Show of hands. How many real estate brokers/agents reading this were recruited by M.I.T.? Crickets. Yeah, thought so. Me neither. I can spell technology. I’m not a TechnoGeek by anyone’s flimsy definition. Folks who know me are laughing at the thought. My blog? I know how to write posts then click the publish button.
I realize the online community by nature is composed of a far higher percentage of technologically gifted people than the population in general. Really, I get that. But they talk to each other so much about how wonderful this app is vs that app, they don’t realize the Gomer down the hall who’s making half a million a year by physically farming, or God forbid, calling people on the phone, avoided more in income taxes last year than they grossed.
Don’t get me wrong, some of my best friends are Geekoids. That’s what they do — help guys like me. If they studied what I did for a year, they still wouldn’t know half of what I’ve forgotten. Same with me and what they do, except I could study into my next three lives and still fall short. This isn’t about right or wrong. This is about how much you want to earn, and how you’re gonna skin that many cats.
I’m in the business of investment real estate. You a broker/agent? What business are you in? I’m not gonna belabor the point of hours spent on activities you’ll claim are directly related to your bottom line. The only thing related to your bottom line is closed escrows. The rest is what makes you feel good about doing what you were gonna do anyway. And for the record, if messin’ around with the hi-tech part of your business floats your boat, more power to you. But pulllease stop trying to convince yourself and others it’s time well spent. Write that speech, print it, put it in the crosscut shredder, then spread it on your lawn. Before long you’ll have the greenest grass in town.
Let’s bring the dirty little truth about hi-tech in real estate out in the open once and for all. For 98% of the agents out there using online/hi-tech approaches to increase their bottom line, it’s a giant FAIL. That’s not a criticism of those approaches whatsoever. It’s a fact though, and everybody knows it. You and I can walk into any real estate office in the country worth its salt, and I’ll bet roughly 9 out of 10 times the #1 producer will be getting their business through mostly offline activities.
Repeat — If taking care of everything related to hi-tech in your real estate operation puts a smile on your face, good on you as Greg sometimes says. Frankly, I only have to spend one dinky paycheck a year to have my favorite gaggle of geeks do for me that voodoo they do so well. For the record, I also don’t service my own car, make my own clothes, or grow my own food. What a rebel.
If I take this I gotta do everything myself logic and apply it to say, baseball, I guess it’d result in players making their own bats and gloves. Extreme? Not any more than tellin’ me I have to do anything other than what folks pay me good money to do. They pay me to increase their net worth, allowing them to retire well. They require me to know about tax shelter, exchanges, financing, and the myriad other related areas of knowledge necessary to do what I do well. The next prospect who leaves me because I don’t take care of my hi-tech needs myself, will be the first.
And yes, many of my clients are generated by my online efforts. Also, most of last year and the first month of this year was spent increasing my firm’s hi-tech ‘footprint’. We’re now virtually paperless. We act as our own server for our various databases. And when I say, ‘act as our own server’ I mean there’s a lonely little computer sitting in the corner serving its little ass off. We don’t do squat. If there’s a problem, we ‘call the guy’ — the same guy who showed us what buttons to push. 🙂
More power to those now rolling their eyes, thinking how wrong-headed this all is. Frankly, happiness is infinitely more valuable than how much money you earn. So if that’s the tradeoff for those spending so much of their time away from pro$pecting and belly to belly meeting$ while dealing with their tech needs, I salute them — it’s a trade heavily weighted in their favor.
When my son was young I spent 15-20 hours weekly with his sports activities. I knew what it cost in dollars not earned, but the payoff in terms of time spent together was a no-brainer. We make these sort of choices all the time, don’t we? What value do I assign to having been in the dugout for 98% of his baseball games from the time he was 8 ’till his sophomore year in high school? I can’t, it was priceless, as are the memories.
My NCAA baseball umpiring schedule used to take a minimum of eight hours a week away from my brokerage endeavors, sometimes 16 — and that was just the games themselves. There were the meetings, ongoing training, umpire camps, preseason tournaments, and post season. Can’t tell you how much I enjoyed it. Even though at the time I had three full time assistants, I was finally forced to decide: Serve my clients with the quality they’d come to expect, or take fewer of them. There was no wrong way to go from my viewpoint. The level of service and more importantly the quality of results delivered to clients wasn’t gonna change either way. I chose, for various business and personal reasons to walk away from umpiring. Though I still miss it like crazy, using 20/20 hindsight I can honestly say it was the right move.
By adding 500 extra hours a year to my business, the majority of which was spent prospecting in one form or another, my income increased significantly. Furthermore, I’d never have been able to expand my firm to several states had I remained an umpire.
To those who haven’t stepped away from the keyboard to evaluate what’s generating closed escrows, I conclude with this: We’re all different. If you honestly believe your income is higher with you spending time changing your own hi-tech oil, then continue along that path — it’s obviously working for you. On the other hand, if you think putting yourself in front of 50 more serious prospects a year might be more productive for your bottom line, AND that would make you happy, you may want to modify your approach.
