Effective real estate brokerage is simply doing the most profitable activities before you do the less profitable activities.  One of the greatest mistakes is believing that all net profit producing activities should be done.  The great agents – those who retire wealthy – learn quickly that most activities taught today in real estate will end in net profit but only very few maximize net profit. 

Since maximizing net profit is a special part of real estate to me (a part that I enjoyed and pursued), I’m going to lay out the 25 ways that I believe maximum profit can be obtained from your real estate business.

1.       Look to do more fully disclosed dual-agency transactions.  Get your listing off to your database as soon as you get it.  Get the sign up before it hits the MLS.  Hold that open house the first Sunday.

2.       Determine some great ways to fill your pipeline with more listing presentations and time-block those activities.  Many of these lead generation activities have been taught for years, but recently, we’ve made them fun.  Do the things that other agents don’t do like working with the expireds and having the largest inventory of for sale by owner relationships.  Talk to the assisted living center sales people and know who owns real estate in your town but gets their tax bills sent out of state.  These are just four of the 64 methods that my coaching clients use to aggressively pursue more listing leads each week.

3.       Quit spending money on stupid stuff.  Vendors promise methods to make more money with less work.  This business requires work, at least 40 hours a week.  Those 40+hours will require that you talk with people and ask them to buy and sell.  Trying to trade that work in for a blog, a website, or social media does not work.

4.       Work with fewer buyers.  When you do work with buyers, make sure they’ve happily answered questions over the phone.  Make sure they get pre-approved in writing before you meet with them.  Make sure they meet with you so you can show them how you will produce property for them that isn’t in the MLS.  Make sure they sign a buyer-brokerage agreement.  You’ll be showing them for sale by owners, expireds, and clients out of your past client database. 

In addition, you’ll send postcards to the area that they want to buy in and advertise their needs through your site(s) and social media outlets along with any print advertising.  This method creates multiple returns from one exertion of energy.  While you’re showing property to buyers, you’ll be showing them off-market property that could create a listing lead and increase your chances for a double-ended transaction.

5.       Stop trying to educate your clients.  You know what’s best.  Make the recommendations.  Don’t spend a 2-hour listing presentation that contains the college course on marketing real estate.  You don’t get paid until closing, therefore you work for free until the closing.  Make sure that your work is efficient.  Efficiency makes that you’re talking with a client who has a real motivation that actually makes sense!  With that motivation, you can design a marketing plan to actually achieve your client’s goals.  Teaching them how is a waste of time.

6.       Know when to cut a client loose.  Sometimes, there are sellers who say they want to sell, but their motivation never really made any sense to you.  Then you find that they won’t reduce their price, and they negotiate like they don’t want to sell.  Could it be that they don’t want to sell?  How about those buyers who are shown perfectly good properties with the lowest interest rates known to mankind and they still won’t pull the trigger?  Maybe by the 15^th showing, you might become more aggressive in asking them why an offer isn’t forthcoming.  The old 80/20 rule does apply here – 20% of your clients take up 80% of your time.  Trading in these clients for better ones is a skill that the top agents know how to do without hurt feelings.

7.       Know when to refer clients.  Buyers and sellers who won’t cooperate with questions designed to help them should be referred.  You need to give them valuable reasons as to why they should answer these questions.  If they still decline to answer the questions, they have probably already answered your question as to whether or not they’re worth your time.

8.       Get multiple bids on everything.  The days of me trusting one vendor are over.  Whether it’s printing, insurance, or IT assistance, I get more than one opinion.  It takes longer, but I meet more potential clients.  Also, I usually learn so much more about how my money is being spent.

9.       Get an assistant.  Our lead generation activities are so good that our clients want to do more of them then they find that they soon run out of time.  With many of my clients, we have been teaching their transaction assistants on how to spend a few hours of their day generating more leads.  The assistants appreciate that they have a way to make some more money, and we’re doubling the amount of listing presentations for our rainmakers.  The top people soon find out they can’t do it all themselves.  Get over the fact that you’re afraid of adding a little overhead when you have access to some of the best systems in the world to generate listing leads.

10.     Get a coach.  There are a few real estate speakers and trainers who have retired wealthy from their real estate earnings.  If they can teach you how to do the same or give you manuals on how to do it, take advantage of it.  Reinventing the wheel is just stupid.

11.     Produce your own leads.  Buying leads is expensive, and usually doesn’t meet the same profit potential as producing your own leads.

12.     Watch your spending.  Real estate agents have a knack for consistently spending more than they earn, no matter how much they earn.  You don’t need a new car when a 3-year old one will do just as well.  You don’t need that many pairs of shoes, and you can certainly go on a 10-day vacation versus a two-week vacation.  Look for ways to cut back and save money.

