There’s always something to howl about

The Ten Commandments of Buyer Side Representation

Merry Christmas.  Happy Hanukkah.  Happy Kwanzaa… Festivus… all that stuff.  Lovely… now let’s get down to business.  I’m buying a house.  Along the journey, I’ve paid close attention to how the average Real Estate Agent operates.  I’m sharing these thoughts with my fellow Bloodhounds at the risk of offending some – or perhaps all – of you.  But it all comes from the right place and I hope you enjoy…

Commandment #10:  Have a freaking take.

Are you the type of Real Estate Agent who likes to open doors for clients and then stand silently with a pleased expression as they walk through the home?  If so, I suggest you consider a new profession.  Look, I want to know what YOU think about a home too… that’s one of the reasons I hired you.  I might agree with you, I might not.  But when you have a take, you engage in critical dialogue with your clients.  In my case, I’d trust you more if you tell me what you don’t like about something.  It would make me feel like you’re looking out for me.

Commandment #9:  Don’t tell me you’re a Top Producer.

Because if you are, I probably know that already and all it sounds like is bragging (which most of the time… it is).  Just let your work do the talking for you.  Oh, and here’s just a bit of a peeve… if you’re in the “Million Dollar Club” is that really something worth crowing about anymore?  What is that… 3, 4, maybe 5 houses a year? 

Commandment #8:  Avoid this question:  “So what do you want to do?”

This commandment is closely associated with #10 above.  One agent I was working with loved to interrupt me with that magical question and eventually I told her what I wanted to do:  fire her.  Instead of asking what your client wants to do (which, by the way, they could easily figure out without your counsel)… you ought to continue tossing ideas/suggestions at them.  And if you REALLY want to impress your clients, give them the upside and downside with every suggestion you make.  Then listen.  Simple.

Commandment #7:  Get over the B.S. cliche’ “The Buyer’s Agent service is free because I’m paid by the Seller.”

I almost didn’t write this one because I know it’s going to set some people off.  But Commandment #10 forced me to come clean.  Every seller has their number… their bottom line number.  And whether you like it or not, we live in a new world where access to information is faster and easier – especially for Real Estate Shoppers.  Ten years ago home shoppers would mosey off to buy the Sunday newspaper and leaf through the Homes and Garden section.  Today, we subscribe to RSS feeds, watch Virtual Tours, and hook our iPhones up to listing data via GPS.  No, information isn’t always “instant” (which is how one agent tried overcoming this objection) but it’s instant enough for most consumers.  So, instead of clinging to the B.S. notion that Buyer Side Agents are the “keepers of the data” and provide a “free” service to their clients, I think it’s going to be absolutely CRITICAL in 2011 and beyond to articulate a true value proposition.

Commandment #6:   Pour your online foundation – now.

When I found a home I wanted to make an offer on, quite honestly I didn’t trust that my agent was going to look out for me during the due diligence period.  So I decided to find my own inspector.  Problem was, I didn’t know anyone and needed to start from scratch.  The good news:  my search and subsequent decision was made in about 15 minutes of web work.  This is because Domicile Consulting has committed to the web – and they’ve built an impressive body of work online.  For me, all I had to do is read the Yelp reviews and my mind was made up after a 5-minute conversation with Ross Neag.  Do you have a Yelp profile yet?  I put one together in about an hour and need to build upon it.  If you want to see an extremely impressive online resume, check out our good friend and fellow Bloodhound Mark Madsen and prepare to be blown away.

Commandment #5:  Take risks in 2011 – the kind that make your stomach just a little bit queasy.

I”m a firm believer that you cannot win unless you’re willing to lose.  And this commandment is the only one of my ten that comes from Mark Green the CRM guy instead of Mark Green the home shopper.  In this commandment I’m going to reveal why there isn’t a killer CRM product for the Real Estate industry.  It’s not an issue of building it… that’s relatively easy.  The reason the Real Estate industry doesn’t have a killer CRM product is because CRM vendors won’t commit to servicing a product that its’ clients won’t commit to using.  And here’s the straight dope:  if you ain’t using it, you ain’t gonna pay for it… regardless of how many bells and whistles the CRM has.  This is a debate I’m certainly interested in if anyone has an opposing viewpoint though.  The bottom line:  invest generously back into your business.  Why?  Because your competition won’t.

Commandment #4:  Don’t miss the softballs.

