SEEING THE SHIFT

Economic Update

Keller Williams Realty Staff Economist Ruben Gonzales talks about spotting a market shift.

If you have been in the real estate industry for very long, you probably know that the housing market goes through cycles. During the growth portion of the cycle, prices are going up and inventory levels are typically low but growing. After the market shifts, prices begin to decline as inventory levels reach a peak and then start to decline.

The cycle that real estate agents are most familiar with is the basic seasonal cycle that exists in the market. In the spring, as the weather warms up and summer is on the horizon, listings and sales start  to pick up. When summer arrives and kids are out of school in most locations and weather is at its warmest, sales peak. The fall brings the start of the slowdown as listings start to dwindle and demand decreases. The market typically bottoms in January when weather is coldest.

Then there are longer cycles that dictate where these peaks and troughs move from year to year. These cycles can last a few years or more than a decade, depending on the underlying factors that are driving them. They are very difficult to predict in advance.

In any market, there are two sides to the coin driving the cycles: supply and demand. On the demand side, you have demographic cycles which dictate how many people exist in an area who are able to buy houses, and economic cycles which dictate if those people are in a financial situation that’s  conducive to purchasing a home. On the supply side, you have availability of space for new construction, the number of existing structures and the costs of labor and materials.

You may have observed that over the last few years the market has made substantial gains as it recovered from the huge downturn that started in 2006. The markets started coming back in 2012, and looking at the country as a whole, they have been up since.

So now the question is, “When will the market go in the other direction, and how do I know it’s happening?” The short answer is that we don’t know and that we won’t know until it has already happened.

It’s really difficult to predict the timing of market cycles because there are so many factors at play, and often the thing that causes a shift wasn’t even on the radar. However, there are some things you can watch to know when you are potentially getting close so that you can start shift-proofing your  business while you still have the resources available.

Look first for a persistent loosening in lending behavior by banks. As the most qualified buyers start to dwindle because demand is slacking, banks will look to loosen standards to stir some demand from the bottom of the credit barrel. Inventory will eventually start to rise, and prices will flatten  out, as demand begins to dwindle faster than supply can adjust. Sales will start to decline   year-over-year as the market begins to settle into a downward trend.

The things that might cause this on a local level could be caused by a dip in the local economy or  overbuilding spurred in the aftermath of a long spurt of population growth in an area. It’s important  to watch patterns in the local economy as well as the housing market in your area. If unemployment in an area begins to trend up or the population begins to trend down, chances are that the housing market has already shifted or will soon follow suit.

With the market at its healthiest in nearly a decade, now is the time to start shift-proofing your business. Remember, shifts are going to happen, but you can minimize your vulnerability by taking  actions now that will help you thrive, not merely survive, when the next one occurs.

IDENTIFY OPPORTUNITIES AND CLOSE GAPS WITH THE DAILY GCI TOOL

CGI Tools

Keller Williams associates and leaders share how using the Daily Company Dollar and Daily GCI tools help them spot opportunity in their business and to identify when they've covered operating costs and begin making profit!

Brenda Benson, operating principal of the Ballantyne Area market center (Charlotte, N.C.), shared that the Daily Company Dollar tool was among the last of the Growth Initiative (GI) tools that she tackled because the word “daily” was intimidating. Now, she feels that it’s one of the most exciting tools offered in the GI suite because it tells you if your business is sustainable and predictable.

While this market center is profitable, like 98 percent of Keller Williams Realty’s U.S. and Canadian market centers, and a strong advocate in the power of profit share, (they’ve shared back more than $1 million in just the first three quarters of 2016), they’re always working to close gaps and become even more efficient.

Team leader Chip Walton uses this tool himself. As a result, he’s able to share with his agents the day each month when the market center becomes profitable, leading to an even larger profit share pool. “And when this happens on the 13^th of the month – that’s truly exciting!” says Walton.

Now with the Career Growth Initiative (CGI) Keller Williams associates have a similar tool called the Daily GCI tool to help them identify when they've covered operating costs and are beginning to make profit.

When you have a goal for your business and are tracking your progress to your goal, you will see results show up in the Daily GCI Tool. This tool empowers you to identify your breakeven day in the month so you can celebrate that you are now generating profit.