Ultimately it’s all about how many skinned cats YOU want to hang on the wall. Nobody cares how they were skinned. We all decide how we’re gonna skin our own cats, and how many we’d like on our own wall. Let’s stop kiddin’ ourselves though about the relative productivity of time spent on various tasks. My ongoing assumption is that those insisting on spending so much of their time on the hi-tech needs of their operation are doing it because they expect to earn quite a bit by spending that time.
Does this make any sense?
John Kalinowski says:
Jeff- I’m not a rocked scientist, but for what it’s worth I do have a degree in mechanical engineering, and in my previous career I used to sell high-tech “stuff” to rocket scientists at NASA. I even helped design a part that went up on the space shuttle and to the space station. I know, blah, blah, blah.
Anyway, the reality is that many of us have to do our own work out of necessity in the beginning, as there’s only so much cash available and it’s just not possible to pay a geek to do the work. I started my own company in December and I had no choice but to build my own WordPress website, design and print my own marketing materials and flyers, create my own custom sign, and even build my own special sign posts in my garage. Might sound stupid to you, but when you’re starting out and still have five kids to feed, every penny matters.
Yes, I still go to all my kid’s events, it just means I have to work until 11:00 most nights. Do I mix in good old-fashioned 1.0 skills? Of course, but there’s nothing wrong with doing some things yourself until you get to the point where you can start hiring it out.
All the gurus tell you “just hire an assistant and worry later about how you’ll pay them”. It sounds good, but it’s not reality. Until you get to the point where you can pay others to do the boring stuff, most are forced to do it on their own.
There may be many top producing agents who are cranking along without technology, but if they’re not paying attention to it now, it will hurt them at some point. And yes, the big shots like you 🙂 can hire that stuff out, but you built your business on 1.0 skills in a purely 1.0 world, and now have the means to hire as 2.0 grows. Little guys like me have to do the 1.0 and 2.0 work ourselves, and have no choice but to burn the midnight oil.
February 20, 2009 — 4:56 pm
Jeff Brown says:
John — Figures a near rocket scientist would comment first. 🙂
My thoughts had zip, zero, nada to do with agents in your position. Been there, lived that, wasn’t talking to you.
You make an excellent point saying I built my business on 1.0 etc. True enough, but irrelevant to my main point, which is what produces the income NOW, in the 21st century.
I went from 1969 to 2000 before I hired my first assistant who wasn’t a traditional secretary/receptionist. The people who’ve advised others to hire then worry about paying them later? It’s silly on it’s face.
I don’t know the nature of your operation, or how the ‘pie’ of business generation is split. I’ll speak for myself.
This calendar year, based upon our marketing plan, we expect to earn 75% of our gross income as a direct result of 1.0 efforts. Our 2009 online presence will be increased by at least 100% and could be by 200%. We love our online results. However, our banker and my Boss much prefer our 1.0 results.
I’m assuming you don’t drink the 2.0 Kool-Aid exclusively. Agents relying on Old School prospecting methods have been, are, and will for the next few years at least, be kicking the asses of the 2.0 crowd. I do both. I often combine them.
Results don’t lie, John. 1.0 kicks 2.0’s tail most times.
February 20, 2009 — 5:39 pm
John Kalinowski says:
I think you’re right on the 1.0 kicking 2.0. Most of my listing business still comes from sending snail mail marketing to expireds and FSBOs, and we work buyers from there the old fashioned way. I do wonder where it’s all heading, though, and I’m sure those who are spending extra time on 2.0 will benefit.
My “pie” is split 8 ways: me, my wife, five kids, and a dog (oh yeah, and a goldfish). Thanks!
February 20, 2009 — 6:05 pm
Jeff Brown says:
You must be one hard workin’ guy.
February 20, 2009 — 6:14 pm
John Kalinowski says:
I am listening to you on the 1.0/2.0 mix, and I’m trying to focus more on good old-fashioned 1.0 this year. Right now I’m working on the database side, with Greg’s help, as that’s definitely been my missing link. Have a great weekend!
February 20, 2009 — 6:27 pm
Genuine Chris Johnson says:
500 hours a year of prospecting. That’s an interesting, interesting idea.
February 20, 2009 — 6:41 pm
Jeff Brown says:
Actually Chris, I ADDED 300 or so of the 500 hours to prospecting. Give or take it was about an hour a day extra. The other 200 hours were spent doing more of the normal stuff.
February 20, 2009 — 7:06 pm
Jeff Brown says:
Chris, one of the local agents with whom I’ve been friendly since 1996, has averaged give or take. 700-1000 hours a year prospecting. His typical year come hell or high water is 50-75 deals. He uses his computer to plan his two annual hunting and fishing trips. 🙂
February 20, 2009 — 7:32 pm
Tom Vanderwell says:
Jeff,
All I can add to this is that you really have a way to make one think. Whether you are a Realtor or a lender, it’s always a matter of analyzing what works and asking the question, “will this help or is this wasting my time…..”
