Showing Agent Call Transcript with Best Agent Business

Best Agent Business Showing Agent Calls
Agent Management - Showing Agents

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Showing Agent Call 6.23.12 – Best Agent Business


Steve: Okay, hi this is Steve Kantor with Best Agent Business and welcome to a discussion of–of Vicki from Colorado Springs and Frank from Alexandria of Virginia the top agents with REmax about the Billion Dollar Agent, Showing Agent model. Um, Vicki can you just introduce yourself in terms of where you're located and um how many years in business.

Vicki: I'm in Colorado Springs, Colorado. I'm with REmax property. And I have been in the business for 14 years now and have been with REmax for 12 to 14 years.

Steve: Okay and Frank can you go ahead and introduce yourself?

Frank: Sure um, Frank from Alexandria Virginia, the Washington DC metro area. We're licensed in Maryland and District Columbia as well. And I've been doing real estate about full time about 16 years and I'm with REmax. I had about 5 years with Century 21 and then switched over to REmax.

Steve: Okay, great so our objective today is that Vicki has been building and planning out the Showing agent model, working with me on the Best Agent Business side for few years. And to do full disclosure, Vicki is actually my sister and he want a central referral to Colorado Springs, that's what she gets in return for sharing her knowledge. So we've been bantering back and forth a little bit of last few years in building out a Showing Agent model, which we believe is the most profitable model for top billion eight dollar agent team. It's a radical departure from the buyer agent model.

So we're gonna do three things–I'm gonna quickly interview Vicki about her business and the flow of the buyer side of her business, then I'm gonna ask Vicki to state the top sales objections she usually gets from top agents as to why they think the Showing Agent model is impossible and never ever will work and then Frank will do about ten minutes worth of questions that he thinks other top agents and including himself with how–about how does this work or not work or potential issues. So let's get rolling.

Vicki can you give us a little sense of your business—about um, about how many deals last year first of all and your average sales price and commission check.

Vicki: Okay, last year we closed 52 transactions with an average of sales price of just over 300,000 probably on the 305 range. Um, my mixed lot and the three–you know–the three percent so, basically 9,000 dollar average commission. Um, mixed on my transactions it's probably about 25-30 percent listing and the rest of it was buyers side. So the primarily all buyers side. This year we're gonna have a more–a little bit more even mix of listings and buyers.

Steve: So, first comment I'll make for those people who are listening or top agents is 52 transactions not too much, correct? Not that impressive frankly. Are you an individual agent or team agent, Vicki, based upon REmax's definition?

Vicki: I'm an individual agent.

Steve: So, Vicki is an individual REmax agent. She actually ranked top 100 in the country with REmax individual agent. How many buyers sides did you close last year Vicki?

Vicki: I would say probably in 40 range.

Steve: Okay, so how many of those 40 buyers did you show property to do you think?

Vicki: Zero.

Steve: So you kinda wonder she's an individual agent, she doesn't have a buyers agent. Have you ever had a buyers agent Vicki?

Vicki: Never, never.

Steve: No buyers agent she closed 40 buyers sides and she didn't show the buyers, so magically how did that happen? We'll look more closely. What was your total GCI roughly?

Vicki: About 550.

Steve: Okay and what was your net profit?

Vicki: Uh right around 330, 60 percent.

Steve: Okay so net profit on 550K was 330 about 60 percent. Pretty darn good correct–for about 54 deals. Believe me I’ve talked to many, many agents who literally have 800,000 to a million GCI, Vicki, and their net profit is lower than yours of 330K so congratulations. In normal buyers agent situation if it's a 300K deal, 9,000 dollar check, how much are other teams in your office off to pay now to buyers agent typically?

Vicki: Probably between 40 and 50 percent.

Steve: Okay, so let's say 50 percent is 4,500 dollars and once you averaged out your Showing agent cost, paying people hourly for part time Showing work. On average how much were you paying out per deal?

Vicki: It averages about to 500 dollars. Some years it's six but generally right around 500 dollars.

Steve: Okay and that'll–that is Showing Agent component. The other component is the callers side and what were you project on the callers side?

