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How you can capitalize on any recession

(BUSINESS) Some see their local market struggles and have fear, but this is a case for quality control and accountability as the cure.

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In October of 2000 three Americans, George Ackerlof, Michael Spence and Joseph Stiglitz, were awarded the Nobel Prize in economics.

Their work essentially focused on information economics and the implications of asymmetric information – when the party on one side of a transaction has much better information than the party on the other side i.e. producer vs. purchaser, seller vs. buyer, insider vs. outsider.

In other words, a service provider possesses greater information regarding his/her true capabilities than the consumer deciding which provider to choose.

How does the side with the greater information effectively use and benefit from information advantage?

These three Nobel Laureates demonstrated more specifically that consumers prefer, have higher confidence in and are willing to pay more for products and services backed by a “guarantee.” The assumption on the part of the consumer is that value and quality are related to assurances of consistency and reliability. Consumers believe that the manufacturer or service provider presenting a “guarantee” is more likely to perform. This greater certainty offers greater value.

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The notion that consumers prefer and will pay more for services and products that are guaranteed is not difficult to understand. Taking advantage of this principle to attract more clients and earn higher fees by guaranteeing service performance is, however, not easy to execute. It is especially difficult in an Independent Contractor culture.

The risks associated with guaranteeing a product or service only make sense when systems, processes, and controls are employed; when accountabilities are increased and problems or defects are reduced.

In the case of real estate service, how can any organization manage, control and otherwise influence behaviors where most activities take place “out of sight and beyond reach” by independent service providers? And if imposed standards, processes and controls solve one problem might they not create another – agent retention?

According to the three Nobel Laureates, attracting more clients and earning higher fees as a result of offering a greater certainty of better service is not a hopeful business assumption… it is an economic reality!

How can you capitalize on this reality?

The first step is to provide the leadership team, sales professionals and support staff with a clear understanding of the principles of consumer-centric service – presenting foundation education. In an industry that is frequently provider-centered, this is not an automatic.

From here it’s basically an eight-step process:

  1. Develop consumer based standards of service
  2. Create and implement a defined service process (each step)
  3. Implement a system for delivery consistency
  4. Measure performance with detailed metrics
  5. Commit to benchmarking and ongoing analysis
  6. Provide timely, multiple level performance feedback
  7. Offer recognition, awards and rewards for high achievers

But does this really work?

During the past two years thousands of real estate sales people and their managers have voluntarily elected to implement just such a process. They are attracting more clients, keeping them longer and creating higher levels of service satisfaction.

For example, the Quality Service Certified® (where I am the President and COO) real estate professional follows a defined service process, delivers it in writing to every client (every time), guarantees performance and submits to a service evaluation survey at the end of every transaction for heightened accountability. Do prospective clients see any advantage? As a consumer wouldn’t you!

The breakthrough: Service

When service performance results are compared between QSC agents and non-QSC agents who are from the same company, some interesting differences are noted. QSC agents are achieving 15-35% higher levels of client satisfaction and reducing dissatisfaction by as much as 80%. Additionally, clients are indicating a 50% greater likelihood of doing business with and referring business to their QSC agents over non-QSC agents in the same company, in the same markets at the same time.

Independent validation of service results through outside organizations such as Quality Service Certification, Inc. and Leading Research Corporation add the kind of credibility that is very difficult for an organization to generate when judging itself.

Quality control and greater accountability are essential ingredients in delivering measurably better service. In these uncertain times, prospective clients prefer and will pay more for products and services that offer greater certainty. But certainty requires more than a promise to perform.

Quality control, greater accountability and the systems supporting these objectives, can be developed through your own investment and creative efforts, or you can partner with an organization that understands your business and possesses existing resources.

Rx for recession… control service quality and raise professional accountability.

#accountability

Kevin is a Co-Founder, President & COO of Quality Service Certification, Inc. (QSC) and earned an MBA from The University of California – Irvine. With over 20 years of Real Estate experience, his primary focus is on consumer research, developing better service management systems, and sharing the importance of consumer-centric service standards, transparency and accountability to create measurable and meaningful differentiation and long term advantage for those professionals that put customer needs first.

Real Estate Brokerage

COVID-19: Huge list of resources to quickly help you and your clients

(NEWS) NAR has compiled a comprehensive list of resources for Realtors, homeowners, and insights on how the stimulus bill will impact the industry.

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As the COVID-19 crisis continues to rattle the globe, many of us have far more questions than answers. Realtors are trying to figure out how to be socially responsible, stay healthy, and maintain their business.

The National Association of Realtors (NAR) has collected several resources to help you and your clients stay informed of industry happenings during these difficult times.

Click the following headlines for the full lists.

