Luckily, beating a cash offer on a house is not as hard as many agents think. We’ll share our strategies to improve your offer by reducing the negative aspects of financing while creatively solving some of the other concerns a seller may have. Here are the top 10 that have helped my team successfully beat out cash offers—yes, even in this red hot market.

Disclaimer: All suggestions mentioned in this article are for informational purposes only. We are not offering legal advice. Laws and restrictions are different in each area. Check with your local real estate commission and attorney for guidance before using any of the techniques listed.

1. Use a Cash Lender

One of the best ways to beat a cash offer is simply to transform your offer into a cash offer by using a cash lender. Born from the needs of mortgage buyers to compete with cash buyers, cash lenders will buy a home with cash then allow the buyer to refinance or purchase the property after closing. 

Here’s how it works. Once a buyer is qualified with a cash lender like Homeward Mortgage, they can select a house and Homeward will place a cash offer on the property. Once the property is purchased, the buyer rents the property from Homeward until their loan is finalized.

There is a charge for this service. The fee is about 2%, but it is reduced if the buyer uses Homeward Mortgage for their final loan. For buyers with a home to sell, they also offer a buy with cash before you sell option.

2. Submit Your Offer Early

Competing with cash offers can be stressful, but don’t give up hope. Many listing agents today will not review the offers for three to four days after the property becomes active. This allows more buyers to have the opportunity to see the property so the seller can receive more offers. 

Some buyer’s agents believe the best strategy is to wait until the last minute before submitting an offer. Don’t do this! We have found that the best practice is to submit your offers early! 

There is nothing worse than finding out the day before the offer deadline that the seller got tired of having to be out of the house for showings and decided to accept an offer the day before. Think of it this way: If your buyer’s offer is on the table, at least they will have a fighting chance, and if you follow some of my other suggestions, your buyer’s offer may even win!

3. Offer a Signing Bonus

A common seller negotiation tactic today is to hold all offers through the weekend and present all the offers received on Monday. This allows the listing agent to pit desperate buyers against each other and drive the price up even further. This technique also increases the chance of getting a cash offer that sweeps the rest of the competition.

The best way to overcome this is to offer a “signing bonus” for accepting your buyer’s offer quickly. To be successful at this, your buyer must put their best foot forward and make the “signing bonus” the highest and best offer they can make.

Assuming the list price of a home is $400,000 and your buyer is willing to pay 10% over asking. Instead of offering $440,000 and waiting through the weekend, structure the offer so the sales price is $420,000, but if the seller accepts the offer within the next four hours, the sales price will be $440,000. A $20,000 bonus just for accepting your offer sooner.

This approach allows your buyer to submit their offer early, eliminating the competition, and the seller gets to feel like they got a fair price. A true WIN-WIN! The best part is if the seller doesn’t accept the offer, it stays in the mix so your buyer can still have a chance to win.

However, to win against cash offers, you need to do more than just offer a signing bonus.

4. Be Memorable & Likable

Winning an offer is a competition—literally. It’s your buyer’s offer against all the other buyers. So, if you want to win against cash offers, you need to be memorable and likable! 

I’ll deny it if asked, but in the past, I have been known to help polite agents that I liked get their offers accepted. On the other hand, I have not lifted a finger to help an agent who was rude and standoffish. So if you want to beat out a cash offer, kill them with kindness. Here are two easy ways you can be more memorable and likable to the listing agent:

Leave Unique Feedback

When your buyer is interested in a property, you have a great opportunity to set the tone. Instead of leaving the same old feedback, mention how your buyer loved the home, the neighborhood, and how they can see themselves living there. 

In many cases, the feedback goes directly to the seller. This is their first impression of your buyer’s offer. Just be mindful not to mention anything about your client that can be considered discriminatory under Fair Housing. 

Think of it as a mini-buyer love letter without the potential issues that love letters present.

Send the Listing Agent an Introductory Video

Next, record a quick introductory video of yourself to the listing agent. (Due to Fair Housing, I don’t include videos of my clients.) Let them know you will be submitting an offer and for them to keep you abreast of any status changes. 

These extra little touches can be the difference between your buyer’s offer being in second or first place!

5. Offer an Appraisal Gap

One of the main reasons cash is king in bidding wars is because of the requirement of an appraisal for mortgages. Bidding wars are causing sales prices to rise far beyond what we as agents or appraisers can realistically justify. 

The difference between the sales price and the lower appraised value is called the appraisal gap. When a financed buyer offers to cover any appraisal gap, they are putting up additional money for the down payment and closing costs. For example, if a property is marketed for $400,000 and it gets bid up to $420,000, the financed buyer may agree to bring in an additional $20,000 in the event the property doesn’t appraise.

Coach your clients who don’t have the additional funds for an appraisal gap to try to restructure their loan to a lower down payment option. If that won’t work, have them ask parents, grandparents, or even borrow from their 401(k) in order to cover the gap in the event the appraisal comes up short.

Remember, they will only need this money if the appraisal comes in lower than the agreed sales price and in most cases, the deficient amount is less than the agreed appraisal gap. While this is a top strategy, today many buyers are offering appraisal gaps. So, to win your offer, you may have to pull out the big guns.

6. Have Your Buyer Pay Your Commission

When you are competing with cash offers, sometimes you have to pull out the big guns. Commissions have always been a touchy topic for buyers and sellers, and many sellers feel that it isn’t fair that they pay commissions for both their agent and the buyer’s agent.

Since this experience, I have successfully used this technique to differentiate my offers to gain an advantage over the competition.

7. Add an Escalation Clause

Escalation clauses often get a bad reputation. However, if used correctly, they are powerful tools that allow your buyers to make their strongest offer without the risk of overpaying compared to the other competing offers. 

For example, a home I sold recently had six offers. This beautiful four-bedroom, three-bathroom home in a small rural town east of Denver was listed for $460,000.

Three of the offers were under $470,000, two were at $480,000, and one was $500,000. The buyer who offered the highest amount had already sold their home (without a contingency to find a new home) and had to find a home ASAP or they were going to have to rent. 

They were in a pinch and because of their situation, they made an over-the-top offer to ensure they would win. What they didn’t know is that the other offers were $20,000 less than their offer. 

To prevent the buyer from overpaying, the buyer’s agent could have made an offer of $475,000 with an escalation clause of $1,000 more than any viable competing offer up to $500,000.

Had they done this, we would have had their offer accepted at $481,000 ($480,000 highest competing offer + $1,000 escalation), thus saving the buyer a whopping $19,000!

This technique is sure to place your buyers in the top spot, but this alone won’t always beat out cash.

8. Pay the Seller’s Closing Costs

While this next tip will give you an edge when the offers are close, sellers today feel like they are getting nickeled and dimed. That sounds funny when they are getting offers 10%+ over asking, but ask a homeseller and that is what they’ll tell you.

In most real estate transactions, the seller pays for the costs of the title insurance, escrow, and homeowner association (HOA) fees. Despite the common practice of having the seller pay for these fees, there isn’t a requirement for the seller to do so. Combined, these fees can range from $1,000 to $5,000, depending on the location, HOA, and the price of the home.

One benefit of this is that in most cases, when the buyer pays for the title policy, they are able to select which title company they wish to purchase the title insurance policy from. If your buyer wants this option, be sure to make this clear in your offer. Also, be sure to get estimates of the fees prior to having your offer accepted, or place a limit on the costs your buyer is willing to pay.

While saving the seller a few thousand dollars seems miniscule compared to the hundreds of thousands buyers are paying for the house, this little gesture goes a long way with some money-conscious sellers.

9. Give the Seller a Flexible Possession Time

Since many sellers also need to buy a home, many get nervous about finding a home they can afford and actually want to buy. To relieve the seller’s fears, your buyer can be flexible with the seller when it comes to them having to move after they sell the home.

Of course, cash offers have an advantage when it comes to flexible possession dates. However, there are two main strategies buyers with financing can use to give the seller more time to move. Each has benefits and drawbacks for both the buyer and the seller. The key is finding the right solution for both parties.

No-cost Rent-back 

If the seller needs time to stay after the home is sold, then a no-cost rent-back can give them time to stay in the home long after the home has been sold. 

The challenge with this strategy arises when your buyer needs a mortgage loan. FHA loans and conventional loans have a requirement that the new buyer occupies the property within 60 days of ownership. If the seller needs more time than that, your buyer may have to qualify for an investment loan.

Recently, our team had a seller who was waiting for their new home to be built. The winning buyer agreed to get an investment loan so they could allow the seller to rent back the home for up to six months after closing. This saved the seller from the cost and inconvenience of having to move twice. Once moved in, the buyer plans to refinance the home to a lower interest rate owner-occupant loan. 

Most states provide a pre-approved form for post-occupancy. To protect your client and yourself, if your state doesn’t provide these forms, advise your client to have a lease drafted by a local real estate attorney.

Replacement Home Contingency

If a no-cost rent-back doesn’t work for your buyer, try using a replacement home contingency. A replacement home contingency is a two- to four-week contingency for the seller to find, contract, and inspect a replacement home. If the seller cannot complete this by the end of the time period, they may extend the time or the buyer or the seller may terminate the contract.

The benefit of this technique is that you don’t run into the 60-day occupancy requirement as you would with other options, since the closing and possession will be coordinated with the seller’s replacement home purchase.  

The downside is that if the seller cannot find a replacement home, they can terminate the contract and stay in their current home. In this case, the buyer may lose any money they paid for inspections and appraisals.

Having good communication with the listing agent and understanding the seller’s needs is key to making deals like this work.

10. Communicate!

I am appalled when I get offers in my inbox from agents who didn’t even bother to call or text before they sent it over. What kind of agent does this? A lazy agent who doesn’t really want to do their job, that’s who!

When writing an offer for my buyers in this competitive market, I want to make accepting it as easy as possible for the listing agent. To do this, I always call the listing agent (yes, on the phone! … and no, not in a text message!) to get a crystal-clear understanding of what the seller’s situation is and how we can draft an offer that meets their specific needs. 

Call me old-school, but I appreciate the details when I’m presenting offers to my sellers. Many of the other listing agents I know do too. So write a detailed cover letter that contains bullet points of key features of the offer, and how the buyer’s offer takes into account the needs of the seller. If needed, explain the buyer’s situation and their financing. 

Lastly, I call or text the listing agent and let them know that I sent them an offer and ask them to confirm that they received it. This shows them that I am proactive and communicative.

Bottom Line

The way to beat out cash offers on a home is to relieve as much stress and eliminate any fears the seller may have. You can do this by writing your offers in a way that reduces the hassles of financing and takes into consideration some of the other concerns a seller may have. We wish you the best in applying my team’s 10 strategies for writing winning offers!

The post How to Compete With Cash Offers: 10 Ways to Write Winning Offers appeared first on The Close.

Here on The Reynolds Team, giving up is not an option. Our persistence and strategy led to more than $1 billion in sales in 2021 and we’re on track to hit our goal of closing a thousand buyers in 2022. Our agents use a 10-step search plan to find homes for their desperate buyers. I’m sharing our property search plan with you because I want each and every one of you to succeed.

1. Kick Off Team Meetings With an Internal ‘Wants & Needs’ List

Our first step to finding homes to show desperate buyers is to post to our internal “Wants and Needs” list. This is a private Facebook group for our team and brokerage where agents list what their buyers are looking for in a home. 

To cast as wide a net as possible, we also review our clients’ “wants and needs” at our weekly team meetings. This helps keep our buyers’ needs top of mind for listing agents. The minute a new listing comes in, our listing agents will already have showings lined up from the list.  

If we can match a new listing with a buyer from our “wants and needs” list, we call this a “Love Connection”! We don’t stop there, though. If a connection isn’t made through our brokerage and team, we reach out to other agents in our network.

  Pro Tip

If you want to learn more about The Reynolds Team, check out my interview with team leader Sarah Reynolds Oji on The Close Weekly Podcast.

2. Contact Top Listing Agents From Other Brokerages

This technique is great for buyers who have a home to sell or a low down payment. The secret is to get access to homes before there is a lot of competition for them through the MLS. 

