Volume XXVII • Number 6 • June 2013 Sponsored By:
The Market Ahead
Eric Belsky, the managing director of the Joint Center for Housing Studies at Harvard University shared his thoughts on the future of homeownership in America at the recent Gathering of Eagles. Here is a snapshot of what we heard: • Americans of all ages retain a strong desire to be homeowners; • Household formation has returned to its predicted rate of 1.1 to 1.3 million new households per year and is expected to stay there – in fact depending on immigration and the general economy it could be higher in the years ahead; • While prices have risen quickly in several markets at annualized rates Commentary cont. on p2
inside 4 How Do You Turn Social Situations into Business?
6 The Eagles Gather, Learn, Share and Adapt
8 Interesting Facts from the REAL Trends 500
9 Why Does a Customer Buy
From One Vendor Rather Than Another
10 Idea Sharing With Innovative Brokerages 12 Interview with Martha Turner, Martha Turner Properties 15 REAL Trends Housing Market Report – May 2013 17 Mobile Websites and the Future They Are Facing
In looking at the profiles and performances of the 1,350 largest brokerage firms in the U.S., the largest 250 firms in Canada and the most productive 7,000 sales professionals in the United States we found something interesting… virtually all of them are beating the market. That is their increases in units and volumes are beating their respective country performance by several percentages. And have been doing so for some time. A few observations from our discussions with many of these leading firms and sales professionals. They don’t seem to spend too much time reading the news, for it has become mostly negative. They don’t invest too much time in bemoaning what used to be because they mostly believe today is fine and tomorrow Looking Forward cont. on p5
Commentary cont. from p1 Office: 7501 Village Square Drive, Ste. 200 Castle Rock, CO 80108 Phone: 303-741-1000 FAX: 303-741-1070 E-mail: firstname.lastname@example.org Web site: www.realtrends.com Editor: Steve Murray – email@example.com REAL Trends Team: Bob Bill – firstname.lastname@example.org Amy Broset – email@example.com Jaime O’Connell – firstname.lastname@example.org Travis Saxton – email@example.com Daniele Stufft – firstname.lastname@example.org Tracey Velt – email@example.com Doniece Welch – firstname.lastname@example.org Copyright 2013 by REAL Trends. All rights reserved. Material in this publication may not be electronically stored or reproduced in any form without written permission. Violators will be punishable by a fine of up to $100,000 per offense.
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not likely sustainable, most markets remain undervalued – it may explain the continued desire for both first time and investor buyers to invest in housing; • There are likely enough governors or restrictions in the mortgage market to prevent a runaway bubble to take place again – despite the “frothiness” in some markets today. All in all, his report indicates that the fundamentals of the housing market are positive and likely to remain so for the near term future. Speaking of focus on fundamentals While the downturn certainly took its toll on the brokerage business nearly 76 percent of all firms ranked in the 2002 REAL Trends 500 survived the “depression” in housing sales and remain in business. For the past several years much of the chatter in the business has been about technology, technology and more technology – mainly because it is new, it is visible and because we have been told that to housing consumers it matters. Likely, some of this is true – competing online is important just as marketing and advertising have always been an important factor. But when we speak to leaders of realty firms the main focus is now on real fundamentals of brokerage – recruiting, developing and inspiring real estate sales professionals. Sounds funny and nostalgic that after all that has happened the basics of our business remain the ability to attract, build and retain good sales professionals. In a market where the growth in the number of new sales people may not return to pre-crash levels and where the upside growth in transactions will likely level off in the next year or so, recruiting and developing people will become ever more important. The same will be true in terms of sales management and leadership. Housing consumers may look online for hours and may visit numerous sites when they do, but over 80% still use a real estate professional to buy or sell a home and two thirds of these still choose a sales person because they know one or someone they know referred them. Fundamentals haven’t changed all that much. n
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additional commentary How Do You Turn Social Situations into Business? By Michael Goldberg, Knock Out Networking LLC Very carefully! But here’s the truth. People don’t want to feel obligated to do business with you just because you took them to a ball game. Or wined and dined them over lunch. Or spent hours playing golf on a Tuesday afternoon. It doesn’t matter if you’re the best agent or broker in the world! Business happens at the speed of trust and if there is no trust, no value, no genuine relationship, and no synergy, all the ball games in the world aren’t going to change those relationships. A few years back, a wholesaler for an annuity company saw me speak at an event and hired me to speak at a couple of his “road shows.” He thought my message about networking would be a great incentive to attract financial advisors to his events. And he was right. In fact, his events were such a success that he hired me again and referred me to some of his counterparts around the country who also hired me. I returned the favor by introducing him to some of my client firms in his region.
