Austin Smith - Goomzee.com

Below is Part 2 of “Tips for Brokers”. Part 1 (viewable here) offered up some golden nuggets of brain food by covering Who to Recruit and How to Recruit Them. We pick up where we left off below by discussing the all-important interview process. The interview is a face-to-face interaction that can be handled several different ways to achieve successful results. Unfortunately, the process on the whole is oftentimes overlooked and/or poorly conducted. Read on to learn how to make the most out of your next series of interviews.

What to Do Once You’ve Recruited… Let’s set up a hypothetical: Broker Bill has fifteen prospects in his lobby. His end goal: narrow down his findings to three ‘possibles’. His problem: which way to go about interviewing. Should Bill conduct his interviews in the traditional manner, i.e. a mano-y-mano grilling of each prospect, ending only when they begin to break into tears? Or perhaps the Boiler Room route is best, a la Ben Affleck’s “Hitler youth rally”-like group interview that is less of an interview and more of a shock-and-awe presentation of your company’s new-hire philosophy. Whichever you choose, make sure you have multiple people sit in on the interview process. It is nigh impossible for an individual to make an objective decision; they will subliminally cater to like-minded prospects, unintentionally closing the door to the other potentials regardless of their merits. For this reason, include several people in the initial interview/questioning, or set up a tiered interview system that passes off prospects to a different ‘interrogator’ every time. This will ensure that potential hires will pass through selection based on merits, not likeability.

While in the process of assessing candidates, it’s important to remember to trust your gut. Resumes will only tell you so much, and oftentimes paint a greatly exaggerated picture of a prospect’s achievements and work habits. As interviewer it is your responsibility to break through the ‘front’ put on by most potential hires; the facade that has been cultivated and polished to depict a perfect employee, but may not necessarily mirror what is truly on the inside. The qualities that make up an ideal salesman (quick thinking, confidence, communicates well, works with others, you get the idea.) are indefinable but easily recognizable. And if not by you, then most definitely by the rest of your team. Since his potential hires will be working directly with the agents he already has in place, it may be a good idea for Broker Bill to embark on a sort of office-wide field trip. This would give his ‘Top 3’ a chance to interact with his existing team, which offers the team a chance to evaluate Bill’s prospects; a move that stealthily passes the decision-making onto the agents, since of course Bill is going to ask for their feedback…

One final note: Background Checks! (Click here to view a list of background-checking groups.) While it may seem like a formality, due diligence is of the utmost importance when it comes to background checks. A complete check includes reference checks, criminal history checks, and work history checks that produce clear job descriptions and requirements. Armed with this info, you’ll be able to lay down the hammer when potential hires begin to embellish their former positions.

I hope this post provides you with some ideas to implement when it comes time to hire some fresh meat. Hiring valuable agents will be an integral facet of the industry’s uphill struggle; if we keep populating the field with under-trained, incompetent bags of air, the market numbers will go nowhere but down. It should be a no-brainer at this point that a brokerage’s profitability is directly attributed to the style of agents they hire. For this reason, I encourage you to spend as much productive time as possible when screening new hires; your decision could put the market back on its feet.

An oft-overlooked aspect of the real estate brokerage is the new agent hiring process. While not so much different from any other business’ hiring process, there are several nuances that brokers must take into account when screening the new blood. The important thing to remember is that you, the broker, are a different type of boss than what one would encounter in, say, an In-N-Out burger. True, the questions asked and best practices followed during an interview may not be too terribly different between the RE Broker and Burger Bob, but the role played by both parties couldn’t be more dissimilar.

Real estate agents by nature are independent. This trait is what attracted most of them to the biz in the first place; sort of the same inherent longing for the unknown that drove most trappers West in the 1800s. They (agents) thrive on their own, take pleasure in their Lone Ranger status, even revel in the solitude provided by their home office. For these reasons, brokers need to be less of a hand-holding, micro-managing boss and more of an always-available mentor. Micro-managing, nitpicky brokers are a turn-off to independent, self-empowering, and self-critical agents; and practicing these sorts of management techniques will only help to hurt your brokerage.

