them a qualified buyer or market the home once it is ready to be put back on the market.Why are they showing up now? iBuyers are moving into traditional markets and growing because of the influx of venture capital and other private and institutional investment funding in the residential real estate market. These companies are connecting a relatively small group of large, qualified investors to prospective home sellers and home buyers, for a fee. iBuyer purchases only occur online and directly from the owner of the property, usually at a small discount slightly below market price. Less Time, but Higher CostsThe iBuyer “hook” is a simplified and expedited transaction process, unlike the standard thirty to forty-day escrow period. An iBuyer transaction allows a seller to move on to their next home or the next chapter in their life. A seller must decide whether speed and convenience trump potential increase net returns on the sale of the home. Unfortunately, the seller’s net sheet will reflect a higher cost. Sellers will more often than not get less money (sometimes, much less) for their home than they would if they listed it with a real estate agent. (I’ll explain that as you continue to read on in this post.) Again, the significant benefit for a seller going the iBuyer route instead of through a real estate professional is time.We are beginning to see more of the “brand name” iBuyers such as Zillow and Opendoor in several metropolitan areas. Zillow – through their iBuyer division Zillow Offers – and Opendoor are gaining a foothold in large markets such as Phoenix, Los Angeles, Chicago, Las Vegas, Miami, Portland, and San Francisco. Zillow Offers is becoming more noticeable these cities as well as in medium size markets such as Minneapolis, Salt Lake City, Orlando, and Nashville – my local market. Opendoor is also entering these same markets as well as others throughout the country. Even Redfin is starting to dabble in the iBuyer market. With the continuing infusion of investment money in the industry, I anticipate new iBuyer companies will be established this year. Expect several more press announcements on where iBuyers are entering new markets to establish a foothold to purchase homes.Something we should watch for is not their sales volume, but their net proceeds from purchasing a home then re-listing it for sale. Their higher fee may help their “bottom-line numbers” in the short term, but after I do the math it appears it is going to take a large amount of sales volume over a significant period of time to sustain long-term profitability. Just my opinion.A Selling Option Not for EveryoneIs there a real benefit to the home seller who uses an iBuyer to purchase their home? Maybe. If a seller needs to sell their home quickly, then utilizing an iBuyer may be a choice they might want to consider. However, a property owner must understand the net proceeds from the sale of their home will certainly be less than what they would receive if they chose a professional listing agent. The fees charged by these companies are usually higher than the traditional six-percent commission charged by REALTORS®. For example, the average Opendoor “service fee” is seven to eight-percent. This cost is higher than the customary six-percent fee charged by REALTORS®. Also, iBuyers will value a home right at or below its market value. Higher fees and a lower value will mean less money for the owner. However, as I previously noted, they might accept less money if they need to sell their home sooner rather than later.iBuyers Will Acquire Some Business, But Not All of ItSome of my peers in the industry are saying iBuyers will have a significant impact on home selling throughout the country. It is my opinion choosing an iBuyer will not become the “go-to” option most home sellers will select to sell their home. However, I do see one type of seller who will probably benefit from using an iBuyer. Personal estate administrators and surviving heirs don’t care as much about sale proceeds as they do about selling the house quickly. Using an iBuyer to dispose of a decedent’s property will be a good option for these folks.Many people believe iBuyers are industry disruptors and threaten to take business away from traditional brokers. Others see these new market players as a temporary industry “fad” and will fall by the wayside when the economy slows down. I do believe they are disrupting the market somewhat, but, not to the level of taking large sections of market share and altering current competitive business practices. Will they be around for the foreseeable future? Well, time will tell. I would not get too anxious about them disrupting your business as their primary objective is to assist those who want to dispose of their property in a timely manner. As I have written in previous posts, I am more concerned about companies such as Redfin and Compass who are well-funded real estate companies and are strategically seeking large segments of market share in the U.S. Currently, they two are working hard to get a large portion of everyone’s business in the markets in which they operate.Stay Focused!There is no question our profession continues to evolve. The iBuyer concept is indicative of what we are now seeing in the industry. Our role as real estate professionals will be different in the years ahead, but I am confident we will still have a role to play. Agents and brokers will need to adapt to the changes happening now and in the future. In the meantime, I would encourage all of us not to let all the news we read online via social media and industry news portals to interfere with our unique value proposition as REALTORS®. Sellers and buyers will always need someone they can turn to and shepherd them through the complexity of today’s real estate transaction. Always remember the fundamentals of the profession and hone your selling and relationship skills like you never have before! (My book, “Do You Have a Minute?” is all about the fundamentals of real estate selling and client and transaction management.) These basics principles of what we do will still be around even when our industry morphs into something different than what we see today.Now, get out there and sell something and don’t let those iBuyers frighten you!-JMG John M. Giffen, CRB, CRS, CDEI, GRI Director, Broker Operations (615) 371-1544 Blog: www.JohnGiffen.com Author of “Do You Have a Minute? An Award-Winning Real Estate Managing Broker Reveals Keys for Industry Success”

There is Crazy in the Water!