everything right. So imagine the cost of doing only some things right? Or everything wrong? Here are suggestions to help you do everything (or at least most things) right when looking to develop social situations into business (and potential listings). Understand what networking is all about It’s not just shaking hands and kissing babies. Handing out business cards. Promoting your firm and how awesome you are at getting the property sold. Pitching your wares. OK, there’s some of that, but not much! Networking is about learning from and potentially helping people. Good people, those you like and want to help. If you help great people, they help you right back! It’s all about them
Always focus on learning about the other person until they start asking questions about you. Typically, I don’t talk about myself unless someone Now, the business was nice but I also thought I got a asks me a specific question. The exception might be great friend out of the deal. We’re based only a few if something just happened in my world that I’m hours from one another and share a love for the excited about and want to share. If something is same football and baseball teams – a rare find! Well, going on in your business or even personal life that the relationship never took off. For some reason, the is so exciting that others will relate or be interested wholesaler became reluctant to respond to my in hearing, feel free to share. But remember to shift messages. I actually saw him at a client event (I gears and start asking questions about them. By referred him) where again I was the speaker. He was being interested you become interesting! very nice to me and even apologized for being so bad about returning messages. I joked about it but it Be a connector was the last time we spoke. I still have a relationship with him but it’s not where I thought it was going. As you’re learning about people you meet, think about who you can introduce them to that will help Here’s my point. I thought I did everything right in their cause. Some brokers you work with (and those terms of building the relationship. The connection you’re looking to work with) may have a niche in felt natural and our conversations were fun and let’s say the manufacturing industry. Maybe you never felt forced. He may have felt that if we know the VP of Operations for a manufacturer and developed the relationship further that he would be can provide an introduction. Givers always gain so obligated to hire me – which I’m hoping wasn’t the look to offer help and make connections in the best case. So it’s never a sure thing even when you do interest of the parties involved. I have two hard and 4
fast guidelines – you must really like them (because if you don’t, your friends may not either) and they must be great at what they do (professionally, they must offer value and make you look great in the process). Find common ground The best way to find common ground is to ask great questions. So, how did you get involved in real estate? What college did you attend? What made you become a broker/owner? What are some of your current initiatives and goals? What are your biggest challenges? How do you market your business? What do you do for fun? If you don’t get similar questions asked in the form of, “How about yourself?” you’re doing something wrong or there’s simply not a good connection.
networking is all about! You know, it’s been great that we’ve had the chance to spend time playing golf (badly) and learn about each other’s businesses. I would love to explore how WE might help one another moving forward? Or, how can WE refer each other more business over time? Yes, you can be direct if you use WE language and make the business relationship truly that – a relationship! Out of sight is out of mind Believe it! Establish a “staying in touch” strategy that keeps you connected and learning from those you meet, like, and value. Examples include a standing phone meeting every 30 days, dinner whenever you’re in town, quarterly meetings, or whatever. I have sushi with one client every quarter (she buys!) and we discuss movies, television, family stuff, and spend about 5 minutes discussing business.
Say what you mean and mean what you say Be very specific about what you want when it comes to business. If there is a specific type of referral you want, mention it (when the time is right). The more specific you are, the more likely you are to get it. Remember the manufacturing example I mentioned earlier? If that financial advisor doesn’t mention manufacturers and related details about how they help, that connection does not happen. So make it happen! Speak the language of WE Practice using WE language and establish collaboration and working together – what true
There’s nothing new under the sun and these ideas are far from revolutionary. But most business owners (real estate agents too!) don’t have a system in place to do a lot of the little things consistently. Who are you looking to meet or get to know better? Implement some of these ideas into your day to day with centers of influence and referral sources and see what happens. Out of sight is out of mind. Michael Goldberg has helped thousands of agents and brokers generate hundreds of thousands of dollars to their bottom line. His sales consulting firm Knock Out Networking LLC is focused on helping agents generate more prospects, more referrals, and more business. n
Looking Forward cont. from p1 will be better. And they are consistently curious about how to improve – everything. At the same time these leaders exhibit a refreshing confidence that whatever comes their way can be dealt with.
