Talking is Action!

By
Services for Real Estate Pros

I've decided to "weigh in" on the issue of providing unanticipated services from the perspective of a real estate agent because I'm sure that many of you are working harder than you have in the past.  Much of the weekend was spent in preparation for an upcoming presentation to title professionals.  The title industry is facing profitability issues caused by reduced business levels and increased competition.  The "knee jerk" reaction is to do anything and everything to bring difficult and possibly unprofitable deals to the table. 

Providing unanticipated services in difficult deals

Real estate agents need to pay close attention to every associated cost of a transaction to sustain profitability, especially the incremental costs associated with providing unanticipated services.  It's not enough to say that you're making $x,xxxx in commissions without considering the operating and opportunity costs of added services.  You're unable to charge supplemental fees making personal productivity the only viable option to prevent losses. 

All time comes with tangible costs and consequences

Every time that you make a phone call or drive somewhere to facilitate a deal that wouldn't close otherwise, you're expending a valuable resource in the form of time.  Don't think only in terms of overall compensation.  Think in terms of enhanced production capacity or personal fulfillment if you were to spend your time differently.  It doesn't matter if you used the time to blog for future contacts (business related) or watch your kid's ballgame (personal). 

 Are you a professional order taker or a professional decision maker?

Order takers:

  • Tend to focus only on short term goals or gratification
  • Will continuously offer additional services to appease others 
  • Will work 24/7 without concern for costs, consequences to industry, or profitability 
  • Perceive marketing as the most important business activity
  • Shun the role of education in professional development 

 

Decision makers:

  • Implement a comprehensive strategy that emphasizes long term success
  • Understand the importance of professional boundaries and compensation
  • Recognize the need for personal time as part of a bigger picture
  • Integrate marketing as one of many vital business activities
  • Embrace every opportunity to expand professional, business, and interpersonal skills
What's this mean?

By giving services away for free, you create unrealistic future expectations and devalue your work-product.  I know that it's a difficult reality to accept, but it's true.  Buyers and sellers are likely to use you in the future, or refer your services to others, only if they respect your decision making abilities.  Decision makers offer real value to a transaction; order takers do not.   There's nothing wrong with explaining your time availability and the scope of your services at the very onset of a professional relationship.  All other professionals do it. 

So can you!

There's more

Your value as a professional lies not only in your ability to make decisions, but in your ability to use words to commit others to productive activity.  It's all about the way that you communicate with buyers, sellers, and the other professionals in a transaction. This rule applies to your personal productivity and profitability in general and becomes particularly important when facing additional work-loads caused by difficult deals.

The key is to get things done with words.  Talking is action. 

Effective communication = Profitability!

For follow up posts see:  Professional Boundaries: Two real world examples and Radical Professionalism.

   _________________________________________________________________________________________________
 

 Note: On Tuesday morning at 10:00 AM I'll be speaking at:

The Management Education Center

Eli Broad Graduate School of Management (Michigan State University)

811 West Square Lake Road, Troy, MI 48098

If anyone works nearby and has spare time that afternoon, let me know. 

It would be great to meet other members of Active Rain.

Click here for general information about lecture.

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Rainer
100,055
Ed Rybczynski
Havre de Grace, MD

Hi Joan

It's very true, as a real estate agent you can avoid future misunderstandings with buyers and sellers by clearly explaining the scope of your professional boundaries at the onset of the relationship.  If your unavailable on Tuesday and Thursday evenings and Sunday afternoons ... it's your business.  You owe an explanation to no one.  People will understand, and respect you, and decide to work with you for being so honest.  Try to view each transaction as a separate project with you as Sr. level management and the project team leader.  I really appreciate your thoughts on this matter.

Apr 30, 2007 05:18 AM #11
Rainer
100,055
Ed Rybczynski
Havre de Grace, MD

Laurie

I really appreciate that you found value in this post.  I can tell from your comments that you knew the answer to you dilemma all along.  I sometimes tell clients that the answers are readily apparent if they find themselves awake in the middle thinking about certain situations.  Your seller would have continued to demand more, and more, from you.  By creating boundaries, you now have your own self respect and have protected the integrity of your profession.  All decisions have consequences. You might have lost out on one listing, but there is a safety net and many more will follow because a decision was made that makes you comfortable in the long run.  Thank you very much for stopping by and sharing your thoughts. 