Vicki: Approximately 500 per transactions, per buyers transactions.

Steve: Okay, so take the calling effort and the showing effort, and that's 1,000 dollars, so basically where most teams are paying out $4500 you're paying out a thousand. The difference for those of you who can subtract is $3500 multiply about across 40 deals and it's a $120K difference to the bottom line. The difference between Vicki doing 550 with a $330K net profit versus most agents who talked to who do 550 have a net profit about $200k is basically this Showing Agent model as long as of the uh–as well as a few difference things. It's that significant. Okay let's talk—

Vicki: Now, I don't think you can minimize the amount of stress on me personally as well not having to show property.

Steve: One other mile point, Vicki, how many vacations did you take last year?

Vicki: 10.

Steve: So 10 vacations–

Vicki: And I hadn't been taking 10 – weeks, vacations for the past probably 5 years. We're gonna crank it up next year.

Steve: Not bad–so let's work through difficult–

Vicki: Unintelligible

Steve: Difficult buyer deals. Some things I'm gonna ask Vicki, some things I'm just gonna explain what she's doing. Vicki, like many top agents, is using a buyer lead generation system with IDX, she uses tiger lead and you've had tiger lead for about how many years?

Vicki: Since 2008, so it's been four years now.

Steve: Okay tiger lead is an excellent system. There's 5, 6, 7 of them out there. You may have also have heard Boomtown, Market Leader, Agent Jet, Commission Think, Conversion, Real Geeks, Real Estate Web Busters, basically Best Agent Business, my company, deals with all of them. They're all great. And currently you're spending money to generate about how many leads per month?

Vicki: Roughly about 200 to 250 or so–at the moment.

Steve: Okay, the first key part of your model is does your buyer agent call those leads?

Vicki: No.

Steve: No.

Vicki: Not the first time, first of all I don't have a buyer agent.

Steve: I know, it's a trick question.

Vicki: Yes it was (laughs)

Steve: Okay, so let me just, I'm just pointing out to everybody. Her buyers agent doesn't call the leads because she doesn't have any buyers agent. How many different part time callers do you have?

Vicki: I have three.

Steve: Okay, why do you have three part time callers instead of one full time?

Vicki: Because they all have different skill sets. And also I use stay-at-home moms who have different levels of experience with the real estate industry. One of them has absolutely none other than her own personal transaction. But they also have other things that they do with their life and they can only give me part time.

Steve: Okay, and that's a key thing I'll emphasize to people. As you're gonna see having multiple part time people is far superior than one full time. Your average sales cycle for these tiger leads if ye–if you average out any guess…. how many months from start to finish to close you know–lead coming in to close deal–what do you think the average is?

Vicki: We actually ran the numbers last year and the average was 9 months, however we closed at least 5 transactions last year with the um, timeline was over 24 months–

Steve: Okay–

Vicki: –from the initial contact to closing.

Steve: Okay, so the key point is the buyer agent model in my mind is dead in the water. When you have leads that are gonna close on average in 9 months and buyers agents turn over, there's no way that they're gonna be patient enough to stick it in there. Stick it out for 9 months. So the callers, what's the next step, do you actually do a phone consultation them, or you do a buyer consultation? What's the next step, once they're ready, X months down the road? What's the next step that happens?

Vicki: I just wanna interject something here, part of the job of the couple of lead callers is to actually get the buyer preapproved, not just prequalified but preapproved, with my lender partner before I ever even speak to them or meet with them, unless they're just coming for an investigation trip. And in most cases, they are coming to buy so the lead callers get them totally preapproved and then they coordinate with me for that initial visit. If they're local, then I’m gonna coordinate that meeting as well.

But my first contact with them is usually at the office for that initial buyer orientation when they arrive from out of town, or when I sit down to work with them locally.

Steve: Okay, and–

Vicki: And then that–

Steve: And at that point do you meet with them solo or with the showing agent?

Vicki: I am meeting with them solo for the first few minutes, the buyers of the showing agent shows up in the middle of the meeting either at the beginning or in the middle of my orientation. And I'm explaining to them during that orientation my business model and how this other person is gonna come into the picture.

