real estate

Gross Commission Income as a Yardstick of Success

samuelabbottiii, , , , , , , , , , Leave a comment

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

Don’t Balk. Learn ASAP.

samuelabbottiii, , , , , , , , , Leave a comment

Today we had a birthday party for my four-year-old daughter. My wife invited a few couples from the community as well as our immediate neighbors and everyone that had young kids brought them. The party was a hoot and we all had fun.

I, of course, am now ready to curl up in a ball with a book for an hour or so before I fall asleep.

Talking with one of the fathers and he asked me how work was going. This is what people do. They ask me how the market is, how work is going. I answer the question, on average, two or three times a day to different people.1

I answered like I would, telling him that the interest rates are higher than they’ve been in more than twenty years, which makes it difficult for people to want to buy. Being that many sellers are also buyers, there’s also a lack of inventory which is compounded with what is already a low-inventory market. So, things are going okay, but they could be better. What homes there are are selling quickly. There are more cash deals than what is typical, and most of the sellers that I’m working with are moving out of state for various reasons.

We somehow got on the topic of assumable mortgages. It was definitely something I brought up. It’s something I’ve been thinking about. Having gotten licensed in 2017, there hasn’t been a big reason to know anything about assumable mortgages. Now, with interest rates being as high as they are relative to how low they were three years ago, I know it’s something I should learn more about to help buyer clients secure loans on the best terms possible.

But, I have yet to learn about them. That is, until after my conversation with this guy when I proceeded to look it up so I’d know what the hell I was talking about.

Don’t talk about real estate things that you don’t fully understand with people. That’s my lesson for today. We talked in and out and all around the notion of an assumable mortgage. I hadn’t grasped the concept fully. It was only partially hatched in my little 2017-licensed brain. No appraisal? Couldn’t be. Has to appraise. Turns out that’s not true. Bank doesn’t give a shit so long as you have the difference between the loan and the sale price in cash. What kind of loans are assumable? Are there certain kinds that frequently are or certain kinds that frequently aren’t?

I knew nothing, other than that the point was to acquire the lower rate. I didn’t know that one then has to come up with a down payment sufficient to cover the difference between the loan amount and the market value/asking price of the property. I didn’t know that government-insured loans are often assumable, that conventional loans rarely are.

I didn’t know. But he asked, and I admitted I didn’t know.2

What’s worse is that I brought it up. I initiated it. I looked uninformed, professionally, which makes it appear that I’m not fully able to represent my clients. That’s true to some degree. This is something I should know about, like I said.

I don’t want to get myself into situations where I don’t know things that I should know professionally. Not going to win me any points with the public. So, I learned, and I’ll learn more. I’ll begin to use this for my clients, when possible. I will ask my sellers about the nature of their loans and will research this more effectively in my pre-listing process.

  • If the thought comes that I should know something because it will make me more valuable professionally, I shouldn’t balk. Learn it asap.
  • Don’t unnecessarily put myself into positions where I don’t have the answers that relate to my profession.
  • When these things happen, autopsy the situation, see where I went wrong, correct course, and don’t make the same mistake twice.
  1. It pays to have a canned response to this. It’s not something I’ve mastered. I usually make the mistake of being transparent and telling them how the market actually is or how work is actually going. Maybe that’s me being authentic, or maybe I’m missing opportunities to be a clever real estate salesperson. ↩︎
  2. This is a sign of progress. The new-agent version of Sam would have tried to bullshit his way through it instead of just admitting that he didn’t know and exercising even the smallest display of humility. ↩︎
Don’t Balk. Learn ASAP.

Top Contacts

samuelabbottiii, , , , , , , , , , Leave a comment

This is something I’ve yet to perfect but I have a belief in it because of how many people have instructed me to do it or something similar to it.

As a real estate professional, I’m in the people business, much as I hate to admit it. See, I don’t hate people, no not at all. But I don’t particularly love having to interact with them for my work.

I’m what is frequently referred to as an introvert. But, I get along well enough with others, so I’m moderately successful at real estate sales. This doesn’t help me though when it comes to spontaneously reaching out to everyone I know so I can be top of mind.

Yes, it’s not something I’ve been doing well lately. We participated in a coaching program earlier this year with Workman Success Systems and this is one concept they’re known for.

I identify my top contacts. This might be 250, 100, 50, or somewhere in between. The working notion here is that these people are the people most likely to refer me business. From here, I design a contact plan of how I want to keep in touch with them. At WSS, it was as simple as a phone call or a face-to-face meeting once per month.

A book that influenced me a lot earlier on is 7L – Seven Levels of Communication.1 Strongly recommend it. I may reread it now that I’m thinking about it. I could use some motivation around this.

The premise of the book is that trust comes as a byproduct of communication. When we communicate with people more and more, they trust us as professionals and become more and more likely to refer business to us.

So, how do we keep in touch with these people? WSS keeps it simple with a phone call or a face-to-face once per month.2 7L provides lots of ideas, an example of one is their emphasis on writing personal notes.3

7L also prescribes the task of grading one’s database. WSS had a similar suggestion. Most people think in terms of A, B, C, and sometimes D, and F. The point is that if I grade them, I don’t have to remember who’s at what stage, I just search for the categorical letter and see the list of people.

WSS used A is for leads that are expected to buy/sell/etc. within 30 days, for instance, whereas, A+ is an Ambassador in 7L — somebody who has before, and you expect to in the future, refer you more than 1 deal per year. Typically A (or A+) is the optimal grading, and people less likely to close or less likely to refer us business (depending on which model is used) would be graded as B, C, D, F, etc.