Apr 30, 2007 05:26 AM #12
Rainer
100,055
Ed Rybczynski
Havre de Grace, MD

janeAnne

That's the essence of the work that I do with corporate clients.  Fraud prevention is best accomplished by improving internal processes and enhancing efficiency.  Fraud, due to it's nature, can't flourish in an efficient environment.  The byproduct of my fraud preventive efforts is increased profitability internally and often we find an enormous bump in customer satisfaction.  Thank you for commenting. 

Apr 30, 2007 05:33 AM #13
Rainer
228,711
Sarah Cooper
Real Estate Shows - Hurricane, WV

Hi, Ed!  I can think of two very good local title companies, I didn't realize that was a luxury these days! 

I would have thought I was more of an Oder Taker (feels like it some days!) but after reading this I'm more to the Decision Maker side.  I'm always trying to get a little more education or at least keep my mind sharp.  I enjoy marketing but it needs to be fun.  I am able to walk away rather than take on something that is just not going to be workable in terms of my time or services. 

Good stuff, Ed!  Wish I could come hear you speak, Michigan's a bit of a stretch though!

Apr 30, 2007 06:31 AM #14
Rainer
100,055
Ed Rybczynski
Havre de Grace, MD

Hi Sarah

WV is different than other states because attorneys control title companies.  I'm not at all surprised to hear that you know of a couple of great title companies.  From your posts, I had a suspicion that you leaned more towards decision maker than order taker.  FYI: The post written recently by your mom was probably, at some level, the inspiration for this post. 

About presentations: I'm only in Michigan for 2 more weeks.  I seem to recall a couple of dates later this year in Nashville and Knoxville, Tennessee.   I'll share more about these and others when I have a little time in my office to look at the calender. 

Thank you for sharing your thoughts. 

Apr 30, 2007 07:13 AM #15
Rainer
228,711
Sarah Cooper
Real Estate Shows - Hurricane, WV

Hi, Ed!  My Mom's in Knoxville and we'll be there a few times the next few months.  Let me know about those!  I'll let her know she helped inspire another post, she'll like that.  I'd like to have her join so she can read Members Only posts, like this one and some of mine.  I told her some of my favorite work is Members Only and she feels left out.

And yes, the good title companies I can think of are so good because of the lawyers at the helm.  (One of them is my broker!)

Apr 30, 2007 07:17 AM #16
Rainer
23,542
Daniel Gates
Insure Consulting - Palm Bay, FL
I would love to see a follow up blog to this detailing how an agent can implement this.
Apr 30, 2007 07:38 AM #17
Ambassador
905,071
Margaret Woda
Long & Foster Real Estate, Inc. - Crofton, MD
Maryland Real Estate & Military Relocation
Isn't this the truth!  I finally broke down and allowed myself to take listings at a lower rate sometimes, but these sellers aren't as willing to accept a lower level of service.  They really expect to pay less, yet receive the same time, advertising, etc.  I just have to stick to my guns because it is inherently unfair to charge different rates for the same services.  "Free" is just not fair, when other people are paying for above and beyond services.
Apr 30, 2007 07:51 AM #18
Rainer
100,055
Ed Rybczynski
Havre de Grace, MD

Daniel

That's an excellent idea.  I'll work on it as soon as I can.  Thanks for stopping by. 

Apr 30, 2007 07:52 AM #19
Rainer
100,055
Ed Rybczynski
Havre de Grace, MD

Margaret

Stick to your guns.  Your sellers and buyers are looking to you for leadership and knowledge ... and compassion too.  It's all about professional demeanor.  People will respect you if you earn ... and expect ... their respect.  Thanks for sharing your thoughts and opinions.