To do this, we begin by looking up the top agents in the specific neighborhoods that our buyers wish to live in. We often don’t know who is selling the most homes in any given area, so we train our buyers’ agents to search the MLS for properties sold over the past six to 12 months. 

Then they sort the list by the listing agent’s name. This will consolidate the names and show who has sold multiple properties in the area. With this information in hand, they can contact the listing agents who have sold multiple properties in the area, and ask them if they have any upcoming listings that may fit our buyer’s criteria.

Agents who are neighborhood specialists typically have sellers who would sell their home if they got an offer they can’t refuse, as well as other homesellers who are preparing their home to sell it in the next few months. 

The goal is to make their seller client an unbeatable offer even before they’ve signed a listing agreement. This technique works wonders for buyers with contingencies and special circumstances. In fact, I have bought two houses this way myself!

3. Prospect OLD Expireds, Not New Expireds!

Our team’s next step is to search for expired listings and homes that have been withdrawn from the market. Even in today’s low inventory market, some listings don’t sell the first time around. 

Start by searching your MLS for expired homes over the past three years. Many older expired listings are from sellers who were not able to get the price they wanted. Prices have risen so much over the past year that the unrealistic price they were asking two years ago probably isn’t so unrealistic today!

If a listing has recently expired or has been withdrawn, contact the listing agent and ask them if they know if the property is coming back on the market.

For older expireds, go ahead and call them yourself. The good news is that homeowners of older expired listings aren’t receiving the 20 calls a day from desperate real estate agents that are typical for newly expired listings. Therefore, they are more likely to answer the phone and they are much more pleasant to talk to. 

BONUS TIP: Use Artificial Intelligence to Find Homeowners Who Are Getting Ready to Sell 

When you want to find homes for desperate buyers, human intelligence is great, but artificial intelligence is better. Why? That’s simple. Platforms like SmartZip use artificial intelligence to instantly sift through hundreds of data points on the internet and your MLS with one goal: to find homeowners who are getting ready to sell—before they contact their first agent. 

Even if you don’t find “the one” for your buyers with SmartZip, you can be the first agent to contact homeowners who are likely to sell in the next year. ZIP codes are limited and going fast, so if you want to unleash the power of artificial intelligence, check if your ZIP code is available here: 

Visit SmartZip

4. Write Backup Offers With a Backup Clause Written by an Attorney

In today’s market, you have to be proactive, creative, and BOLD to find your buyers a home. If your buyers love a neighborhood or home, don’t be afraid to write a backup offer on homes that are already pending. 

Bidding wars can drive the price so high that the winning buyer may feel they overpaid and subsequently get buyer’s remorse. Due to this, we are seeing a higher number of contracts terminate shortly after the contract is ratified than we have in the past. This is why we coach our buyers’ agents to encourage their clients to submit backup offers on hot properties. 

To protect our buyers and give them the ability to keep shopping, we have a strong backup clause, written by an attorney, that allows their client to terminate the contract prior to going into first position. This technique works well with homebuilders and fix and flips too!

5. Start Door Knocking With Your Rejected Offers (+ Script)

If you have been working with your buyer for more than a few weeks, chances are you have already made—and lost out on—at least a few offers. This can feel devastating to you and your client. Luckily, there’s a way to turn that rainy day into a glorious win—prospect around your recent offers!

After you dust yourself off and collect your thoughts, print out the offer your clients just made and start door knocking the neighborhood for other potential sellers who may be considering a move in the near future.

With your (redacted) offer in hand, go door-to-door and tell the neighbors that you have a motivated buyer who just made an offer and lost out on the home down the street. Let them know your buyer loves the style of homes and the neighborhood, and that they are set on living in the area.

Rejected Offers Door Knocking Script

When they answer the door, you will say:

copy to clipboard

Hello, my name is [Name] with [Company] and my client made an offer on the property down the street.

[Point in the direction of the home and hold up the previous offer.]

My client lost out on that home to a higher bidder, but they love this neighborhood and the style of homes here. Have you heard of any neighbors who may be thinking of moving in the near future?

[Pause for their answer, then ask:]

Are you considering selling while the market is HOT…HOT…HOT!

Do this and you will be surprised how well-received this approach will be. Many neighbors who love their community will want to help you find a home for your buyer client.

6. Trade Your Buyer’s Contingent Property With a Flip

One of the biggest challenges our buyers’ agents face is finding a home for a contingent buyer. These are buyers who have to sell a home before they can buy. This becomes even more challenging when the home they need to sell is in dire need of repair. 

This was exactly the case for one of my seller clients last fall. They had a home in a desirable area but it hadn’t been updated in more than 20 years. They wanted to find a home in the same area that offered more bedrooms and was already completely remodeled.

Since the homes in the area were built in the ’60s and ’70s, my strategy was to find them a recently flipped home. Using the seller’s home as bait, I contacted the fix and flippers in the area and asked them if they were looking for a new fix-and-flip project in the area. 

Hungry for inventory, several flippers expressed interest in my seller’s home. I told them that in order for them to be able to buy my client’s home, they had to sell my client another home that they had coming on the market. It took a little legwork, but in the end, we were able to negotiate the purchase of newly remodeled home with the caveat that the flipper would buy their home at a fair price. A true WIN-WIN!

7. Prospect FSBO Listings

The buyers’ agents on The Reynolds Team are expected to do the unthinkable … call FSBOs! If you have been selling real estate for more than a few months, you may have also found that these sellers are always reasonable, generous, and a pleasure to work with. 

OK, OK, so that may not be true all the time, but when you contact FSBOs, you will discover that most agents ignore them. They think these homeowners have no interest in listing their home with an agent. 

The truth is, they are happy to offer a commission to an agent who has a bona fide buyer for their home. That could be your buyer, but you’ll never know until you pick up the phone and start cold calling homeowners who have listed their own home for sale. 

8. Prospect Rental & Short-term Rental Ads

Calling the “Home for Rent” and Short-term Rental ads is a great way to find homes for your desperate buyers. Why? Because many investors may be interested in selling in this hot market. With interest rates rising and economic uncertainty everywhere, some investors might be looking to cash out at what they think is the top of the market. 

As a real estate investor myself, I would be interested in selling … if I didn’t have to go through the effort of getting a rented house ready for market. Getting a house “for sale ready” is different than getting a home “rent ready.” 

A “rent ready” home may have white semi-gloss paint, matching trim, and a neutral gray carpet. To get a home “for sale ready” requires nicer features like gray walls with a bright white trim and doors, and nice laminate flooring. Many landlords don’t want to take the chance on updating a property to make it “for sale ready” only to find they didn’t get the price they wanted.

What investors may not realize is that many buyers in this low inventory market are willing to pay nearly the same amount for properties that haven’t been updated as the recently renovated competition. This makes now an outstanding time for an investor to unload some inventory without having to invest the time and money to update their property.

On our team, buyers’ agents call the for rent, VRBO, and Airbnb advertisements to see if an investor is ready to sell. If that doesn’t work, it’s time to coach the buyer to reconsider some of the diamonds in the rough. Worst case scenario, you will have conversations with local rental property owners that might lead to future business. 

9. Coach Your Clients to Consider Aged Listings

If we haven’t found a home that matches our buyers’ needs at this stage, agents on our team still don’t give up. They then coach their clients to reconsider the aged listings (listings that have been for sale for longer than seven days). 

These homes may not be priced as well—or they may even be a little overpriced for the condition—but with a little coaxing, you may get the seller to come down a few dollars. 

Of course, your buyer may have to wait a few more years for the Instagram-perfect kitchen or yard, but they will be able to stop paying rent and start building equity—and that’s what’s important, isn’t it?

If you don’t have your hopeful buyer in a house after all this, it’s time to look in other areas.

10. Take Your Buyers on ‘Turf Tours’ of Other Neighborhoods

While I’m sure this idea has already crossed your mind, you may not have had much success getting a stubborn buyer to look into other areas. Well, I’d like to help you with that! Buyers tend to buy in locations with which they are most familiar. They might want to be close to work, schools, or shopping, or may be trying to invest in an up-and-coming trendy neighborhood.  

This can be difficult if the area they want is priced far above their budget. Some buyers will tell you they would rather rent than to consider moving outside their comfort zone. This can be a huge mistake since homeownership is what is going to help them build enough equity to afford to live in their desired neighborhood someday. 

If they say they want to live in a specific area because of the recreation and lifestyle, then consult them on how they can have a similar lifestyle in another location that is more affordable.

To get clients to consider new areas, our team conducts “Turf Tours.”  First, we ask them to take a ride with us. (Yes, in the same car!) We say, “I have an area I would like to show you. I just have one condition. You can’t ask me where it is until we have already seen the area and some homes.” 

Curious, they will usually agree. To be successful at this, you must remember that you are a consultant, not an order taker. The clients tell you what they want to achieve and why they want to achieve it. Your role is to serve as a consultant who guides them toward reaching their goals.

Bottom Line

This is our strategy for finding homes for buyers in today’s market. Our goal on The Reynolds Team is to serve over 1,000 buyers in 2022. To achieve this, we know we MUST leave no stone unturned when searching for homes. We hope you will do the same. Please share tactics that have worked for you and your team in the comments.

The post The 10-Step Plan My $1 Billion Team Uses to Find Homes for Desperate Buyers appeared first on The Close.

The first step is to take my 10-question real estate sales personality assessment. As a certified MBTI practitioner and real estate coach, I have used this assessment with more than 1,000 people—from brand-new agents to billionaire real estate CEOs. I sincerely hope that it helps you too. 

For this assessment to work for you, you need to take it seriously. If you don’t answer the questions as honestly as possible, the results won’t help you, and they may even lead you down the wrong path. Once you’ve finished the assessment, return here for resources to help you tailor your lead generation approach to your personality. See you soon!

Take My Quiz

The Best Lead Generation Strategies for Every Personality Type

Here is a rough overview of the different lead generation strategies that work for each personality type. Just make sure you take the quiz to find your own real estate sales personality. Below the strategies, we include some helpful resources to get you started.

Why Finding Your ‘True Self’ Will Help You Succeed as an Agent

As Shakespeare said, all the world’s a stage and we all have many roles to play. In my life, I have three main roles: parent, spouse, and real estate agent. Each of these roles requires me to behave and respond accordingly to meet each unique situation.

Think of each role as wearing a different hat. When I am wearing my parent hat, I must be responsible, polite, and calm. My spouse hat helps me to be patient and loving, and when I wear my real estate agent hat, I must be confident, outgoing, and responsive.

But who am I really? Who am I when I’m not a parent, spouse, or real estate agent? What is my true self? The real Sean is the person I have always been. From the time I was four years old, through my twenties, today, and someday, into my sixties. It’s the part of me that doesn’t change. 

In order to succeed at real estate, I had to dig deep and find my true self through tools like the MBTI. I discovered my true self loves reading, learning, and spending long periods alone. This doesn’t sound much like the personality of a nationally recognized, top-producing real estate agent and real estate coach, does it? Fortunately, I have found ways to incorporate the real me into my real estate career so I don’t lose interest or burn out … and so can you!

Why Aligning Your Personality to Your Business Is Crucial to Your Success

Your personality plays a crucial role in your success (or lack of it!) in real estate—but not in the way you might think.

Too many unsuccessful agents try (and fail) to adapt their personalities to “fit in” better as real estate agents. They think they need to be highly extroverted to succeed, so they push themselves way too hard to “become” the fast-talking extrovert they see on “Million Dollar Listing.” This approach is doomed to failure, and at the very least, it’ll make you miserable in your chosen career.

To achieve long-lasting success and happiness in real estate, you must approach your business in a way that’s aligned with your personality. Here’s why. Studies show that changing your personality is incredibly difficult, if not impossible, for most people. The scientific evidence is clear. While most people understand that our upbringing and life experiences shape our personalities, modern researchers have discovered that our personalities are also partially determined by genetics. 

So that means the harder you push against your personality type, the more miserable you will be, and the faster you will burn out. I’ve seen this happen many, many, times in my career.