Some people make their entire careers just focused on direct referral. In order to do that, we have to be referrable. In order to be referrable, we have to behave remarkably when we’re dealing with clients.

Old Sam doesn’t always deal remarkably with clients. We all make mistakes. The important thing is to actually do our best so we can lay our head on the pillow peacefully, and so we can ensure that we’re going to be talked about positively by the people we’ve helped.

When it comes to this aspect of the business, we’re rewarded for being good at relationships. I sometimes feel that the effort makes it insincere, inauthentic. I have an angle, after all. So, I’m going to challenge myself to find a way to do it authentically for me.

Writing comes much easier to me. I could finally get serious about a work-related blog and send content out to my people once a month, once a week, bi-weekly, whatever. I could call the ones that I feel comfortable calling because I like them and they seem to like me.

Another way I could increase my SOI activity is by visiting people. I’m always so busy like every other real estate professional claims to be. 4 Getting out, intentionally, and visiting with past clients and friends in the area where I work is much more up my alley than the phone call. The visit, as opposed to the call, feels more meaningful for them, and it’s more fulfilling for me.

So, there I go! Win/win.

  • Begin a blog for my company and email the post however often I decide.
    • I’ll begin with a monthly newsletter with a market update and whatever other ancillary things that matter that I can think of.
    • I’ll post that as a blog post on our company website.
    • Maybe I’ll read the market report to a video screen and call it a YouTube video.
    • I’ll link both in our MailChimp account and send them out monthly to our subscribers.5
  • I’ll challenge myself to visit with one past client/member of my sphere of influence (SOI) every week.

For me, this feels both authentic and effective. It’s something I can get behind doing because it suits my personality and preferences more. Many people I know don’t mind making phone calls—it comes easily for them. Great. I think the important thing is mapping out a system and actually executing it for an extended period of time.6

  1. I’m a guy who’s had a considerable amount of my business come from people I know personally and from direct referrals from people I know personally. I believe this is due in large part to this book and the things it teaches. ↩︎
  2. I merely skimmed the Ninja real estate book you may have heard of. One concept that jumped out at me was this one. Very similar, they recommend a call every seven weeks to set up a meeting every eight weeks. Something like that. The approach is altered slightly everywhere but is otherwise ubiquitous. ↩︎
  3. Writing personal notes can be an effective and touching way to communicate. It feels very personal to see someone’s handwriting. A good rule of thumb with this would be to commit to writing X per day. In the 7L book, there’s an in-depth formula for how to write the cards. Use the formula if it’s helpful. If it deters you from writing them, it’s not serving you and you should just write notes. ↩︎
  4. But I’m rarely too busy for lunch with my business partner at the drop of a hat. ↩︎
  5. This will be distinct from the newsletter we’re already sending out, for this will actually be news! ↩︎
  6. Holiday cards, thank you notes, thinking of you notes, blogging, phone calls, client events, visiting them at their home, inviting them to visit you at your office or an open house, getting lunch/meals, play dates with their kids and yours, birthday parties, housewarming parties—the list goes on. ↩︎
Top Contacts

Tailored Shirts and Lightning Rods

samuelabbottiii, , , , Leave a comment

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

Keeping Up Appearances

samuelabbottiiiLeave a comment

Today I was thinking about how important it is to look good in real estate. A lot of people would disagree with me and emphasize that merit alone makes all the difference. I wouldn’t disagree totally with them, but I found myself looking for permission from somebody to tell me to floss a little bit.

Nobody gave it.

I grew up somewhat financially conservative with a father born in 1950 who was very money-conscious and thrifty. So for me to do something like buy a luxury vehicle felt very against my nature. I couldn’t justify doing it, but it seemed like it was becoming more and more important to my business. Part of that is the obsession and delusion around making a substantial purchase that’s inherently not needed. But still.

To the person who says that this idea isn’t important, I would ask whether they would be willing to attend a listing appointment wearing blue jeans with the knees worn out of them and the bottom backs of the pant legs torn and tattered. This isn’t to say the whole business is about looking good, because it’s not. But this does have its place.

We want to make a strong impression. The public isn’t totally aware (if at all) of the statistical reporting from your MLS. Even when competitors publicize it, the consumer is still going to intuit someone’s success from outward things that aren’t necessarily true indications.

Dress sharp, feel sharp, play sharp. This simple notion has been critical for me in the business. I used to dress to the nines. In a fairly rural marketplace, it was what I would now consider over the top. But I felt like I was really on my game, and at the time being really new at this, that was important to me.

I still dress well and wear a collared shirt if I know there’s a chance I’ll be face-to-face with a customer or a client. To some degree, I’m managing their impression of me, but more importantly and practically, I feel good, I feel sharp, I feel like I’m on point. If I don’t have a mostly clean shave, if I’m wearing gym clothes, if my car is filthy or dirty on the outside, I’m not going to feel as confident walking into an appointment or having that interaction in the coffee shop I didn’t expect to have.

Feeling confident is important for us because real estate is a people business, right?

So, I always dress at least pretty well when I go out. And definitely when I go to work. I can’t tell you how many people have made a comment about how “business must be good” and “must be selling lots of homes” because of the car I drive. It puts me in a position of strength rather than feeling insecure — especially around clients or colleagues (the other agent in the deal) that have significantly nicer vehicles.

We have to feel strong in this business. This is an easy way I influence the way that I feel when I’m out there in the trenches.

Keeping Up Appearances