There is a TED video (Ted.com) from Shawn Achor that reveals the real secret to long lasting success. Go see it. I am confident that most of the leaders in this business live that way every day of their lives. n 5
The Eagles Gather, Learn, Share and Adapt by Jeremy Conaway, contributing editor It was the 26th iteration of the Gathering of Eagles. The conference, a REAL Trends by invitation only conclave, is generally recognized as the premiere learning and networking event for those within the top 500 North American real estate brokerages. Sherry Chris, president & CEO of Better Homes and Gardens Real Estate (BHGRE), built on that theme with a creative facilitation of a panel of brokers from Atlanta, Houston, Boulder and Austin on the “Next Generation Brokerage Business Model.” The room was packed as Sherry, using the “Are You an Alpha or a Beta Brokerage?” title, carefully wove the comments of both the panel members and a number of brokers in the audience into a profile of what the new business model was going to look like. The discussion provided information regarding cultures that work in the new era, space allocations, the use of new media, branch staffing levels, emerging technologies, orchestrating company growth and leading edge customer service practices. The panel included both BHGRE brokers and non-BHGRE brokers. The industry should appreciate the fact that Sherry and BHGRE uses sponsorship resources to bring valuable information and learning experiences to everyone in the industry regardless of franchise or brand. The program next journeyed into what might best be called the uncharted waters of today’s mortgage industry. Representatives from Wells Fargo Home Mortgage, Citi Mortgage, and Shelter Mortgage painted a picture of a mortgage industry caught between legislative imperatives and regulatory unknowns. The situation is simple, but its ramifications are complex. The marketplace is still in the process of responding to the mortgage crisis of 2007 and 2008. Congress has responded with what it believes is an acceptable solution in the Dodd-Frank Act. But, as is the fate of all legislation, the implementation of the new law through a regulatory scheme is now in the hands of a bureaucracy known as the Consumer Financial Protection Bureau (CFPB). History tells us that in all likelihood the CFPB will swing the regulatory pendulum too far in its initial efforts and 6
that at some undetermined point in the future these initial response steps will be ameliorated by experience and that a more realistic regulatory process will emerge. In the meantime, two undesirable results could and might well occur. If the initial mortgage eligibility rules are too strenuous the consumer’s current lack of comfort in the housing market will be validated and the housing situation could, once again, stall the greater economy. The second dilemma arises from the fact that during the interim period many mortgage firms, brokerages, loan officers and/or agents could be using policies, procedures and practices that will be ultimately found illegal under the new law or regulations. The advice of the panel members was clear. At the present time there are adequate mortgage funds available for properly qualified borrowers. However, the current lack of clarity regarding what is a legitimate procedure under the Dodd-Frank Act is far from clear. All involved in this situation should default to very conservative practices. Compliance will be the ultimate skill set over the near term future. Beware of the regulators need to pursue high profile cases in order to make their point and establish their reputation. You don’t want to be the poster child for the new mortgage reality. Tommy Spaulding a renowned speaker, New York Times bestselling author, executive coach, entrepreneur, and leadership consultant shared with the attendees the value of building lasting, genuine business (and personal) relationships through his motivational and real world experiences. John Ikard, president of FirstBank Holding Company shared with the attendees the amazing details of what may well be the ultimate corporate culture. The bank, one of the most successful in the country, is owned by the employees of the bank and led by a combination of 46 officers and directors each of whom has spent virtually their entire career with the bank working their way up the organization from one position to another. The insight he offered provided a glimpse into the unique role that a fully developed culture can play in determining a business’s strengths and weaknesses.
Dr. Eric Belsky, managing director of the Joint Center for Housing Studies at Harvard was clearly the most prolific of the “Gathering” presenters. He unselfishly shared volumes from his encyclopedic memory on various housing issues. He first spoke to the difficulties currently surrounding the mortgage process previously discussed above. He then went on to report that the Center’s research has established that American’s are just as committed to homeownership as they have ever been. Contrary to a number of reports to the contrary he reported that Americans have not adopted a fondness for rental lifestyles. In any event the housing market has heated up and will stay there absent a disaster. “People really want to pursue homeownership.” The will is clearly there; the question is whether there is a way.
People really want to pursue homeownership. The will is clearly there; the question is whether there is a way. He addressed the issue of housing supply. “We are actually in an under supply market.” Look at how much housing starts went down. 800,000 is the median and acceptable annual level. We have been below that for several years recently. Lots more households, if they occur, should require more starts. REAL Trends provided the attendees with a copy of Dr. Belsky’s slides that offer a virtual goldmine of information. A panel of high performance agents from Florida, Minneapolis, Houston and Fort Collins provided valuable insight into the thoughts and motivations of these folks relative to their broker and brokerage relationships. Why have they not gone into the brokerage business? What do they look forward to in the market ahead? They talked about lifetime learning and the importance of focus. Issues regarding the support of core services and growing role of third party Internet based firms were discussed.
Behavior psychologist Dr. Michael Staver made a presentation taken from his current book Leadership is Not for Cowards. He made a number of excellent points including the fact that leadership problems tend to come from the need to be in control, the need to be right and the need to be all things to all people. An especially timely presentation came from the data integration panel. Jay Gaskill, Ian Morris, Lorne Wallace and Jim Zellmer made this subject come alive in an interesting and relevant manner. As the discussion evolved it became increasingly obvious that virtually every lesson learned during the Gathering to this moment was, in some way, dependent upon the broker’s ability to access and evaluate data against established standards of reporting, performance and accountability. Certainly the good news is that beta brokerages are improving on their use of data integrated into the firm’s management system. One of the most eagerly anticipated program segments was the session dedicated to the future of real estate portals. Pete Flint of Trulia, Errol Samuelson of REALTOR.com, Greg Swartz of Zillow and Andy Woolley of Homes.com did a terrific job of presenting what is clearly one of the most contested subjects in today’s North American marketplace. One of the first subjects discussed was the amazing capitalization level that some of the portals have reached and the relatively short time it has taken to build them. Predictably the discussion quickly arrived at its most contested point. Are the portals practicing or preparing to enter the brokerage business? It is this question that ignites the ongoing discussion. The portals take the position that they have no interest in being in the brokerage business. They counter by suggesting that there are five steps in the consumer experience that must be addressed (dreaming, gathering, initiating, transacting and owning). The portals point out that the large brokerage community has focused all of its attention on the transacting phase thus leaving the other four phases open. They further contend that they are investing millions of dollars and hiring the best people in the country to meet these consumer needs. They conclude by suggesting that unless the brokerages want to spend millions of dollars to duplicate their 7
efforts brokerages should partner with portals to meet consumer demands and expectations. The brokerage community on the other hand points to certain relationships and competencies that the portals are developing and suggests that these efforts donâ€™t appear to be a baby food factory. The discussion continues.