Focus on What Matters

During appointments with potential new team members Walton often comes across individuals who want to talk about sales volume. To which he has a reply ready: “Volume is great, but that’s not winning the game. If you don’t have profit, so what?”

The leadership team of the Ballantyne Area market center is focused on helping their agents bulletproof their transactions. If a deal doesn’t close, the agent is certainly not generating the income that is going to fund their life.

Lynn Davis, the Ballantyne Area MCA for more than eight years, is key to this conversation. She also uses her specialized knowledge to help agents determine when in the month their own business will be profitable. If they don’t know, or it won’t be, she helps them fine-tune their expenses and find ways to bring profitability back up.

Jay White, a mega agent within the market center, says that while he’s always had these types of tools, they’ve been random. He would track different business metrics, but the CGI created a way for him to easily track everything together. For example, White has been tracking his revenue but had never compared it to his expenses. The CGI helped him realize this crucial missing step. “Real estate is a lag business. If I realize I won’t be profitable, I can look back at the listing numbers and adjust it. If I’m not hitting my income, I can go back to my activities.”

The CGI allows everyone within the market center to speak the same language. During productivity meetings, team meetings and ALC meetings, everyone is having the same conversations. For this reason, the Ballantyne leadership team believes it’s important that they introduce every member of the market center to this initiative – and quickly. “We’re reaching out to everyone in our market center. No one slips through the cracks!” says Benton.

 

Keller Williams associates can learn more on KWConnect and by talking with their market center.

WHY IT'S IMPORTANT TO SHARE YOUR STORY

Local Expert Tools for Keller Williams Associates

During this Mega Leadership panel, leaders from the Sandy Springs (Atlanta, Ga.) and Arlington (Arlington, Texas) market centers took the stage to share how they have embraced the Career Growth Initiative and, specifically, the Local Expert tool. You know you are the local market expert, but are you sharing this story?  Take a look at how some KW associates are using the CGI tools to share their story, establishing themselves as local experts and reinventing their client relationships.

It Starts with Vision

When Jean Rawls, operating principal of Sandy Springs, shared her vision with team leader John Fountain, the conversation was entirely about production. Production is a huge determinate of culture because the more money agents make, the happier they are.

With this in mind, Fountain and his team have spent the last four years steadily growing the market center from 200 to 403 agents. Hitting the 400-person milestone was a huge accomplishment that he credits to the guidance provided by the Growth Initiative. But something was missing.  “I noticed our culture was off. Our staff was a bit frantic.” says Fountain.

Fountain went about changing his world by first changing himself. He hired a KW MAPS Coach and was taught the power of using tools and setting standards. This led to increased profits for the market center and a shift in the culture. Agents were getting excited again. “We were communicating our victories and everyone was sharing in the celebration. We talked about how we were winning not just against our competitors, but against ourselves!”

The Growth Initiative’s model made it easier for Fountain to become a better leader. Now, with the launch of the Career Growth Initiative (CGI), Fountain feels that agents will have the same opportunity to reinvent their relationship with their clients. The Local Expert tool, a set of professionally designed, easily customizable templates, helps agents become better communicators. It provides agents a simple and effective way of sharing their value story with their database. As a result, they’ll be able to earn more business and establish themselves as their clients’ indispensable, local market expert.

Keller Williams Associates Can Access Their Local Expert Tools on KWConnect

The Arlington Approach

Arlington operating principal Smokey Garrett and team leader Dennis Tuttle have both embraced the Growth Initiative as the means for achieving their shared vision for the market center. To reach new levels of growth and profitability, their primary goal has been to master the initiative’s processes and tools.

Garrett believes that the Growth Initiative provides them a huge advantage. “You’re not just telling them [your team leader] to do it, you’re telling them HOW to do it. This is the most valuable part about being with Keller Williams – you don’t have to recreate the wheel.”

Having risen through the ranks, first as an agent, then as a member of the ALC, Tuttle knows how important it is for him to walk the talk. He uses the Growth Initiative’s models and tools while running the market center and encourages his agents to do the same. From his perspective, the business of running a market center and the business of running an agent’s real estate business are not much different.