John Giffen, CRB, CRS, CDEI, GRI, SRES, BROKER, REALTOR® (Benchmark Realty, LLC) — Mon, 20 May 2019 17:00:21 -0700

Another spring selling season is in full swing around the country, and the crazy people are returning to the real estate market everywhere. The folks I am speaking of are the buyers, sellers and cooperating agents (on the other side of the transaction) who cause real estate professionals great stress and anxiety as they manage residential property listings and sales transactions. This year, in my local market, we see even crazier behavior from the “over-medicated, under medicated or not medicated” crowd.The managing brokers I manage at Benchmark Realty, LLC are calling me every day with situations involving clients who are allowing their emotions to get the best of them and electing to walk away from transactions that are only a few days away from closing. Cooperating agents are doing the same by speaking into various issues outside of their fiduciary responsibility and evoking fear and apprehension in their buyer and seller clients. Trust me, as spring winds down and summer arrives, real estate buying and selling is going to bring out the worst in some people. There is crazy in the water!The Last-Minute Temper-TantrumA couple of weeks ago, one of our brokers stopped by my office to fill me in on a situation concerning one their agent’s upcoming closing on a listing. The transaction was three days from the closing table, with a “clear to close” and closing disclosure issued by the lender and final title and loan documents were sent to the title company. The buyers made their final inspection to check on a few minor repairs they requested in the repair amendment to the contract. A couple of minor issues cropped up as they looked over two of the repair items they felt were not properly repaired by the seller. The buyers wanted the seller to rectify these issues prior to closing or escrow money to cover them. Their agent informed our agent who, in turn, communicated with the seller about the buyer’s request. Once the seller learned what the buyer wanted, he became very emotional and elected not to close on the transaction and wanted to retain the buyer’s earnest money. Remember, the repairs were minor and within reason. The seller was mad and wanted to “punish” the buyer. This created a flurry of phone calls, emails and texts between the two agents and their managing brokers. The seller was not willing to budge and, in my opinion, allowed his bad feelings toward the buyer get in the way of any reasonable thinking. The title attorney overseeing the closing felt the seller would most likely be in default because he was not acting in “good faith” to address the repairs. Long-story-short, the deal did close in the end, but not after a lot of unnecessary “trauma and drama” taking place. Buyers Going Behind an Agent’s BackAnother situation came to my attention just a few days ago. One of our brokers informed me of a transaction falling apart because the buyers went behind our agent’s back and made an offer on another house. The lender - a close family friend - immediately drafted a loan denial letter for the first house and subsequently sent over a loan pre-approval letter for the second house. Our agent was pretty upset as she was kept out of the loop. These buyers – and, their lender – created some significant issues for the sellers and both agents in the transaction. The buyers could find themselves purchasing two homes and possibly spending some time in a courtroom defending a lawsuit filed by the first seller and, maybe the second seller. I encouraged our broker to advise his agent to release the buyers from their agency agreement and focus on finding a client who is not as deceiving as the one with whom she was working. She did and helped another client get under contract on a home that met their needs.Let the Screaming Begin!The last scenario I will share is one that is occurring much more often than in past years. An upset client calls our office and asks to speak with the managing broker. The broker takes the call and all he hears on the other end of the line is constant yelling from the client complaining about how our agent was not properly communicating with him. The client expresses his or her grievances by letting their emotions run wild and screaming at the broker because they feel “injured” by what our agent did or did not do. Ninety-eight percent of the time, the client is reacting to a situation they cause, or the other party instigates. All we can do, as brokers and managers, is listen to their ranting or tell them to call back when they are much calmer. I have hung up the telephone on people who do not let me get a word in to discuss the matter or not willing to listen to me. They are determined to ensure they get their point across to me. I have little patience for this type of behavior. In this particular scenario, communication did take place, but the demands of the client were more than unreasonable. Our agent said the client had some serious mental issues and was in therapy.Why is Behavior Getting Worse?As I write in my book “Do You Have a Minute? An Award-Winning Real Estate Managing Broker Reveals Keys for Industry Success”, client behaviors and the problems they cause for agents, brokers, and others in a real estate transaction are becoming more significant