Volume XXVII • Number 4 • April 2013 Sponsored By:
commentary
The Market for Brokerage Firms Brisk Again
What Now? The market for housing sales softened on a year over year basis in February. While unit sales were still up (4.5%) and the average price of what was sold was up (5.0%) these were both on the low side of the averages of the last eleven months. What should be concerning is why this is happening now. Interest rates continue to be near record lows and prices remain attractive. We think there are four things at work here. First, inventory levels are at or nearing record lows. The National Association of REALTORS® says less than 5 months, but most markets reporting to REAL Trends indicate that for the lower half of priced homes it is less than two months. Anecdotal information indicates multiple bid situations are now the rule and not the exception. Buyers are in essence piling up on the sidelines, not because they don’t want to or can’t, but they can’t find anything that fits their needs. Commentary cont. on p2
inside 4 It’s Back, It’s Not Back, It’s the Same, It’s Really Different, Quit Bumping!
6 Guest editorial, Kerron Stokes 7 My Next Step – New book by
RE/MAX Chairman Dave Liniger
7 ShowingIndex – March
14
Now that the recovery is well underway it appears that the market for residential brokerage firms is picking up strongly. In the past 15 months 7 market leading firms have been acquired, three by Berkshire Hathaway HomeServices and one by Pentagon Federal Credit Union. These firms were from across the country: the southeast and the northeast, the middle Atlantic, the Pacific Northwest, the midwest and from California and all saw significant deals completed. We expect this pace to continue for at least the rest of the year and likely into next year. Both Realogy/NRT and Berkshire Brokerage Firns cont. on p9
8 Interview with Andrea Bushnell, Esq. 11 REAL Trends Housing Market Report – March 2013 13 WHITE PAPER EXECUTIVE SUMMARY
Luxury Consumers: The Emotional Role of Home
14 How to Get More Referrals from a Networking Group 16 Conclusions From the Front Row 17 Smart Website Promotion for Top Real Estate Sites
GAT H E R I N G o f E AG L E S M AY 1 , 2 & 3 , 2 0 1 3 • D e n v e r, C O T h e We s t i n D e n v e r D o w n t o w n
Commentary cont. from p1 Office: 7501 Village Square Drive, Ste. 200 Castle Rock, CO 80108 Phone: 303-741-1000 FAX: 303-741-1070 E-mail: realtrends@realtrends.com Web site: www.realtrends.com
Editor: Steve Murray – smurray@realtrends.com REAL Trends Team: Amy Broset – abroset@realtrends.com Jaime O’Connell – joconnell@realtrends.com Travis Saxton – tsaxton@realtrends.com Daniele Stufft – dstufft@realtrends.com Tracey Velt – tracey@traceyvelt.com Doniece Welch – dwelch@realtrends.com Copyright 2013 by REAL Trends. All rights reserved. Material in this publication may not be electronically stored or reproduced in any form without written permission. Violators will be punishable by a fine of up to $100,000 per offense.
To purchase a membership or any of the following REAL Trends products please visit us at www.realtrends.com: • Brokerage Compensation Report • Game Plan • Online Performance Study • REAL Facts • REAL Trends 500 • Valuing a Residential Real Estate Services Business
Second, while unemployment continues to fall, it remains well above historical levels of around 6 percent. Further, when one looks beyond the headlines it turns out that much of the decrease has come because labor statisticians don’t count those who have given up looking for a job and secondly the definition of full time work has been lowered in terms of the number of weekly work hours. In reality were we counting unemployment as we did twenty or even ten years ago it would be 2-3 or more points higher than what is reported. Simply, household incomes are not growing fast enough to create the normal number of new households. Thirdly, while prices are up over the past two years, millions of families remain with little or negative equity. Normal housing sales levels of about 6 million annual units (given the total number of households) and an average 4 months of homes available would indicate that about 6 percent of all homes would change hands in a given year. With an estimated 8 million homeowners underwater that equates to 480,000 potential listings we aren’t seeing. Lastly, the tighter regulations on mortgage foreclosures leave a shadow inventory of between 1.2 and 2.4 million units (depending on the source) that are not on the market but should be. Given the state of the legal and regulatory environment it is unlikely that much of this will hit the market anytime soon. Real estate professionals have been through some interesting times in the last ten years. A record boom was followed by a record crash. Over 76 percent of the REAL Trends 500 and almost 1 million of the 1.4 million Realtors® found a way to navigate both. Now leaders will need to adapt again to record low levels of inventory clashing with strong demand. As is always the case, hope is not a strategy or a plan. Hoping and waiting for inventory is not going to get the job done. For the first time in our collective history real estate professionals are going to have to create inventory. Leading brokers and sales professionals should focus on those strategies to locate and recruit sellers. The last ten years have seen new and strange market conditions. This is but one more. We have no doubt leaders will find a way. n
