challenge

Competition

samuelabbottiii, , , , , 1 Comment

I’m an envious bastard.

There are a few (several) agents in my market that consistently sell more than me, and a couple of them have continued to grow and sell more despite my plateauing.

They’re good at what they do and they spend a lot of time and money in their businesses. I admire them, I know most of them fairly well. Still, when I see their success, it doesn’t make me feel warm and fuzzy.

Real estate is a zero-sum game. When they win, I lose. The notion that “there’s enough to go around for everyone” seems to have never been less true than it is right now. We have low inventory, a glut of agents, and few buyers that are willing and able to buy.

I used to hear that though: “There’s enough for everyone,” and I would feel reassured. I remember when I first got into the business in early 2018 and my then-broker would talk about what it was like in a down market. She made the comment that they always made sure there was enough for everyone, but that they all had to tighten their belts a little.1

I’m not sure there’s going to be enough for everyone. I’m a pretty scrappy dude when push comes to shove. I have a somewhat trying upbringing and the Marine Corps to thank for that. But I expect that a lot of agents are going to struggle in the next few years—myself included.

Nationally, there are almost 7,000 fewer agents2 than there were at the end of 2022. But if you look back to August of 2022, there are almost 19,000 fewer.3

So people are getting out. For people who sell real estate who sell more than 10 deals per year, this is a good thing.

Why? You might think that it doesn’t make any difference if Janice stops selling real estate because she has a history of consistently selling 2-3 houses per year.

But what you may not have considered, is that Janice and all the other Janices out there are gobbling up the ones and twos, the here’s and the there’s, that you and the other top-producing agents would be listing and selling.

While they may not be on your radar, they ought to be in this regard. They’re eating up deals.

I’m still a pretty competitive person, whether I like it or not, and I don’t like seeing other people succeed. I’d like to though. It’s an intention. But I think this is still too primal for me. I’m 33 and have four kids and my wife’s home raising them. I’m competing with retired 65-year-old women who are married, don’t need to work, happen to know everyone, decide to get their license and they take off like a bat out of hell, for example.

I’m out for blood, man. I hate seeing them win. Makes me work harder.

It’s a weakness, a character defect of mine. And even though it’s not the type of motivation I aspire to be inspired by, it’s motivation nonetheless.

  1. For context, they were charging me and most agents there between 35%-%50% of every commission we earned. That’s not to mention that she was married to a doctor and co-owned the firm. I eventually left and went where I could make more money. ↩︎
  2. REALTORS®, with the numbers based on NAR‘s statistics. These numbers do not factor in licensees who are not REALTOR® members. ↩︎
  3. NAR – August Monthly Membership Report ↩︎
Competition

Gross Commission Income as a Yardstick of Success

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Or as a cat o’ nine tails! GCI is a metric we hear a lot in real estate. Everybody in an MLS can see how much everybody else is selling. For some of us, that means the pressure is on.

The tendency to measure oneself against one’s competitors is strong, I would imagine, in any competitive person. The ability to do that in an objective way by using statistical analysis is somewhat unusual in business, though less in sales.

But we real estate professionals have this ability at our fingertips! The different ways in which this is useful are numerous, but I haven’t heard anyone talk about the ways it’s not useful.

For a guy like me, having a yardstick to measure myself against my peers is not something I enjoy. My tendency is not towards feeling satisfied, but towards feeling as though I could be/should be doing more.

Maybe I’m unique in this way.

This aspect of measuring myself against others doesn’t feel particularly healthy or wholesome, and it’s not a good index of success. When I’m up, I enjoy thinking of all the agents that have sold less than me. When I’m down, I’m filled, at times, with envy and resentment towards my peers for being ahead of me.

The same phenomenon occurs when we see the highlight reel of people’s lives and we think, “Why isn’t my life so grand?”

The reality is that everyone has to deal with life. But we can get a distorted perspective of it due to only seeing one version of the life that those people want us to see.