and challenging to manage. So why are so many more people misbehaving? There are many reasons for bad behavior, and I don’t have enough space to mention all of them in this blog. Let me share a few possibilities of what might be causing stress and anxiety everyone is feeling these days. Too Much Data!Access to information is easier now that it has ever been. The information overload we all are experiencing has occurred through easy access to communication and data on smartphones, tablets and laptop computers. As increased Internet access to property information readily available through websites such as Zillow, Trulia, and Realtor.com, so has the expectation of a quick response from a real estate agent to a prospect or client on a multitude of questions, issues, and concerns. It seems we are constantly texting, emailing or calling to receive and relay information to everyone. And, the person on the other end wants a response NOW!Emotions Blocking Reasonable Thinking Another source of erratic behavior is letting emotions get in the way of making a decision that can jeopardize the transaction for either the buyer, seller or both parties. When emotions replace clear thinking and objectivity, there is nothing but chaos for all involved in the deal. Sometimes, the agents themselves are the ones who allow their feelings to hamper a successful property closing. As I noted in my book, REALTORS® can be their own worst enemies.Psychotropic Prescriptions and Their Effect on BehaviorA third – and very troubling – contributor to lousy behavior could be attributed to the use – or non-use – of prescribed psychiatric drugs. I know this might come across as a little controversial, but it is a reality that real estate professionals must be willing to face and understand.According to IQvia, a leading health industry technology consulting company, over 150 million Americans are taking prescription medication to control depression, anxiety, obsessive-compulsive disorders, anti-psychotic behavior, etc. The proper use of psychotropic drugs can allow individuals to cope with everyday activities and maintain a sense of normalcy in their life. Some of my closest friends are on medication and find themselves leading much healthier and productive lives. However, if medicine for behavioral disorders is misused or not used regularly, it can cause significant problems for the patient and the way they interact and communicate with others. Mental illness is real, and it can lead people to abnormal behavior. Many agents and brokers are caught in the crosshairs of those who are mismanaging or not taking medicine or have not sought professional help in addressing their behavior(s). This doesn’t happen very often, but when it does…it is pretty damn serious.There are many more reasons “all hell breaks loose” when people show their worst sides. The three “case studies” I previously mentioned are pretty common in the real estate world and are ones I have experienced first-hand as an agent and principal broker.Most of the time, “it will work itself out in the end”! Finally, I believe there is some good news about all this craziness. What I discover in almost every situation where people are upset about something happening, or not happening, in a transaction is a solution can be found. We have to remember to stop the ranting and raving, calm down, step back and take a few deep breathes. A long time ago, my late father told me “Don’t worry. It will work itself out in the end.” And, most of the time it does. As a managing broker, I found if my agents and I approached various situations calmly and rationally, nine times out of ten they will work themselves out.For agents, I share this very important piece of advice: it is imperative that you do not let the bad behavior of your clients and cooperating agents get in the way of servicing your client, negotiating a contract or closing a transaction. Trust me, it can be challenging and frustrating. I get it. However, agents have fiduciary responsibilities they owe to their clients and emotions can interfere with their ability to assist a seller or buyer in a real estate transaction. Remaining calm and collected and being objective will allow an agent to be successful in all the important work they undertake for their clients, customers, other agents and themselves. In the end, it does work itself out.-JMGPostcriptOne of the reasons I share my thoughts on client and cooperting agents "craziness" with you is because I am more likely to witness all types of behavior than the average real estate agent or managing broker. I oversee seven managing brokers and almost 1,100 agents in offices throughout Greater Nashville and Middle Tennessee. Our market has been one of the hottest markets in the country over the past three years and, let me tell you....we have seen CRAZY at times! If you haven't experienced challenging clients or agents on the other side of the transaction....trust me, at some point in your career you will. John M. Giffen, CRB, CRS, CDEI, GRI Director, Broker Operations (615) 371-1544 Blog: www.JohnGiffen.com Author of “Do You Have a Minute? An Award-Winning Real Estate Managing Broker Reveals Keys for Industry Success”

The Attack on Buyer Representation

John Giffen, CRB, CRS, CDEI, GRI, SRES, BROKER, REALTOR® (Benchmark Realty, LLC) — Wed, 15 May 2019 12:28:53 -0700