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additional commentary It’s Back, It’s Not Back, It’s the Same, It’s Really Different, Quit Bumping! by Jeremy Conaway, contributing editor It was really a great session. While the fog swept across the harbor in San Diego 35 industry executives from across the country spent the afternoon sharing and assessing the current realities of their markets. Area after area reported healthy increases in sales volumes and prices. Inventory figures sounded like science fiction stories and the art of the hopeful seemed to create a positive rhythm that could be felt even as many expressed concerns that unit prices were rising too quickly. But even with the good news and positive reports one could sense an overriding anxiety in the room. Yes, after several long and sometimes fatal years, something called a solid market was back. But, it is becoming increasingly clear across the country that that which is back is not that which had departed. For so many in the industry, the mantra “when the market comes back” has been something that part of all of us longed for and maintained in our hearts and in our imaginations even when the going was at its worst. So, now, it is a bit of a downer that, as the reports that so many have for so long waited for begin to arrive, we discover yet another sobering truth. The market that is now rising before our very eyes is not that which we thought it would be. It is not going to look like 1995 or 2005; it is going to look like 2014. For many this reality is going to be destabilizing. There are expectations that are not going to materialize. Most of all there will be disappointment and from this disappointment will come stress, conflict and no small level of disruption. A starting point for this discussion might be found in the history of the market itself. There are many in the industry for which the past several years represented the formidable years of their career.
Still others were at full altitude and speed when the horrors of late 2005 came into play. But even fewer are in a position to appreciate the fact that the history may not view the past seven or eight years as a period onto itself but rather the tail of the much longer boom market that began in 1992. For a period of thirteen years before the dynamic forces of the great real estate boom finally ran out of steam, the market experienced the longest sustained period of growth and market activity in the history of the American real estate industry. During this period all was well for everyone whose life, career, business, community and neighborhood included the real estate dream. There was really no need to fix anything. Everyone who counted was happy. So, now, for the first time in over twenty years, the North American real estate market is essentially starting all over again. Oh, sure, many will argue
So, now, for the first time in over twenty years, the North American real estate market is essentially starting all over again. that the great mass of matters will be as they have always been but it is not these old practices or traditions that will impact or influence the great weight of the market moving forward. They will merely serve as the playing field upon which the real action will take place. Waiting to play a role in sculpturing the new market’s form, process and substance is a cast of millions which, for the first time, not only includes
real estate professionals who long for stability and prosperity, real estate business persons who are focusing on market level returns of investment, but now millions of consumers (both old ones and young ones) who want to return to the dream of homeownership. It includes investors who wish to profit, politicians who wish to tax, regulators who seek to interfere, technologists who wish to automate, vendors that wish to control, and yes, a few dozen writers and consultants who want to impact. Each has an idea regarding what this new market should look like and how it should go about developing its new shape and adapting to its new surroundings. A very powerful group that is waiting to play out its influence will be those who believe that the industry should return to what it might have been during the “good old days.” These folks will urge a return to the world in which brokers and agents held the biggest sway. Another group of substance will be comprised of those who believe that the market should become consumer centric. Yet, another powerful voice will be heard coming from those who would point out that reconstruction cannot occur without capital and thus it will be those with capital who should be calling the shots. For the purposes of this discussion it matters not which of these groups will ultimately prevail because in the final analysis all will influence the process and all will complain about the end product. Our focus at this point in the market’s history might better be placed on the upcoming battle itself. Even as we speak, all of the notable players are choosing their gladiators and lining up along the line of skirmish. Each is assembling weapons, resources and loud voices through which to state their case. Each of the groups identified above are powerful and will be well represented at all levels of the conflict. The real question at this point is whether or not there is some way we can avoid the expense, pain, and embarrassment of a long series of protracted
negative interactions. Can the industry somehow set about the process of fielding a leadership cadre that is capable of at least attempting reasonable negotiation and meaningful settlement? Is it really necessary that we delay the real “return of the market” for several more years while history sorts out who is the biggest and who is not? Is it possible that we could foster a conversation that rises, not out of threat, but rather creativity and innovation? Are there any such leaders of this persuasion left or have they all gone to parts unknown? The issues around which these battles will be fought are plentiful. By way of example one can already see wisps of smoke rising from around the “pocket listing,” MLS core services, agent rating, the mortgage interest deduction and agent compensation alternatives. There are a dozen more just waiting for their turn in the spotlight. Even a cursory review of
Even a cursory review of the industry’s communications channels discloses that some in the industry can hardly wait to put on the gloves and let the fighting begin. the industry’s communications channels discloses that some in the industry can hardly wait to put on the gloves and let the fighting begin. One recalls the interaction caught so well in the movie Days of Thunder in which in responding to a complaint about the practice of bumping competitors so that they will lose control, one of the veterans played by Robert Duval smiles and says, “Bumping is just racing.” If so, real estate body shops are about to have a great few years and the aspirations of some are about to once again be delayed. n