Steve: Okay and to point out to everybody, Vicki has been halfway surprised that she's practically gotten no negative feedback. In fact it's positive, which we can go into later. So just to move things forward given the time we have on the short half hour call, you can send the buyer out with the showing agent, correct? How many different showing agents do you have–

Vicki: Correct–

Steve: –how many showing agents you have currently?

Vicki: Currently I have 5, I'd be training another 5 um within the next month.

Steve: Okay, and just to clarify–they're all within–

Vicki: They come–they come and go as you can imagine.

Steve: Right, but they're within the REmax office, they are not on your team, correct?

Vicki: They are not, they are independent agents–

Steve: Right, and you pay them just to make clear–

Vicki: And um I like it–

Steve: –Right, and you pay them ball park uh I think showing agents typically in a market is paid 20 dollars an hour. Vicki I think you're paying 25–

Vicki: I'm paying 25

Steve: Right and some markets I think 15 is fully real simple. So the one thing have uh–

Vicki: I do also bonus them a 100 dollars per closed transaction. It really isn't, you know it's not something substantial but it's really more of a “thank you” for you know their efforts in terms of um, you know, just being persistent.

Steve: Got it. So my own two cents is I would pay 20 not 25 and I would not bonus the 100. There's no reason or relevance to do so, I'm (unintelligble) issue if that's okay. So, when they have a proposal, who writes up the offer, when they have a proposal?

Vicki: I have an assistant, an unlicensed assistant to actually fill in the contract documents for me at using temp sites that I've created, we do use an e-contract and online finding type program. And then I review, then I take it from there, make general revisions, send it over to the listing agent. And start the negotiations.

Steve: Okay next questions is who does the contract and negotiation, the showing agent or yourself?

Vicki: No, actually as I said an unlicensed assistant creates the document. Once I've reviewed it, it goes on to one of my contract managers to sit down with the clients in the office or get on the phone with them if that's most convenient, and walks them through all of the contract documents explaining the terms of the documents and explaining to them how to fill them out and sign them.

Steve: So again this is another radical part of the model, which is–we broken out. Usually the buyers agent does everything and does it exceedingly poorly in my mind and ineffiiciently, and costs too much. So basically buyers agents, 80, 90 percent of the buyers agents in the country are poor workers. The majority should be fired and they're overpaid. That's my opinion, which is pretty radical. So again, you've gotten the contract management stuff off your plate so you don't have to buy it. How many part time contract managers do you have?

Vicki: I have three, those are all licensed independent agents and they are paid hourly at 35 dollars an hour. Um–

Steve: Right, that sounds fine, 35 dollars an hour and actually I want to point out to the people listening, they're actually (unintelligible) at what they because of the very, very important task. They don't cover–they don't get rid of everything but what have they–hopefully they cover 80, 90 percent of what you usually have to deal with. The main thing is they're reducing your stress so you could focus your time on your unique, which is building out the systems and the seller side of the business and–and taking listing appointments etcetera. So the contract managers do that and uh, then tell me, this is kind of a fun question, who goes to the closing?

Vicki: I normally go to the closing but on Monday I didn't. For Tuesday, I didn't. I have an interesting situation that isn't too uncommon. I was way on vacation, my showing agent had met with and I had met with on the buyer orientation, my client from Japan who'd been here for awhile to look for a home, found one, went home. I had maintained all the rest of the communication with the buyers in Japan. But it came to closing and I wasn't here but the showing agent was perfectly capable of going back and doing the walkthrough and attending the closing without the buyer and without myself. So when they arrived, I will be reconnecting with them as I always do and um, doing a house farming business, which is my particular system. At that point I reinforced my referral, I kind of trained them on how to refer me. I surveyed them and uh find out if there were any issues with the uh system and it's amazing. Um, they loved the way that we operate. Our–

Steve: Great.

Vicki: –our business model is, they are great.

Steve: Correct, so I want to emphasize something to people listening. One, a lot of few would have said this is impossible but it's been done for the past few years with Vicki and my brainstorming back and forth. Second thing is people would say oh the clients would be left out of sight, it's actually exactly the opposite. Almost every single client that Vicki's worked with that had previously bought or sold a house, at the closing table raves about how this system and the client service and the specialized task is far superior.