In 2013, for the 26th consecutive year, the eagles soared, the eagles learned and the eagles shared their unique perspectives with new eaglets. This yearâ€™s program demonstrated that the Eagles of our industry are a tenacious group capable of transition and adaptation. They are a marvelous group and this was an awesome program. n
Interesting Facts from the 2013 REAL Trends 500 Top 10 Movers by Transaction Sides Rank 1. 2. 3. 4. 5. 6. 7. 8. 9. 10.
Company HomeServices of America NRT LLC Realty ONE Group Hanna Holdings, Inc. The Long & Foster Companies Prudential Fox & Roach Realtors RE/MAX Results Baird & Warner Allen Tate Companies Prudential Rubloff
Location 2011 Sides 2012 Sides Sides Increase Minneapolis, MN 113,556 151,017 37,461 Parsippany, NJ 255,410 289,614 34,204 Irvine, CA 15,475 22,770 7,295 Pittsburgh, PA 30,797 37,986 7,189 Chantilly, VA 61,030 65,912 4,882 Devon, PA 19,257 23,317 4,060 Eden Prairie, MN 11,843 15,633 3,790 Chicago, IL 14,489 18,269 3,780 Charlotte, NC 12,405 15,932 3,527 Chicago, IL 3,632 7,055 3,423
Top 10 Firms in Growth in Transaction Sides 2008-2012 Rank 1. 2. 3. 4. 5. 6. 7. 8. 9. 10.
Company Location 2008 Sides 2012 Sides Sides Increase HomeServices of America Minneapolis, MN 123,756 151,017 27,261 Realty ONE Group Irvine, CA 4,400 22,770 18,370 NRT LLC Parsippany, NJ 275,640 289,614 13,974 Coldwell Banker Honig Bell Joliet, IL 2,722 9,958 7,236 Baird & Warner Chicago, IL 11,300 18,269 6,969 RE/MAX Results Eden Prairie, MN 9,685 15,633 5,948 Prudential Rubloff Chicago, IL 1,573 7,055 5,482 Hanna Holdings, Inc. Pittsburgh, PA 32,512 37,986 5,474 Prudential Americana Group Realtors Las Vegas, NV 6,461 11,318 4,857 Keller Williams Realty - The Rawls Group Atlanta, GA 3,969 8,352 4,383
Top 10 Core Service Providers
Rank 1. 2. 3. 4. 5. 6. 7. 8. 9. 10.
Company NRT LLC HomeServices of America The Long & Foster Companies, Inc. Hanna Holdings, Inc. Prudential Fox & Roach Realtors Allen Tate Companies Crye-Leike Realtors Shorewest, Realtors Real Estate One Mel Foster Co.
Location Parsippany, NJ Minneapolis, MN Chantilly, VA Pittsburgh, PA Devon, PA Charlotte, NC Memphis, TN Brookfield, WI Southfield, MI Davenport, IA
Total Core Services Transactions 279,885 155,032 46,269 37,508 24,683 16,829 15,463 12,603 11,249 8,275
Why Does a Customer Buy From One Vendor Rather Than Another? Posted by Inc.com on May 7, 2013 According to research recently conducted by The Rain Group (detailed report here), customers tend to buy from sellers who are superlative at the following tasks: 1. Bring New Perspectives and Ideas If customers could diagnose their own problems and come up with workable solutions on their own, they would do so. The reason that they’re turning to you and your firm is that they’re stuck and need your help. Therefore, you must be able to bring something new to the table. 2. Be Willing to Collaborate Customers absolutely do NOT want you to sell them something, even something that’s wonderful. They want you to work with them to achieve a mutual goal, by being responsive to the customer’s concerns and ways of doing business. Ideally, customers want you to become integral to their success. 3. Have Confidence In Your Ability to Achieve Results Customers will not buy from you if you can’t persuade them that you, your firm, and your firm’s offerings will truly achieve the promised results. It is nearly impossible to persuade a customer to believe in these things unless you yourself believe in them. You must make your confidence contagious. 4. Listen, Really Listen, to the Customer When they’re describing themselves and their needs, customers sense immediately when somebody is just waiting for a break in the conversation in order to launch into a sales pitch. In order to really listen, you must suppress your own inner-voice and forget your goals. It’s about the customer, not about you. 5. Understand ALL the Customer’s Needs It’s not enough to “connect the dots” between customer needs and your company’s offering. You
must also connect with the individuals who will be affected by your offering, and understand how buying from you will satisfy their personal needs, like career advancement and job security. 6. Help the Customer Avoid Potential Pitfalls Here’s where many sellers fall flat. Customers know that every business decision entails risk but they also want your help to minimize that risk. They want to know what could go wrong and what has gone wrong in similar situations, and what steps you’re taking to make sure these problems won’t recur. 7. Craft a Compelling Solution Solution selling is definitely not dead. Customers want and expect you to have the basic selling skill of defining and proposing a workable solution. What’s different now though is that the ability to do this is the “price of entry” and not enough, by itself, to win in a competitive sales situation. 8. Communicate the Purchasing Process Customers hate it when sellers dance around issues like price, discounts, availability, total cost, add-on options, and so forth. They want you to be able to tell them, in plain and simple language, what’s involved in a purchase and how that purchase will take place. No surprises. No last minute upsells. 9. Connect Personally With the Customer Ultimately, every selling situation involves making a connection between two individuals who like and trust each other. As a great sales guru once said: “All things being equal, most people would rather buy from somebody they like... and that’s true even when all things aren’t equal.” 10. Provide Value That’s Superior to Other Options And here, finally, at the No. 10 spot (below everything else) comes the price and how that price compares to similar offerings. Unless you can prove that buying from you is the right business decision for the customer, the customer can and should buy elsewhere. n 9
brokerage Idea Sharing With Innovative Brokerages By Tracey Velt, contributing writer
Here’s what they had to say:
A little over a year ago, Better Homes and Gardens Real Estate started Next Generation Brokerage, an idea sharing forum that invites what they call Beta Brokerages to join the conversation. Beta Brokerages are those that are “using the latest, most flexible technology.” Building meaningful brands. Reaching the public in new and different ways,” according to nextgenbrokerage.com. “They are works in progress. Constantly changing. Evolving. Doing things that have never been tried before. And they come in all sizes, shapes and business models. They differ in how they connect with consumers and agents.”