Guest Editorial, Kerron Stokes Across the country, we are hearing stories of low inventory, stronger housing prices, and consumer traffic picking up in the real estate market. Are all of these signs an indicator that there is a “new normal” in real estate? Recent history should have taught us that there is no normal! Now is the time to reinvent your business with confidence and innovation. Plenty of capital is sitting on the sidelines looking for opportunities to invest in well run businesses, big and small. New industry leaders are emerging in this market. Are you one of them? Are your best days in front of you? The mistake so many companies make is always focusing on what they have done in the past. They struggle with how to talk about the future because sometimes it seems unclear. More than ever, people are looking for leadership. Leaders that use the past as a springboard towards the future. If you haven’t defined your vision, or even worse, others haven’t caught it, try to do these activities during the week and watch your vision become a reality! Dream big, act small- Talking up the vision for where your company is going to go is always a good way to catch peoples attention. Spending your day working on the little things that demonstrate a commitment to getting there will instantly gain the respect and support you will need to be successful. People are always watching the little things you do, and those actions speak louder than anything you will ever say! Develop other peoples vision- Effective leaders do more than collaboration and delegation. It is your responsibility to understand, appreciate and empower those within your organization to bring their very best to work. The easiest way to do this is to give them full responsibility for their part of the business and to pursue it all the way! You will have more time and better results when you take your hands off the reigns and let people run with their big ideas. Challenge your people to fail BIG! - It may sound strange, but if you are going to do something your competition won’t do, you have to be willing to fail. Most importantly, you have to promote a culture
where people are rewarded for trying to do the right thing, even if it results in failure. Great things happen when mistakes are made, and great teams are born when they are given the freedom to push the envelope. Find ways to replace yourself- How would your business change, if you obsessed about finding people better than you to replace you? What if you went into every meeting with agents, recruits, staff or vendors looking for what unique ability they have that is better than you? People are searching for organizations where their expertise is appreciated and where their future is clear. Eventually, if you get good at this, you may replace your day to day roll entirely. What would you do with more time, a stronger organization, and more money? Stick to the plan- It is easy to get caught in the trap of reorganization and change for change sake. Once you lay out a vision for your organization, stick with it! Constant change and reorganization confuses those that want to follow you. It stops people from bringing their very best to the job because of an uncertainty of roles and responsibilities. Inconsistency keeps other leaders from buying into the future of the business because success becomes a moving target. As the leader of your organization, you are both the visionary and the Chief Compliance Officer. It is imperative that despite wins, losses, or set backs, your eyes remain fixed on the goal while you clearly communicate a commitment to getting there. For those willing to think ahead, the next five years in the industry could prove to be one of the most revolutionary and prosperous times for both agents, broker managers and owners. More than ever, the successful firms will have to project a forward facing attitude towards technology, mobility, consumer education and most importantly the quality of life for the agents. Either through mergers, acquisitions, or organic growth the success of every real estate firm will come down to the character of its leadership. Seeing a prosperous future for your organization begins and ends with your actions today! Contact Kerron at Kstokes@me.com
My Next Step – New book by RE/MAX Chairman Dave Liniger In the early days of 2012 Dave Liniger, chairman of RE/MAX was hit with a life threatening illness. He came very close to losing his life on several occasions and there were doubts that he would ever be able to resume a normal life. In his new book Liniger shares the entire experience, good and bad, up and down, as he attempted to stay alive and return to the life he has always known. For those who have had serious challenges in their lives, even if less than life threatening ones, we recommend My Next Step. It is one of the most personal accounts ever recorded of what this kind of event really means. n
ShowingIndex
- Leading Indication of Home Sales
300% 280%
ShowingIndex
260% 240%
Home Sales
200% 180% 160% 140% 120%
Mar.13
100% 80% 60% 40% 20% 0% -20% -40%
Feb.13
Au
y-0 1 g-0 1 No v-0 1 Fe b-0 Ma 2 y-0 2 Au g-0 2 No v-0 2 Fe b-0 Ma 3 y-0 3 Au g-0 3 No v-0 3 Fe b-0 4 Ma y-0 4 Au g-0 4 No v-0 4 Fe b-0 Ma 5 y-0 5 Au g-0 5 No v-0 5 Fe b-0 Ma 6 y-0 6 Au g-0 6 No v-0 6 Fe b-0 Ma 7 y-0 7 Au g-0 7 No v-0 7 Fe b-0 8 Ma y-0 8 Au g-0 8 No v-0 8 Fe b-0 Ma 9 y-0 9 Au g-0 9 No v-0 9 Fe b-1 Ma 0 y-1 0 Au g-1 0 No v-1 0 Fe b-1 1 Ma y-1 1 Au g-1 1 No v-1 Fe 1 b-1 2 Ma y-1 Au 2 g-1 2 No v-1 Fe 2 b-1 3
-60% Ma
Percent Change from May 1, 2001
220%
Source : "Housing Sales" is the actual property sales statistic as reported by the National Association of REALTORS. The "ShowingIndex" is a moving trend statistic that tracks the rate of showing appointment requests from the websites of more than 60 real estate companies throughout the U.S. 40 of the companies are Top 100 companies as reported by REAL Trends.