Vicki: Absolutely, absolutely.

Steve: I also wanna point that from our point of view, the relationship starts at the closing table. For most of you listening, the relationship ends at the closing table. If you run the numbers in terms of new client acquisition, the value of the act of the friend acquired at the closing is critical. That's why Vicki spends the time to spend an hour a month later once they've moved in, unpacked, to go meet with them in their home if they're happy etcetera, and extend the relationship and start the ongoing referral process. Vicki's a big (unintelligible). So that's great for short view of it. Um, what I'm gonna do is than you tossing out–well, why don't you toss out–what's the top two sales objections, Vicki, that top agents give to you as to why this would never work and then Frank we'll have you ask five or ten questions. What's the top two that you hear all the time Vicki?

Vicki: Well the obvious one from most agents is that they feel–they think that the buyer will feel like they're being pushed off on to a subordinate and will feel that they're not important, and that is absolutely not the case. But it is directly related to the way that I explain it to the client, and have to be explained so that they can see the benefits to them rather than just m–

Steve: Right.

Vicki: –And I explain to them that I don't need to see all of the homes that they're not going to buy. They kind of chuckled them because it's so apparently–unintelligible–it's so apparent–no, why would I need to do that. And I also give them a clear understanding of my business model that it consists of the team of specialists that all work in their highest skill set, and that quite honestly showing property is not mine. These people that they–that are taken them out to show property are better it to be in it than I am. I reserve my time for the things I do best which are negotiating and getting them smoothly through the transaction–

Steve: Got it. That's how it's (uintelligible)

Vicki: –they have no problem with that.

Steve: One other key point and then Frank I'm gonna have you ask some questions–

Frank: Okay

Steve: –which is–

Vicki: Steve–

Steve: –the only way–

Vicki: The other–

Steve: –hold on Vicki, I'm actually gonna sort of cut you off so–so we get some questions from Frank. The key point which you have to understand if you're listening is you can't just relist, you can't just randomly hire some showing agent and pay them part time hourly. It will not work. The only way that it's works is there's literally ten pieces that are incredibly systematic with all the stuff behind the scenes with the database, etcetera. One of the most important which we have not even touched on is that every single showing agent goes through training on how to be a showing agent and they must follow the exact system or else they're fired immediately and they're not gonna get more work. If they follow the system then it works consistently and there's consistent service delivery. Okay, Frank, I'll open up to you and let's just go through questions that you have for Vicki.

Frank: Sure, thanks Vicki for all that information. Let me just start with the showing agents. They're within your property?

Vicki: They're within my property. Correct.

Frank: –yeah within your brokerage. And how many opportunities are there? How many do you interview to pick one?

Vicki: I would say I probably interview three to four to get one–

Frank: Okay

Vicki: –and I normally train four to get three because within a very short time I can usually pair one of them out and really quickly for a variety of reasons.

Frank: How long have you seen that they stay with you?

Vicki: The ones that I have right now have been with me for about two and half to three years.

Frank: Okay, are they tight people that there's ever any conflicts, or they're trying to work their own business?

Vicki: Absolutely and that's why I train–I try to have so many of them and that's why I'm gonna be training another five to hopefully get another three–

Frank: Okay.

Vicki: (laughs) –Because there's busy times like summer or vacation–they're taking vacations, whatever the case may be, there's only so many people that are available on a particular day, there've been days when we had four buyers in town all looking at property at the same time, I wasn't showing anybody but we had to have four agents out of course, you know that gets the, just logistically it becomes an issue.

Frank: So does one closing agent stick with that buyer from start to finish or are there times where there's more than one closing agent working with the buyer, the same buyer?

