If you haven't been stuck on a deserted island for the past year or so, you have heard the talk of the real estate bubble losing quite a bit of air. The downturn to this market has drastically affected real estate companies in their never ending quest to stay profitable. In the spirit of the all mighty dollar, here are 10 quick tips for broker/owners to help maintain their bottom line.
Tip 10: Keep Your Producers, Lose Your Losers
Hold your agents accountable for their production. Keep the good ones, lose the ones that are just wasting their time and your money. What you don't need is a bunch of dead weight slowing down the rest of your agents. All it takes is a few low producing agents looking for reasons why they aren't converting, to jump to the conclusion that it is the company to blame. We call these agents 'Jumping-Jacks', these are agents who have hung their license with every firm within 30 miles hoping to find the right match, not realizing that the firm isn't the reason they are not making money.
Tip 9: A Million Dollar Look Doesn't Cost a Million Dollars
Too many brokerages let their next-door neighbors son design their company logo and branding. The first foot you put forward to the public is your brand. Website, business card, street sign, fliers, letter head, if you look unprofessional more then likely they will think you are too. There are hundreds of 'drive-through' Internet based design firms that can make your agency look like a million dollars for a few hundred bucks. I can guarantee this is the best spent 500 dollars you will ever put into your business.
Good Branding
Houlihan Lawrence www.houlihanlawrence.com
Home One Realty
www.homeoneonline.com
Falcon Living
www.falconliving.com
Poor Branding (sorry)
Montana Real Estate Brokers www.mtrealestatebrokers.com
Carolinas Metro Realty
www.carolinasmetro.com
Dwell
www.dwelltexas.com
Recommended Design Firms
Logo Works
www.logoworks.com
Logo Bee
www.logobee.com
Logo Maker
www.logomaker.com
Tip 8: Cut Traditional Advertising
If you are still spending over $1000 a month on print, please for the love of god, stop. Don't get me wrong, print/tv/radio is great at building your brand....slowly. However, you will not see a direct return on investment from traditional advertising. There is no way to say a radio ad that cost $5000 dollars brought in 300 leads and 5 sales, it is just too hard to quantify. If you spent $5000 on Google Adwords to drive traffic to a well designed website with a good CRM (customer relationship manager), you will be able to tell you exactly how many sales resulted from your advertising spend. Broker Wendy Richards of Denver, CO recommends a lead generation system called Realty Generator. They receive a consistant 500 leads a month by spending $3000 on their Internet marketing suite. That results in a lead aqusition cost of just $6 per lead. If you sell 2% of those leads with an average commission of $4,000, that is over $40,000 of quantifiably profit each month.
Tip 7: Office? What Office?
If you are planning to get an office or upgrade to a bigger one. Stop and think. Overhead is one of the biggest killers of a start up business. Unless it is completely necessary, there is really no need for an office in this day in age. There are many places you can meet your clients. Panera Bread is one of my favorites, talking shop over a nice ciabatta and latte is much nicer then chatting beneath the hum of a florescent light.
Tip 6: Get More Out of What you Already Have
If you have a website, you probably aren't using it to the fullest. If you have a multi-function copier you probably don't know everything it can do. There are tons of examples of things most brokerages already have that much more profit can squeezed out without any more expenditure. Look at all your assets and try and take advantage of everything they offer. Don't go out and buy new things hoping that it will be the magic profitability elixir. The truth is Realtors as a whole are notorious for being consumers and most Realtors spend more on making money then they ever actually make. Lean is mean, only spend it if you can see a direct and obvious return on investment.
Tip 5: Keep the Leads Flowing
If you are looking to cut costs, do not cut the lifeblood of any successful brokerages...leads. If anything, refocus money spent elsewhere on brining in more buyer leads. Without customers you might as well close up shop.
Tip 4: Build Solid Relationships
The mortgage broker next door or the title company that stops by each week to chat can be some the best partners in helping grow your business. You can legally join in marketing agreements that are 100% RESPA compliant to help offset some of your advertising budget. Also think of your agents as a partnership. If you pooled all the agents and collectively bought your advertising you can take advantage of the lower prices you get when buying in bulk.
Tip 3: Previous Customers are Loyal Customers
When the market slows down one of the best places to look is to the people who have helped you get where you are today. Drop thank you letters to all your past clients, send them home valuations, or just let them know your there to help. Things happen, people have to move, and it would be a shame to lose that deal cause you were 'out of sight, out of mind'.
Tip 2: Take Advantage of Free Advertising
There are TONS of free advertising venues on the Internet. If you have a few extra minutes, you can really generate some serious leads with only a little finger power and a point in the right direction. An agent friend of mine in Hawaii receives over 150 leads a month just from posting on Craigslist.
Here are the most popular sites you can put your listings on and get tons of free traffic to your website: www.craigslist.com, www.trulia.com, www.oodle.com, www.propsmart.com, base.google.com
Tip 1: Don't Lose Your Listings
In a slower market, a buyers market, many home sellers get quite impatient when their home doesn't sell within the first few months of listing. You need to make sure you are doing everything you can so the only excuse for the home not selling is the market itself. Homeowners will try and blame anything and everything on you, not on the actual merit of their home. So cover your bases, make sure you market their property everywhere you can and you list it for a reasonable price. In general, don't take pocket listings, don't overprice the property, and most importantly set expectation so they know what to expect.
We hope this helps, and remember if there wasn't bad times, the good times wouldn't seem so good.
Justin Tracy
Marketing Director
RET Certified
info@retcertified.com
www.retcertified.com