I can’t believe I even need to say this – but you Bloodhounds wouldn’t believe how few Listing Agents didn’t engage me AT ALL when I called about visiting one of their listings.  Seriously.  I’d call the Listing Agent about a property I’d found online. 

  1. Some agents never called me back – ever.  Okay, so maybe this means they had an offer on the home that looked 99.9% iron clad and they didn’t see the need in showing it again.  But hello, McFly, wouldn’t you want to find out my story?  If I had a Buyer’s Agent at that time, I wouldn’t be calling you myself.  Doesn’t this seem to be a pretty promising selling opportunity?
  2. Some agents did a fine job with everything on the showing side – but the sales follow through lacked.  For example, I’m assuming that the MLS here – which I’m guessing every agent in the area subscribes to – has a function where the agent enters a prospect’s email address and home search parameters and then an automated email goes out every day or two.  It wasn’t long before I was getting the same data… in the same format… at the same time… from multiple local agents.  So, the question becomes – how do you break through this clutter and stand out?

Commandment #3:  Conduct a SWOT Analysis & Consider Alternate Comp Models.

Per Commandment #7, technology is changing the way Real Estate is marketed and sold.  Redfin is a great example.  I predict severe downside pressure on the traditional compensation model in 2011 – who doesn’t?  I guess my question becomes:  which side are you on?  Are you clinging to the status quo and hoping for some sort of Hail Mary where everything remains the same?  Or are you willing to analyze how technology and trends might potentially impact your business model in the year ahead? 

I’m not saying that you’ll arrive at a different conclusion than 2010.  But what I am saying is that every business should formulate its’ annual plan.  I like renting a cabin and spending 48 hours focused on business planning.  Here are the steps we go through each winter:

  1. Review the past year vs. the previous year’s business plan.  Successes?  Failures?
  2. Conduct SWOT Analysis
  3. Conduct pie-in-the-sky brainstorming session (idea generation only – do not discuss merits of ideas yet)
  4. Grade all ideas in terms of cost, benefit, time to implement and risk
  5. Rank all ideas (implement first, second, third, etc.)
  6. Assign implementation/ownership of each idea

Commandment #2:  Increase your fiscal literacy.

I have a good friend in the mortgage business named Brian Larrabee.  He’s one of the most honest, hard-working and loyal colleagues I’ve ever had the honor to stand beside.  And I know he won’t mind me sharing one of his secrets to success:  Brian knows how to use historical data, math, logic, and a bit of financial acumen in overcoming common sales objections.  I think it would behoove Real Estate Agents to share this level of competency in this area – not just with a cursory understanding but rather a deep one.

  1. Rates are rising (yet they’re still extremely attractive and will look downright incredible a year from now)
  2. Home affordability (relative to inflation, real estate prices, and % of household income) has never been better
  3. Real estate should serve as the backbone of most Americans’ financial plans

If you’re looking to move some of your buyers off the fence, show them how the recent increase in rates has impacted how much home they could comfortably afford compared with 30 days ago.  Read and internalize what Brian Brady is saying here on this blog.  The beauty:  you’re truly consulting with your clients – and you’re motivating them to buy at the same time. 

Commandment #1:  Answer your freaking phone dude(ette)!!!

I have no idea why, but the average Real Estate Agent lets 94.3% of their incoming phone calls go to voicemail.  Now, of course that’s a made-up number – but to me, that’s about what it felt like.  If there’s one thing I’ve learned about the mortgage industry over the past eight years, it’s that top mortgage professionals answer their phone as close to 100% of the time as humanly possible.  Why?  Here are a few reasons:

  1. Because a commission check is often at the other end of the line.  Who wouldn’t want to answer that call?
  2. Because a client isn’t usually calling to talk about the weather.  They want or need something.  Now.
  3. Why the heck not?  In other words, what are you doing that’s more important at that given moment in time than servicing your client?

Well there you have ’em – my 10 Commandments for the year ahead.  I sincerely do wish each of you the best this coming year.  I appreciate everything I’ve learned here at Bloodhound Blog – and all the friends I’ve made along the way.  2011 is going to rock.


28 Comments so far

  1. Greg Swann December 26th, 2010 1:37 pm

    Bravo ten times over! This is the perfect argument to make here.