Vicki: Um, you mean showing agent and actually–that is a very good question. We try to keep one showing agent with the clients throughout the entire showing process no matter how many times they go out, but that's not always practical. One of the keys to this is the training process. All of the agents are trained to show property in a very specific way that I have chosen to do it. It's you know, it's a very systematic message. So, if for some reason they're not available on a particular day, we have to switch to a different agent. They will have a very consistent experience, everything will be exactly the same, they'll know how it's gonna operate, and then we have the ability to pass on information about those clients to the other agents so that they, you know, they know who they're working with, they know what their likes and dislikes are, what we've learned about them at that point–

Frank: Okay

Vicki: –So that it's very seamless for the clients–

Frank: Okay

Vicki: –It's not disjointed at all

Frank: How much time do you spend in training, do you do the training or does somebody–

Vicki: I do the training–

Frank: –On your team–okay.

Vicki: –And, I do the training and I usually do it in a group.

Frank: Okay

Vicki: And that's why I said I'll be training five agents at a time and probably only end up keeping three. The training involves about an hour in the office going over procedures and written documentations then I actually take them out, role play three different houses pretending that we are looking at homes with a particular family and show them exactly how the training plays out in real life.

Frank: Okay, so for each buyer, on average how much time do you personally spend with the buyer from start to finish?

Vicki: Well, my initial time is that the buyer orientation which runs between 45 minutes, it probably averages about 45 minutes–

Frank: Okay

Vicki: –Before they go out and start looking at homes. And then I will communicate with them at the end of each day, so I might spend 10, 15 minutes on the phone with them just, you know downloading information about what they thought of what they saw. I don't assume that what I hear from the showing agent was a correct interpretation of their thought. And um so we've got time during that keys, once uh they get ready to buy a property, they found a property they want to write an offer on, I'm probably involved in—I’m involved in the negotiations of depending on how long it goes, I'd say I probably got another hour invested there and then I'm involved during the management of the transaction. I do have a closing coordinator who does all the background work but of course I'm supervising that.

Frank: Okay, you mention that–

Vicki: Let's say I probably put in 5 hours.

Frank: Probably 5 hours over time, yeah. Uh–

Vicki: For the entire–

Frank: You mentioned that the showing agent cost per client is about 500 dollars, the calling cost is 500 dollars. How about the cost for the unlicensed assistant that fills in the paperwork and then the contract manager?

Vicki: The contract manager normally it takes them an hour and a half maximum two hours to walk somebody through the tran–the contracts, so there's a maximum of 70 dollars for the contract manager and my unlicensed assistant who actually still does the paperwork charges 13 dollars an hour and uh it takes her about an hour, maximum 15 dollars a day.

Frank: Okay, great–

Steve: Frank–

Vicki: So that's the–you know we've got a hundred dollars there.

Steve: Okay I got to cut us off there in terms of the time, but Frank that was awesome first ten questions. And we will do another session in a week or two. And–and also re–record it but that was awesome as a starting point. Um thank you very much Vicki, thank you very much Frank. We'll connect further on this. Want to kind of wrap up before I do a one minute summary, Vicki what's the part of this whole thing that and I never asked you this question–that you love the most?

Vicki: Well, it's really simple. I get to do what I'm best at and what I enjoy most and do it to my highest skill level because I'm not exhausted and I–I have reserved my energy for the keys that are most important to the client. And seeing them understand that concept at the end of the transaction and be able to appreciate how all the pieces have come together for their best interest with me at the helm is just so rewarding.

Steve: Got it, okay that sounds good. I actually didn't place that but that's in-it's in my summary. So, to summarize it for those people out there, if you have a business doing 3, 400,000 GCI or more, and you have a normal model with a buyer agent then you're leaving huge amounts of money on the table and your profit margin is far less than it should be. If you're doing a million GCI your profit margin should be 50 percent, 500K. If it's not, talk to me. Most of you out there are making about 30 percent or 300K. So three things that I'd focus on is, first focus on your unique talents as Vicki said to fewer and fewer things. Focus on your unique talents and then number two, delegate everything else. Vicki's delegating 5, or 6, 7 different functions to different specialized people. And third, systems. Behind this, the only reason it works is because it's systems driven to deliver a consistent service quality at a different level of stuff. If your personality is a hyper harry, hunter salesperson and you love driving business forward but you can't sit still and build systems, then you need to hire someone like Best Agent Business who can. Okay, thank you very much and we'll pick it up again another time. Goodbye everybody.

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