featured leaders Andrea Bushnell, Esq. Interview with Tracey Velt, contributing writer As association executive of the 30,000-plus member North Carolina Association of Realtors®, Andrea Bushnell prides herself in being creative and innovative. REAL Trends interviewed her to find out how she got her start. REAL Trends: Tell me about your career path. Bushnell: My career path was accidental. I was a practicing lawyer—a litigator— and I was traveling extensively. In fact, my work as an attorney in Thailand shaped much of the way I am today. But, then I had a baby, and I realized that I was away from home far too much. In 1995, I took a position as general counsel of the Oregon Association of Realtors® in an effort to be home more with my child. (Bushnell eventually had a second child.) When my predecessor left Oregon, a group of past presidents of the Association encouraged me to apply for the vacant CEO position. I started that position in 1997. I was in that position until summer 2009. At that point, I had an opportunity to become executive vice president of the North Carolina Association of Realtors®, which was a bigger association with more assets and more visibility. I’ve been there ever since. REAL Trends: How do you do business differently? What makes your leadership unique? Bushnell: This is the hardest question for me, because all of us who have this job are really good.
It’s an amazing group of individuals who run state and local associations. We all want to do what is best for our associations on behalf of our members. When you run an association, you have a lot of employees that you have to make sure are nurtured. I’m never afraid to take a chance on an employee. People gave me a chance as a young lawyer. But, if I had to say what I do well, I have a friend who told me this, and it sums it up: There are association executives who run associations like a shiny train. The shiny train runs smoothly, is always on time, is reliable and never breaks down. That’s the system approach. Then, you have association executives who run a different kind of train. They’re always going off the track, they’re not always perfect, and they don’t always run on time, but they always have new ideas and bring fresh thinking to the table. I’m that type of train—the more entrepreneurial train. I never want to go with the status quo. I will always challenge things, even if things are working well. Is it still valid and important? This approach takes a lot more work and energy.
I never want to go with the status quo. I will always challenge things, even if things are working well. REAL Trends: What are some trends you’re seeing in associations today? Bushnell: I do a lot of strategic planning for different organizations. Across all of them, there is a new understanding that we’re in a unique position. We still have to give the social support to our members. How do you compete in ways that reach
the consumer and association members in a more meaningful way? We may not be able to compete dollar for dollar, but we can compete by thinking creatively about services and how we reach people. One of the
We may not be able to compete dollar for dollar, but we can compete by thinking creatively about services and how we reach people. biggest trends I see is reaching and involving consumers in our issues. To be successful, you must engage the public and that’s a huge trend right now. REAL Trends: Do you have any hobbies outside of your career?