So what, then, truly helps your brokerage? How does one go about becoming ‘all the broker they can be’? First off, it’s all about the hiring process. Knowing who, how, and when to recruit new bodies into the fold is a lengthy process that should most definitely be handled by more than one set of hands, regardless of who makes the final decision. Of course, the first step in the agent hiring process is to identify Who You Want to Recruit.

This usually means deciding whether to set your crosshairs on either wet-eared greenhorns or battle-hardened mountain men. But I say, why not both? Is there a downside to having a healthy mix (experience-wise) of agents on your team? Those that have outrun tribes of angry natives a time or two will be better equipped to teach the new breed how to hunt, and in return will be schooled in modern technology by the younger generation. Hmmm, perhaps the frontier analogy ‘galloped’ away from me there. Kinda like how a ravenous pack of bloodthirsty wolves runs off a herd of buffalo…

Anyway...try to avoid the tell-tale signs of a sub-par agent. Experienced brokers know that splits and benefits don’t attract experienced agents; your value offering takes care of that. With this in mind, beware of young bloods that step up the plate and instantly start asking about pay, commission-splits, desk fees, benefits, vacation time, etc. Sure, these things are all integral to the hiring process, but they can also be broached at a better time than the initial interview. When an agent leads with these sorts of questions, it is pretty apparent that they are money-grubbing and probably not so much interested in the well-being of your company beyond its ability to output a paycheck on a set schedule. YOU DON’T NEED THIS KIND OF AGENT! Remember, you don’t have to ‘buy’ prospects when your value offering blows their socks off.

Which brings me to step number deux: How To Recruit. Headhunters will hold firm that advertising in the existing job-search mediums will net you nothing more than run-of-the-mill, unethical, and lazy agents who are going to produce about as much value as a hole-less strainer. In case some of you have as much trouble with on-the-fly math as I do, that would be a big ZERO. They maintain that the only way to populate your brokerage with valuable bodies is to retain a personnel ‘headhunter’. This is like me telling you the only way to sell a property is to use Realty Connect. Good for me, yes, but a falsehood nonetheless. 4 ways to recruit agents: Monster.com, Word-of-mouth, advertising, and trade show presence. There are countless job-search sites on the net, and a select few have risen above the rest to provide the bestest job search information; I would advise using one of the top dogs to ensure your not wasting your time. Experts have suggested setting apart a section of your website for ‘Help Wanted’ ads. This is definitely an option, and also something that could be implemented in any sort of periodical produced by your office. As far as trade shows are concerned, it’s no mystery that the ‘who’s who’ of the industry can be spotted at the popular conferences like Inman Connect and NAR’s Mid-Year. But among the real estate bigwigs are thousands of individual agents looking to break the mold and hop on the innovation train. They are in attendance because they don’t mind making that extra effort. You know, then, that they are susceptible to recruitment because you know that they are looking for that next big ‘thing’ that will work wonders for their career. That ‘thing’ could be your brokerage.

Unfortunately, getting your name in front of the eyes of a new agent is only half the battle. Once they know of your office, they are going to seek out some sort of job description or requirement. True, the role of real estate agent does not vary too drastically, but every office has its tics, its unique requirements and its interesting rules. The job description should be transcribed in great detail and presented to a prospect as they are deemed interview-worthy. This document should contain a bullet-point rundown of ALL relevant office characteristics including fees, requirements, dues, benefits, parking procedures, coat-rack policies, and everything from the coffee maker best practices to which duties can be passed off onto the receptionist. While it may seem like a lot of unnecessary work during the hiring procedure to put together these materials, it will aid you in achieving a sort of continuity throughout the process. Continuity and standardization are key to ensuring that agents are hired on a completely objective basis.