  2. […] This post was mentioned on Twitter by Real Estate Feeds. Real Estate Feeds said: The Ten Commandments of Buyer Side Representation: Merry Christmas.  Happy Hanukkah.  Happy Kwanzaa… Festivus… a… […]

  3. Mike Mulllin December 26th, 2010 2:14 pm

    Mark, that took some time to compose – thanks!

    I’ll add one – “just tell the truth.” I’m not suggesting agents and lenders intentionally mislead clients but there’s a ton of unspoken facts and opinions. If the home can’t sell for what the seller wants just tell them. If the buyer is making ridiculously low offers then just tell them.

    We’re the experts and the clients need leadership, not “yes” people.

  4. Thomas Johnson December 26th, 2010 2:17 pm

    That’s some mighty strong mustard in those ten commandments.

    It’s going on my wall right next to Yoda:
    “Do or do not there is no try.”

    Thanks for this. Happy New Year.

  5. Jeff Gingerich December 26th, 2010 5:45 pm

    Powerful thoughts…thanks for sharing!

  6. Al Lorenz December 27th, 2010 9:43 am

    Thanks Mark! Very well done.

  7. michael Urbanski December 27th, 2010 10:16 am

    Commandment #1?
    I used to “have a take” until I walked into a house with pink carpet….I mean bright pink freakin carpet!
    I quickly said “We can have them replace the carpet, don’t worry”
    The buyers said “We love it!” and then acted like I was a jerk for not liking it?
    From that point forward I said “designed to taste” and less disapproving garbage like that. Later in my career I walked into a house with a dead Squirrel laying on the middle of the floor. I said “The squirrel skin rug comes with the place” and they bought. Humor wins over honesty every time… long as you are honestly funny. I think?

  8. Greg Swann December 27th, 2010 11:00 am

    > Humor wins over honesty every time… long as you are honestly funny.

    This is my approach. I don’t tell people what to want, but I’m very loose when I’m showing, and I just have a good time. If I think something’s funny, I make jokes about it.

    OTOH, I’m very strident about true red flag issues, not just structural defects but also resale obstacles — school noise, for instance, or if we’re too close to a planned freeway. It’s the buyers’ job to eliminate homes that don’t suit their tastes or their lifestyle. It’s my job to help them eliminate houses that could be a poor financial decision.

  9. michael Urbanski December 27th, 2010 10:28 am

    commandment #1 (my personal favorite)
    The phone answering phenomenon, or the non-phone answering phenomenon seems recent to me. Is it that between email, twitter, Facebook we service providers are being taxed further with constant communication which tends to get lost in the din of white noise?
    Call for a Pizza and see how many times the phone rings! If Pizza delivery companies can provide better service than Real Estate professionals, we have a major problem. Maybe if a real estate pro doesn’t answer their phone they should have to work two shifts at Dominos? Just a concept.

  10. Patti Mullen December 27th, 2010 11:11 am

    Definitely, represent your client to the best of your abilities. Being honest and prompt, a job well done will mean they come back to you for a lifetime.

  11. michael Urbanski December 27th, 2010 12:31 pm

    One of my favorite thing to brag about was “I have unsold more houses than I have ever tried to sell” This is #1 honest and #2 allows them to not feel pressured until as the professional I feel that they need to be pressured. OTOH there is nothing worse than saying something that is not funny and then the silence that smells like someone laid an egg just lingers… know what I mean?!

  12. Chris December 27th, 2010 3:06 pm

    Mark, I really like #9… No need to brag to me about how much money you’ve made/houses you’ve sold, the only thing I want to know is that you are listening to ME and MY needs and wants.

  13. John Sabia December 27th, 2010 9:05 pm

    All great points… I think the most annoying is agents who not only don’t answer the phone, but who don’t return a call at all.

  14. Jim Klein December 27th, 2010 11:50 pm

    Thanks, Mark. Those are great principles for any business.

    I’m ambivalent only about #9. I think maybe it’s trumped by, “When you’re selling, business is good.”

    Now me, I’ll take bragging over humility every time, so maybe I’m not typical. Still, nothing sells quite like success.

  15. Greg Swann December 28th, 2010 7:22 am

    > Now me, I’ll take bragging over humility every time, so maybe I’m not typical. Still, nothing sells quite like success.

    My clients always ask me how my business is doing. I tell the truth — tough sledding, but we’re lucky to have survived. My thinking is that they want to know that I’m still going to be around tomorrow, although the motivation could be thoughtful consideration or maybe even just small talk.