Sherry: Tell us about your company.
There are currently 40 brokerages that are part of this forum. Better Homes and Gardens Real Estate President & CEO Sherry Chris and a panel of beta brokerages recently spoke at the REAL Trends Gathering of Eagles. Panelists included Kevin Levent of Better Homes and Gardens Real Estate Metro Brokers in Atlanta, Lane Hornung of 8z Real Estate in Boulder, Kelly White of GoodLife Team in Austin and Mark Woodroof of Better Homes and Gardens Real Estate Gary Greene in Houston. “So far in our research, there are four common themes from this group,” says Chris. They are: 1. Office space as it exists doesn’t need to be the same. Many of these brokerages are doing well with 15 to 20 square feet per agent. 2. Each company is actively engaged in new media and building a strong marketing strategy around that. 3. These brokerages are using cloud technology and didn’t encumber the companies with legacy systems. 4. They all found a way to provide exceptional customer service that is different from their competitors.
Lane: Our business model is predicated on volume of real estate sold. We target a small group of real estate professionals who have high production. We have a Marine Corp. philosophy in that we will take our time filling our slots with those who fit best. I was in the Marine Corp. and those beliefs loosely reflect the culture of our company. Kelly: We started in 2008 and decided to build an experienced company to start. We’ve had success in hiring those from outside of the industry who have been successful in sales. We get them up as quickly as possible. Our passion is creating professionals in the industry, but we also created sales systems around a professional sales person. Kevin: Our company is 32 years old. We have 25 offices and 1,600 sales associates. We’re a traditional company on the face but our model is built around a unique architectural design that attracts the community. We have 40 square feet per person. We created a training program that is reward driven. We reward with more leads, marketing dollars and award for achieving certain levels through training and more. We launched a program (Vets to Reps) aimed at getting veterans into jobs. That is a marketplace that is growing and they are in need of jobs now. Our company takes on the costs of training these vets who spend 60 days in that program. Everything in our company has to be wrapped around the program: training, recruiting, marketing and rewards. It’s almost a company inside a company. So far, we’ve put 100 vets through real estate school and of those, about 15 joined our company and 25 others are testing at state level. Mark: We are using the concept of market centers. We have 20 offices and 850 people. Instead of mega offices, we have small community-minded offices.
We’re providing an experience for both clients and sales associates. It’s about lifestyle. People like the idea of having a community area. We have bistro coffee makers and comfy chairs. Sherry: What is your company culture? Kelly: We are accessible. The brand is part of our culture—A Good Life. We talk about it in all areas, with agents and customers. We hire based on whether or not an agent has the same core values that our company has. We have fun and have an open bullpen with high tables, a lounge and Espresso machines. Everyone wears noise-cancelling headsets. To give you an example of our culture, we Ring the Rooster. A while back someone started throwing a rubber chicken around the bullpen. When a customer closed, we would ring a bell. Now, we have the rubber chicken attached to the bell and when someone closes, we ring the rooster. It’s just a quirky fun thing we do. People love it. We also have a Friday afternoon club where we serve a purple cocktail that we created. We adhere to many of the concepts from the book, Conscious Capitalism, by John Mackey. Mark: In our office everyone wears green. Our culture starts with core values. We made those core values short and easy to understand. Most important, we have managers who understand and promote the culture. The team members do the most to keep that going, living it everyday. We don’t hold on to people who aren’t a good cultural fit. Lane: The Marine Corp. has a very strong culture. We’re not that extreme but we do want people to self-select out. Culture is about the hard decisions you make—decisions that cost you money. For it to work, the core values of the company must line up with the person who controls the company. We are a purpose-driven company. We developed some of our culture based on the book, Start With Why, by Simon Sinek. We believe there are things in our industry that are broken and our purpose is to fix those things.