I am going to get nostalgic for a moment. When I was young, I loved watching Bugs Bunny, Daffy Duck, Porky Pig, and all the other Looney Tunes characters from the golden age of animation. Looney Tunes is still around on TV, but the shows produced from the 1940s, 1950s, and 1960s are far superior to what we see today.Some of my favorite Looney Tunes episodes were the many battles and escapades between Bugs Bunny and that famous rabbit hunter – Elmer J. Fudd. One phrase used by Bugs over and over when Elmer would try to catch that “rascally rabbit” for his rabbit stew dinner was “You know, this means war!” Bugs was always ready to take on Elmer whenever he felt threatened. Bugs Bunny always seemed to win. So, why am I writing a real estate blog with an introduction talking about cartoon characters? Shouldn’t I be discussing topics centered around real estate? Well, as I peruse the headlines on Inman.com, RISMedia, and other news outlets over the past few weeks, I feel we could be heading toward a showdown like Bugs and Elmer involving a few industry players as well as consumers in preserving some of the fundamental cornerstones of our profession. Redfin, Zillow, Opendoor, and others are attempting to change how properties are listed and sold. Lawsuits have been filed by consumers attacking our compensation, especially commissions paid by sellers and earned by buyer agents. Like Bugs Bunny, we might be coming to a point where some in this business might begin screaming, “This means war!”I don’t think any of us are going to grab our favorite firearm and go after those who are attempting to change the way we do business. But if agents who have been in the industry for any period of time are going to remain in it and survive, they must wake up and realize some companies are working diligently to disrupt our business and how we work with prospective buyers and sellers.I recently wrote in a post on my personal blog how a consumer in Minnesota had filed a class action lawsuit against the National Association of REALTORS® and several of the larger real estate companies including Realogy, RE/Max, Keller Williams, and others. Since then, additional lawsuits cropped up from consumers in other parts of the country challenging how compensation is shared in a transaction with a buyer representative and the impact it has on the seller’s bottom line. I am expecting more of these suits to be filed as well as others attacking our current methods of real estate practice. The New ParadigmI believe we may be finally reaching a point where we, as real estate professionals, are just now realizing we have done a very meager job of informing and educating the consumer – and the media – on the benefits of a buyer or seller utilizing our professional services. Over the years, we assumed our industry was safe and far from being dismantled and turned into something entirely different.The real question we must ask ourselves is a simple one: “Is it too late to change the perception the prospective home buyer or home seller has of us?” Maybe yes, maybe no.Unlike many sectors of our economy, real estate is an essential foundational component to economic stability and prosperity in the U.S. Real estate effects other industries such as construction materials, furniture, and appliance manufacturers, carpet mills, insurance brokerages, and numerous other service providers. It has always been a reliable gauge for how well the stock and bond markets perform, employment numbers, and other financial indicators. Our contributions as those who “steward the land” have enabled families to live the American dream and support the growth and flourishment of cities, counties, and states nationwide.Surviving the New RealitySince the early twentieth century, our breadth of knowledge and expertise have assisted millions and millions of consumers make the right choices when buying or selling a property. However, our survivability will be tied to how well we are willing to adapt and accept the changes that are taking place now and in the future. Technology, “out of the box” thinking, and large sums of venture capital are driving the changes we are seeing. These new realities are not going to go away. They are here to stay. REALTORS® and their brokerages must be willing to embrace and adapt to what is happening if they want to remain in business. As the saying goes – “you have to play to stay.”The DisruptorsThere are those in the industry who want to radically change how REALTORS® and their brokers represent consumers, market residential properties, and manage the real estate transaction. They feel the current way of how we do real estate in this country is broken and not consumer friendly – thus the lawsuits and online portals attempting to replace the hard work of the real estate professional. In their eyes, interpersonal relationships and “hands-on” work are not needed as technology can accomplish what we are paid to do. So, what is going to happen to REALTORS® as the industry evolves? In my last blog post, I talked about how an agent’s role in a transaction will change to that of a consultant or shepherd of the transaction and buyers and sellers will choose exactly which services they want from us to assist them in selling or purchasing their home. We are already seeing this trend beginning in certain parts of the country, especially with firms like Redfin who are utilizing technology and agents who sit in cubicles to initiate, manage, and close a transaction. Also, the direct online buyers, known as iBuyers, are attempting to lure home sellers by eliminating the listing agent in selling a home but instead utilize their services. iBuyer companies, such as Opendoor, Zillow Offers, and others, claim they can provide simple and easy solutions for sellers who want to quickly sell their homes at a competitive price with fewer hassles. Time will tell if these companies can survive long term – especially if the economy goes into another period of recession.Buyer Representation