Personality Is Crucial, but Sometimes You Still Need To Eat the Dog Food…

I would love to tell you that you will always enjoy every part of your real estate career, and you will never have to do the things you don’t enjoy, but that would be a lie. While personality is a critical factor in determining your approach to real estate, it’s not the only factor. Your budget and urgency will also play an essential role in determining the best strategy for your success.

Suppose you have an unlimited budget and the time to slowly develop your real estate business over many years. In that case, you could write a blog that ranks number one on Google or become a real estate influencer on social media. I know agents who have done both, but again, it took them years to get to this level. 

Short-term goals and urgency to make money will often require you to do things outside of your comfort zone to achieve the results you want in the time frame you want them. The good news is, we all can “flex” out of our personality preference for short periods of time.

This means that even I can “eat the dog food” and spend a few hours each quarter calling my sphere of influence (SOI) to invite them to an ice cream social. 

However, if we stay outside our comfort zones for long periods, we can become stressed, irritable, or worse, burnt out. This is one of the main reasons many top-producing agents eventually fail. They spend years forcing themselves to work outside of their comfort zone, and eventually, they burn out. Ask me how I know.

As a result, I sought out a personality assessment to help me better understand the agents I was coaching, with a goal of helping them build sustainable real estate careers that complement their strengths. I wanted them to be excited about the business again.

Next Steps: Learn My 16 Strategies for Real Estate Success

Want to stop pushing the boulder up the hill for good? My book, 16 Strategies for Sales, will help you laser-focus your lead generation strategy so that it works seamlessly with your personality, not against it. 

Get the Book

Bottom Line

Knowing your real estate personality will provide you with a deeper understanding of the best approach to grow your real estate business. You can increase your sales by gaining awareness of your personality type and adapting a sales strategy that complements your innate strengths and abilities.

The post What’s Your Real Estate Sales Personality? Take Our Quiz & Find Out appeared first on The Close.

Let’s take a look at the three most successful team models in real estate today so you can make an informed decision and build your own multi-million-dollar team. If you’re starting from scratch, I recommend ZipRecruiter, an all-in-one app for recruiting and hiring both agents and support staff. It’s the number one rated job-seeking app on both Apple and Android, so you’ll always cast the widest net and find hidden talent.

Visit ZipRecruiter

The Best Real Estate Team Models for 2022

Before deciding which real estate team model is best for you, you have to understand the financial risks, difficulties, and potential outcomes. Traditionally, the three most successful real estate team models include The Mentor/Mentee Model, The Team Leader Model, and The Lead Team Model. Here’s a quick comparison of each team model:

Now, let’s do a deeper dive into each model:

1. The Mentor/Mentee Real Estate Team Structure

If you are looking for a low-cost, low-risk real estate team structure, look no further. In this model, you mentor newer agents into the business in exchange for a percentage of their commissions for a specific period (typically 12 to 24 months). After that, the new agent will leave the team and pursue their real estate career. 

You provide structure, set expectations for success, and answer questions. However, you are not providing leads, paying for their marketing, or managing team members. This is a common real estate team model for brokerage agents that offer residual income from their MLM (multilevel marketing) or downlines, like Keller Williams, Exit, and eXp.

Mentor/Mentee Real Estate Team Organizational Chart

The Mentor/Mentee real estate team structure doesn’t include Operations in its organization chart. Operational activities are handled by the brokerage or outsourced to a transaction coordinator.

The organizational model is simple. As the mentor, you recruit new team members, train them to be successful, and then you transition them into your downline. To maximize your downline further, teach your team members to do the same. This will grow your downline exponentially and provide you (and them) with long-term residual income.

Mentor/Mentee Real Estate Team Lead Generation Model

The objective of the Mentor/Mentee Model is to teach new agents to fish (when a cliche works, it works!) They pay you a portion of their commission for access to your lead generation knowledge and experience, not for actual leads or marketing.

As a mentor, you can teach outbound prospecting, sphere of influence (SOI) calls, strategic planning, and even how to host an effective open house.

Mentor/Mentee Real Estate Team Model Services & Expectations

Mentors and mentees set their own individual goals. Ultimately, you want your mentees to be successful, so you’ll want them to keep all clients and leads they generate while on your team.

You may choose to provide administration or transaction coordination, but it’s not required. Team members are responsible for their marketing and advertising. Remember, the value of your team is your time and training, not what resources you are providing. 

Why Retention Is Intentionally Low

Team member retention is intentionally low because it purposefully moves new agents into production. When your mentees transition into your downline, you receive a portion of the brokerage’s revenue or profit generated from that agent’s transactions, even after they leave your team.

Mentor/Mentee Real Estate Team Model Splits & Costs

This real estate team structure teaches team members to become independent real estate agents. Team members are responsible for all the expenses associated with being an agent, including marketing, their office bill, MLS fees, and split to the brokerage.

The splits in this model are lower for you than other real estate team models because you are not paying their expenses. Therefore, you can only expect to get between 10% and 30% of their commissions.

The mentee should receive at least 50% of the total commission after the brokerage takes its portion and the split is paid to you. This ensures that your team member makes enough money to stay in business.

How to Tell if the Mentor/Mentee Model Is Right for You

If you like to teach, are part of an MLM-style brokerage, and want to produce a continuous source of productive agents to fill your downline, this is a perfect model. 

However, if you are not building a downline at your brokerage, think twice about this structure. Inherent turnover means you are constantly training new agents, taking time away from your production. You might find that the small portion of commission you earn for training a new agent doesn’t compensate you for the time you could’ve been making sales.

2. The Team Leader Model

The Team Leader Model is centered around actively promoting the team leader or the team leader’s brand. This traditional real estate team structure focuses its efforts around a neighborhood or community.

As the team leader, you provide structure and resources to team members, and team members promote the team leader’s brand, not themselves. Because you’re building a brand around a specific community, high standards and unmatched customer service are essential.

Team Leader Model Organizational Chart

The Team Leader Model is divided into operations and sales. The team leader is typically the lead listing agent, and team members are showing-agent roles. The sales side of the organization may also include a telemarketer and a second listing agent.

This structure requires at least one employee and one business manager, but is most effective with an additional marketing manager and transaction coordinator.

Team Leader Model: Primary Lead Generation Strategy

As the team leader, you set lead generation goals, team member expectations, and maintain standards. You are also responsible for leads for the team. Client referrals are the secret to success, so maintaining relationships and providing unmatched service is crucial. Keep lead generation costs low so you can spend those savings on making your client experience second to none.

Lead Ownership

You may, at times, feel the need to allow the team members to retain clients after the closing. But don’t—this could be a huge mistake!

You took the time to create the team, assumed the risk of hiring employees, and covered the operational costs. Therefore, every client should remain a client of the team, not the individual agents. 

This ensures that if/when a team member leaves, the lead will continue to be marketed to by the team and not by the former team member. This must be clear when inviting a new member onto your team.

Team Leader Real Estate Team Model Services & Expectations

Since this real estate team model is based on high-level customer service, you’ll want to provide full-time administrative support so the rest of the team can focus on sales activities.

You should also provide all marketing materials to ensure brand quality and uniformity. 

How to Set Expectations & Reduce Turnover

Team members should have specific weekly or monthly productivity goals, like number of contacts, leads, contracts, and closings.

Generally, team members should produce four to six transactions their first year and eight to 12 transactions thereafter. Half of their business should come from their sphere of influence, while the other half will come from team lead generation activities.

This real estate team structure has higher retention rates because you’re carefully hiring for a team’s cultural fit. But if a team member fails in customer service or has a poor attitude, it reflects on you and your brand. Hire slow and fire fast should be your motto for this team model! 

Team Leader Model Splits & Costs

Member splits are typically 50/50 or 60/40 (40% to the team), depending on the source of business. You might give a larger split if the team member provided the lead from their sphere. 

Remember that your split must be enough for you to provide support and marketing for the rest of the team. If your split is too low, you may end up using your commission income.

As far as costs go, team members should be responsible for their phones, cars, and National Association of Realtors (NAR) dues. However, depending on the percentage of commission you take, you may choose to cover the common business expenses, like office bills, errors and omissions insurance, signs, cards, MLS, and lockboxes. 

How to Tell if the Team Leader Model Is Right for You

This is an excellent real estate team structure for someone with an established brand (or someone who has a strong vision for building a brand). You’ll also need high standards, enjoy working with others, and have proven techniques that generate business. Setting expectations is essential, as is selecting the right team members.

However, there are some challenges with this team structure. For example, if you don’t take the time to appreciate your team members, it could lead to resentment and jealousy. To have long-lasting success, you will need to check your ego at the door. Don’t let emotions cloud the bigger picture … TOTAL COMMUNITY DOMINANCE!

3. The Lead Team Model

The Lead Team Model is divided into sales and operations but further separates the sales side into inside and outside sales.

1. Inside Sales: They deal with inbound leads, follow-up, and prequalification.
2. Outside Sales: They handle showings, negotiations, and contracts.

This real estate team structure is high-cost and requires high transaction volume to keep the machine moving. It’s the most expensive and riskiest to operate, but when done correctly, there’s absolutely no limit to your success.

Lead Team Model Organizational Chart

This model is operations-driven, not sales-driven. The operations team oversees sales, instead of the other way around. It’s essential to have both a business manager for operations and a lead manager for the sales team.

The inside sales team follows up on leads from your advertising efforts and ensures lead qualification and assignment. The outside sales team is responsible for showings, negotiations, and contracts. 

Remember, there are some great alternatives to hiring an inside sales team member. With an ISA (Inside Sales Agent) company like Real Qualified, you can essentially outsource the job of qualifying leads and nurturing existing leads.

Visit Real Qualified

Lead Team Model: Lead Generation Strategy

The Lead Team Model’s primary source of lead generation is advertising, which is expensive—it could easily cost $500 to over $20,000 per month. 

Your advertising budget should include sites like Zillow and Google, or lead acquisition platforms like Zurple, BoomTown, and kvCORE (see my kvCORE review here). If you prefer prospecting, your team can prospect expired and FSBO (For Sale By Owner) leads using software like REDX and Landvoice. Just note that the cost and strategy of lead generation for the entire team is your responsibility.

Lead Team Model Services & Expectations

Expensive lead generation and tight profit margins mean team members have higher expectations and rigid daily or weekly milestones that must be met. It’s reasonable for each team member to close a minimum of one transaction per month, with a stretch goal of three closings a month. 

This model attracts newer agents because of the low split or flat fee. Turnover, therefore, can be higher than with the Team Leader Model. To protect your brokerage, be sure to write into your team agreements that clients remain with the team if an agent leaves. 

Lead Team Model Splits & Costs

Because this real estate team structure is high volume and heavily reliant on systems (not skills), it’s pretty ideal for brand-new agents. 

As you build your team, look for team members who are highly driven and hoping for the right opportunity. You may want to consider covering some of their administrative costs, like MLS and NAR dues, so they can focus on your leads instead of taking a part-time job.

Inside Versus Outside Sales Compensation

Be sure to comply with state employment requirements, including minimum wages, tax withholding, and whether certain team members should be classified as employees or independent contractors.

Outside salespeople should receive 25% to 30% of the commission or a flat fee of $800 to $1,500 per closing. This may seem low, but the outside salesperson doesn’t have any expenses. Nor do they handle the lead acquisition, manage the lead once it’s under contract, or assume the financial and legal risks that you do.

With this setup, they could easily build up to three to six transactions a month and make $40,000 to $60,000 their first year. You should compensate inside salespeople with an hourly rate plus a bonus for appointments set or successful closings. 

How to Tell if the Lead Team Model Is Right for You

Do you want a large real estate team—but without being the brand or meeting with every client? Then this is perfect for you. It operates on systems that manage hundreds—if not thousands—of leads every month, which means you can build a scalable business that can generate millions in commissions. 

However, you will need significant startup capital. This is the most expensive of all the models to set up and operate, so there is substantial financial risk if you don’t get it right. The most common mistake is overpaying team members. The advertising costs are too high, and the margins are just too thin to overpay your team.