Kevin: We give canned hams to top producers. The culture is the living thing. We built it around the people but they have to want to be part of it. Find out why people stay at your company. We spent $50,000 on focus groups to determine why people stay at our company. Guess what? It wasn’t about the money, they stay because of how they feel. Our managers roam the offices and we give out goofy gifts like canned hams and underwear at our awards banquets. We do a lot of glad-handing. I make hamburgers in the parking lot. These things make agents feel good. I could disappear for six months and the culture keeps living. Sherry: How important is technology? Kelly: We had a model that was about the agent providing a five-star experience. In doing that, we had to find a way to standardize the technology we were using. We noticed that no one was spending money determining which technology was useful. We created one web-based platform that is easy to use and integrates. It’s flexible. We did our due diligence and tested it before implementing it and we trained our agents on how to use it. Lane: Our company came from technology and moved into real estate. The most important decision we make is what not to do. We keep the list of must-haves small. Our first question is always, “Is it a lead generator?” For our back office, we follow in the wake of Google. We use every aspect of Google that we can. We don’t have a single system, but we rely on cloud technology. Sherry: How do you balance that the agent is your customer but the end consumer is just as important? Kevin: Agents realize that they no longer are in control. We offer satisfaction and service. We don’t sell a product; instead we control the service. In many cases, the agent is seen as a walking key, so the relationship between agent and consumer is the missing piece. Training is important. And, you have Idea Sharing cont. on p13 11
featured leaders Martha Turner CEO, Martha Turner Properties, Houston, Texas Interview with Tracey Velt, contributing writer Started 32 years ago, Martha Turner Properties now has seven offices, 220 sales associates and 75 employees in the Houston area. REAL Trends interviewed Turner to find out her secrets to success. REAL Trends: How do you do business differently? Turner: It’s the culture of my company. I set that culture up in 1981 when I first started. I was a schoolteacher for 15 years and was a very organized, step-by-step person. I was creative in my teaching methods— teaching children multiplication tables by singing them, etc. That carried over into my brokerage. I’ve continually provided additional learning to my agents, and I’ve been a specific part of this learning experience. I conduct all of my sales meetings. My outer offices are connected via television, so every Tuesday morning I welcome the whole company. I start every sales meeting with good news such as a human-interest story or a parable from the bible. I use every sales meeting to teach a new skill or strategy. When I finish I say a short prayer, I have salespeople and employees of all faiths, and I refer to our holy one as God. I’ve never had anyone disagree. The good news can apply to everyone. I pride myself in knowing the market and I do it by going on as many listing appointments as I can. I have 220 agents and they know that if they need me, all they have to do is call. 12
We have very little turnover. My employees have been with me for 15 to 20 years and it’s the same with many agents. On occasion I have someone who is lured to another company or who decides to retire, but we rarely have turnover. I put my agents first and foremost. Every day at the close of the workday, my office is empty. Employees and agents are gone and they have a right not to come back until the morning. I want to make sure every day at Martha Turner is the most valuable day they could ever spend in real estate. I employ national speakers to speak to my company. I invite motivational speakers who many have nothing to do with real estate. We also have someone come in and talk about organizing taxes. We role-play. We are unique. REAL Trends: What are some trends you’re seeing in your vertical? Turner: Until this year we were operating on an island in Houston. A lot of people moving here were being transferred from the east and west coasts but couldn’t buy because their houses wouldn’t sell in old places. We had to lease a lot. Now that they’re selling their homes, we have a shortage of listings. People who are the wealthy ones in Houston are a little different than the ones we get from outside. People with new money are willing to move into areas that are deemed undesirable by the old wealthy contingent. One thing that hasn’t changed in most markets is that every buyer likes an open floor plan. REAL Trends: Do you have any hobbies outside of your career? Turner: I love my company. My priorities are God, family and job. I’m soon to be 73 years old, and all I want to do is be here to bless people and enjoy the day.
I’ve been able to travel quite a bit. My husband and I owned an apartment on The World, a condominium ship that was built about 15 years ago. We traveled for six years. But, we sold that last year because we weren’t using it as much as we could. Now we’re building a beautiful home on the bay in Galveston. We’ll have kayaks that the grandchildren will enjoy. We have grandchildren from age 18 down to age 3. My husband, Glenn, retired several years ago and has been my CFO for over 10 years. REAL Trends: What are you passionate about as it relates to your business? Turner: I’m at a point in my life where I spend a lot of time in ministry work. I support ministries that help women and children. There’s a need for homes for women and children who have to make a living. Every day I wake up and think about what I can do to be of help to someone in my company or to someone in need. I’m passionate about helping other people and helping them achieve success.
I love it when someone tells me their goals and I help them make a plan to reach those goals.