Resources for property owners

This guide collects resources curated by trusted sources like the American Land Title Association, bank regulators, and the Consumer Financial Protection Bureau to provide property owners with guidance during the COVID-19 crisis. Some of the resources provided include:

  • A real-time list of county record office closures
  • Disaster recovery and business continuity plans
  • Information from major banking institutions regarding their policies and customer outreach
  • Information from mortgage insurers
  • Federal Housing Administration (FHA) foreclosure and eviction moratorium

Guidance on tech-driven alternatives to open houses

As more states head into lockdown or shelter-in-place situations, open houses are a no-go now and for the foreseeable future. While many are concerned about what this means for their business, there are options available as long as you are willing to get creative and embrace technology. In order to help facilitate this shift, the NAR has created a set of guidelines to help members navigate this situation in a way that is safe for them and their clients.

How stimulus recovery will affect the industry

A $2 trillion economic relief bill just passed the U.S. Senate and is expected to pass through the U.S. House and Presidential office without issue. The NAR has been hard at work to make sure that self-employed and independent contractors will see relief from this stimulus package.

What are Realtors doing to help their communities?

Realtors are a vital part of their communities; they know the neighborhoods and small business owners whom they see every day. During the COVID-19 crisis many realtors across the country are doing their part to help the most vulnerable people in their communities.

This is a constantly evolving situation as every state is being faced with tough decisions that affect the health of the citizens and economy. We encourage realtors to stay safe and continue checking resources as the situation progresses in their area.

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Real Estate Brokerage

Project Hatch: Advice directly from successful people

(BUSINESS) Project Hatch shares stories of major founders around the world in an effort to help others grow professionally and “found” their dreams.

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Even if we’re at the tip top of the professional food chain, there is always something that we can learn from those who came before us. Additionally, there is always something that can be learned from peers (or mentors if you’re continuing the career-ladder climb).

This is the intent of Project Hatch, which is designed to tell the stories of founders in order to inspire others who are looking to go down that path. “The best way to learn how to build a company is from those who have done it before,” according to Project Hatch’s official website. “Project Hatch features case studies and analysis from the view-point of founding teams.”

Examples of case studies include some current heavy hitters, such as Tyler Handley – founder of Inkbox, Alex Zaccaria – founder of Linktree, and David Ciccarelli – founder of Voices.com. Their stories include where they are and how they got there.

“So for us, the primary drivers of growth have typically been performance marketing and the associated word of mouth and the organic and return off that. So Facebook, Instagram, Pinterest, Snap and we’re experimenting with TicTok right now,” – Tyler Handley

“We created a solution to a problem that we thought was unique to us; but it turns out millions of other people had the same problem. One of the key moments of validation for us, was early on, when the platform was uploaded to Product Hunt,” – Alex Zaccaria

“Exactly two years ago, we raised $18 million USD from Morgan Stanley Expansion Capital out of San Francisco. As growth stage equity investors, they were attracted to a large and growing market for voice and audio products,” – David Ciccarelli

The case studies include four key areas that are broken down for major industries. These include: ecommerce, media, agency, and SaaS. With ecommerce, you can learn how to create scalable stores; with media, you can find out how media giants receive hundreds of millions of views on different social platforms; with agency, you can learn how to be more innovative in order to standout in today’s competitive market; and, SaaS offers the most passive form of online income when done correctly, so they feature those who have done it (and are making $600k per month!)

Project Hatch boasts over 15,000 monthly users, over 33,000 monthly page views, and 111 monthly interviews. The site also includes run downs of celebrities’ net worths (so, be sure to look through that if you want to feel bad about yourself).

This is a solid platform that offers something interesting for everyone at any point in their career. However, I would be remiss if I didn’t mention that, since there is so much professional advice out there, don’t go overboard looking into so much of it that you forget to do your own work.

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Real Estate Brokerage

How do you know it’s time to become a broker?

(BROKERAGE) It sounds dreamy to open your own brokerage and be your own boss, but when is it TRULY time become a broker?

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Everyone joins the real estate workforce for a different reason. Some to flip houses, others to represent buyers, and so forth. And most are happy with their broker of choice, but for others, the itch to become a broker becomes so great that it cannot be ignored.

But how do you know when it’s time to become a broker? Maybe it’s time for a new broker because you’re unhappy, but it’s also possible that you have the skills and drive to lead your own company.

To find out, we asked three brokers with thriving businesses:

Jennifer Archambeault is the Broker/Owner of Urban Provision, REALTORS®, a growing Texas brokerage.

We asked her how to know when it’s time to create your own brokerage:

It is time to create your own brokerage when the limitations of your current brokerage restricts your personal or professional growth, hinders your ability to serve your clientele at the highest level or you are no longer able to see the value your current broker brings to the table.

Regardless of the reason, it is important to be mindful of your competency and ability to handle the responsibilities involved with running a brokerage and/or managing or mentoring agents.

Is there a tipping point?