Bottom Line

There are thousands of successful real estate teams across the nation, and each has its own unique structure. The three I outlined here are the most common successful models, and if you follow my advice, they will give you the best chance of success in building your real estate team.

Over to You

Have a real estate team structure that we overlooked? Let us know in the comments or join the conversation in our Facebook Mastermind Group.

The post 3 Foolproof Team Models for 2022: Hiring, Splits, Lead Gen + More appeared first on The Close.

We’re now one of the fastest-growing real estate brokerages in Colorado and add an average of 40 new agents every year. The biggest lesson learned: You must have a strategic plan and know how to recruit real estate agents. This article covers my strategy for poaching producing agents from other brokerages, as well as some retention strategies to help build on your recruitment success.

Why You Need a Plan for Recruiting Real Estate Agents

Over time, all teams and brokerages will lose agents. Attrition in this industry is inevitable. NAR reports that the median tenure of Realtors at a brokerage is just five years. But fewer agents means lower potential revenue, and reduced revenue means fewer services available to your remaining agents. Even if you only want to add two or three agents a year, you need a viable recruitment plan.

There are only two ways to recruit. The right way and every other way. The right way means building relationships. Creating trust and showing your recruiting prospects that you care ensures that you attract the right agents. It also increases your chances of retaining agents after you have invested a lot of time and money in recruiting and training them.

How to Identify the Ideal Agents to Recruit 

Before you make a recruiting call or send an email, identify what type of agents you are prepared to support in your organization. Agents in different phases of their careers have different needs. If you can’t support them, you can’t recruit them, and you certainly can’t retain them.

Finding & Recruiting New (or Newer) Real Estate Agents

There are two types of new agents: prelicensed candidates interested in getting their real estate license and current students or recent graduates of real estate school who are interviewing brokerages.

You can collect prelicensed and in-school leads by placing ads on employment websites like ZipRecruiter, Indeed, Career Builder, and Craigslist. You can direct high-funnel candidates to a real estate licensing school like Real Estate Express or Kaplan when they reach out. Keep in touch, so they are sure to interview with you once they receive their license.

You can find lower-funnel leads by contacting local real estate schools and asking them if you can present your team or brokerage to their classes. They will usually ask you to bring lunch or snacks for the students in exchange for a 15-minute presentation.

If you want to recruit brand new agents, ZipRecruiter is the way to go. It’s the #1 rated job search app on both Apple and Android devices, which means you’ll cast the widest net possible for new talent.

Visit ZipRecruiter

How to Support New Agents

If you plan to recruit brand new agents or ones who have only sold a few homes in the past year, be prepared to spend a lot of time training them in marketing, buyer and seller presentations, managing a database, and writing and negotiating contracts.

If you choose to hire more than a few new agents at a time, you’ll need a designated mentor or trainer and a detailed educational program at your brokerage. Otherwise, their needs will impact your personal real estate production. In short, if you don’t have the resources to train new agents, don’t recruit them.

Fortunately, we provide plenty of training resources for new agents at The Close and on The Close Pro.

Visit The Close Pro

Finding & Recruiting Producing Real Estate Agents

If you’re recruiting producing agents, you need an idea of their production and contact information. You can find it manually through your Multiple Listing Service (MLS). Most MLS offer the ability to search closed transactions.

Begin with a search of recently sold homes in your target territory. Download the list and sort by the listing agent’s name, which shows how many closings each agent has had in your area. 

In a sample search of 1,500 closed transactions, I identified more than 100 producing agents—great potential leads who sold two or more properties in my territory in the past six months. 

You can also find producing agents in just few clicks with recruiting software like BrokerMetrics. BrokerMetrics starts at $200 a month for the basic tools. In addition to agent production and contact information, BrokerMetrics can also provide market share and trend reports.

How to Support Producing Agents

Producing agents have basic needs that include a good website, an excellent customer relationship management (CRM) tool, lead generation support, and a sense of community. They are the easiest agents to manage but also the easiest to overlook—which makes them susceptible to getting poached by other brokerages. 

Creating a strong sense of community in your team or brokerage is key. Conduct regular team meetings, group lead generation activities, and mobilize around a common vision or cause to ensure everyone feels seen, appreciated, and supported.

The Secret to Attracting, Recruiting & Retaining Top-producing Real Estate Agents

Recruiting top-producing real estate agents (typically, those who sell more than 30 homes a year) is all about knowing what they’re looking for: opportunities, recognition for their efforts, and/or a better compensation plan.

Opportunities

For top producers, opportunity could mean a leadership role, impressive title, learning something new, or accessing better training or mentors.

Recognition

Some top producers thrive on the approval of others (like me!). And believe it or not, many companies aren’t good at giving credit or recognition. Top producers typically invest more time and money into their businesses than other agents, helping to grow your brokerage brand.

For this reason, I believe they deserve special treatment. You don’t need to kiss their butt; they just need to feel appreciated. Create unique, exclusive experiences like inviting them to sporting events. I once took my top agents to see Tony Robbins in Palm Springs. They still talk about this trip 16 years later.

Compensation

Many top producers negotiated their compensation plan long before becoming top producers. They’re now paying an unfair share of their commissions to their brokerage and are looking for a better compensation plan. Nonetheless, changing your compensation model to accommodate a top producer could lead to resentment among other agents on your team and divide your brokerage.

Instead, build your team or brokerage compensation plan to attract financially conscious top producers. If you already have an established compensation model, consider offering an upfront signing bonus. 

The Best Scripts for Recruiting Real Estate Agents

If you only learn one thing about recruiting scripts from this article, it should be this: The best script is the true script. So get very clear about who you are and are not. 

If you are a top-producing team that wants to build your brokerage brand, make that clear in your script. You might not appeal to a top producer who wants to grow their own personal brand, but you will attract mid-level agents who want to be part of something exciting and who aren’t concerned about being the “Top Dog.”

The key to recruiting success is to find the right candidates to join your organization, and not to get appointments with everyone with a real estate license. Think of your scripts as a means of weeding out the agents who don’t fit with your goals and culture. With this in mind, here are the four most effective scripts I have used to recruit producing agents to my brokerages.

The Best ‘New to the Area’ Recruiting Script

This is a great script if you or your brokerage are new to the area. Once you’ve gathered a list of recruiting leads using the MLS or BrokerMetrics, use the following script to contact them. The secret to success with this script is to start with curiosity in your voice.

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Hello [Name],

This is [Your Name] with [Team or Brokerage].

I see that you have recently sold [#] homes in the [specific location] area.

Do you specialize in [that specific location]?

Are you looking to do more business in [that specific location]?

[If they say YES … shift your voice to excitement!]

Great! The reason for my call today is because we recently opened a new office in [location], and we are looking to invest in a few agents to help them grow their business in [specific location].

Would you like to have a conversation about that?

Are you available ______ at [time/day]?

Many recruiters would scoff and say that this script is too direct because many companies reward recruiters for the number of appointments they set and not the quality of the lead or appointment. 

Another concern I hear with this script is with the word invest. Recruiters say things like “I don’t have money to give them” or “We don’t BUY agents.” However, you can devote your time to mentoring them, provide extra leads, or invest financially. However you choose to invest is up to you.

But remember, if you don’t plan on investing in agents in some way, you are going to have a hard time recruiting talented agents and retaining the ones you have.

The Most Effective Mid-level Agent Recruiting Script

Use this script with agents working in a specific community, neighborhood, or town. Begin by paying attention to their advertising on Facebook, newspapers, and listing signs. When you see an agent who is marketing a unique message or new listing, contact them with the following script.

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Hello [Name],

This is [Your Name] with [Team or Brokerage].

The reason I am calling is I saw your [advertisement or marketing campaign] and I was impressed by [the message, quality, or professionalism].

I see you have a listing in [specific location]. Do you sell most of your homes in [specific location]?

Are you interested in getting more listings in [specific location]?

We are also looking to grow in [specific location], and we are looking to invest in a few agents to help them grow their business there.

Would you like to have a conversation about that?

Are you available ______ at [time/day]?

This is one of my favorite recruiting scripts because it works on Facebook Messenger, text, and even on Slydial, as long as you are honest and transparent. 

The Best Events & Seminar Agent Recruiting Scripts

Holding events and seminars is an outstanding way to attract learning-based agents. These agents are likely newer to the business or mid-level seasoned agents looking for new ideas.

Keep it a small event, and don’t hold it in your office. Agents will be intimidated to come into the lion’s den. 

It’s best practice if you present the information or host the panel, which positions you as the expert … everyone wants to know the expert.

Trendy topics work best, like social media (especially TikTok) strategies, paid Facebook Ads, business planning, and cryptocurrency. 

Here is the exact script I use to get real estate agents to my events:

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Hello [Name],

This is [Your Name] with [Team or Brokerage].

The reason for my call is [vendor] and [team or brokerage] are holding an event for real estate agents called [event name], where we will go into detail about how to [specific goal].

Are you interested in attending?

[If they are interested, they will ask what day and time the event is.]

The event is on [date and time] at [location]. It is limited to [five to 25] agents. Can I mark you down to hold your seat?

The secret to successfully recruiting at events is conversion. Think of your event like a lead magnet on your website. You need to offer something attendees want, but your end goal should be to convert them into recruitment leads.

The event is mainly for you to build trust through familiarity. They see you at an event, then later see you at an association meeting, and when you later call them to have coffee, they are more likely to listen to your recruitment pitch. 

Try the Columbo Script

You may remember the TV detective series “Columbo,” where the main character would say, “Just one more thing” before revealing the secret that solves the mystery. At some point during an event, make the big reveal:

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Hello [Name],

I am hosting this event because I am looking to grow my brokerage in [location] and want to [result you want to achieve]. I am looking for agents who are looking to [result you want to achieve] too.

Just one more thing … If you want to be more effective with [the event topic], then approach me after for [something of value, like a script, an example, or a worksheet]. This will help you achieve [the result you want to achieve] faster.

The Best Script for Recruiting Top-producing Agents

A recruiter’s greatest challenge is signing top-producing agents because their usual techniques often don’t resonate with successful agents who have their own processes and systems, a great personal brand, and tons of business.

Top producers are attracted to three things: opportunities, recognition, and compensation. As such, the secret to recruiting them is providing the special treatment they’ve earned. Be direct, clear, and concise. Either pick up the phone or walk into their office. An email or text doesn’t work for this script.

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Hello [Name],

This is [Your Name] with [Team or Brokerage]. You may not have heard of me, but I sure have heard of you.

The reason I am calling you today is to invite you to an opportunity that is only available to a select few top-producing agents like yourself. Are you available [date and time]?

[Pause. They will ask what the opportunity is.]

This is an exclusive opportunity, and due to privacy, I can’t share with you specifically what it is. But I can tell you that it’s limited, it’s real estate-related, and it’s a once-in-a-lifetime opportunity. Can you make it on [date and time]?

[At this point, they will reluctantly agree to meet or politely reject your offer.]

I am sure you are wondering what the opportunity is, right? That’s completely up to you to decide. Offer the opportunity to meet someone influential in the industry or join your organization on the ground floor before it reaches the next level. Whatever you decide, this script will help get them in the door.

Recruiting Real Estate Agents: How to Handle Common Objections

No ultimate guide to recruiting agents would be complete without addressing the common objections real estate agents present, and how to counter them. Remember, you’re playing the long game. It’s important not to burn relationships by being too pushy. If you overuse objection handlers, you can come across as insensitive.

The Most Common Objections You’ll Hear & How to Respond

I don’t want to move at this time. (Too busy.)

Honestly, as a successful, busy agent, there is never a good time to make a move. The good news is we can help make the transition easier. The sooner you can make the move, the sooner we can implement your new plan.

I am loyal to my Broker/Office. (I’m happy where I am.)

I respect the fact that you are loyal. In fact, that is exactly why I am interested in working with you. Let’s be honest, if you were getting the support you needed, would you even be talking with me right now?

I don’t want to leave my friends.

If I could demonstrate that we are not only a good fit for you, but it would also be good for them, how would you feel about bringing them by to meet me?