You rock!
Tom
February 20, 2009 — 8:23 pm
Arn Cenedella says:
Jeff
It makes a lot of sense.
I try for 2 hours a day minimum on prospecting.
This is mainly on the phone or getting face to face with folks – stopping by their house or their office or meeting for coffee lunch or dinner. People appreciate when you give them your time when an immediate sale is not on the menu.
Clearly, tech is becoming a bigger part of our business especially I think if you want to keep your database from getting really old. After 31 years in the business, many of my clients are in their 70s and even 80s. I need some “new blood” to keep my business fresh and growing and so blog/social media is part of that effort. I know there are RE agents who both close a lot of escrows and are superstars in the blog/social media world too but sometimes I wonder if some of the self-proclaimed experts in the blog social media world really sell that much real estate.
February 20, 2009 — 8:28 pm
Jeff Brown says:
Tom — Thanks so much. I wonder how surprised most agents would be if they knew the exact origin of every piece of closed business? The first time I ever did that analysis in earnest, it was the discovery of where the business WASN’T coming from — the newspaper. That was 1975. Just over 8% of my income came from ads in the local rag. Yet, half of my marketing/ad budget went there. 🙂
Arn — I’m with you. Dad used to tell me he thought the ‘redheaded stepchild of most real estate agents was the front end of the pipeline. That’s been my observation also.
Most of those so-called SM ‘experts’, the ones in real estate, couldn’t carry your jock when comes to puttin’ cat skins on the wall.
February 20, 2009 — 8:48 pm
Matthew Hardy says:
I talked to a guy yesterday who owns a significant business with the top brokerage in New York city (read: he makes lots of money). His team is busy as hell and are using Excel spreadsheets and cell phones to get the job done. That’s the extent of their 2.0 world. He wasn’t looking for a system that connects everything to everything to everything but a simple tool that doesn’t screw up the success he’s already having. While he definitely wants to better leverage his Excel data, he was crystal clear on avoiding a mistake so many make: spending inordinate amounts of time on technology at the expense of making money.
February 21, 2009 — 1:20 pm
Jeff Brown says:
Matthew — TomAto – Tomato. Whatever works for each person’s bottom line. I’ve already made that mistake, and it cost me six figures easily. Live and learn.
Their clients are apparently happy with their bottom line too. It’s all about how furry you’d like your wall to be. How you skin the cat is what we all talk about over beers. 🙂
February 21, 2009 — 2:16 pm
Jim Lee says:
A look at your current bank statement will tell you if your current approach is working or not.
Online works great for me but I know it doesn’t for some, and can’t because there’s only one #1 position in Google, one #2, etc., etc.
“Always ride your horse in the direction he’s going.”
February 21, 2009 — 9:26 pm
Thomas A B Johnson says:
“You and I can walk into any real estate office in the country worth its salt, and I’ll bet roughly 9 out of 10 times the #1 producer will be getting their business through mostly offline activities.”
I would also bet that the #1 produce is older than 55-60 years old. This is 2009 Real Estate Demographics 101. Most of us agree that the offline dinosaurs own the top of their markets. Since offline methods trump web 2.0, doesn’t that guarantee that barring premature demise, the dinosaurs will rule the earth for quite a while? With Wall Street’s 2008 demolition of retirement accounts there is genuine need to stay in the game at least another 5-10 years, as well.
The wonders of medical technology will continue to allow those offline agents to remain at the top far far longer than the web 2.0 would like to even consider. To wit: modern medicine has kept Russell Shaw in the game at the top of his market displacing any potential web enabled usurper from the pinnacle of that market. It will be years before Russell’s furry catskins will be available to a competitor. If we consider that the median Realtor is over 55 years old and it is likely that the 55+ slice of the NAR membership operates offline, I think my efforts to gain market share must include an offline emphasis. Of course, I am guilty of a very broad brush here.
In our praxis, we work ex-urb markets that generate significant catskins where the clients “don’t do email.” Needless to say, we own 1st page of Google vs our competition there. The benefit for us is bragging rights for our offline prospecting, and we also capture the out-of-town prospects that do “do email and Google” 😉
This discussion is all about creating your own recipe blended, seasoned and prepared with just the right amount of catnip to generate maximum catskins.
February 22, 2009 — 12:52 pm
Jeff Brown says:
Thomas — You say ‘Do what works’ better than I do by far. 🙂
I think your brush was a bit too broad on the age factor though. My son is 28 and will easily do six figures his first ‘non-mentee’ year. He’ll do the vast majority of of it using methods available in 1969.
It’ll be easier with modern helpers, but it’s still gonna be 1.0 for him by Dad’s design.
Until the tipping point is crossed, re: the public flocking to the laptop, while simultaneously ignoring Old School options, 1.0 will remain very profitable.
February 22, 2009 — 4:14 pm