part of who I am. At the end of the day, everything I do is for my family first. I have four children, two grown and two still at home. Playing the cello is not a hobby, but it is my passion. A career in music was too cutthroat to me. I used to perform and it’s the only thing I ever reserved just for me. But, since coming to North Carolina, I’ve been busy making sure the organization is on track and that my kids are OK after a move from Oregon. REAL Trends: What are you passionate about as it relates to your business? Bushnell: I am passionate about the creativity of my career. If I didn’t think that this was a creative, fun job, and if I didn’t think I was making a difference; then I would be unhappy. It isn’t just about working with great people; it’s about making a bigger difference in the lives of all people. There’s nothing more sentimental than housing. And if I can play a part in making sure that the public is well serviced and able to find affordable housing, then that drives me. n
Bushnell: I was a music performance major before going to law school. I play the cello, and it’s a huge
Brokerage Firms cont. from p1 Hathaway HomeServices are strongly interested in growing their owned business foot prints and several large regional firms, among them Hanna Holdings, The Long & Foster Companies and RealtyUSA remain committed to growing through acquisitions. Combinations between firms in markets across the country will pick up among medium sized firms as well. Why? The market for housing sales should continue to increase from the recession lows for several years. Brokerage bottom lines have improved significantly. The aging of the ownership of many firms creates a need for exit planning. And growth through
recruiting continues to be highly challenging. Growth through acquisitions, mergers and other forms of combinations is a strategy that, when executed correctly, is a time tested means of gaining share. Valuations have improved substantially over the past twelve to eighteen months and while they are not going to return to 2003-2005 levels, they are still competitive with historical averages. Terms have also improved for the best run brokerage firms. We expect levels of activity to be greater in 2013 than in any year since 2006. n
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market news Housing Market Report March 2013
The REAL Trends Housing Market Report showed that the combination of new and existing home sales in February 2013 strengthened from the prior year although a slower rate than in prior months. The annualized rate of the combination of new and existing home sales increased to 5.502 million up from the 5.267 million recorded in February 2012. The average price of homes sold in February 2013 was up 5.0 percent from the average price of homes sold in February 2012 marking the eleventh consecutive month of increased home sale prices.
March 15, 2013 – Housing unit sales for February 2013 were up 13.2 percent in the South, the strongest showing in the country. The next highest region was the Midwest where unit sales were up 7.7 percent. The Northeast declined 7.3 percent and the West declined 2.9 percent for the same period. The average price of homes sold in February 2013 increased 5.0 percent across the country. The West had the best results with the average price of homes sold increasing 15.6 percent followed by the South region at 7.8 percent. The Midwest region showed an increase of 6.2 percent while the Northeast lagged with the average price of homes sold decreasing by 6.9 percent. “February 2013 sales of new and existing homes increased at one of the slowest year-over-year rates since early 2012. It appears that the lack of inventory is starting to have a material impact on sales as a majority of markets show less than three months of inventory. Several markets are less than two months of inventory. Weather may have had an impact in the Northeast as well. The average price of homes sold was up solidly again due to supply and demand imbalances. This scarcity will have a negative impact on future housing sales,� said Steve Murray, editor of the REAL Trends Housing Market Report. n
It appears that the lack of inventory is starting to have a material impact on sales.
11
REAL Trends February/January Housing Market Report (Versus same month a year ago)
February 2013 Closed Sales
February 2013 Average Price
January 2013 Closed Sales
January 2013 Average Price
+4.5%
+5.0%
+12.1%
+0.3%
-7.3%
-6.9%
+12.5%
-6.0%
South
+13.2%
+7.8%
+17.7%
+8.9%
Midwest
+7.7%
+6.2%
+11.4%
+7.2%
West
-2.9%
+15.6%
+5.1%
-1.3%
National Regional Report Northeast
25.0%
National
Northeast
South
Midwest
West
20.0% 15.0% 10.0% 5.0% 0.0% -5.0% -10.0% -15.0%
February 2013 Closed Sales
February 2013 Average Price
January 2013 Closed Sales
January 2013 Average Price
Advertising Opportunities in REAL Trends Contact Doniece Welch at dwelch@realtrends.com or 303-741-1000.