As a leader, Tuttle teaches agents how to think without emotion. He does this by helping them look at their numbers and realize that they do in fact have a compelling story to share. “Everyone wants to say they’re the best but our agents can prove it with facts,” says Tuttle. They can track their LORE (Language of Real Estate), have informed conversations and use the Local Expert tool’s listing flier and PowerPoint presentation to show it visually during their appointments.

Supporting Tuttle in this role of educator is the Arlington market center’s MCA Christie Lee. She often helps new agents understand that they can leverage the market center’s story to help show their validity. In an office that is quickly gaining local market share, new agents have a lot to talk about. By sharing how their market center consistency outpaces their local board, they can earn validity with their clients.
Ken Wimberly, a mega agent within the market center, has already experienced this. This year, his commercial real estate business will surpass $100 million in sales volume and he credits it to the Keller Williams models and systems.

“The CGI is a phenomenal tool for ANY agent. I track my goals, my team tracks theirs and we have a conversation on a weekly basis,” explains Wimberly. As a team, they look at the reality of their business while studying the CGI’s various interconnected tools. And when they do find an interesting trend or strength, they understand the importance of shouting it from the rooftop using the Local Expert tool.

THE BIGGEST MISSED OPPORTUNITY IN YOUR BUSINESS

Lead Generation

At Mega Camp 2016 Jay Papasan presented Reimagining the 33 Touch where he showed agents the ONE Thing they can do now to close the gap between potential clients and actual clients. Did you know that picking up the phone and being purposeful in your marketing strategy can increase your units by up to 800 percent?

In the upcoming new edition of The Millionaire Real Estate Agent(MREA), the 33 Touch is reimagined and changed to 36 to Convert. During the presentation, Papasan walked attendees through the 36 client touches agents can make each year to exponentially increase their business.

Are Your Leaving Money on the Table?

In recent interviews with more than 200 real estate sales businesses earning at least $1 million in GCI, it was discovered that 90 percent of all their business came from as few as five sources, with repeat and referral business consistently in the top three. “If you want a big business, repeat and referral is going to be a pillar of it,” Papasan said.  Are you doing everything you can to capture repeat and referral business? Chances are there is more opportunity than you realize.

71% Would

In the National Association of REALTORS® annual Profile of Home Buyers and Sellers, 71 percent of buyers and sellers surveyed said they would use the same real estate agent again in another transaction. “We do not have a customer service problem,” Papasan said.

17% Do

“But we do have a communication problem,” he continued, as he shared only 17 percent of buyers and sellers actually do use the same real estate agent again. This means agents are leaving 54 percent of potential business right there on the table.

54% Opportunity

There is a huge opportunity to bridge the gap and capture that 54 percent of potential business. Here’s an example of what that 54 percent could do for your career.

An average agent who does nine transactions in their first year and only works within the 17 percent would theoretically grow their business to approximately 120 transactions over a 20-year career. While that’s nothing to sneeze at, it’s also the definition of average.

Compare that to a Millionaire Real Estate Agent who started with those same nine transactions in year one but who successfully captured the full 71 percent in the same period of time. Their business is on a completely different trajectory, building to almost 3,000 transactions over 20 years. That’s 25 times the average!

So the question is: Are you an average real estate agent or a Millionaire Real Estate Agent?

The Strength of Weak Ties 

Papasan further explained that weak ties equal opportunity and can help fill up your database. On average, every person has approximately 150 close relationships/strong ties. These are people likely already in your database. But each one of them has 150 strong ties – your weak ties – waiting to be added to your database. By being purposeful in your outreach to your 150, you can start collecting referrals from the 22,500 weak ties just one degree of separation away.

36 to Convert

The following activities will help you strengthen your strong ties and tap into your weak ones:

4 Telephone Calls Each Year: Telephone calls can have an immediate impact on your business. If you only do one activity, this would be it.

2 Events Each Year: This can be a movie night or social gathering somewhere in town. BONUS: All four calls can be wrapped around these two events. Call to invite them to the events and then call to either thank them for coming or say you missed seeing them. Surprisingly, agents report the “we missed you calls” were actually the most impactful.

26 Bi-weekly Emails Each Year: Keep the conversation going and stay top of mind with bi-weekly emails to your database. An example would be to create valuable newsletters with relevant industry and neighborhood information. When writing content, Papasan suggests you think about what appeals to you and what type of emails you like to receive. Another content idea is a personal real estate financial statement you send to your clients each year to let them know how their home is doing. 