The lesson for me is that sales volume isn’t the only way I should measure myself. I’m at a point this year where I’m at half of my annual GCI for last year, only it’s September 11th.

Ouch.

Granted, I have some plausible excuses, but what it really comes down to for me, is that it didn’t happen. I had several opportunities with buyers, who are real buyers, but they didn’t buy. Likewise with sellers. I’ve had several listing opportunities but the people didn’t end up listing. To be fair, I’ve also lost two or three to competitors. The market has become more competitive and more saturated, both in the sense of new agents as well as larger agents and teams gaining more market share.

Part of the trouble is that there aren’t many homes for sale here. We’re in a low-inventory/high-demand part of the country right now. I wasn’t able to put several of those people where they wanted to be, at least not yet.

Additionally, I could say that I worked the backend of building a real estate team with my business partner, and the focus on that this spring took precedence over production. I also had my fourth child in April. But more than anything, the first thing is the reason.

Unlike some, I work almost exclusively by personal referrals and direct clients that I know personally. Other than that, I have people that find me online and contact me. I do some intermittent advertising, but not really enough to talk about.1 Because of that, I get what I get to a large degree, and being 33 in an otherwise older community, sometimes that’s not million-dollar listings. Sometimes it’s piece of shit tear-downs where the guy needs someone to help him navigate the short sale process.

Now, in light of those things, it’s more reasonable that I’m at where I’m at. Furthermore, I have existing deals and will likely bring more to the closing table other than those between now and the end of the year.

Irrespective, it brings me back to the idea that I’m measuring my self-worth against other people’s sales volume. That’s the problem for me.

This is mostly a spiritual problem. I’m putting all my eggs in this basket (work) and consequently, I’m deeply disturbed in this situation because what does this mean about me?

So, if my identity is all wrapped up in my work, and I don’t feel like I’m making progress in other areas of my life, I’m going to be all fucked up when I’m not producing at work—even when it’s outside of my control. I have to diversify. Work is still work, and I still need to do it and do it well. But when I’m balanced in other areas of my life, I’m better able to endure difficulty when one area isn’t going how I think it should.

So, I blew the dust off of a novel that I wrote and began taking it through the fourth round of edits a couple days ago. I began making time to spend with my friends over coffee for a couple of days a week before work. I’m talking about the way I feel and the emotions I’m experiencing around this with my wife and my close friends. I just began a big reading project that I’m excited about. I’m considering how I can be of greater service in my life to the different people and organizations that I touch, especially my family at home.

I’m counterbalancing the other roles in my life. Ironically, I’ve been putting the majority of my focus on work this entire year. Between that and exercise and my family, little attention above what’s expected or required has gone into the other areas. A bigger conversation is my tendency to “work” more in terms of showing up, but not working effectively and efficiently while I am at “work”. So I could benefit from some practical remediation as well as spiritual, and that’s going to become a focus as I begin my business planning for next year.

  1. I’ll be doing more now. ↩︎
Gross Commission Income as a Yardstick of Success

Tailored Shirts and Lightning Rods

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Today I moved an old tiki bar off a porch and into a pickup truck in the middle of a thunder and lightning storm.

I was driving about 90 minutes to a closing. The listing is outside of my normal market by about 20 minutes, and the law office that handled the title work and the settlement was about 25 minutes farther still. From my office, the whole trip there was a little over an hour, but I was planning on stopping by the listing to get my lockbox and grab the key.

About 15-20 minutes into my ride, I got an email from the paralegal at the attorney’s office with a half dozen photographs of various things that were still at the listing during the final walk-through moments prior.

I look through them. Two of the items had been addressed, and the other four remained. I let the sellers know in a text and didn’t get a reply back until 15-20 minutes after that. The wife said she was on her way. I said ‘Me too.’

