Tuesday, September 7, 2010

To Be or Not To Be a Real Estate Broker

Alright, I'm officially admitting it.  I'm unemployed. Though I really shouldn't be. I have an active real estate broker's license, and five years worth of experience managing real estate offices. Managing expectations as they flow inward and outward. Bypassing the detritus of hot heads, overcoming objections, motivating a lazy facebooking workforce, rattling a saber, stepping onto the field of consumer-versus-vendor battle to ring a cash register, and carefully explaining the know-how to tired and throbbing heads.  All this told is just painting light on a canvass until it seems like a matador is standing there to narrowly evade the tip of a horn in quiet acceptance of raucous cheers.

While there is some business-to-business selling, the majority of the work is B2C. Oh, like a jager shot, makes me shiver to think about it now.  I think I have no desire to step back into the hot box, even though I have flame retardant skin, which by itself may be good reason to.

The number one problem real estate agents have to overcome before they can enjoy the feel of the hunt, savor the kill, is the adding of good structure to the day.  There is nothing quite like a commission only gig.  It's like walking along a tight-rope without a net beneath you. Before amateurs become professionals, they practice on low ropes. What is the low ropes course for a real estate professional?

Well, its a few things.  The first is a game called "Ring, Ring" in which you and another RE prof, instead of tending to status updates, roleplay as if one of you were a customer responding to an advertisement. The other is the agent. All that occurs in Ring, Ring is the one agent questions the other who is the caller in a manner to identify the caller's needs, to build rapport and trust bond, to break ice and siphon the caller's mind of detail and question statements for greater clarity until that mind is dry and exhausted as a resource.  Then the agent gives teaser lines about property, a customized delivery of information based on the needs he has uncovered.  And then comes appointment time.  This is phase one of the low ropes course.

Phase two concerns the only reason a real estate agent exists, which is to provide information about real estate.  Because the customer is busy doing umpteen million things with his or her day, all day everyday, a good agent, worth his bootstraps, is in the marketplace morning, noon and night. Previewing properties, testing keys, comparing portfolios and offerings, keeping track of days on the market, meeting with property managers and property service providers, bankers and mortgage professionals, other brokers---constantly stoking in his or her mind the flames that surround real property. That should be fully 50% of the real estate professional's day, teaching themselves "The Story" as it is in this particular moment, since the other half the day concerns teaching the story to prospects they meet along the way.

And when the inbound call does come, in addition to their Ring, Ring expertise ability to identify customer/client needs, the real estate professional is, in fact, a primary resource of real estate information, a living real directory, the CIA of Real Estate.

When I was a rental agent, I often said, and it was definitely true, I could reduce my client's time and energy investment on any particular apartment search---that I could take a 2-week search if they did it themselves and git 'er done in less than 2 hours if they went with me. I rented, on average, 2x more apartments than any other office's best agent.  Who wouldn't pay $600 to have a two week vacation complete with peace of mind? To be enabled to make a decision that would influence the course of one's life for at least a year, in split second time and to know that decision was sound---would wouldn't pay for that? Most of my clients who ended up paying a realtor fee split it with their landlord and so paid, on average, less than $1000. Usually it worked itself out to be $50/month, less than a cup a coffee a day.

Apart from structure, the biggest problem for a real estate salesperson, at least in Boston, is that their principal broker, the owner of the office, is a slave driver. Most offices are set up so that the agent is slavishly producing all the leads for the company.  Every office is like this, there are no exceptions yet.  The agents must toil non-stop, posting advertisements to Craigslist, Postlets, Oodle, Hotpads, Boston.com, Facebook Marketplace---they all have metrics to maintain.  The broker says so many ads per day yield so many calls which you can then translate into a certain number of appointments and then apply your closing ratio to yield deals.

My first year in real estate, rentals, the broker said 15 new ads per day, repost old ads en masse.  And so it was that 300 ads per week generated about 100 inbound calls which turned into 20 appointments, and, after the whole everything, usually became 3-5 deals. But never was it possible to maintain this pace. Something always had to give.  For me, it was the rest of my life.  I did everything to keep my metrics secure.  This paid out well for about 3 years. But slowly and surely while the competition in the market grew in number and keener on the ploy, maintaining that metric became impossible.

Last year, I managed an office in Cambridge where the problems for the agent were compounded by the nature of the marketplace.  In Boston, if you name your top five landlords, you've identified at least 1500 properties.  In Cambridge, the top five landlords barely comprise 500 properties.  The majority of the Cambridge/Somerville portfolio of rental properties are three family houses, owned by the "indies", small here and there landlords, barely professional, trying to make buck off their blue chip real estate.  The second largest "professional" management company doesn't even use a master system for their keys, its a real shit show. Chasing down all that information, trying to bring it all into one source, and competing in an open market to boot---quality assurance has never been more of a problem.  The time an agent has for advertising in that market is even more sparse.  And I observed that the average salary for a Cambridge/Somerville rental agent was about $15,000 less than the average salary of the Boston rental agent.  With only a river separating them, its a real treat to observe such disparity.

There has come into the market, recently, some help for the agent on both sides of the river.  New database services that allow agents to quickly upload property information into a database and then, with the push of a few buttons, get that data placed, in fine looking template form, onto the major websites as advertisements.  This was indeed a much needed tool for the real estate office.  Only problem was---every office got the tool. Again the shit show---Craigslist was bombed out worse than Vonnegut's Dresden! With every agent in every office posting the same exact advertisement multiples a day---Craigslist itself responding with "throttling measures" to slow the agent down, there are queues of 20 minute sometimes waiting to post 1 ad.  More time wasted not on the high ropes or the low ropes, but in slavish lead generation.

Earlier this year, I thought I might go to work for an office in Boston that touted a newer and better system for generating leads.  Indeed, leads were scattered all over the floor when I got there.  I did have to post ads every day. These ads came from a customized database that put up templates custom designed by the owner, with links to the company site, to a specific landing page where the customer was a allowed, after registration, to view property in an online database.  I wasn't allowed to tinker with the template in any way. And the leads I was given everyday were the contact information that users provided in order to gain access to the online database.  Garbage! compared to inbound calls. I may as well have been cold calling out of the phone book.

A real lead for a rental agent is a person calling, not emailing, but calling after they have seen a few ads by the agent.  That call represents a decision to do business with the agent or agency.  Most of the time they are thinking---yes, I want information about this specific ad.  About the same frequency, while the call is taking place, that particular apartment is being rented by someone else somewhere else. But such is a turbulent market as this.  The call, initially, is less about particular apartments and more about the needs analysis.

The agent, the junior broker, should not be in the office making outbound calls or posting ads all day, but in the field, prospecting, viewing properties, rubbing the dirt of the market on their skin, and interrupted only by inbound calls.

Now I have a strong idea on how to put together a killer rental office.  I even have one lead, a broker who has an office in Cambridge who is looking for a new manager.  What I perhaps do not have at the moment is the inclination to wrap myself up in the B2C world again. Rewarding as it can be.

I am in this hour resolving to continue the dialogue with that broker though, hopeful I will find a participant willing to make the necessary investments to create a platform upon which real estate agents can stand.  I've long held the contention that in a real estate market, such as Boston, there is a greater return for the energy in being a rental agent.  Rental agents can easily perform the functions of sales agents, whereas I have observed numerous occasions where sales agents flounder in the transition.

I do however have aspirations to get involved in business-to-business sales.  I have recently opened discussion with an alternative weekly publication who needs an advertising account executive.  Let this writing also stand as a sort of resume, should anyone know of an sales role within the Boston area, perhaps you can help me make the connection. I promise to be a good referral.

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