is Under AttackBuyer representation, as we know it, is under ever-increasing attack by not only attorneys associated with the recently filed lawsuits but some of the large venture-capital backed companies who want to do everything they can to remove the buyer’s agent from the transaction. The Latest Announcement: Redfin Direct and Online BuyingRedfin recently announced the launch of their new online buyer program called Redfin Direct in Boston. Briefly, this program allows buyers to make offers on Redfin-listed homes online, directly through the company website. There is no buyer’s agent involved and the listing broker – Redfin – assists unrepresented buyers through each step of the home purchase. They provide a questionnaire for buyers to complete when they want to make an offer. Redfin says the questionnaire provides detailed information on how to make an offer, order an inspection, work with a lender and to close the transaction with an attorney/title company. If a buyer wants to have the home inspected, they contact the listing agent so the inspector and buyer can have access to the house. All the paperwork goes directly to the listing broker, Redfin. The buyer is dependent on the listing agent to ensure everything in the transaction is in order. Knowing how Redfin operates, I expect they will continue to expand Redfin Direct in major markets throughout the country. The issue I have with what Redfin and other startup companies are doing by eliminating buyer representation is the buyer has no one to speak for them in the transaction. Buyers are without a professional agent who can advocate for them, especially during the critical stages of the deal. Certain phases of the transaction are full of “drama” including the post-inspection period when repairs need to be negotiated with the seller or during the pre-closing period when issues pop up at the final walkthrough and need to be addressed before everyone sits down at the closing table. Buyers are going at it alone and without professional guidance and counsel.In the online buyer option such as Redfin Direct, who do you think is going to ensure the seller’s needs will always come first? Who owes the loyalty and obedience to the party in the contract who has an agency agreement with the listing broker? It will always be the listing agent and listing broker. These folks are driving the transaction. In my opinion, this is dangerous and creates serious challenges for the buyer from contract to closing. Redfin defends the non-buyer rep arrangement by stating today’s consumer wants other options when buying a home and should be able to navigate the various steps with little to no help from a broker. Long story short – they do not need a buyer’s agent. But I believe buyers do need representation.Buyer representation is a hallmark of what we do as REALTORS®. In Tennessee, before 1996, buyers were forced to work with an agent under the listing broker to help them buy a property. Many within and outside the industry felt buyers were at a serious disadvantage and needed formal and legal buyer representation. As a result, in 1996, our state created our current agency law, and it created an official buyer agency designation to guarantee home buyers had someone who truly represented and advocated for them. It changed how agents worked with buyers and provided them with someone who could be able to “go to bat” without worrying about upsetting the seller and listing broker who previously were the source of their commission. What Redfin and others are creating with online home purchasing is taking us back to the “good old days.” The listing broker controls the entire transaction. We will have to wait and see if Redfin can gain traction in other markets with this new home buying option. Defending Our Work as Real Estate ProfessionalsIf we want traditional buyer representation to continue, agents are going to have to wage “war” against those who wish to destroy it. There are a large number of agents and brokers in this country who devote a significant amount of time and energy working with buyers. To wage battle against companies like Redfin, an agent is going to have to know and convey their unique value proposition to the consumer. A buyer or seller must understand we know what we are doing, and they can be confident in our ability to get the job done.I have written in previous posts on this blog as well as in my book, “Do You Have a Minute?” your value proposition is probably the most critical element of selling real estate. This is especially true as the market continues to evolve and adapt to numerous technological and generational changes. Those who can communicate their value proposition to the client will be more than likely remain in this business in the years to come — those who can’t will die on the vine.The pressure on the industry to transform itself will continue in the foreseeable future. Lawsuits will continue against the large national brokerages and NAR. Startup companies with lots of venture capital will continue to pop up and provide new “solutions” for the consumer – especially the homebuyer. It is my belief the buyer representation side of our business is vital to protecting the consumer and their interests as they set out to find a new home. For this piece of our business to continue and endure for years to come, REALTORS® must be willing to fight for their existence as buyer agents. I am hopeful there will be an effort to preserving buyer representation soon. We all need to be ready to step up and do what needs to be done to keep it around. If we don’t, online buyer portals like Redfin Direct will be the “go to” place for buyers to purchase their next home. We might find ourselves sitting out in the cold, wondering what happened.-JMG John M. Giffen, CRB, CRS, CDEI, GRI Director, Broker Operations (615) 371-1544 Blog: www.JohnGiffen.com Author of “Do You Have a Minute? An Award-Winning Real Estate Managing Broker Reveals Keys for Industry Success”