I don’t want to deal with the hassle of changing companies.

I understand completely. Many busy agents who have already joined us had the same concern. That is why we help you with the transition. Let’s go over a transition plan.

I don’t know how I can support myself without leads. (My broker gives me leads.)

What percentage of your leads are coming from your company? What is your split on those leads? If I can show you how to generate more income without having to be handed leads, would you look at joining my team?

Your company costs more than I pay now. (I don’t want to pay ______.)

To make more money, you must increase revenue, not simply cut your expenses. It doesn’t matter if your expenses are $0 if you’re not generating enough income. I will show you how to make enough money that the additional expense won’t matter.

I think I could sell more homes if I were with a better-known company.

NAR statistics show that consumers choose an agent by the company only 5% of the time. So if we can show you how to increase your business by 20%, would you be OK with a lesser-known company?

Key Takeaways: Recruiting Real Estate Agents to Your Team or Brokerage

All teams and brokerages face attrition. Losing agents over time means you’ll need a plan for recruiting real estate agents to maintain market share. Ultimately, your success lies in your ability to clearly communicate the services your team or brokerage provides to the right type of agents.

Your script is the first step in narrowing the field of agents in your territory. A good script is direct and to the point. It attracts or repels, allowing you to quickly sort the agents who are a good fit from the agents who are not.

Over to You

I hope this guide proves successful in recruiting agents to your team or brokerage. What did you think of our Ultimate Guide to Recruiting? What are your secrets to recruiting real estate agents? Let us know in the comments.

The post The Ultimate Guide to Recruiting Agents for Your Team or Brokerage (+ Scripts) appeared first on The Close.

For the past 10-plus years, I’ve coached agents, teaching them how to differentiate themselves so they can attract high-end clients. In this article, I will uncover how to become a luxury real estate agent using 10 of my tried-and-tested methods.

Download Our Checklist for Breaking Into the Luxury Market

1. Adopt a Fancy Hobby

The best way to meet high-net-worth clients is by doing something you already enjoy. This can be as easy as joining your local antique car group, attending a few fine art shows or wine tastings, or finding a local polo club.

While buying a horse or an expensive car might not be feasible for you, you can always find other ways to be an enthusiast. For example, you may not be able to afford a Ferrari, but you can certainly educate yourself on the company’s history and attend meetups and car shows to show off your knowledge.

Then, if you are attending a vintage car race, you can bring a list of luxury properties in your area that feature large garages or outbuildings that would be perfect for a vintage car collector.

Before you jump in: I cannot stress this enough, nobody likes a poser—so start with a hobby you actually enjoy, or at least find interesting. 

2. Make Luxury Part of Your Personal Brand

A key step to breaking into the luxury market is to make sure all your marketing materials, including your business cards, website, advertising, and social media look both cohesive and sophisticated. 

Attract the attention of high-end homebuyers by showing them the best of the luxury lifestyle in your farm area. Marketing the luxury lifestyle is easier than ever before with social media as the perfect place to “fake it until you make it.” It won’t cost you a lot of money to feature and discuss high-end restaurants, gallery openings, or golf tournaments on your social media accounts. 

If you want to take your luxury marketing and branding to the next level, we recommend Luxury Presence. An all-in-one platform, it’s used by at least 20 of the top 100 WSJ agents. Luxury Presence offers agent websites, lead generation, and even video production—all with a razor-sharp focus on the luxury real estate market.

Visit Luxury Presence

3. Get Involved With Charities & Causes

Generally speaking, high-income people enjoy supporting causes, attending charity events and auctions, volunteering, and fundraising. Start with a cause that means something to you. Your relationships and opportunities will develop naturally when your dedication to the cause shines through. From there, you can build a network that will lead to new opportunities.

Again, this is a strategy that really requires authenticity and sincerity. Don’t fake a love of rescue dogs if you don’t like animals—people will see right through you. 

4. Sweat the Small Stuff

Every detail in a property worth millions of dollars is important. When you’re showing a luxury property, you need to be ready to point out the luxury finishes, from the big obvious indoor basketball court to the tiniest cutting-edge audio speaker. 

If, for example, you work in a market with lots of expensive historic homes, you need to have the proper vocabulary: know a cornice from a corbel and the difference between balusters and the balustrade. And be familiar with easements and zoning boards that get a say in renovations and restorations. 

On the water? Know your boat lifts and dock permits. In the mountains of Colorado, what are the fire risks, the best ski lodges, and stocked trout streams? If someone is going to pay a premium for luxury property features, you need to become the luxury agent who knows what they are and why (or if) they’re worth it. 

Again, social media is key to showing off your expertise. If you can’t afford a marketing manager, do what 4,000 other teams do: get curated local content automatically posted to your social media accounts using Artur’In. For a fraction of the cost of a marketing manager, Artur’In will curate, create, and post content to your social media feeds to engage any audience you want. They also do automated Facebook and Google pay-per-click (PPC) campaigns if you just want leads.

*Close readers save an extra $300 through waived setup fees.

Visit Artur’In

5. Solve a Problem Specific to the Wealthy

Remember, you’re not just a real estate agent, you are a luxury real estate agent, and you offer more profound knowledge and broader expertise. Here is a list of common concerns for high-net-worth individuals, which often dovetail perfectly with your real estate services. 

• Real estate investing
• Legal tax avoidance and tax consequences 
• Asset appraisal, privacy, protection, and preservation
• Insurance
• Zoning and land use
• Development
• Banking and lending
• Common property and prenuptials

Think of one (and only one) problem that a luxury client may have that you can solve. You can then position yourself as the one person in your market who solves this problem for affluent clients. Reflect on your career and experiences and ask yourself the following questions:

• What experiences, skills, and knowledge are valuable to a luxury client?
• Which luxury clients would benefit from my skills and experience?

Then, write a positioning statement to use on all your marketing. For example:

“I help high-income individuals create, acquire, and manage a diverse property portfolio.”

6. Teach a Relevant Course 

Once you know which specific problem you are uniquely qualified to solve, get out there and start educating your prospective clients. High-net-worth individuals may desire a deeper knowledge of real estate investing, 1031 exchanges, recent zoning changes, second home purchases, or development opportunities—and you can be the one to teach them.

Position yourself as the real estate educator and local authority by creating a 30- to 45-minute presentation or workshop. Ideally, you want to share all the ways that they can solve the problem without telling them exactly how to do it. End with that simple call-to-action: If they would like more, they will need to schedule a meeting with you.

Focus on educating without getting anything in return. Even if you don’t set any meetings at first, you will eventually become a trusted authority on your chosen subject, leading to opportunities in the future.

  Pro Tip

Don’t forget to bring snacks! Offering cookies, coffee, or even wine and cheese can go a long way toward breaking the ice.

7. Level Up With Designations

If you choose to become a respected luxury real estate agent, you need proof that you have the knowledge, skills, and experience to handle such an expensive asset. There are several designations and certifications explicitly designed for agents in the luxury real estate market, including:

• Luxury Homes Certification (LHC)
• Certified Luxury Home Marketing Specialist (CLHMS) 
• Accredited Luxury Home Specialist (ALHS)

8. Hitch Your Wagon to a Star 

You can gain serious skills and connections by helping other luxury agents with their marketing, events, and open houses. When you can show your well-to-do peers that you are hungry, they will be more likely to take a chance on you. 

Don’t be too proud to co-list, either. If someone is too busy to take on a luxury listing, offer to jump in, co-list, and do the grunt work. Half of a commission of a luxury listing is well worth it. Becoming a luxury real estate agent is all about the hustle.

9. Mine Expired Luxury Listings & FSBOs

Luxury homes can take two to three times longer to sell than the average home because fewer people can afford them. Plus, many are custom-designed and have unique features, making them more difficult to price correctly the first time.

Some luxury listings can sit on the market for years and change listing agents two to three times before they sell. You don’t necessarily need to close your first listing to get started—you just need to get it, and more will follow.

Luxury FSBO (For Sale By Owner) sellers can also find it difficult to attract “real” homebuyers for their premium-priced homes. This means that there is opportunity for savvy agents to prospect for both luxury expireds and FSBOs.

I have coached several agents on how to get listings by prospecting expired luxury listings and FBSOs. Because you are approaching them unsolicited, present yourself as an ambitious (yet professional) luxury real estate agent who offers the ultimate solution to their problem of wasted time, since their property’s “days on market” are likely to be higher.

10. Claim New Construction as Your Own

Hustling to become the representative for a new residential construction project is one of the fastest ways to establish yourself in the luxury market. If a developer has one project and likes the work you’ve done to sell it, chances are they’ll have another one…and then another one. 

The hard work it takes to get the listing and to do well with it will pay off in spades. It’s a mutually beneficial relationship that can grow and develop over time. 

Bonus Tip: How to Do Luxury Marketing on a Budget

If you can’t quite afford a luxury marketing team yet, try Lab Coat Agents Marketing Center. It’s the first design platform created just for real estate agents. They offer beautiful, easy-to-edit templates for email newsletters, just-sold flyers, door hangers, social media posts, business cards, and much more.

Visit Lab Coat Agents Marketing Center

Bottom Line

Connect with your passion. Be genuine in your pursuit of relationships and networks. Create a plan to connect with affluent people who share the same excitement for luxury real estate properties that you have. Brand yourself appropriately, work hard, and provide a professional, unparalleled client experience. Take these steps and you’re already on your way to becoming a luxury real estate agent. 

Remember that in today’s world, luxury is not about price—it’s about the uniqueness of an experience and elite level of service. Keep track of your progress with our luxury agent checklist.

Download Our Checklist

Over to You

Confident you now know how to become a luxury real estate agent? Do you have a way to break into luxury that we didn’t mention here? Let us know in the comments, and if you’re an active agent, join our Facebook Mastermind Group for more advice from pros.

The post How to Become a Luxury Real Estate Agent—10 Easy Ways to Break Into the Luxury Market appeared first on The Close.

The solution is to create a lead generation plan that leverages your unique personality. Today, we’re going to help you create a custom plan that fits your personality and fills your pipeline with leads and referral opportunities.

Assessment: Determine Your Unique Sales Personality

Your unique personality should be the key consideration when selecting strategies for your lead generation plan. Have you ever considered that there may be a lead generation strategy that aligns with your goals, past experiences, and personality? You don’t have to like or enjoy every lead generation strategy—some are going to be better for you than others.

How to Determine Your Unique Sales Personality

Using the Myers-Briggs Personality Type Indicator and the DiSC Assessment, I created the 16 Strategies for Sales Personality Assessment. This assessment is designed to help you learn about your unique sales personality, which will help you become a more effective, successful, and happier salesperson.

Take the free 16 Strategies Sales Assessment on my website, 16 Strategies.com. It should only take five minutes.

Now that you have a better understanding of your unique personality, let’s go through my five-step formula to create a plan that is just right for you.

My 5-Step Lead Generation Selection Formula

With this 5-Step Lead Generation Selection Formula, you’ll create a lead generation plan that you’ll actually stick to. If you’re ready to start creating your plan today, download the Lead Generation Plan Worksheet.

Download the Lead Generation Plan Worksheet

1. Begin With Your Goal

When it comes to getting leads, a goal is simply a destination with a deadline. It defines where you want to go and when you want to get there. All of the decisions you make about your real estate business must align with your goals. 

As a coach, I’ve found that when agents aren’t achieving the results they want, it’s usually because they are out of alignment with their goals, or even worse, they haven’t set concrete goals. They then find themselves jumping from idea to idea and strategy to strategy with no real plan.

How to Set Concrete Goals & Actually Get Results

Setting concrete goals is as simple as asking yourself three questions. Don’t skip this step! The answers to these questions will form the blueprint for creating your lead generation strategies.

• What do you want to achieve? (Be specific!)
• When do you want to achieve it?
• How long do you have before you must produce income?

Now that you have set or refined your goals, we can take a closer look at your sales personality, which will help you select the best mix of strategies to deploy.