12
LUXURY PORTFOLIO INTERNATIONAL® WHITE PAPER EXECUTIVE SUMMARY
Luxury Consumers: The Emotional Role of Home Luxury Portfolio International®, the luxury face of Leading Real Estate Companies of the World® has partnered with Harrison Group to author its latest white paper entitled “The Emotional Role of Home.” This latest research uncovers key motivations behind the decisions of today’s luxury home buyers, providing unique strategic insight for Luxury Portfolio members to determine the best ways to serve the discerning luxury clientele. The paper is based on data collected by Harrison Group, in conjunction with the Survey of Affluence and Wealth in America, produced by American Express Publishing and Harrison Group and is inclusive of results collected exclusively for Luxury Portfolio. Several key takeaways are explored in detail in the White Paper, available only to Luxury Portfolio members, with thought-provoking statistics and detailed evaluations. Findings include: The emergence of worth. Amid the Great Recession, affluent consumers have become savvier in managing their finances and resources, and as a result describe themselves as being happier and more successful than prior to the recession. Priorities have shifted to focus on a closer network of trust, while secure incomes and less debt are helping wealthy families gain an even stronger position. With increased confidence comes less fear in the marketplace and more expectations focused on the quality they are receiving for their money, a phenomenon presented as the “Worth Dynamic” – where consumers weigh whether the details of a property are worth paying a premium. Quality and craftsmanship matter. The home as a refuge. The idea of the Worth Dynamic flows into the increased connection with home. The emotional association with a home begins with the purchase and continues to deepen as the home becomes a place of private serenity and
the foundation upon which good things are built. Many homeowners say that their home makes them feel extremely happy and is the place where the best memories are made and where they plan for the future. This is made all the more important for owners of luxury homes with a shift in how mainstream Americans view the wealthy. Wealth disparity has been continually spotlighted in the national conversation, and a concern for the affluent is being looked upon with distain rather than with admiration for their success. Nearly all homeowners now agree that their home is a place to take refuge. Additional topics covered in more depth in the White Paper: • Increased liquidity leading to increased demand in the luxury real estate market • One Percenters driving demand in the second or vacation home market • Looking ahead and marketing to the next generation of home buyers: Millenials and Gen-Xers “The Emotional Role of Home” concludes that current market conditions and the state of today’s affluent consumer set the stage for a potential boom in the luxury real estate market. Being equipped with the statistics, tools and marketing and market intelligence provided by Luxury Portfolio International® ensures its members are in the best position possible to serve this unique market segment. n
13
networks
How to Get More Referrals from a Networking Group by Michael Goldberg, Business Blocks Consulting I was inspired by a question asked of me by a top producer at, well, a top producers meeting. I belong to a referral group that meets once a week for the past 4 months. No sales yet. What could I be missing?
It’s hard to say what this agent is missing since I’m not attending the events with him. That said, I answered his question with a few more questions. (I’m funny like that.) Only he knows the answers – which became yet another discussion. If you’re a part of a networking group, chamber, association, or whatever, ask yourself the following questions and consider my insight.
Are you paying attention to other members of the group when they’re speaking? If the meeting is structured and attendees get an opportunity to deliver a presentation (some groups offer 30 seconds or a minute), it’s time for you to take note (yes, literally take notes so you can follow up on what you’re listening to) and see who you need to get to know. Why? So you can help them and they can help you. If you (and other members) are more focused on the bagels and coffee, there are missed opportunities – for everyone!
Are you attending every meeting? You can’t just show up to networking meetings
Are fellow members paying attention to you? You can only expect this privilege if you pay
I guess you can see why I didn’t use this as the title. Anyway, great question nonetheless!
14
when you feel like it. (I’m tempted to use the term willy-nilly.) You must be an active and frequent participant in an effort to put your time in. Remember, it’s all about the relationship. If you focus on relationships, the business will be there. And how can you focus on developing relationships if you’re not attending enough meetings?
attention to them. (See above.) That said, you must deliver a meaningful presentation (elevator pitch) that is articulate, a bit entertaining, planned, focused, and with a call to action. A good model I discuss often is the PEEC Statement – your Profession, Expertise, Environments (target market), and Call to Action (who you want to meet or be connected to). If you can do this and change it up slightly for every meeting, you’re on your way. HINT: Costumes and props work well!
dynamics go hand in hand. If you like hanging out with others and you find yourself laughing a lot, getting introduced to others, and being invited to outside events (like golf), this is a good sign. If this is not the case, you want to be honest with yourself. Ask for direct feedback from those you trust to determine how you might come across to other people. Although it may not be the thing you want to hear, it might be what you need to hear. And then – work on that!
Are you meeting with other members’ one on one or in small groups? Why? So you can learn more about them and their businesses. So you can learn how to refer them business. So you can get to know what they do when they’re not talking business. So you can build solid relationships. So they can get to know you too and refer you lots of business. Focus on the relationships and the business will be there. (Are you seeing a theme?)
Do you like the other members? Again, kind of relatable to the above but it’s important that you have chemistry with most of the members of any given group otherwise they won’t refer you business. It’s just that simple. It might be a good approach to focus on venues that attract those with common interests – becoming active at a fundraiser because you’re passionate about helping those with Parkinson’s. Typically, true networkers like true networkers so try to go where they go.
Are you generating referral business to other members? One of the best ways to establish trust and build relationships is to refer other group members business. But first, you must make sure they are absolutely awesome at what they do. Speak to
Are you clearly communicating the type of business you’re after (elevator pitch again)? You must be specific about what you do and with whom. Why? So your network can help connect you with all the right people. The more specific you are about communicating your message, the easier it will be to get connected.