Every day I wake up and think about what I can do to be of help to someone in my company or to someone in need. I’m also passionate about the handwritten note. Email and telephone calls are important, but more powerful is a handwritten note. Honestly, I’m just so proud that the company I created can run without me. I’ve left an impression on the company that will stay with the company going forward. You don’t want something you created to die when you’re not around. n
Idea Sharing cont. from p11 to remember that consumers don’t care who you are. They only care about how you can help them. Kelly: The brand matters to the consumer. Agents can’t do that without the help of the brokerage. We work with agents to provide an experience to the consumer. We’ve been paperless for three years. We provide everything for them. We offer a brand promise to the consumer. Customers will rate us on Google, and we have metrics around the five-star reviews. You must have a brand that means something to the consumer and then train agents to deliver on that. Mark: We believe that we’re a partner with both the agent and the consumer. We are not there to deliver service; we’re there to get consumers results. We’re
there to make a difference. Nothing happens for anyone unless you rally around the consumer brand. We are going to reviews on Yelp. We need to know what people are saying and do something about it. Lane: Every closed client gets a chance to review the company and the real estate agent. The No. 1 thing that determines the consumer experience is how good the agent is. We have a centralized system for marketing and we’ve got call centers. But, it’s the agent’s ability to deliver the experience that dictates our success. For more information on the Beta Brokerage project, go to www.nextgenbrokerage.com. n 13
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market news HOUSING MARKET REPORT MAY 2013 May 15, 2013 – The REAL Trends Housing Market Report showed that the combination of new and existing home sales in April 2013 strengthened from the prior year and at a faster pace than in prior months. The annualized rate of the combination of new and existing home sales increased to 5.731 million in April 2013 up from the 4.932 million recorded in April 2012. The average price of homes sold in April 2013 was up 7.9 percent from the average price of homes sold in April 2012 marking the 13th consecutive month of increased home sale prices. Housing unit sales for April 2013 were up 19.0 percent in the South, the strongest showing in the country. The next highest region was the Midwest and West regions where unit sales were up 15.3 percent. The Northeast was up 11.8 percent. The average price of homes sold in April 2013 increased 7.9 percent across the country, a better showing than in the prior month. The West had the best results with the average price of homes sold increasing 15.7 percent followed by the Midwest region at 8.5 percent. The South region showed an increase of 5.2 percent while the Northeast lagged with the average price of homes sold decreasing by 0.1 percent. “April 2013 sales of new and existing homes increased at the fastest pace in several months evidently shaking off the impact of shrinking inventories. The two regions of the country with the lowest average sales prices, the South and Midwest, continue to outperform other regions in terms of unit sales increases. The average price of homes sold was up solidly again due to supply and demand imbalances. As this report and other housing indicators show the scarcity of inventory and buyer demand are creating a situation where prices are advancing at far greater rates than had been predicted due to high levels of housing affordability and restricted inventory,” said Steve Murray, editor of the REAL Trends Housing Market Report. n 15
REAL Trends April/March Housing Market Report (Versus same month a year ago)
April 2013 Closed Sales
April 2013 Average Price
March 2013 Closed Sales
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National Regional Report
20.0% 15.0% 10.0% 5.0% 0.0% -5.0% -10.0%
April 2013 Closed Sales
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March 2013 Closed Sales
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technology Mobile Websites and the Future They Are Facing By Travis Saxton, marketing and technology manager Mobile is abuzz lately at our events and other industry related conferences. It certainly will continue to grow and get more innovative. Many are debating a native mobile app, one in which the clients download from the app store, versus a mobile website that the website visitor gets automatically when landing on your normal URL. The debate is a bit of a chicken and egg scenario. Many feel, including REAL Trends, that a mobile app can be an extremely effective part of a mobile marketing strategy, but not the end all. Essentially promoting the mobile app through your mobile website is a key ingredient in making your mobile app successful. A great example of this is visit Zillow.com or even our own site realtrends.com from your mobile phone. You are offered their/our mobile app when you land on the page.
Brokerage sites on average are getting 1 in every 4 visitors from a mobile device so you already have the eyeballs or the conduit necessary to market your mobile app and get widespread adoption. The problem lies in that most brokers that do both a mobile app and a mobile site do a poor job of cross promoting and relaying the value of the mobile app from the mobile site. Recently REAL Trends interviewed Gregory Borodaty, CEO of Aumnia (www.aumnia.com). Aumnia is a mobile website development company that represents a few of REAL Trends technology consulting clients. Greg injected some fresh insights into this conversation and we really identified with his perspective of the mobile website strategy. He
said “a mobile website plays two critical roles in a brokerage’s/agent’s value proposition to the consumer. The ability to portray consistency from a brand marketing perspective across multiple screens and most importantly the ability to deliver to the consumer what they want when they want it.” The latter part of that admission will be the focus for a bit. As the consumer is in an “on demand” status this day and age. Many do not want to download or wait for a mobile app to install on their phone to get the bits of information they want now. Think of two very common scenarios in which a consumer either is at home during the evening (watching television, dinner, etc.) or they are out actively searching properties. A typical strategy is the agent will send a link to a property detail page and the first thing most consumers will do today is to check out the link on the phone. In many situations this link sent is either not mobile friendly or not action friendly. This is why the consumer is going to the site or visiting in the first place so we need to adapt to their needs. Examples of this are very simple click to action buttons to increase conversions. Like Click to Text, Click to Call, and Click to Email. The old adage of a contact form collecting a bunch of irrelevant information is now outdated and intrusive especially from a mobile device. With mobile leads contributing to a significantly higher lead capture rate and conversion to action rate we need to put more attention into integrating our mobile strategy with the habits of consumers. One such way is geo-location based search so if your consumer is out and about they can instantly see the properties around them. I was surprised (as was Greg with Aumnia) with the breakdown of mobile search habits. He says “although its critical for long term success and you have to have geo-location to quickly display nearby properties contrary to popular belief this only accounted for 25% of mobile property searches. The other 75% came down to specific “advanced” methods like suburb, neighborhood and street address with the latter of those three accounting for 30% of all mobile property searches.” 17
You can see the “long tail” still prevails and consumers are using the mobile sites to find very fine tuned searches like actual street names, etc. So we as real estate professionals need to be cognizant of this and deliver a high quality mobile experience to the consumer regardless of whether they are on the home page of your mobile site or a property detail page. Ideally, the agents could deliver a property detail link to the consumer and the consumer could click to call/text or email back to their agents to stream line the process and increase interaction.