2. Match Your Strategies to Your Personality Type

You have your results from my 16 Strategies Sales Assessment. If you don’t, go back and take it! This information will help you select lead generation activities that align with your strengths and reconsider the ones you might find challenging or emotionally draining.

The Success Cycle

We all can “flex” out of our personality for a period of time. However, when we stay out of our preferred strategies for too long, we become stressed and irritable. This is one of the main reasons new agents fail so often—they spend too much time working outside their comfort zone and burn out.

The secret is finding lead generation strategies that align with your personality and don’t require you to flex out too often. When you do, you may find that you actually enjoy lead generation. Your positivity will lead to more appointments, and more appointments lead to more contracts—which generates inspiration, excitement, and passion.

It really is that simple. I call this the Success Cycle.

The key to remaining in the Success Cycle is engaging in lead generation that you naturally enjoy—activities that are in sync with your unique personality.

3. Identify Your Available Resources

Putting together the right lead generation plan means taking a serious look at your resources. Every agent has unique experiences and opportunities that will help create success in sales. You just have to figure out what they are and how to benefit from them.

How to Identify & Assess Available Resources

Ask yourself the following questions:

• Who do I know who can help me reach my goal faster?
• Specifically, what can they provide or teach me?

Next, consider your education and work experience. School and work provide both skills and knowledge to help you achieve your goal. Ask yourself:

• What advantage do I have from my education to help me reach my goals?
• What knowledge from my work experience can help me achieve my goals?
• What skills have I already developed from my previous experiences?
• What other experiences benefit my real estate goals?

Lastly, identify what lead generation opportunities you have: tools, systems, and resources in your company or association. To identify these resources, ask yourself:

• What lead generation systems does my company provide?
• What lead generation education is available to me?
• What other resources can provide lead generation systems, tools, and education?

Define Your Budget & Brokerage Resources

You’ll need to consider your budget in your lead generation plan. Some lead generation strategies are more expensive than others, so be sure you’re adhering to a careful budget. 

Research and utilize resources that are offered by your brokerage, like lead management systems, FSBO (For Sale By Owner) and expired leads, advertising, and consumer apps.

Now that you have identified your unique resources, we can discover the lead generation options available to you—and how they work with your budget.

4. Explore Lead Generation Options & Costs

It’s simply impossible to cover every lead generation strategy available to agents, but we’ve compiled 37 Underrated Real Estate Lead Generation Ideas for 2022 to get your wheels turning. 

Choosing the right mix of strategies can be overwhelming. To make it easier, I categorized the strategies by active and passive, cost, time commitment, and lead quality.

Active vs Passive Lead Generation Methods

Active lead generation methods are strategies where you control the result. For example, calling FSBOs (For Sale By Owner) to get listing appointments is active because you can continue to call FSBOs until you find a seller willing to meet with you. You control your lead-generating actions.

With passive lead generation strategies, you can’t control the result. For example, marketing is passive because you can’t control how many people contact you on a given day.

Some strategies can be both active or passive, depending on the activity. For example, having a booth at a local bridal show is considered active if the agent engages with prospects. But, if the agent just stands behind the booth, waiting for the prospects to engage, it’s considered a passive strategy.

Prioritize Your Optimal Lead Generation Strategies

Begin by reviewing and ranking the lead generation strategies that fit your personality. Next, create a list of them organized by cost and lead conversion time. Ask yourself these probing questions:

• What are lead generation strategies already available to me?
• Do I have access to free or discounted lead generation strategies?
• What is my budget to spend on lead generation systems?

Let’s put it all together and create a blended lead generation plan that includes everything we just discussed.

5. Create Your Custom Lead Generation Plan

Now that you have reviewed your goals, deepened your understanding of your personality, uncovered resources, and analyzed options, it’s time to select the best strategies for your lead generation plan.

You should choose at least three strategies—but no more than four. Like the legs of a table, your business can’t stand on just one or two strategies—a table is stable with three legs but stronger with four.

Pinpoint Your Pillar Strategy

At least one of the strategies you select should be active, which ensures that you will have the ability to generate leads even when times are slow. We call this your Pillar Strategy. You will need to hold yourself accountable to your Pillar Strategy on a weekly or monthly basis.

Choose Your Support Strategies

Your Support Strategies work to enhance your Pillar Strategy, and they can be a mix of active and passive ones. Remember to take into consideration your resources, budget, and the time your overall plan will take to convert leads.

As part of your overall plan, you should manage your sphere of influence (SOI) database by contacting leads, following a marketing plan, and holding small events. Managing your SOI database will ensure a consistent stream of repeat and referral clientele.

Use this list of questions to guide you in designing your own unique lead generation plan.

• Which lead generation strategies are available at low or no cost to me?
• Which lead generation strategies do I already have experience with?
• Which lead generation strategies excite me?
• Which lead generation strategy is in alignment with my personality?
• Which lead generation strategies have I already tried?
• Which lead generation strategies did I enjoy or dislike?

Real Estate Lead Generation Plan Worksheet

Now that you know my step-by-step formula, it’s time to put it into action! Download the lead generation plan worksheet and create your own custom real estate lead generation plan.

Download the Lead Generation Plan Worksheet

How I Developed the Lead Generation Plan That Transformed My Career

I have had several different lead generation plans in my real estate career. My unique strength is educating people, and my preferred method is speaking to groups. Writing and public speaking allow me to work within my strengths and achieve my goals.

A few years ago, I ran a real estate investment group and was often a guest speaker at other groups. Offering education was my Pillar Strategy. My other three strategies were managing my SOI database, advertising investment properties, and seeking out business-to-business opportunities.

The advertising generated leads who were then invited to hear me speak about real estate investing. The customers generated through the speaking and advertising were presented as potential buyers to homebuilders and banks with foreclosed properties. In the four years I ran this lead generation plan, my team and I closed on more than 2,000 homes!

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Over to You

Now that you have completed your custom lead generation plan based on your personality, resources, options, and most importantly, your goals, you’re set up to accomplish something great! If you want to deepen your understanding of how the strengths of your personality can help you be successful in sales, I invite you to read my book on sales personalities.

Do you have a lead generation tactic we didn’t mention here? We invite you to share your success stories in the comments. If you’re an active agent, join our Facebook Mastermind Group to learn and share with other agents nationwide.

The post How to Create a Custom Real Estate Lead Generation Plan (+ Template) appeared first on The Close.

These days, instead of getting asked about how to win bidding wars, my clients and friends constantly ask me if we’re in a real estate bubble that’s ready to pop. That’s why I decided to write this article explaining what a real estate bubble is, if we’re in one now, and most importantly, if or when I think the bubble might pop. 

I’ll wrap up by providing some key resources I used to survive and thrive through the recession of 2008. 

Free Template: Housing Market Infographic

What Is a Housing Bubble, Anyway?

A housing bubble, or speculative bubble, is defined by a steep rise in housing prices that is not supported by common or logical economic factors or fundamentals. The first recorded speculative bubble occurred in the 17th century in Holland and is now known as Tulip Mania, a period during which prices for some newly introduced and fashionable tulip bulbs climbed precipitously and then collapsed dramatically. More on this later.

2022 Market Factors Indicative of a Coming Housing Bubble Pop

Ask a real estate CEO or economist and they’ll tell you that there are many factors contributing to the current and massive housing appreciation throughout the U.S. Factors such as the sudden growth in remote work, changing migration patterns, and supply shortages are contributing to an already under-supplied housing inventory.

Increased demand and low inventory is causing regular homeowners, like you and me, to have to bid 10% to 20% over asking price to secure a deal on a home. These basic economic forces have caused home prices to rise in some areas by more than 40% in just the past year!

While these factors are indeed important, there are other factors behind the scenes that may be causing even bigger problems for the American housing market. 

Institutional Investors Are Changing the Market

Real estate speculation is at an all-time high. However, unlike in 2008, this time it’s not from unqualified buyers who are buying property with subprime mortgages. Instead, massive institutional investors are buying single-family homes by the tens of thousands. 

Looking to cash in on the high rents and a housing shortage that likely will take 20 to 30 years to resolve itself, these firms have raised BILLIONS (yes, with a B!) of dollars and are often using those funds to pay market price or above to buy homes throughout the United States.

It gets worse. With limited existing home inventory, some institutional investors are hiring homebuilders like Lannar to build entire neighborhoods to turn into investment rental properties.

This practice will put further strain on the already short-handed new home industry and prevent more new homes from being built for individual homeowners. 

The primary concern with institutional investors is that not only are they buying housing that is further diluting housing inventory, causing inflation, and increasing rents, but when we do have an economic downturn that impacts housing values and rental income (and we inevitably will), will those investors hold the homes and developments or dump them like a truckload of bad fish?

If that happens, we could see a few hundred thousand homes hit the market in a short period of time and the housing market will have officially burst, possibly to a greater degree than we experienced in The Great Recession that began in 2007. However, I suspect that those running these institutions are smart and have planned for a future market correction.

So, Are We in for a Housing Bubble in 2022? When Will It Pop?

With low inventory and pent-up buyer demand, we are not likely in a catastrophic housing bubble in 2022… yet. However, it is still possible for values to slow and the market to correct without causing a total housing market collapse. 

The main factor that could change the trajectory of housing appreciation is interest rates. With inflation still on the rise, the government has announced it will raise interest rates throughout 2022. This is highly likely to have an impact on rapid housing appreciation but not enough to make home values fall.

As we know from history, war can also slow the economy. With Russia’s invasion into Ukraine, even the threat of a U.S. war with Russia could negatively impact the rising housing market.

Overall, I agree with what Gary Keller, founder of Keller Williams, recently announced at his annual conference, “We’re not in a bubble, but we may be blowing one!”

5 Ways Realtors Can Prepare for a Potential Housing Bubble Pop

Just because I don’t think we’re in a bubble ready to burst doesn’t mean you shouldn’t be prepared for one. World events like the war in Ukraine, rising gas prices, and inflation might put a damper on the confidence and qualifications of buyers. 

In 2007, the market had more buyers than listings. Builders were selling homes by lottery, and real estate agents were living large—and so was I. Like many others, I owned multiple properties and I was building custom homes on the side for big profits.

As agents, we knew that 100%, no-document lending was wrong, but we didn’t know the consequences. One year later, in September 2008 when Lehman Brothers—the nation’s fourth-largest investment bank—filed for Chapter 11 bankruptcy, it signaled the start of the largest real estate crash of our lifetime.

It was like someone turned off Niagara Falls. One minute you are selling 10 homes a month, the next you have 20 listings and no buyers. The clients you just sold homes to start calling and saying that they could no longer afford their payments and had to sell—ASAP. Short sales and foreclosures quickly became the norm.

I was fortunate. Unlike the million-plus real estate licensees that left the business, I pivoted to working with distressed homeowners and became a Real Estate Owned (REO) agent. An REO agent represents banks and loan servicing companies to sell the homes that they foreclosed upon. 

If you want to get ahead of any possible market shift, you can learn more about how I not only survived the recession, but how I thrived in a shifting real estate market in this course offered in The Close Pro.

Visit The Close Pro

In the meantime, here are a few more resources to help you prepare for a shifting market: 

1. Diversify Your Lead Generation Strategies

As a rule, generating leads is going to be harder. That means you might have to change how you get leads.

2. Follow Industry Thought Leaders

Of course, watching and learning from industry thought leaders or top producers in your city can be helpful too. Chances are they have weathered recessions before, so look to see what they’re doing and how they change it up in response to the market.

3. Try Working With Investors

Contrary to popular belief, investors generally increase their buying activity when prices soften. If you want to get ahead of the game, learning how to work with investors can help.

4. Conquer Your Fear of Cold Calling

The days of business just falling in your lap might be coming to an end. The agents who thrive will be the agents who are fearless and relentless cold callers. Learn some tricks to get ready.

5. Keep Yourself Motivated

If you’re down in the dumps all the time, it’s going to be very hard to attract much new business. Learn how top agents bounce back, and copy their strategies so you stay fresh and confident no matter what happens in the market.