4 Promotional Direct: Think about sending out a creative promotional item with a relevant message that encourages interaction from your database such as a social media campaign connected with the item.

Your Business Is Your Database

As you go forward with implementing your 36 to Convert, think about frequency and your medium; do what works for you, Papasan encouraged the audience. “Be as creative as you can be,” he said. “And by creative, I mean have fun!” Other tips include being consistent and focusing on consistency, not perfection.

You now have lots of great ideas to move forward with to help you get more of the money being left on the table. If you could take just one action that you enjoy that would get you that repeat and referral business, which would you pick? Let us know in the comments section below.

KW associates can watch Papasan’s full presentation on KWConnect.

BOLDLY GO WHERE PRODUCTION INCREASES

We are excited to welcome Brad McKissack back to Utah as our BOLD Coach on October 3rd!

Written by Dianna Kokoszka, BOLD teaches techniques that propelled Kokoszka’s million-dollar real estate career and secured her place as the industry’s “queen of systems and scripts.”

BOLD conditions agents with powerful mindset exercises, language techniques, and lead generation activities. This transformative program increases sales through the relentless pursuit of leads and business-building activities. Discover the transformational results BOLD will have on your life and career. Choose abundance for your life. Last year, BOLD graduates INCREASED their CLOSED TRANSACTIONS by 50% and INCREASED their INCOME by 114%.

To register for the FREE BOLD 1st step class please visit www.kwutah.com/events today!

Think Bigger

When it comes to success in real estate, the conventional wisdom is laser-focused on local marketing. But, as Gary Keller teaches, it pays to think bigger. Just ask Amy Kite of The Kite Team in the Naperville, Ill., market center, which services eight counties surrounding Chicago. Here she shares tips you can use to double your production in just one year. Kite joined Keller Williams Realty in 2005. Prior to that, she had been in the business less than a year with another company when she attended a Keller Williams training class offered at the Barrington (Ill.) market center.

She says she was never pressured to join the company even though she was taking the class, but she loved the culture and the commitment to training – it was a perfect fit for the self-proclaimed “education junkie.”

Fast forward to 2015, Kite’s 13-person team closed $73 million in 485 transactions – up from slightly more than half of that in 2014. How did she go from a solo real estate agent to the head of a growing team and a multimillion-dollar business with such a significant year-over-year jump in revenue? It was a process, she says.

Getting the Fundamentals Right

When someone asks Kite what the secrets are to building such a big business, her first response is, “The database.” Building a solid database and establishing regular ways of communicating with your contacts and clients is essential. Real estate is a business highly dependent on referrals, and it’s critical to keep in touch and remind people that you’re out there.

Kite also invests in education and networking opportunities to meet other successful KW agents  from whom she can learn. She initially attended BOLD in 2009 when it first came to Chicago and  has returned a total of 12 times. When asked why she has attended so many times, Kite says it  stopped being about the real estate component after about the fifth one and became about the mindset and accountability that the program promotes.

“BOLD is about who you can become. Do you believe you can become somebody spectacular? Do you believe that having a mindset shift can help you, whether it is in business or in your personal life or wherever?” she says. “The funny thing is that after you’ve taken it a dozen times, you look at people differently and sometimes you think, ‘Aw, you just need BOLD.’”

Her BOLD training also helped her understand that, in order to grow, she needed to invest in team members to keep the momentum going. When she first added an assistant in 2007, she more than doubled her business.

Getting Big Fast

Three years ago, Kite started targeting and working with builders in the Chicago area as a member of the Builder Trade-In program, helping their buyers rent or sell their “contingencies” – the houses they needed to sell in order buy the builders’ properties. Because Kite was suddenly working throughout the eight counties surrounding Chicago, she had to expand her reach – and her team. Up until that point, she operated everything with her assistant/office manager. But, now she needed buyer agents, listing agents, and other team members to handle the volume.

As her employee base began to grow, she would note the areas where team members began to feel overwhelmed or where she saw potential to build her business, and invest there.

“Keller Williams is not about ‘what.’ Many times, it’s about ‘who.’ Who are you missing? What piece are you missing there? We had to find the right people to solve our process problems,” she says.