    I don’t care for the kind of self-promotional bullshit many Realtors do in their marketing, but I live and die by war stories: Relating detailed examples from past transactions to illustrate fundamental principles. This is good information for the client to have, but, even so, there is always only one hero in those stories. In the early hours with a new client, I’m looking for a status we call “glued on” — not going anywhere. That kind of selling — using war stories to let you know you’ve picked the right white knight — just makes good sense to me.

  16. Joe Montenigro December 28th, 2010 12:04 am

    You almost didn’t write #7 ?? I wish you didn’t ! In fact, I think you could trash 8 out of 10 them because they’re way off base. And your subject line…. Commandments?? I’m pretty sure you don’t understand agents let alone buyer representation and I’m positive that you shouldn’t be blogging as if you did. Maybe you should rename the article…..”My bad experience with agents” Or “10 reasons why agents suck”…. That I could see.
    Just my two cents worth

  17. Jim Klein December 28th, 2010 10:22 pm

    Oh good, a disagreement! Naturally I hadn’t thought of not telling the truth. So of course I never mean bullshitting.

    Speaking only of any immediate transaction and speaking only directly of the money involved, it’s close to axiomatic that, “When you’re selling, business is good and when you’re buying, business is bad.” Often counterintuitive, it’s almost never false.

    The bubbly waitress who presents as highly productive and a great tip-getter, indeed gets way better tips than the poor soul who’s scraping her way and really needs the charity. Everyone may publicly declare how much compassion they have, but privately they like winners. Sales 101.

    Or, go to an auction wiring that you’re there to spend, and see what happens!

    None of this has anything to do with being nice; that pays in any situation. I’m just speaking of monetary success in a given transaction. When you’re selling, business is good; when you’re buying business is bad. Life is always good, buying or selling…that should be implicit too!

    Also, I’m not sure about “detailed examples from past transactions.” I wonder how motivated some folks would be, to become one of those. But then, I’m atypical about that stuff too. Still, I can’t think of any particular details that would be more convincing of white knighthood, than the general image that you’ve succeeded at doing it.

  18. Greg Swann December 28th, 2010 11:05 pm

    I know every bonehead mistake you can make in a real estate transaction. If you listen to me, I will help you get what you want with the minimum attainable frustration of your objectives. If I find myself working with a buyer who really won’t listen to me when I’m trying to help him avoid mistakes, I’ll generally fire that client.

    I get stuck sometimes — a captain can’t abandon a ship under weigh; that’s the essence of a fiduciary duty. But if a buyer doesn’t know in his bones that he needs me more than I need him, then I know for sure I need to be working with someone else.

    The better we get at selling that one idea — not just good real estate advice, but real estate advice you cannot obtain from anyone else — the better we do. That sounds more arrogant than any of the blowhard self-promotional stunts pulled by Captain Urinal Cakes and the TwitBook Posse, but it comes across to the client as show-don’t-tell and it’s-all-about-you. Marketing is what you communicate, not what you say. This is how how we communicate — because this is how we work.

    Looking for a fantastic marketing strategy, one that will work wonders in any business: Become an uncontested master of whatever you’re doing — and let your customers know what it is they’re buying and how they can make sure they’re getting the best.

    I’m better at talking about all this than I am at doing it, but I’m better at doing it every day.

  19. Jim Klein December 29th, 2010 9:33 am

    >>>Become an uncontested master of whatever you’re doing — and let your customers know what it is they’re buying and how they can make sure they’re getting the best.

    Oh, is that wonderful, especially “know what it is they’re buying.” I’ll bet 99% of RE agents think they’re selling houses, when of course a buyer can pick up a house pretty much anywhere.

    You’re awfully forthcoming about secrets with your competitors. How remarkable that in this world, it hardly matters! Have a great New Year’s—2011 surely doesn’t figure to be boring.

  20. Greg Swann December 29th, 2010 10:55 am

    > I’ll bet 99% of RE agents think they’re selling houses

    Much worse. They think they’re selling likability. Still worse, many buyers and sellers think likability is something worth paying for. A big part of what we do, in the large, consists of teaching consumers to shop for value — and nothing else — when they seek real estate representation.

  21. Dan Connolly December 29th, 2010 12:22 pm

    How’s business?

    Well, telling the client that it is tough sledding but you are lucky to have survived, in my mind, doesn’t do anything good for anyone. First of all luck doesn’t have anything to do with it. Hard work and determination are all that matter. If a buyer thinks it has to do with luck, they will wonder when your luck will run out.