There are often many tipping points causing an agent/broker to dream about having their own brokerage, but they often only clue in on one when they are parting ways. A lack of respect or dissatisfaction within your current company, the inability to come to terms on differences with management, not seeing eye to eye on the company’s mission or vision and not being able to serve clients to the desired standard often top the list of tipping points if the agent leaves disgruntled.

However, there are times it is purely a natural transition having nothing to do with any reason mentioned above and solely taking your career and income to the next level.

Is it better to do so because of a gap in the market or because someone’s independent streak is unavoidable?

Personally, I think it is the latter more than the former. Gaps in the market will change over time but often the desire to be independent doesn’t ebb and flow as easily. If someone’s independent streak is unavoidable they often exude qualities that allow extreme focus to continuously keeping their eyes on a prize.

There are benefits of having your own brokerage, but there are also limitations as well. Some people’s independence can be a hindrance to their business especially when they want to start their own brokerage because they simply do not like or cannot continually follow the rules.

I believe it is better to part ways to build your own brokerage or brand because it satisfies a personal or professional growth need rather than leaving your previous company disgruntled. The latter generally allows for a flawed mindset.

What do you wish you had known before starting a brokerage?

Do not always focus on Plan A because often you’ll end up with the most perfect fit with Plan D.

Being nimble is a must-have quality for anyone in the real estate industry, but owning a brokerage often requires stretching far beyond being nimble and reaching for superhero status. Initially, I believed every agent could be molded into a specific model or a way of doing business but quickly realized that there is a not a one size fits all brokerage regardless of someone with decades of experience said so.

The perception of a brokerage with a large number of agents on the surface implies success. However, the old saying quality over quantity rings very true in a brokerage setting. Stop worrying about what others are doing – be different because that’s how you get noticed. Do what you do well and what works with your clients, for your personality or in your marketplace.

Tyler Forte, Co-Founder & CEO of Felix Homes saw a need to marry technology and real estate.

Here is his take on starting a brokerage:

Prior to starting Felix, I was a venture capital investor and I can tell you that any successful business, whether or not it’s a brokerage, is started because the status quo does not solve the market’s distinct needs.

Speaking specifically to why we started Felix, home sellers are facing a number of challenges that the traditional brokerage model does not address. When I sold my home last year, I saw firsthand how the home selling process is broken. I knew that starting a disruptive real estate brokerage was what I needed to do in order to make the experience of selling a home better.

The challenges homeowners currently face include hiring an agent who does not have their best interest in mind, to the uncertainty of not knowing if their home will be sold and for what price. At Felix, we are looking to provide consumers with the best home-selling experience period.

As far as the challenges we faced when starting a new brokerage, there are many. For one, the real estate industry is slow to adopt new innovative models. This is because current incumbents have built moats around the data and distribution of homes all at the consumer’s expense. In addition, because real estate is governed on a state-by-state basis, educating ourselves on the laws and regulations of each state was a challenge.

Jeff Brown, Owner of BawldGuy Investing has been a broker for decades and is never ever EVER shy about telling it like it is.

How do you know when it’s time to create your own brokerage?

I’ve always contended Dad was right, as you always thought most folks didn’t know when to create their own firm. Over the years I’ve spoken with countless brokerage owners about this very question.

Roughly a third of ‘em actually thought they knew the right time. Me? I did it WAY to soon, though in my defense, I had my dad’s infinite brokerage experience IN the office daily to back my rookie play, stop mistakes BEFORE I made ‘em, and generally mentor the crud outa me.

Most brokers told me they knew when decisions made by their broker bosses just were not what they would’ve done. They usually came a tipping point, where the decision made itself. But again, that was just a third of those with whom I talked. The rest just did what I did, rush in willy nilly. The huge advantage I had was a decades experienced brokerage owner mentoring me daily, in real time, and who, you know, actually gave a damn about me.

So what is that tipping point?

The most often heard tipping point was the feeling of being constrained by their boss’s operating policies. For example, and a gigantic tipping point, was a friend of mine who wanted to run his own office using the Broker-Centric model, not the Agent-Centric model run by the broker for whom he worked.

Is it better to do so because of a gap in the market or because someone’s independent streak is unavoidable?

The latter is merely personality. Sometimes it works to breakaway, and sometimes it’s been catastrophic. Being independent has nothing whatsoever to do with knowing what you’re doing as the person in charge.

The whole ‘gap in the market’ thing has always puzzled me as a reason to open a brokerage. The exception clearly would be that the policies of operation under which you’d run your own office would substantially improve your chances of taking advantage of whatever market gap you perceived. I find that to be uncommon, at least in my experience.

What do you wish you had known before starting a brokerage?

Without even a hint of maybe having a doubt, I wish I’d understood the good news/bad news joke that says: “Well, Jeff, the good news is you’re now the Go-To Guy. The bad news? See the good news.” 🙂

The difference between signing the backs of checks and the front of those checks cannot be overstated. Every single buck stops at your desk, period, end of sentence, over ’n out. Some folks find that to be too daunting.

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