One of the best ways to establish trust and build relationships is to refer other group members business. their clients and see what they say. Also, when you generate referrals, insure they are sound – as in they have a great chance of turning into closed business. Otherwise, they may not be referrals. Are you likeable (loaded question I know)? This is tough. Do you like talking to other people? And do they like talking to you? Typically these
Do some of the other members come in contact with the type of business you want to do? Are there successful centers of influence or referral sources (CPA’s, attorneys, property and casualty brokers, mortgage bankers, etc.) in the group that you’re building positive relationships with? If not, why? Should there be? Can you invite them and get them to become members? If you’re attending networking meetings, chamber mixers, association functions, speed networking events, and other venues, ask yourself these questions and be honest with your answers. Can you look at yourself in the mirror and say you’re taking all of these approaches? Networking requires work – as in net-work. Is it time to get to work? n 15
Conclusions From the Front Row We had the pleasure of attending and participating in several national real estate conferences this past month. First was Keller Williams, then RE/MAX, Leading Real Estate Companies of the World® (LeadingRE) followed by Prudential Real Estate. Each had record or near record attendance. Two celebrated significant anniversaries (RE/MAX 40 years and Keller Williams 30 years) while one announced a new brand change (Prudential to Berkshire Hathaway HomeServices) and LeadingRE for the first time offered a program for the sales professionals (and as a result had a record turnout). Here are some observations. At Keller Williams they announced that based on their research they had become the largest real estate franchise in the U.S. with nearly 80,000 sales professionals. They reported a record in profit sharing as well with over $50 million paid out to program participants. They had a record turnout for their Family Reunion once again. In addition to the announcement of their growth, the program was focused on culture and education which is their hallmark. One has to be impressed with the growth of Keller Williams over the past thirty years against tough determined competitors. Credit their attention to recruiting and training as the means by which they got there. RE/MAX Founder and Chairman Dave Liniger for the first time told the story of his brush with death and disability to lead the conference off. His new book “The Next Step” tells the story in some detail. (See related story in this issue.) While we were aware of the severity of the health challenges Liniger faced hearing him tell it in his own personal way brought home how fragile life can be and that resiliency is an underrated personal attribute. RE/MAX saw the highest attendance in many years. Liniger reported that the company had seen a 17 percent increase in closed sales with little growth in its sales professional population in 2012. RE/MAX continues to lead all national and global networks in per person productivity and seems to have a renewed focus on driving that figure even higher. 16
LeadingRE A record turnout among broker leaders and the added attendance for the first time of sales professionals made this the largest audience ever at a LeadingRE event. Membership is up and each part of their core business saw significant improvement in 2012 over 2011. International expansion continues at a strong pace. With the addition of sales professionals and the expansion of their Luxury Portfolio program, LeadingRE continues to expand their educational content and reach out to more areas of the management of residential brokerage. From sales management to marketing and relocation there are programs for almost every segment of the operation of a brokerage firm. We would expect attendance to grow significantly in the years to come as more members see the benefit of having national programs for their top performing sales professionals. Prudential Real Estate After two years of uncertainty, the leadership and membership of Prudential were excited to see their future. Berkshire Hathaway HomeServices CEO Ron Peltier, President Robert Moline and franchise network CEO Earl Lee were pleased to be able to announce and show the new name of the network, Berkshire Hathaway HomeServices. Those in attendance were equally excited, not just about the fact of the new name, but the actual design, color combination and other factors. A significant part of the presentation was a video from Berkshire Hathaway Chairman Warren Buffett sharing his thoughts on why for the first time he used his own companies name on a company he owns. He also showed a bullish attitude towards housing. It was a significant moment for all in attendance that the world’s most revered investor said that housing (and the brokers who help people buy and sell houses) has a bright future. Prudential will now move forward to complete their transformation to the new name and although it will take time we expect them to be a significant competitor for years to come. n
technology Smart Website Promotion for Top Real Estate Sites By Travis Saxton, marketing and technology manager
10. Dilbeck Real Estate, La Canada, Calif.
All too often we see real estate brokers resting on their laurels when it comes to technology. From their perspective it’s easy to understand. With so many options for website and back end technologies how do you keep up and how do you know what the competition is even doing. One thing is clear to us with our technology consulting and that is that real estate brokers do not promote the advantages of their websites enough.
11. Prudential Fox & Roach, Philadelphia, Pa. 12. Prudential Homesale Services Group, Harrisburg, Pa. 13. Intero Real Estate Services, Cupertino, Calif. 14. Carol Jones Realtors, Branson, Mo. 15. John Greene Realtors, Naperville, Ill.