    While I would never advocate lying under any circumstances, looking at the world in a “half full” mindset, where you truly believe that since the average agent hasn’t sold shit this year, then you are doing great, even to be just hanging in there. This means that the answer could be “even in this recession we are doing great”…end of answer. People want to work with winners. Jim’s right about that.

    They want to know that you can live without their closing this month and your motivation is not to get them to the closing table right away, but to take the time it takes to find them the right property.

    I think we work the same way. I spend quite a bit of time pointing out every flaw in the house. I like saying, “nothing would make me happier than sitting down writing an offer, getting it accepted and preparing for closing, but I think you can do better”.

  22. michael Urbanski December 29th, 2010 12:32 pm

    It is odd how doctors in other counties approach the telling of bad news to patients. For example most doctors in Europe tell the patient that “You have cancer and a 50% chance of dieing” while in this country our doctors say “The good news is you have a very good chance of beating the disease…you do show signs of cancer, but we have had some wonderful breakthroughs in the last several years”
    I prefer the American way of providing bad news. Communicating hope is more helpful to everyone, even the ones that don’t survive. Especially now.

  23. Teri Lussier December 29th, 2010 3:32 pm

    >For example, I’m assuming that the MLS here – which I’m guessing every agent in the area subscribes to – has a function where the agent enters a prospect’s email address and home search parameters and then an automated email goes out every day or two. It wasn’t long before I was getting the same data… in the same format… at the same time… from multiple local agents. So, the question becomes – how do you break through this clutter and stand out?

    Thar’s gold in that thur comment. I’m guilty of this. Going to have to figure out how to do a much better job of delivering information. Thank you.

    And the whole post is great. I love it when people tell me how to get better at what I do. Bam. Easycheesy.

  24. Mike Mullin December 29th, 2010 4:03 pm

    Teri – I don’t sell homes but the first thing that popped into my head after reading your post was the gold is not in how you deliver the information (because you are all using virtually the exact same system) but is in how you uncover the buyer’s desires before even programming the robot to send an endless stream of homes to their Inbox. Or maybe it’s a one-off email you have to send personally each time you see a “special” home within the automated stream.

    I think the automated delivery is a must but you are correct – there needs to be something outside that system that makes the prospect want to stick with Teri. Judging by my interaction with buyers who have been referred by real estate agents it wouldn’t be that tough to stand out from the rest. 🙂

  25. Jim Klein December 29th, 2010 7:21 pm

    Wow. I think Mike gave away the biggest secret for all businesses in all times, and in only four words–“uncover the buyer’s desires.” Whitney, Ford, Gates, Jobs…they didn’t do anything but that, AND acted on it. Oh, what a world it could be.

    Nice job, Mike; that should be enough to lock up Dayton for the Bloodhounds!

  26. Teri Lussier December 30th, 2010 3:22 pm

    I’ve been working this over in my mind for awhile:
    Everyone has a website with an IDX, and/or an auto-mls. Big deal. Kinda like we’ve been told that all we have to do is plug people into the computer and voila! Clients. In the end it all circles back to customer service, salesmanship, a human touch. It’s as if all the technology and automation is throwing up walls while clients still want- a little help here! We do get paid for something besides a pretty website. We still need to listen, learn, listen, pay attention, talk, listen, latherrinserepeat and I’ll admit I forget that sometimes. Anyway. I did sleep on this and woke up this morning with some solid ideas about how to make the MLS plug-and-play more meaningful for potential clients. So thanks again, Mark.

  27. David Grbich January 28th, 2011 1:01 am

    Mark – very creative and thoughtful post – back to the basics.

    I particularly like Commandment #1: Answer your freaking phone dude(ette)!!! My answer rate is likely 80% so really hoping that I can drive 20% more business by simply answering my phone. My larger pet peeve in this area has to do with “some” agents not returning other agents calls or responding to offers. Professional courtesy with clients and peers build reputation and brand.

  28. Mike Mullin January 28th, 2011 9:59 am

    Today’s pet peeve – I’m on day three with an FHA loan sitting idle on my desk. The ONLY item needed to submit for final Underwriting is the buyer’s agent’s signature and return of one of the FHA forms. Could I submit the loan anyway? Sure, and I will today regardless. However, it amazes me how SOME agents are only working part time and their clients pay the price.