Market Bubble History: What Houses & Tulips Have in Common

In the mid-1600s, tulips were imported from the Turkish Empire to Europe for the first time. They were so delicate and rare that the people of Holland saw them as a sign of great wealth and prestige. This made the already scarce but very fashionable tulip bulbs quickly rise in price.

The desire for this status symbol quickly spread throughout Europe. With millions of new buyers, a shortage of bulbs arose as growers could not keep up with demand. With limited supply and high demand, tulip sellers raised prices, then raised them again and again. The more the prices rose, the more the Dutch believed tulips were a wise investment. Sound familiar?

Eventually, the demand was so great that the Dutch set up a futures market to allow investors to buy and sell bulb contracts on end of season bulbs. The frenzy continued with premium tulip bulbs selling for over 5,000 florins, or $150,000 in today’s dollars!

That is, of course, until the bubonic plague reached Holland and kept bulb traders away from the crowded bulb auctions. Lack of trading caused prices to rapidly fall. Wanting to cash out, contract holders began to sell.

Tulip contracts then flooded the market and the more that were available, the lower the prices fell until values were below their previous “non-bubble” market value.

Citizens of Holland lost millions of dollars, leaving some in complete financial ruin. While Tulip Mania is the most famous bubble story, there’s a lesser-known bubble story you may not have heard of.

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Lincoln’s National Debt: America’s First Real Estate Bubble

The first recorded real estate bubble in the newly formed United States was just after the Revolutionary War. The war caused some serious damage to the existing housing supply. After the war, much of the nation’s focus fell on rebuilding the infrastructure, but not rebuilding the housing supply.

By the early 1800s, life began to normalize and young families desired a home of their own. This caused housing values to rise quickly and helped spark the movement to homestead the west.

At this time, Abraham Lincoln was a young man living in Springfield, Illinois, and working as a land surveyor. Lincoln had inside knowledge that the railroad was planning to build tracks through his small town.

Believing that a railway would bring tourism and a bustling economy to his sleepy town, he borrowed money to buy the properties that would be directly across from the train station.

Lincoln wasn’t alone in his desire to get rich quickly from real estate. Property speculation was rampant across the country. Unregulated by the federal government, banks allowed for easy financing for properties and land. Real estate values skyrocketed as more and more people saw the opportunity to build wealth by speculating on real estate.

That is, until 1837. In an effort to prevent the banking system from collapsing, the federal government refused to allow banks to accept anything other than gold or silver for land purchases. This caused The Second Bank of the United States to foreclose on heavily mortgaged lands and farms. Does this sound familiar? A little like Lehman Brothers in 2007, right?

Values then began to rapidly fall as speculators sold off their lands before banks foreclosed on them—some for literally pennies! This caused “The Panic of 1837.” This recession put a temporary halt to western railway expansion and the tracks never came to Springfield. Lincoln’s dreams of being a wealthy real estate investor crumbled.

To make matters worse, when Lincoln couldn’t pay his debts, the properties were repossessed along with his survey equipment, cart, and donkey! Young Lincoln was left to repay his debt for the remainder of his life. As President, he would jokingly refer to it as the “National Debt.”

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Past Housing Bubbles & Why They Popped

Like the tulip bubble, when housing bubbles burst it may not be just due to the buyers running out of money or getting scared out of the market, as you would think. Bubbles can burst due to unrelated events, like a plague or war.

Real estate bubbles were commonplace in the U.S. during the expansion to the west from 1821 through 1857. Land speculation was fueled by unregulated banking, agriculture (mainly cotton), and the Gold Rush, until this pattern was interrupted by the Civil War in 1861.

Large real estate speculation bubbles likely couldn’t occur for nearly 150 years due to four major wars and two depressions, leaving the U.S. economy and housing prices to mildly fluctuate with smaller booms and busts. Of the 50+ recessions and depressions that the country had seen, only three were caused by actual real estate bubbles.

Until 2008, when the country was on the tail end of an unprecedented 20-year economic boom that coincided with the introduction of subprime mortgages, creating a perfect environment for real estate speculation—and a massive housing bubble so large that when it burst, it disrupted the entire world’s economy.

The important point here is that while real estate bubbles are not a new occurrence, they are not very common, either. With the massive appreciation of the past two years, it feels like we may be in one now.

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Over to You

Do you think your local market is approaching bubble territory and is ready to pop? Let us know your thoughts in the comments.

The post Warning: Housing Bubbles Tend to Burst. Here’s How Agents Can Prepare appeared first on The Close.

Building the skills you’ll need to regularly pinpoint undervalued, off-market properties, advise investors, and close sometimes tricky deals won’t be easy. However, if you have a passion for investing, a solid work ethic, and a thick skin, you can easily close 50 to 100 deals a year working with investors—regardless of the market. I’ll walk you through the nine skills you’ll need to hone to start working with investors in 2022.

1. Be an Expert in Your Market

When it comes to attracting real estate investors, you need to know a lot more than just days on market and year-over-year appreciation in the area. You must become a bona fide expert in your local market and sub-markets.

Before you drill down into your local market, you need to understand the 30,000-foot view of the industry. Start by reviewing your local housing statistics and economic policy news to stay up to date so you can better inform your clients of what’s going on.

You should also know about upcoming development projects, zoning ordinance changes, and amenities and attractions in the area. Familiarize yourself with the area’s major employers, local schools, newest shopping and dining areas, and public transportation options.

Sub-markets are smaller areas within your local market that can include the next neighborhood that is likely to pop for investors by researching the neighborhoods in your market that allow short-term rentals and have the highest rent-to-value ratio.

2. Know a Good Deal When You See One

In addition to local market knowledge, real estate investors want an agent who knows a deal when they see one. Nothing is more frustrating to a real estate investor than an agent who sends them a deal or property that doesn’t make any sense. It’s a waste of their time and yours—and a sure way to get yourself blacklisted from any investor’s list of preferred agents.

So, before sending potential opportunities to an investor, take the time to do some basic research on the property. For example, an experienced buy-and-hold investor will expect you to estimate the cash flow and cash-on-cash return of the deal before presenting it to them.

To do this successfully, you will need a deeper understanding of the three basic types of real estate investing and how to evaluate deals in each category: buy and hold, fix and flip, and speculation. If you want to get started learning how to evaluate deals, check out my articles on analyzing cash flow properties and fix-and-flip properties below:

3. Learn How to Be a Trusted Adviser

If you are going to become the “go-to” agent for investors, then you need to give them guidance and be prepared to help them avoid common mistakes. There are three common mistakes investors make, especially when they are new.

Overpaying for Properties

Real estate investing is exciting and it is easy for investors to allow their enthusiasm or competitiveness to outweigh their logic. This is especially true when they are competing for a deal in a multiple offer situation. In my 27-year career, I have seen multiple investors overpay for properties just so they can say they WON!

There is a saying in real estate investing, “The money is made when a property is bought—not when it is sold!” This is because it is easy to make money when a property is purchased undervalue, but it is nearly impossible to turn a bad purchase into a good investment.

You can help your investors to not get swept up in the excitement by teaching them to set their maximum offer price prior to making an offer and getting into a bidding war.

Underestimating the Repairs

By nature, most investors have a strong self-confidence. They probably wouldn’t be investors if they didn’t. However, their confidence can cause them to overlook details, and underestimate the cost of repairs and the time it will take to complete the job.

You can guide an investor to avoid the mistake of underestimating their efforts and resources by using my Fix & Flip Property Evaluation Process. It was specifically designed to help you and your investor review a property without missing any detail.

Overpricing the Property

Many novice investors have a tendency to want to raise the after-repair value (ARV) after they close on the property or as they are making repairs. When they do this, they can price the home outside the market—and we know an overpriced property loses the initial interest of buyers and can easily become stale on the market. Then after a few weeks, price adjustments are made and eventually an offer is received that is far below what the property would have sold for had it been priced correctly initially.

We know better. Don’t make this mistake, and help your investors by accurately estimating the ARV and advise them to stick to it.

The next thing you need to do to get started attracting investors is to learn how to find undervalued off-market opportunities. Good thing we’re covering that next.

4. Know How to Find Undervalued, Off-market Properties

Experienced real estate investors are looking to buy properties that are below market and want an agent who can find them undervalued deals that aren’t already on the MLS or Zillow.

Let’s be honest here—even if there is a property on the MLS that is 20% below market, if the listing agent is doing their job correctly, they will collect multiple offers and drive the price right back up to, or beyond, the fair market value.

So the secret to finding undervalued properties for your investors is to learn how to search for off-market properties like preforeclosures, bankruptcy, and estate and vacant homes.

If you want to get started learning today, check out my article on my nine proven strategies to find hidden listing inventory: 9 Proven Strategies to Find Hidden Listing Inventory.

Once you find your investor an off-market property, it will be time to get your hands dirty.

5. Be Willing to Get Your Hands Dirty

Real estate investing is definitely not for the squeamish. You have to be willing to (sometimes literally) get your hands dirty. Ask any investor and they will tell you the same thing; “Trash Is Cash!”

Real estate investors take dirty and rundown properties that nobody else wants, and turn them into sparkling gems and make big profits doing it! So needless to say, when working with most real estate investors, you’re going to need to get a little dirty.

You may need to preview hoarder houses and even properties with mold and fire damage, and at times you may find yourself on your hands and knees in a spider web infested crawlspace checking for lead pipes or looking for the cause of the sagging kitchen floor. Ask me how I know …

So, if you’re serious about working with investors, keep the Louis Vuitton’s at home and break out the Timberlands. It can be dirty work.

6. Be a Referral Resource

More than any other type of client, real estate investors need their agent to be a resource for everything from Hard Money Lenders to plumbers.

Over the years, I have worked with real estate investors from just a few blocks away to as far away as China. Unlike 20 years ago, today investors who need your services will come from all over the country and maybe the world. They will all need your contacts and resources in order to find properties, get them ready to rent or sell, and maintain them.

Get started by creating your list of your preferred contractors, attorneys, accountants, and so on, and be ready to share it with them. They will be happy to get your referrals.

7. Learn to Negotiate Like a Boss

A real estate agent should have strong negotiating skills regardless of what types of clients they work with, but it’s especially important with investors. An investor isn’t going to live in the property; it’s strictly a business and a source of income, so they want to get the best possible deal.

You should be able to assist in getting the best possible deal on buying a property or selling a property for the highest price in the fastest amount of time. Make sure you aren’t too shy to push through tough negotiations. You may need to send multiple offers on different properties—some may be “low-ball” offers and you have to be OK with that. It takes a thick skin to work with real estate investors.

8. Invest in Real Estate Yourself (or Be Willing To)

As a real estate investor and agent, I often notice that the agents who don’t understand what a good deal is are also the same agents who don’t invest themselves. That’s because it’s easy to tell someone else to put their time and money into a deal when you’ve never risked any of your own money before!

Early into my career, I was working with an investor couple, and I had found them a new home neighborhood where they could buy a home for $150,000 and rent it for $1,500 a month (a no-brainer buy-and-hold deal).

I told them that this was a great opportunity and they shouldn’t pass it up. They replied, “If it’s such a good deal, why don’t you buy one too?” I thought for a minute and replied, “You’re right. I will!” and I purchased the home directly across the street from them.

If you are serious about working with investors, you must be willing to put your money where your mouth is and invest in real estate too. If you don’t have the credit or cash to buy a property yourself, you can offer to contribute your commission to the deal in exchange for a percentage of ownership.

9. Learn to Speak Like a Real Estate Investor

An experienced real estate investor is looking for a knowledgeable agent with whom they can share investment strategies, and they will quickly dismiss any agent if they can’t speak like an investor.

If a question like “What’s the IRR?” gives you pause, it may be time to freshen up on your investor vocabulary. If this is the case for you, then sharpen your skills by reading up on your investing terms.

Bottom Line

Real estate investors can be an outstanding clientele for any real estate agent, but many real estate investors get turned off by agents who don’t know anything about investing.

Therefore, if you truly want to grow your sales with investors, you must “invest” in yourself by learning more about real estate investing.

The post 9 Skills Agents Need to Work With Investors & Close 50-100 Deals a Year appeared first on The Close.