She says BOLD was essential to her success here too. After her fifth time at BOLD, she realized she needed to hire a person strictly to handle her database. After that BOLD session, she realized that she could spend $50,000 per year on that person to generate $150,000 in business from her database. She made the hire, and it worked. Today, Kite’s team has 19 people in addition to her, including two listing agents, six buyer agents, two transaction coordinators, a property manager/rental specialist, a receptionist, a vice president of technology, a director of operations, three inside sales associates (ISAs), a photographer/runner and a driver.

She hired seven of those people in the past five months. One of the biggest boosts to her productivity was hiring a driver roughly two years ago, she says. The long hours on the road were taking their toll. One night, she got home at 9 p.m., took five hours to prepare for the next day, climbed into bed at 2:30 a.m. to get a couple of hours of sleep before she had to rise again at 5 a.m. She started to cry. Her husband was alarmed and asked her what was wrong.

“I said, ‘If I don’t get a driver, I’m going to kill myself and someonem else because I’m going to fall asleep on the road,” she recalls. While it seems like an extravagant move, Kite now works as she travels between appointments. She says she gets most of her work done as she sits in the backseat, and instead of spending her at-home hours prepping for the next day and catching up on work, she actually spends time with her family.

Finding the Right Solutions

By establishing systems for handling everything in her office, she can free herself from the dayto- day and more efficiently work on what she does best. When a buyer lead comes in, it goes to one of  the buyer agents. When a listing comes in, it’s routed appropriately to an ISA. For buyers, the team conducts an in-depth consultation to narrow options and makes the search smooth and effective. They deliver properties that match the buyers’ requirements within 12 hours of them coming on the market. Sellers receive a thorough market analysis of Multiple Listing Service (MLS) and private sales along with free home staging, home warranty and a customized Realtor.com® listing.

Kite’s staff schedules everything for her, right down to her phone calls. They are only permitted to schedule her for 15 to 20 listing appointments each week to keep her time free to work on building the business in other ways.

“If it’s not on my schedule, it doesn’t exist,” she says, quoting one of the BOLD laws. She’s also highly focused on testing the marketing tactics that work best. When she began working with builders in so many counties, she expanded into radio and television advertising for its greater reach, which worked enormously well for them. Since digital marketing is so important, her vice president of technology constantly works on her team’s websites, keeping them updated and optimized.

Constantly examining what is working and reinvesting in those methods is critical, she says. Despite her rigor in establishing systems and following the playbook for building a successful real estate business, Kite isn’t afraid to do what works for her, even when it flies in the face of conventional wisdom.

Selling in eight Chicago-area counties is practically unheard of, she says. But she and her team are doing it well. While other agents shy away from selling in the winter months, Kite is enthusiastic and does brisk business from November through February.

While some see Chicago’s brutal winters, Kite sees a timeline with far less competition.

Her BOLD training and large network of contacts has helped her take the road less traveled. Kite makes it a point to attend conventions to meet other real estate agents and learn from them. In addition to regular BOLD sessions, she attends Agent Masterminds, where she learns a great deal from the agents who attend.

Recharge is another favorite of Kite’s because it’s an opportunity to network with and learn from operating principals (OPs), regional directors (RDs), team leaders (TLs) and others who have reached the upper levels of the business model.

She also likes to interact with people in other businesses to see if she can find new solutions to apply. “You can’t just focus on masterminding with people who are like you and in the same position. There’s a ton of value in masterminding with people who are running businesses differently, whether it’s in real estate or not,” she says.

1 Week Left to Register for the RE8Expo!

Only 1 week left to register for the RE8Expo with Ben Kinney​ on September 20th and you won't want to miss this great class.  Register today at www.kwutah.com!

This is not a “what to do” class. This is a “how to do it” workshop. You’ve seen Ben Kinney, the 2014 Inman News Innovator of the Year, at events like Agent Reboot, Tom Ferry, RainCamp, Recruit Select, or on one of his many webinars and classes. He’s at it again in this unbelievable conference, Re8Expo!

Re8Expo is the most action-packed and intense business-building conference in the nation. It’s full of tangible strategies to build your real estate business in an everchanging market. Leave with the systems, strategies, and scripts that Ben has used to build a thriving business with over 600+ deals a year.