Buyer Representation and New Construction

John Giffen, CRB, CRS, CDEI, GRI, SRES, BROKER, REALTOR® (Benchmark Realty, LLC) — Mon, 15 Apr 2019 09:48:08 -0700

Recently, I have been brought in to a few situations where our agent was not getting paid by the builder on a new construction contract because they were not with the buyer when they visited the model home to write the contract. Since you were not with them, the on-site agent will claim you did not “introduce” them to the home and will claim they are the procuring cause. Yes, unfortunately, this really happens. This is why it is critical you clearly educate your buyer client at the BEGINNING of the buyer/agent relationship so they understand the importance of not visiting new construction sites without you. Unfortunately, they do and will write a contract because they fell in love with the home plan the builder’s agent presented to them and want to get the deal sealed before it gets away. I know of two transactions in the past couple of weeks where our agents were excluded from the deal because they were not with the buyer at the time of writing the contract. How can you prevent this? And, how can you get paid?First, as I said, EDUCATE your client! Use my “Home-Buyer Partnership” form I created a while back as a guide when having the conversation about how you run your buyer representation side of your business. (You can download the form from my book site here) Second, you need to have a signed buyer representation agreement in place with the buyer before any offer is made on a property – this includes new construction. Third, if you want to get paid and you are not receiving compensation from the seller/builder, the buyer needs to understand the compensation terms and condition in the Purchase and Sale Agreement. These paragraphs explain in detail to the buyer that you will still be due a commission if the buyer works directly with another broker or agent in purchasing a home. And, if a compensation is not being offered by the seller/builder or their broker, you will be paid the amount you entered in the agreement.It can become problematic when a buyer says they did not realize they had to pay you, their buyer representative, a commission if you did not receive compensation from the seller/builder. That is why it is critical you review the buyer rep agreement in detail with them. Don’t be afraid to go over the compensation sections. Remember, you are operating a business and you get paid for your experience, knowledge, negotiating ability and knowing how to manage complex real estate transactions. If they clearly understand what buyer representation is all about and the benefit it provides them they will want YOU to be with them when they visit new construction homesites. They will know you “have their back” and are working in THEIR best interest and not the seller.John M. Giffen, CRB, CRS, CDEI, GRI Director, Broker Operations (615) 371-1544 Blog: www.JohnGiffen.com Author of “Do You Have a Minute? An Award-Winning Real Estate Managing Broker Reveals Keys for Industry Success”

So You Want to Be a Mentor?

John Giffen, CRB, CRS, CDEI, GRI, SRES, BROKER, REALTOR® (Benchmark Realty, LLC) — Fri, 17 Aug 2018 14:18:30 -0700