In the debate of mobile app versus mobile website, our stance is pretty simple. Both can be highly effective and a clear mobile marketing strategy needs to be adopted in ALL areas of your business. It’s critical to engage the consumer not only during the search process but all the other areas like mid and post transaction. This mobile strategy if you choose to do both a mobile website and app need to be thoroughly evaluated based on the consumer and ask yourselves the following questions:
Tracking is currently a sensitive topic with mobile websites and because these consumers are more demanding we should be holding agents more accountable on swift response times. Greg mentions “that they typically like to establish separate phone numbers and emails to better understand the consumer and hold their systems more accountable.” Tracking these leads ensures a maximum ROI from a brokerage or agent perspective towards their mobile marketing strategies.
Are these two products working in conjunction with each other or competing?
REAL Trends asked Aumnia’s CEO about what the future of mobile technology yields. He surprised us a bit by his second response but he stated: 1) Context/content is key: Mobile sites are becoming more intelligent and can better understand what the consumer’s intent is based on numerous data points like location, etc. Giving the consumer the proper content quickly to their mobile device on the go will only get stronger and more advanced so they can then get to the end result even faster. Are you prepared?
2) The move to truly wireless computing: Long term the ability to seamlessly adjust to a person’s habits on the fly will be a key in the future of mobile computing. Imagine getting a property link on your phone and you check it out quickly and it then beams right to your TV to instantly see it on a 60” HD TV and as you and your wife decide to get in the car to check it out a heads up display (HUD) navigates you directly there without any input just streaming information from your mobile phone. This type of technology is trickling into our market and home security/ comfort automations are there just the seamless integration is quickly catching up. We will see an impact in the real estate industry long term.
How will our mobile app differ from our mobile site?
What are the key differences in how consumers will use each product? What type and how are we delivering our content to the mobile consumer? Do we have instant and accountable calls to action? Lastly, and maybe most importantly, what type of engagement can we deliver to the consumer after they have finished their home search and are now a client for life. This aspect is the most overlooked as most real estate brokerages only deliver a quality search environment, but what happens when I am no longer actively searching? The answer is…….. DELETE About Aumnia Aumnia is a mobile application development and technology company. Unlike other mobile application development companies, they’re focused on mobile web technologies as they believe that developing for the open web has superior and longer lasting value for our clients and their customers than developing applications for closed ecosystems. They’ve worked with some of the best real estate companies and brokerages across the country to develop mobile web applications that drive results for their businesses. Their goal is simple, to build and deliver the best mobile web applications and technologies. For an example of their work visit REAL Trends client and friend www.comey.com from your mobile device to see Aumnia’s technology in action. n
editor’s note REAL Trends Upcoming Events 2013 - 2014 REAL Marketing and Tech Summit October 16-18, 2013 Denver, Colorado. Attendance will be limited to 90 persons. Based on demand for “hands on working sessions” REAL Trends will host a small summit of professionals working in technology and marketing positions. This two day event will focus on both basic and advanced online marketing solutions and is organized as a working session, with presentations from topic experts wrapped around small work groups attacking real issues. REAL Trends Leadership Institute Emerging Leaders Dates to be determined – January 2014 Denver, Colorado Attendance is limited to 50 persons. By popular demand we are repeating the working format from our January 2013 Emerging Leaders
conference. Open to new and emerging leaders wanting to know the fundamentals of leading and managing a residential realty firm with focus on recruiting, training and communications within a brokerage firm. 2014 Gathering of Eagles April 30 – May 2, 2014 “Legendary Leadership” We are honored and pleased to announce that former President George W. Bush will be with us as keynote speaker at the opening afternoon. The program will be open to only 300 persons. President Bush will be speaking on leadership issues and taking questions from the audience via a moderator. The main program this year will focus on several high level issues for brokerage leaders including the future of privately held brokerage firms, second generation leadership development and a workshop on how leaders are using social media to reinforce the culture of their companies. n