I’ll share the process that we followed to help you come up with the right branding for your brokerage. We’ll walk through the steps, including building a customer avatar, choosing a suitable brand name, and bringing it all together with a unique logo design, fonts, and a color scheme.

Build a Customer Avatar

Have you heard the quote, “If you’re trying to please everyone, you will end up pleasing no one”? The same is true in branding. “If you’re trying to attract everyone with your brand, you will attract no one.” That’s why your name, logo, and colors must be designed to appeal to a specific customer.

You may think that creating a customer persona or avatar is a waste of time. Honestly, when I did this exercise the first time I felt the same way. However, after completing this exercise, I found that knowing clearly who my real estate brokerage was trying to connect with allowed me to let go of the desire to please everyone.

Begin by thinking about who your brokerage’s ideal customer is. Most brokerages’ main focus is attracting real estate agents. Because without agents, you don’t have a brokerage. However, some brokerages are specifically designed to attract homebuyers or sellers, like Colorado’s Buyer’s Slice Realty, which attracts buyers by offering a commission rebate.

[Related article: The 5 Employees You Need to Hire to Grow Your Brokerage in 2022]

Obviously, you don’t want to attract agents and repel buyers and sellers, so at some level your brand must appeal to both target audiences. Once you have determined who your ideal customer is, next you’ll want to ask yourself the following questions about your ideal customer. Your goal is to develop a mental picture of this person.

• Where are they located?
• What is their level of education?
• What do they value?
• What do they spend their money on?
• What are their hobbies?
• What are their interests?
• What brands do they like?
• Which famous people do they admire, and why?

Once you have a clear picture of your customer, you can begin to develop a brand that will attract them. You can start with your brand name.

Choose the Right Name for Your Brokerage

You want your brokerage name to be both original and memorable to attract customers. Later, your name choice is crucial if you decide to expand your brand into new areas. It’s also important when you decide to purchase your domain name and when you are registering your brokerage name and trademark with your state.

[Related article: Real Estate Domain Names: 15 Tricks Experts Use to Pick the Best]

You should keep your name short—one to three words max. If you use a truly unique word or name, include a subtitle to add some clarification. Apple didn’t start out as simply “Apple.” They started out as “Apple Computers.” You can do this too by adding a tagline like “Real Estate Services” or “Realty” to your name.

6 Steps To Narrow Your Brand Name Search

When we were coming up with our name, our marketing expert used the following exercise to get us to think outside the box:

1. Brainstorm. Using a large whiteboard, begin brainstorming by writing words that your ideal customer would be attracted to. Things like the city, neighborhood, or state you are in. Features that are familiar in the area like bridges, oceans, lakes, and mountains. Don’t overlook lifestyle activities that your avatar would enjoy, such skiing, surfing, or cycling. Don’t be shy—anything goes here. Write as many words as you can think of.

Continue by writing a list of words that are associated with housing and real estate. This can be words like door, cabinet, avenue, or loft. Keep writing until you have the entire whiteboard filled out.

2. Align. Now that you have a large list of words that will interest your customer avatar and a list that they will associate with real estate, you can begin to narrow the list. Do this by crossing off words that are not exciting to you and or that don’t align with your mission, vision, and values. From the remaining words, circle the top four words in each category to arrive at your eight favorites. Write these words on a separate paper.

3. Distill. Erase the whiteboard and write the remaining eight words in two columns, with the interest words on the left and the real estate words on the right.

4. Combine. Using the words on the board, combine the words on the left with the words on the right. Your goal is to come up with a unique and catchy name. Rich Barton, the founder of Zillow, wanted the name to be unique yet familiar. The name Zillow is a combination of the letter Z and the word Pillow.

Similarly, the real estate brokerage Trelora is a scramble of the word “realtor.” If you can, keep your name short and easy to pronounce. Extra points if you can come up with something unique.

5. Differentiate. The next step is checking to see if the name is already being used. Begin by Googling the word. Add variations like “real estate” and “realty.” Is it already being used in your area? Is it being used in another state?

Trade names are registered in each state. This is why you can have a “Smith Real Estate” in both New York City and Chicago, yet they are entirely different companies. If the name is already being used in another state, then you will have a hard time expanding that name state-to-state in the future.

Check to see if the domain is being used or if it is for sale. Zillow’s Barton said the best part of giving his startup a unique name like Zillow was that he bought the domain for only $12. If the domain is already in use or is more than a few hundred dollars, I suggest looking for a new name.

6. Translate. Thirty percent of the population speaks a language other than English. Knowing this, it isn’t a bad idea to run your new name through Google Translate to see if the word has a different meaning in another language.

After spending six hours toiling over seemingly endless names, we came up with the brand name Steps. We chose Steps because as real estate coaches, we could teach agents the “steps” to become successful in real estate. Our agents can help buyers and sellers with the “steps” to buying and selling their home. Steps are also a feature in many homes, so we felt that customers can easily associate the name to housing.

Choose Your Fonts & Design a Logo

After coming up with our real estate brokerage’s unique and memorable name, the next point of business was deciding if we would use a font or logo to visually represent our brand. We worked with a designer to create a logo to represent our newly branded brokerage.

When done correctly, fonts and logos allow customers to quickly identify your brand. They also help them to associate your marketing, whether it is open house signs, online advertising, or website. This allows your customers to build familiarity and trust with your brand.

Choose a Font

Some companies spend thousands of dollars coming up with a unique logo, but the truth is you may not have to. Many successful brands, like Tiffany & Co, Coca-Cola, and eBay just use a font instead of a logo to represent their brand. A unique font and color choices can communicate sophistication, simplicity, and timelessness.

Begin by typing your brokerage’s name into a font generator website like Fontshop. These websites can show you what your brokerage’s name will look like in over 150 different fonts.

Don’t stop there. You want your font to be unique and stand out, so once you have selected your favorite font, purchase it, install it, and open it up in Adobe Photoshop or Microsoft Word. Using either program, you can select the same font and adjust the height of the letters and the spacing between the letters to give your brand name a new and unique look.

The downside to selecting a standard font to represent your brand is it may not be possible to copyright it since it isn’t a completely unique design. Therefore, if you wish to copyright your brand, you’ll need to make some changes.

For example, Tiffany & Co.’s font is based on the font Old Baskerville, with some minor changes so they could copyright their brand so it could not be used by another company.

Some companies, like Nike, use a specific font and logo together to create their brand.

Design a Logo

The ultimate goal of the logo is for it to be instantly associated with your company. However, designing an outstanding logo is far more complicated than selecting a font. This is why hiring a talented designer is crucial.

To help you come up with the best logo for your real estate brokerage, I wrote out some simple rules about logo design for you to follow.

5 Rules for Successful Brand Logo Design

1. Make It Easily Understandable. You want your logo and name to stand alone without explanation. This means if someone sees your logo, they can understand what it represents without you having to explain it to them. Brands like Target, Apple, and Nike do this well. Both Target and Apple’s logo represent the name of the company. Target is a simple target symbol and Apple is a one-dimensional apple with a bite out of it. A great example in the real estate industry is the Compass logo. Note how the “O” in Compass is stylized to look like a minimalist compass.

2. Be Unique. A quick Google search of real estate logos will show you endless images of brokerage names with an assortment of roofs, buildings, and skylines sitting above the name. While I think it is appropriate for your logo to represent housing, many of these images are overused.

How is a customer to separate you from the competition if the only differentiation with your brokerage brand is the pitch of the roof above your name?

Instead of a roof, try adding features to your logo that represent the type of housing you sell. For example, if you live in Brooklyn, NY, you could use the iconic shape of the front door of a brownstone in your logo. This is different and clearly represents both housing and New York with one simple image.

3. Don’t Distract. One of the biggest mistakes companies make is designing a logo that makes sense to them but not to their customer. This can create questions and confusion in the customer’s mind and prevent them from working with your brokerage.

One logo that comes to mind is a Japanese restaurant near me. Their logo used to look more like a toilet with the seat up than the traditional Japanese ramen bowl and lid. You can imagine the confusion this caused, preventing many customers from eating at this restaurant. Fortunately, they recently updated their logo to a more “appetizing” design.

You can avoid distracting logos by sharing your logo with friends, family, and past customers. Ask them the following questions.

1. What does this logo represent to you?
2. What values does this logo portray to you?
3. What product does this logo sell?
4. How does this logo make you feel?

Feedback can be difficult to hear, especially if you took hours coming up with the design. A little listening and understanding here can save you from having a toilet seat represent your brand!

[Related article: The Best & Worst Real Estate Logos (+ Pro Design Tips)]

4. Add a Tagline. It is easy to start daydreaming about your logo being immediately associated with real estate, but that’s not realistic because you’re not Apple… YET! In the beginning, consumers won’t immediately recognize your logo as a real estate brokerage.

As I said earlier, Apple didn’t start out as simply “Apple.” They started out as Apple Computers. So don’t worry about helping your branding along by adding a tagline like “Real Estate Services.” Like Apple, you can drop it later when your brand is better known.

[Related article: 107 Best Real Estate Slogans & Taglines (+ Slogan Generator)]

5. Hire a Pro. There are many service provider websites where you can hire someone to “design” a logo for your brokerage at a very low cost. I caution you that many of these providers reuse their designs over and over again. I found this out when a custom T-shirt logo I had someone create for me showed up on another man’s hat!

This can also make it nearly impossible to trademark your brand. If you are planning on growing your brokerage beyond your city or state, then I suggest spending the money to hire a professional graphic designer on a site like Upwork to help you create a logo that can be legally trademarked.

A Case Study: Our Brokerage Logo

Since our goal with our real estate brokerage was to grow it throughout our state and eventually into other states, we hired a professional graphic designer to help us with the logo design. After several renditions, we came up with our final font, logo, and tagline.

We felt the lower case font makes it memorable and friendly and the roof line incorporated into the “e” clearly communicates housing, but just in case, we added the tagline “real estate” in a traditional serif font. The next thing we needed to do was come up with the colors to represent our brand.

Choosing the Right Brand Colors

Customers associate company brand colors with emotions and values. Unspoken messaging like color can attract your ideal customers. No company knows this better than Tiffany & Co. Tiffany Blue or “Blue 1837,” named after the founding of Tiffany, has long been associated with vibrancy and escape. Their brand was designed to make the customer feel anticipation and delight.

If you don’t believe that colors say something about your brand … I ask you if you are willing to wear a gold coat to your next open house? (The older agents will get that joke!)

With your customer persona in mind, think about what emotions and values you want them to feel when they see your logo. Review the colors below and the associated emotions. Write down the three or four colors that are your favorite choices.

Shades and patterns can also change the emotional impact that a color can have on a customer. From the three or four colors, adjust the shades and narrow them down to two or three colors until you find the ideal color combination that will proudly represent your brokerage.

The focus of our real estate brokerage brand was to be seen as a modern boutique brokerage. We wanted our customers to feel a sense of nature and harmony with the brand. We felt that the colors white, black, and sage green represented the brokerage as a fresh and modern company.

The challenge we found was many sign companies did not have the capability of consistently recreating the correct “sage green” color and at times, we had real estate signs that ranged from lime green to an ugly greenish-yellow. Yet, I’m sure Tiffany’s & Co. has faced the same issue.

[Related article: 7 Things I Wish I Knew Before Starting My Real Estate Brokerage]

Bottom Line

An outstanding brand will not only attract your ideal customers but also the right agents to empower your brokerage to grow beyond your imagination! Take it from me, there are few things in life more exciting than seeing your real estate brokerage brand showing up around your city. Like seeing your child walk for the first time, if you find the right brand for your brokerage, it too will begin to walk on its own.

Of course, a great brand is only useful if your agents use it consistently in their marketing. To get your agents excited about your new brand, Lab Coat Agents Marketing Center creates stunning, professional templates for social media, print, signage, and more. They also offer an easy-to-use marketing app agents can use to customize their templates.

Visit LCA Marketing Center

The post How to Build a Brokerage Brand That Attracts Customers & Agents appeared first on The Close.