Mentoring a new agent is not an easy job, and it is not for everyone. It requires a considerable amount of time and energy of a senior agent. It is a commitment that, if not managed well, can take valuable time away from the mentor’s business and cause their production to level off or slow down. If you are considering becoming a mentor, you need to realize what you are getting yourself into before committing to working with a new agent.Commitment. Commitment is probably the number one characteristic I look for in someone who wants to be a mentor. The first question I ask when a potential mentor asks me about mentoring is “Are you willing to commit your time, experience and emotional energy in helping someone become as competent and successful as you?” Successful mentoring programs are built on those who are willing to spend the time and effort advising and guiding someone through the “peaks and valleys” of the real estate industry. A mentoring relationship will surely fail if a mentor is not willing to invest themselves in the person they are mentoring. The protégé must feel they have a dependable and reliable person who is helping them reach the next step in their career.Experience. A mentor must be successful in the real estate industry in order to provide the expertise needed to ensure success in a protégé. What is success? Success is tied into transaction production, professional development, technological expertise and industry knowledge and advocacy. Someone who is a top producer probably can bring more to the table for an emerging REALTOR® than someone who closed only a handful of homes. I always say “the more one sells…the more one knows.” Also, a mentor who is willing to spend the time and money to educate themselves through professional development and involvement in the real estate industry will provide the confidence and proficiency needed to properly advise a protégé.Professionalism and Ethical Behavior. What we do as professional REALTORS® is a noble task. We have been asked to steward the largest asset a person has through the selling or purchasing process. In order to do this, a REALTOR® must possess the competence and skill to properly manage the transaction and the expectations of the client. Their ability to handle multiple and sometimes difficult tasks related to property marketing, buyer representation, and transaction management is critical to ensuring the expectations of the client are met. In addition, adherence to the National Association of REALTORS® Code of Ethics and Standards of Practices enables the REALTOR® to conduct themselves and their businesses in a manner that ensures they are always following the guiding principles of “The Golden Rule” and keeping the interests of their clients before their own.Encouragement. A mentor must be an encourager. Our work as REALTORS® day in and day out requires a tremendous amount of time, money and emotional energy. At times, it can be discouraging especially when one feels their efforts are not paying off. The mentor must always provide ongoing encouragement to the protégé as they, themselves, once knew how it felt when they started in the business. There is “the good, the bad and the ugly” of the business that all agents will experience at one time or another. The mentor must be someone one who can encourage others to enjoy their successes but also persevere and stay focused so they can navigate through the difficult times.Patience. The old saying “patience is a virtue” really is true when it comes to mentoring someone in this business. It can be easy to get frustrated and upset at the protégé when their performance does not meet your expectations. Mentoring takes quite a bit of time and effort and the new licensee may not “get it” the first time around. You must be willing to repeat skills and techniques more than once so they can reach a level of competency in a particular task/skill set.Selflessness. The real estate business can be a very narcissistic one. Self-promotion and individual marketing are a standard part of the business in order to gain an edge on the competition. We spend a great deal of time and money marketing our services and value propositions to the market so we can differentiate ourselves from others in the business. As a mentor, it is not about you and what you can get out of the mentoring relationship, but about the one you are helping and how you can make them successful in the same profession. A mentor must be willing to help and to put any self-serving motives aside so the protégé can benefit from what the mentor can offer them. Mentoring is more about giving than receiving.(Excerpted from John Giffen's upcoming book "Do You Have a Minute? An Award-Winning Real Estate Managing Broker Reveals Keys for Industry Success" due out on November 1st on Amazon. ©2018 DKG Publishing Group. John M. Giffen, CRB, CRS, CDEI, GRI Director, Broker Operations (615) 371-1544 Blog: www.JohnGiffen.com Author of “Do You Have a Minute? An Award-Winning Real Estate Managing Broker Reveals Keys for Industry Success”

It’s time to tell the “low hanging fruit” agents to get serious or get out!

John Giffen, CRB, CRS, CDEI, GRI, SRES, BROKER, REALTOR® (Benchmark Realty, LLC) — Sun, 10 Aug 2008 06:28:04 -0700

One of the major issues I see with agents in today’s real estate market is the large number of people who got into the business between 2003 and 2007 because there was so much “low hanging fruit on the trees” in real estate. Many were investors, some were spouses who thought they could bring in some extra income, and others were recent college grads that found the “glamour” of real estate very appealing. I was sitting in my office the other day going down my list of agents to make my weekly round of telephone calls to check in with them to see how they were doing and if there was anything that I could do, as their managing broker, to assist them in their business. I am sometimes the “thorn in their side” (in a nice and professional way) as I always ask if they are staying on track with their business plan, if are they making their calls to past clients and prospects, communicating effectively from “contract to close”, and maintaining the discipline needed to succeed in real estate. One agent in particular, I will call him “Agent Doe”, required some face-to-face time with “The Reality Broker” – that’s me.Briefly, Agent Doe, who is a late “twenty-something”, has been in my office for over a year and has only closed two deals. He is single and supports himself with other income from another job. He told me he was in a funk and was considering retiring his license. Losing a licensee is something I do not want to happen unless I initiate the termination (and when I do it I do it for the right reasons!) I called Agent Doe and asked him to come into the office so I could talk with him. When we sat down I asked him what was going on and why he has not performed to the expectations both he and I had when he placed his license with my firm. He said he has tried to “make a go at it” in real estate, but it just hasn’t worked out. He said the market is down and no one seems to want to buy or sell a home. He also said he has not given real estate the attention it needed from him. That comment struck a nerve with me, similar to when the astronauts hit the ignition button and light the space shuttle for lift-off!I responded with some very simple questions for Agent Doe. First, why did you get your license in the first place? He said he thought he could make money helping family and friends. (When I first interviewed him he was a typical new licensee who was “gung-ho” and ready to learn. Unfortunately, he found out this business requires hard work and a lot of planning and discipline.) Then I asked...“If you didn’t have another source of income would you make real estate more of a priority in supporting your financial needs?” He put his head down and said “probably.” “So, if we took away the ‘safety net’ of the other job you would be more driven to succeed? I asked. He said “yes.”Agent Doe’s view of his real estate license as a secondary vehicle for income is a challenge for many of us in the industry who are responsible for keeping our company’s income in the black. I have always believed it is very difficult for anyone to succeed in this business that are not willing to do it full-time or at least put the time and effort in to their business to make it work. We are continuing to see more and more licensees get out of the business. And, that is not all bad. Agent Doe may be one of them. We need to “weed out” those who got in it for a quick buck or thought it was easy. I would rather have 15 professional REALTORS® consistently closing deals than have a multitude of agents who are “just hanging their licenses on the wall” because they may do a deal or two.I truly believe those of us who remain and are willing to spend the time, money and effort to grow our businesses will reap from a smaller group of real estate practitioners. This is a noble profession. I am confident we will continue to become stronger with members who are committed to the ideals of what it means to be a professional REALTOR® John M. Giffen, CRB, CRS, CDEI, GRI Director, Broker Operations (615) 371-1544 Blog: www.JohnGiffen.com Author of “Do You Have a Minute? An Award-Winning Real Estate Managing Broker Reveals Keys for Industry Success”

