In this blog, Tom Panos busts 10 common myths about real estate.
Myth #1: The most successful real estate salespeople are born, not made
Fact: Incorrect. Yes, a good agent may have a tendency and inclination to be a savvier negotiator with better people skills, but these are things that can be learnt and nurtured. Research shows that at a maximum, people are operating at 50 per cent of capability, which means a majority of human beings are not realising their potential.
Myth #2: Agents who write $1m in gross commission do a lot of cold calling
Fact: There is no evidence that seven-figure agents do cold calling. Seven-figure agents run an attraction business that is built on momentum; their prospecting is best defined as either “warm” or “smart” calling. They simply are nurturing contacts they already have. In marketing this is called “lead nurturing”. At one stage they did have to do cold calling, but most of these agents have got to a level where they are having more calls come in than calls go out.
Myth #3: You have to work for a good office to be successful
Fact: A good sales manager or principal will make an agent feel terrific about themselves. However, a self-motivated agent can work in any environment with the right structure and business unit and be successful in whatever office they work for. Ultimately, a sales agent is not working for an office anyway. They are working for themselves. Self-motivated, skilled agents are always being recruited by every real estate office in the region.
Myth #4: The most successful agents are constantly attending training courses
Fact: This is not necessarily the case. Training courses are empty without courage and action. A training course will not teach you this. A training course and the coach can show you what to do, how to do it, but not to 'want' to do it. You cannot outsource your goal. A life coach or business coach cannot be delegated with your lack of motivation. Having said that, many successful agents are attending seminars and courses because they know the ROI is excellent in training, as it takes only one idea to change the game. You don’t know what idea and where it will come from. So it makes sense to play the numbers game and attend everything you can. And always remember: You know what you know, but do you do what you know?
Myth #5: The cheapest agent wins listings against more expensive agents
Fact: Vendors are interested in the net figure, not the fee you charge. If you can give them nothing else to talk about, it should not be a surprise then that maybe fee is what will matter most to them. The cheapest agent is in fact the one that gets the best price. If you can articulate to a vendor that due to your process, marketing, and negotiation skills you can get a vendor an extra five per cent for their sale, they will be happy to pay one per cent more in fees. If you don’t have the ability to get them to believe this, they will pick the lower fee. Ask yourself this: Are you a messenger or a negotiator?
Myth #6: You don’t need to get VPA (vendor paid advertising) or VIM (vendor investment marketing) to be “mega” successful in real estate
Fact: At the AREC13 conference, the top 10 real estate agents announced in Real Estate Business' Top 100 ranking all were marketing-based agents, not just transactional-based agents. Whilst a basic internet and database campaign will get 'a buyer', it may not get the 'best buyer'. And it is the best buyer that will pay the best price. Agents that use vendor paid advertising (VPA) have the added benefit of not only helping a vendor with house price maximisation, but they also get the benefit of having advertising as a brand enabler. The most successful real estate agents in the country are dominating all media that is relevant in their marketplace. You can still have moderate success in real estate without a strong VPA strategy, but there is no evidence to suggest that this success is sustainable with you becoming a BRAND in your marketplace.
Myth #7: Auctions are the best way to sell real estate at the highest price
Fact: Many will be surprised that even I as a passionate real estate auctioneer do not necessarily believe auctions are suitable 100 per cent of the time. Some marketplaces simply do not have the dynamics of auction being the method that buyers and sellers operate in. Auctions in fact are only a small percentage of total transactions in Australia. They are more pronounced in Sydney and Melbourne and in other markets around Australia that have unique property, high demand/low supply, and areas where it is very difficult to determine the value of a property. In marketplaces where auction is the 'norm', it is negligent of the agent if they don’t use auctions. Every time an auction sells over reserve, the vendor would have lost that money if they had gone as a private treaty sale. Most of the top 10 agents in Australia are supportive and use the auction method.
Myth #8: You will make more money being an agency owner than a sales agent
Fact: This could not be further from the truth. The majority of real estate offices in Australia are simply not returning an appropriate income for the risk in business ownership. The average surgeon in Australia is making $351,000 per annum. A great sales agent can earn this and more without going into business ownership. A great business ultimately can provide an owner a good lifestyle and work satisfaction by managing and mentoring a team. This does not guarantee you will make more money as a principal than a sales person. The decision on whether to open an office is not about money, but choice of work. If you like sales and dealing with buyers and sellers you will be happier and make more money staying in sales. If you like and are also good at building and leading teams and have the financial capacity (access to $250,000 investment) you should consider ownership.
Myth #9: You can be very successful in real estate in a short time
Fact: Unlikely. Good things take time. Bad things generally happen in an instant. Most real estate agents that fail do not want to pay the price today to get the rewards tomorrow. Long-term sustainable success in real estate is about building a brand, establishing positioning, growing a database and a referral network. This will take time. However, time alone does not guarantee you success in real estate. You can be in real estate for 20 years and have the same bad year, 20 years over! Hard work pays off in the future. Laziness pays off now. You choose.
Myth #10: The best agents are the most intelligent and skilled agents in the market
Fact: The best agents are in fact the best marketed agents. There is no point having the highest IQ and having the best skills if nobody knows about you. It’s not who you know, it’s who knows you. Another factor is that being highly intelligent can be a negative in this industry as you could get into the mindset of 'paralysis by over-analysis'.