In 2012 REAL Trends launched the first real estate website ranking based on actual metrics (not what we think is better but rather what is performing better). Numerous statistics were added into the ranking from consumer habits and social media metrics to search engine performance and mobile optimization. Here are the leaders based on statistics in 2012:
Company Online Performance Rank 2012 1. Park Company Realtors, Fargo, N.D. 2. Chinowth & Cohen, Tulsa, Okla. 3. RealtyUSA, Williamsville, N.Y. 4. Blanchard and Calhoun, Augusta, Ga. 5. RE/MAX of Reading, Wyomissing, Pa. 6. Coldwell Banker Rick Canup Realtors, Lubbock, Texas 7. Lang, McLaughry and Spera Real Estate, South Burlington Vt. & N.H. 8. Prudential Tropical Realty, Tampa, Fla. 9. Stark Company Realtors, Madison, Wis.
Looking at this list you see a wide range of brands and independents and from our view a wide range of technologies present. Several are using big name systems like Lone Wolf, Agent Achieve, Reliance Networks, and Delta Media Group to numerous local and custom shops. For this article, we would like to single out the #4 ranked company in the study—Blanchard and Calhoun in Augusta, Ga. We had the privilege to work with Blanchard and Calhoun recently to help them through a technology system launch but one thing was evident we were cemented with their website provider. They use a local company called Powerserve and have used them for quite a few years. One key point is that while many of the national providers are excellent there
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may be local firms that can also fit the bill. The trick is finding one competent and willing to grow with you. Many website providers get into a bad habit of nickel and diming brokerages and that can be a recipe for a poor working relationship. From my perspective Powerserve is not one of these. “Working with Blanchard and Calhoun Real Estate has been an exciting project. Their strong brand and deeply established reputation in the community has made website promotion and social media marketing much easier. Our partnership has strengthened over the years, which allowed us to push the envelope with new technologies in both desktop and mobile browsing.” said Mike Leaptrott of Powerserve. Tom Blanchard reciprocates the praise: “We are grateful for our local website vendor, Powerserve, who keeps us in the forefront of our industry’s cutting edge technology. Through our five plus year partnership, our online presence has grown to become an industry leader for mobile traffic and time spent on the site. We are very proud to have their innovative and loyal support providing www.blanchardandcalhoun.com with the best technology for our agents and our clients.” However, when you achieve this kind of success it’s extremely important to promote what you have and this is where most brokers fall short. Blanchard and Calhoun for example is constantly promoting their website and even took the REAL Trends ranking into advertising campaigns (smart way to use any of our rankings). The ad on Page 17 is an example of a
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recent ad they have run which is one of many to promote their website. They really do a great job of this. While they performed well in search engine rankings they really blew the competition away with their mobile site and was the source of several other local marketing campaigns. This commitment to their site not only reinforces their value proposition to the consumer but you can’t tell me their agents aren’t noticing it either! The moral of the story is finding something that is unique whether it’s your ranking in our online performance study or a new technology you have added to your site. Make sure to promote and when you think you have promoted it enough, promote it more. Whether it’s your impressive mobile statistics, your intuitive map search or your average time on site (if you are up over 10 minutes that is a great one to promote) find the right avenue to promote. Also, neighborhood information and videos in this respect are a great avenue to promote if you have them. Out of sight is out of mind and then you are not arming your agents with the right tools and strategies to compete in a listing presentation. Stay tuned for the 2013 Online Performance Study (and a few big announcements that coincide with this), which will begin collecting data Q2. If you feel your website can rank amongst the best in real estate please contact tsaxton@realtrends.com and we will make sure you get added to the study. We will enhance and grow this ranking to include more firms in 2013 so stay tuned for the updated list. n
editor’s note REAL Trends Leadership – Emerging Leaders
The World’s Most Exclusive Real Estate Club®
Due to strong demand and great results REAL Trends will host a fall meeting for Emerging Leaders once again in Denver at the JW Marriott. We will limit attendance to 50 persons and focus on a workshop format.
On May 1, REAL Trends will announce a new membership program for those sales professionals with a lifetime of success. While numerous worthy designations are available for the completion of educational courses and training, for the first time REAL Trends is working with some of the nation’s top sales professionals to develop a program for the world’s most productive individuals and teams.
We are pleased also to announce that Larry Kendall, founder of The Ninja Leadership program will be our featured teacher on leadership. Other topic areas are recruiting, online marketing and effectiveness and how to grow through mergers and acquisitions. The dates are October 16-18, 2013.
We are calling it The Fellowship of Realty Professionals, or The Fellowship for short. After an official launch in early June we will be reaching out to the world’s most productive sales professionals to invite them to participate. We will be in touch with leading brokerage firms throughout North America to be sure that those who qualify are aware of this new membership organization. n
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