Apr 30, 2007 07:55 AM #20
Rainer
58,052
Virginia Halter
RE/MAX Signature Properties - Harrisburg, NC
ABR, CDPE, CRS, GREEN, SFR, SRES
Great Post!!!  I like to go the extra mile for clients but I have found that my clients realize I am going the extra mile when I provide a good business name to them or help them find a reliable business to work with to get a job done.  I had a client several years ago who wanted me to water his lawn for the summer until he got moved down.  Thank goodness he changed his mind.  I agreed (due to my green-ness at the time) and that would have added a 22 mile round trip, twice a week, to my summer!!!  Instead, I gave him a business card for someone I believe in.  Everything worked out great!
Apr 30, 2007 10:10 AM #21
Rainmaker
137,791
Kaye Thomas
Real Estate West - Manhattan Beach, CA
e-PRO, Manhattan Beach CA
Ed- Wonderful post. Thank you.   I know that being a Decision Maker is the best way to operate.. but  I still find myself on the Order Taker side about 24/7 and not taking into account the costs associated with that..   As Laurie noted above I also have likely just lost a listing because I won't give away my services .. the seller didn't want a good agent just a cheap one..
Apr 30, 2007 11:16 AM #22
Rainer
100,055
Ed Rybczynski
Havre de Grace, MD

Virginia

I loved your story.  Thank you for sharing it with me. 

Apr 30, 2007 08:29 PM #23
Rainer
100,055
Ed Rybczynski
Havre de Grace, MD

Kaye

I know exactly what you're talking about.  In my office, we have a tradition at deconstructing each others projects to make sure that they make sense and are profitable.  The lines get very fuzzy at times.  Thanks for commenting. 

Apr 30, 2007 08:31 PM #24
Rainmaker
1,076,844
Joan Whitebook
BHG The Masiello Group - Nashua, NH
Consumer Focused Real Estate Services
I think communication, education and preparation are key.  It sometimes is difficult when things get hectic to put things into perspective.  I think it is important to choose the people you decide to work with to make sure their expectations meet your own professionalism.
Apr 30, 2007 08:32 PM #25
Rainer
188,414
Laurie Manny
Long Beach CA Real Estate - Long Beach, CA

Ed, 

This morning when I wrote my comment I mentioned that I was resigned to not getting this listing.  My response to the seller was as demanding as his was to me, and then some

I just received an email from the seller that he has chosen me to be his listing agent with no further negotiations.  He accepted all of my terms, and they were strong. His response was pleasant and respectful.

You could have blown me over with a feather.  

Apr 30, 2007 08:33 PM #26
Rainer
100,055
Ed Rybczynski
Havre de Grace, MD

Laurie

Doesn't surprise me one bit.  I almost mentioned in my comment  to you that you would probably get this listing on your terms.  It's about boundaries and respect.  It works every time.  

Way to go! 

Apr 30, 2007 08:37 PM #27
Rainer
100,055
Ed Rybczynski
Havre de Grace, MD

Joan

The key is to do business only with people that you trust and respect.  Choose your clients with the utmost of care says Tom Peters and he's right.   But, I agree, it's difficult for any one person to stay one top of every detail.  I have people from different backgrounds that I trust greatly and talk to constantly about contracts that are coming together for the consulting firm.  We are working on a lot of different things now that are very complicated and too much for any one person to deal with without help.  Thanks for commenting.

Apr 30, 2007 08:43 PM #28
Rainer
2,955
Christine Beaur-Mortezaie
Main Street Realtors - Long Beach, CA

Great topic! and so timely.

I just had a potential buyer call on one of my listings - with a list of demands! Well, I had to set up the tone fast. I did something I had never done in my 4 years of business, that is send him a Buyer Representation Agreement. I could not see myself running crazy for someone I did not know, I did know his intentions and I had a hard time trusting him. It was a bad start.

This business like another business should be based on knowledge, common goals and it should be a mutually respectful relationship. And if it is not framed at the begining, bad times will be real bad. We will pay with many hours of unproductive time and frustration. Better lose a potential client.

So am I order taker or a decision maker? Well I suppose both, but definitely striving to be a decision maker.

 

Apr 30, 2007 09:19 PM #29
Rainer
100,055
Ed Rybczynski
Havre de Grace, MD

Christine

Great story.  It's much better to lose a single deal and retain your self respect.  Why do a deal ... just for the sake of doing a deal ... when you know that your going to lose money and hate yourself in the morning.  All business people struggle with the order taker vs decision maker dilemma until they've taken a few knocks.  Then it easier to do what needs to be done.  Thanks for sharing your story. 

May 01, 2007 05:31 AM #30
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