It's Not the Time to Cut Commissions!

John Giffen, CRB, CRS, CDEI, GRI, SRES, BROKER, REALTOR® (Benchmark Realty, LLC) — Sat, 09 Aug 2008 04:08:57 -0700

This morning as I poured my first cup of coffee I opened my morning newspaper here in the Nashville area, THE TENNESSEAN, and read the headline “It pays to haggle with agent over real estate commission.” What a way to start the day! I immediately took that section of the paper and hid it from my wife who reacts quite angrily at these articles. I think she believes in “modern journalistic castrations!”I have spent the past few weeks and months reading nothing but negative news from the liberal media in this country about the state of the real estate industry. This particular article, highlighting survey results conducted by Consumer Reports, touched a very sensitive nerve with me.I find myself constantly defending my profession with those who really do not understand what we, as professional REALTORS®, do for a living. Many in the public, including the uninformed media, compare us to professions that have traditionally and consistently made them out to be “scum of the earth” in what they do for a living. I do not want to name these particular jobs, as I know I will offend many. But, I think most of us know these folks about whom we are speaking. I am very proud to be a professional REALTOR®. I have spent the past several years working in an industry that serves the needs of those who either are selling a home or purchasing a new one. In addition, I have added to my expertise by earning professional designations to my resume as well as obtaining my real estate broker’s license. When I read an article stating I need to be willing to reduce my compensation then I become defensive.Educating the consumer. Most consumers do not realize why we charge what we charge. They don’t understand we operate small independent businesses that have expenses. As business owners we incur marketing expenses, insurances costs such as health, errors and omissions, liability, automotive, disability, etc; fuel and automotive upkeep, office expenses, brokerage expenses – and the list goes on. I equate our business models similar to that of attorneys and doctors. It costs a lot to do what we do.I am worth what I charge! I always tell my clients what I charge you will be different that what it costs you. I work with a successful written marketing plan on all of my listings and use some of the most cutting edge tools for my clients such as podcasts, You Tube videos, virtual tours, professionally printed brochures, etc. I spend a considerable amount of time and effort in marketing a listing and ensuring it receives maximum exposures. Most of the public does not realize the time we spend in front of a computer, on the telephone, at open houses, in meetings, in the car, etc.When reviewing our brokerage fees with clients I always tell them that the breakdown is as follows: I must pay a certain amount to the selling side (usually what the market is commanding); I have to pay my brokerage firm a certain amount; I have to pay Uncle Sam his share of taxes; I have to pay for all of the marketing expenses in marketing their home; and finally I need to put food on the table for my family. When the question of cutting my fees comes up I usually respond with “which one of these components do you want to take away? I would hate top take away money to market your home. Do you want me to get in trouble with the feds for not paying taxes? Don’t you like to feed your family?” I also ask them if they asked their doctor to reduce his fees when they are about ready to get their annual physical. Heads go side to side with an affirming “no.” I have never had a client ask for a reduction once I go through this exercise. Again, it comes down to educating the consumer.The modern real estate practice has become more and more demanding and the costs have risen dramatically over the years. To effectively service our clients we must be able to use the latest tools and resources that will allow us to sell a property at the highest price in the shortest amount of time. It costs money. If, in turn, we can help a seller realize the highest amount of money in their pocket with our expertise and the tools we use then the saying “what I charge you is different than what it costs you” remains true.I will continue to charge what I charge and defend it every time.John M. Giffen, CRB, CRS, CDEI, GRI Director, Broker Operations (615) 371-1544 Blog: www.JohnGiffen.com Author of “Do You Have a Minute? An Award-Winning Real Estate Managing Broker Reveals Keys for Industry Success”