13.     Buy real estate.  You only have enough time in your life to learn one investment medium really well; for most of you, that’s real estate.  Get the down payment together as soon as possible.  Put some money down on a small rental that has positive cash flow after a 35% expense factor, and let the tenants pay off the mortgage.  Don’t believe the “flippers.”  Most of them cannot make it through a sideways market, much less a horrible market.

14.     Make the most of office meetings.  If your office has an office meeting, make sure that everyone presents a motivated buyer and seller.  You should be able to put together a few transactions at every meeting.

15.     Write contracts so they close sooner.  This means less “stuff” that can happen.

16.     Counter-offer every offer.  Make them iron clad.  If it’s going to fall out, make it fall out in the first few days not three months later.

17.     Show fewer short sales and foreclosures to your buyers.  You don’t have control over them.  They take longer and they’re much more frustrating than a real transaction with equity.

18.     Get your buyer to seller ratio to about 20/80.  Fewer buyers and more sellers is one of the major steps to getting you rich.

19.     Generate enough leads allowing you to feel comfortable in raising your commission.  Also, negotiate your commissions harder.  Too many of you are walking out with reduced commissions.  Often, if you take a closer look, many are taking up to a 50% hit in what you take home.

20.     Don’t move offices thinking you’ll be able to do more business.  If you weren’t doing well at one office, chances are that you won’t be doing well at another office.  The only reason to ever change offices is to increase your net proceeds after the commission split.

21.     Get some time to think. You need to turn off your phone at some time in the evening and at some time on the weekends.  When I say turn off your phone, I mean turn off everything.  If you don’t have the business systems to provide excellent value to your clients during business hours, you aren’t going to please them that much after business hours.  Quit using all of your creative energy for services rendered outside the typical business day.

22.     Be happy.  Quit taking clients who beat you up for no reason and who can never be pleased.  If you still want to take them, at least learn how to ignore them.   There are some people who just don’t appreciate what you do, which means you should still do your best but don’t let them affect you.

23.     Stay current with your taxes.  Put some money in a tax-advantaged savings account.  Don’t get behind with the IRS.  Run your business to maximize your net profits after taxes.  Get a 529 plan for your kids.

24.     Build a community of trusted advisors.  You need to have the best real estate coach, the best attorney, the best CPA, the best handyman, and the best mentor available in your sphere of influence.

25.     Prepare a simple plan and break it down to daily activities.  Try to develop some balance around family, fun, faith, fitness, friends, and personal finances.

I know that some of these items are extremely difficult to implement, which is why there are few wealthy real estate agents.  Continually working on these items and shying away from the other “noise” in the real estate industry will help you pay attention to the activities that really make money.  Good luck on your endeavors to get more signs up, work with fewer buyers, have more double-ended transactions, and buy some real estate for yourself!

Walter Sanford has been designing and implementing real estate systems for 30 years.  One of the most successful REALTORS® and now wealthy from his systems, Sanford teaches his systems and strategies through his products, seminars, and personal coaching producing the best results in the industry.  Do what works, do what is proven.  Hire Walter Sanford.  Call our office at 800.792.5837, email walter@waltersanford.com, or chat with us online at www.waltersanford.com.

Thank you for the opportunity to help with your article about top producers.  Here are your questions and my answers.

Q:      What steps/behaviors did you take/adopt that accelerated your rise to a top producer?   

A:      In hindsight, I can tell you that it was not a plan, but my common sense actually worked!  Can you imagine what would happen to an agent’s confidence if they had this plan?  Coupled with that plan, a guarantee from my coaching clients and myself that it (the plan) actually works? 

Here’s “the plan”:

1. Study what the superstars in your area do.  You will find that most will fit into the following plan. 
2. Know that controlling the listing side of the market and having the inventory is the most profitable aspect of real estate and the least expensive method of generating buyers.
3. Discover what demographics are most likely to list in your market.
4. Develop value for these groups.
5. Take that value to these groups through social media, your website, blog, articles, direct mail, radio, ads, telephone, and in rare cases where the demographic is really hot — to the door and the phone. 
6. Capitalize on hot lead generation opportunities  like assisted living centers, mature people in large homes, old expireds, new expireds, old FSBO, people who love you, out-of-state local owners, divorce attorneys, and about 65 other groups for which I have plans. 
7. Make your listing presentation better, your pricing and commission plans better, and lessen the costs of your marketing. 