Turns out, the tiki bar was still on the porch as well, and the bedframe was still up in the loft area. Small bed, but the kind with drawers built-in. The fridge was still full, and there were miscellaneous things in the basement and carport as well as several large bags of trash.

The wife had been there helping me, arriving a few minutes after me. The seller (husband) arrived with his truck and we proceeded to break down and load up everything the best we could.

Long story short, we got it all out of there, torrential rain notwithstanding.

Only once have I had a client leave personal property at the house to be found during a final walkthrough. I resold the house this year actually. The then-buyers were pissed. I don’t blame these guys for being a little pissy in today’s situation.

The moral of the story is, to do the work. I’m all for solving problems before they begin. We have a client expectations sheet with a series of bullet points about the way we do business and what we expect from clients throughout our professional relationship for the listing/transaction.

This includes things like keeping the driveway plowed, keeping the lawn mowed, communication expectations – especially during negotiations, and getting all their things out before closing. Despite a form with their signatures and mine, we were still in a predicament.

Driving to the closing after, I felt as though I was above this kind of shit. My tailored, Brooks Brothers shirt was soaking wet. I felt kind of lousy. And I felt stupid. Fortunately, I was listening to a book called The Obstacle Is The Way, and the author talked about how only a conceited asshole would think they were above whatever it was they were doing at their current station in life. Caught my attention.

That may or may not be true, but the concept of what was being talked about was to be present for the things that we need to be present for, not completely focused on the later-on stuff. I had to get the deal done. It was a notably difficult and stressful transaction. The clients were friendly, but they were disobedient, busy, and likely dishonest with me at times.

Add to these things the fact that we had a difficult property to sell plus difficult buyers, and it made for a really challenging transaction.

But now it’s done. And sometimes we have to roll up our sleeves to get the thing done.

It’s not the type of work that excites me, and it does make me question whether there’s something better, but the reality is that all work is difficult and at times feels degrading. When I feel that way, it helps me to suck it up, get humble again, and focus on the task at hand.

The 22-year-old me would have been thrilled to be in a situation like that, helping these people get their stuff out so we could close a deal and make some real money. Surviving in this game is about not getting too big for my britches. And sometimes that’s a challenge in and of itself.

Tailored Shirts and Lightning Rods

All Education is Self-Education

samuelabbottiii,

I read somewhere recently that all education is self-education. I really appreciate this because it makes sense to me. I can take it upon myself to learn on my own without teachers – in the proverbial sense – and without a school or a neatly packaged curriculum.

Conversely, even if I’m enrolled in school, I could be seeking to merely accomplish what’s necessary so I can get the outcome I desire – be it a grade or even a degree. Seth Godin has some strong opinions on educational philosophy, especially in relevance to this point. “The test is a stick, the grade (and the degree) are the carrot, and compliance is the process.” If we focus solely on outcomes, we miss all the good stuff that’s supposed to happen in between. The test is ideally intended to verify we learned something, evaluating exactly how much and how well. The degree is ideally a representation of the education we spent x amount of years and energy earning. Unfortunately, this is an uncommon perspective these days.

The notion of all education being self-education puts the responsibility on us as to whether or not we’re going to learn. As I oscillate back and forth between staying in school or giving all my energy and time to my reading and writing, I’ve been continually reminding myself about the opportunities that lie dormant and underutilized in the average educational process.

I’m gaining exposure to things that I wouldn’t otherwise, or at least not nearly as quickly. In my particular situation, I don’t feel overly challenged with the content of the school work regarding what’s necessary. Sometimes the quantity is challenging, but this seems annoying rather than productive. The point being made above is that we can go extra deep in the studies and really mine for gold if we want to. This has never been a personal approach to formal education for me, so it’s naturally strange and unfamiliar. Frankly, it’s counterintuitive to the way I was academically raised. It’s pretty cool that we can really make something out of even a community college education, or even out of the books that we read. The real stick is that we have to challenge ourselves though. Easier said than done.

All Education is Self-Education