 When you complete “the plan” with just a few new lead generation systems in place, you will see net profits double in the first year and then double again within months.

Q:      What personality traits or behaviors do top producers share (like maybe a coach, a team, exercise regularly, constant drive)? 

A:      Each of my coaching clients has doubled his or her net within 8 months over their previous 12 months; some even faster.  However, many cannot afford coaching.  I have written manuals that mimic coaching, and these have helped people considerably.  Teams are overrated when you look at the take home pay of each member.  Probably the rainmaker (head of the team) is the only one making a net large enough to rationalize being on a “team.”  Many team members use my systems then leave the team, because they no longer need the security of lead generation since they can do it themselves. 

This business takes work.  You need to feel good to go the extra mile, stay the extra hour, or just make one more call.  Exercising regularly and eating well are traits that most top producers exhibit. 

Drive is the visualization of a goal.  Mine was enough income property allowing me to have a replacement monthly income after expenses.  I have done that…twice.  The first time – I did it with too much leverage, which didn’t allow me to survive a tough market.  This time – I’m buying for cash flow, which has allowed me to continue adding property to my estate.  When an agent has a portion of his/her commission checks going toward down payments on investment dreams then he or she has the income taxes being sheltered by those same investments, there’s some real excitement to work our plan – very hard! 

I think the most important behavior is not only determining goals but also making sure the goals are not mutually exclusive.  A common trait among top producers is balancing the work with family, fun, and faith. 

Another trait is the ability to break down big goals into 10-year, 5-year, 1-year, monthly, weekly, daily and hourly goals through time blocking.  Everything leads toward working more efficiently so an agent can close more.  Then he or she can buy and manage income property to produce a cash flow so he or she doesn’t have to work so hard. 

Q:      What makes top producers tick? 

A:      Working toward the goals stated earlier, helping other people achieve their goals (your broker, the agent you brought into the business, the agent you helped to recruit, your church, your family, etc.) is what kept (and still keeps) me ticking!   Also, designing systems that work while netting more money and providing happier clients all in less time.

Q:      Are top producers born or created? Is it genetics or coaching and systems?

A:      I don’t know, but I do know that God gives everyone a talent.   I have seen non-salespeople use my systems and absolutely destroy (in a nice way!) the competition.  There are good ways to do the business along with better ways and best ways. 

If you are doing the best activities in this business all the time and letting go of the least profitable activities, I would say that your success is guaranteed.  Sure, some are blessed with looks, an education, start-up capital, and/or a great personality.  Many of my superstars had none of those items.  They just slowly and surely instituted consistent implementation of great systems and strategies.  Some got those systems and strategies from one of my seminars, some from my manuals, and some from coaching.  Some got these concepts from other trainers or just used common sense in what was profitable.

Q:      Do you have any recommendations for mid-level agents striving to become top producers?  

A:      Generate listing leads every day.

Q:      Is it harder to attain and maintain top producer status in today’s market or is the market irrelevant? 

A:      You need to be flexible.  The market changes and your demographics change.  For instance, all the agents who today depend only on short sales and REOs will be hurting tomorrow, if they don’t change their demographics.  In 2007, the market changed.  No longer did buyers want to buy, and sellers didn’t like the prices.  It was harder to find clients who wanted to participate.  If you didn’t have systems that generated clients from different demographics, you were out of business.  

Each of my coaching clients maintained their 2007 production every year since and some grew it.  Did the activities change?  Sure, but they were used to lead generation so they simply increased their listing inventory as the market slowed.  There are always buyers and sellers out there.  When the bear chases you, you just have to be faster than the other agent! 

Q:      During your NAR Expo presentation, you mentioned that you had made several bad real estate deals necessitating you to net a large sum each month. Can you share that figure? 

A:      Sure, but it pains me.  When I got into real estate 30 years ago, I had just lost all of my negative cash flow and depreciating real estate in four states.  My monthly “nut” was a little over $30,000 a month.  It took years of success in selling real estate and negotiations with lenders to get everything paid back.  Great systems and strategies to handle personal listing inventories of over a hundred listings at all times in the 80’s and early 90’s allowed me not to only pay everyone back but also to start the real estate investment program that I now live off of.  I love real estate!

Thank you for the opportunity to share!

Walter Sanford has been designing and implementing real estate systems for 30 years.  One of the most successful REALTORS® and now wealthy from his systems, Sanford teaches his systems and strategies through his products, seminars, and personal coaching producing the best results in the industry.  Do what works, do what is proven.  Hire Walter Sanford.  Call our office at 800.792.5837, email walter@waltersanford.com, or chat with us online at www.waltersanford.com.