More on the ‘Art of the Interview’ when we re-convene next week…

There's been a loud hullabaloo in the industry lately concerning IDX feeds. Unfortunately, the staggering amount of people who are unreasonably excited about IDX is equaled and possibly even surpassed by the amount of folks who couldn't tell IDX from their own left hand. I myself was included in the ranks of the un-knowledgeable until I received enlightenment not twenty minutes ago. Now, verily do I pass unto you:

Methinks that most of the confusion surrounding IDX has to do with the fact that IDX is an acronym. Allow me to define IDX, and while I'm at it, some of IDX's acronym'd friends: IDX stands for Internet Data Exchange, and is nothing more than the concept of displaying MLS information on a website. FTP stands for File Transfer Protocol, and is the old standard for networking MLS information. RETS stands for Real Estate Transaction Standard, and is the new standard for networking MLS information. Think of it like this: IDX is what you do, RETS and FTP is the way you do it. Let's break these down a little further:

There are several problems with the FTP standard, hence NAR's mandate concerning the obligatory RETS switch. First off, FTP feeds are only updated once in a 24-hour period. This means that there is a one day turnaround from when an agent updates his/her listings to the point at which the information is made available through the database. The extreme variation of data in FTP feeds has also led many organizations to simply 'framing' a listing search engine into their website; this results in a serious blow to their SEO, not to mention aesthetic appeal. FTP has been described as 'clunky' since information must be aggregated and verified from Point A and B, then delivered to Point C.

RETS, on the other hand, is a real-time feed that is updated in, you guessed it, real time. RETS cuts out the middle man (Point B), allowing for one-stop info exchange between MLS offices. The "common language spoken by systems that handle real estate information" also makes life easier for website developers by standardizing data input. This means that a RETS feed will deliver the same data fields in Virginia Beach as it would in San Luis Obispo.

So Why Should We All Be Happy About RETS?

Beyond the peace of mind achieved by using tried and true methods (reliable and standard in any area), RETS has several role-specific benefits. Agents will enjoy an influx of available vendors to choose from that will augment their business by integrating with the agent's standardized MLS. For vendors, a switch to RETS means saved development time and resources, as well as a larger pool of market opportunities. In other words, an entire industry operating off of the same standard is one big possibility for tech vendors. Brokers will profit as well; due to the increased competition between vendors, the productivity tools available will only get more refined and more valuable. Office websites will be populated easier, and data will be easier to compile and manage for offices who deal with more than one MLS.

While the mandated IDX switch may be an administrative burr under the saddle of most brokers, it is undeniable that such a change will do loads for the productivity of the industry. I have a hard time seeing how someone might have an issue with simplified data sharing. Short and sweet, it benefits everyone involved: from vendors to brokers down to buyers. I'm with NAR on this one; this could pan out to be the crucial change the industry needs to begin correcting itself.

A few weeks ago, while driving down California’s sunny coastline, my sister asked me what made me different from every other telemarketer in America. You know who she was referring to: those guys that only seem to call between 6 and 7 p.m. offering you authentic, discount Cuban cigar bundles straight from the tropical beaches of New Jersey. At the time I wasn’t sure how to respond. But the crisp weather of my native Missoula Valley has since jarred my brain into production, and I am now equipped to answer my sister’s query. The only problem is, she no longer cares about my answer, so I’m forced to blog it out…

Cold calls: the bane of many a salesman’s existence. Unfortunately, even though they are feared more than spiders and public speaking, cold calls are an integral part of any sales pipeline. And even though nobody wants to be on the receiving end of a cold call, the cards are down and it’s becoming evermore apparent that cold calling is not only effective but here to stay. Herein lies the problem: how do we (salespeople dabbling in the cold call) avoid becoming a nuisance and only dial calls that will yield some traction? How do we save ourselves from rejection after bloody, painful rejection?

Well truth be told, rejection is as much a fact of life as stubbed toes, and especially more rampant among the cold calling ranks. Rejection, that is, not stubbed toes. So while you can’t save yourself from ever being rejected again, you can increase the chance of acquiring a new client by learning from where I have failed. Here ‘goes: 4 Hints to Help You Be All The Cold Caller You Can Be. Go get ‘em tiger…

“How Are You Today?”…Interestingly enough, ‘experts’ on the subject advise not to open a cold call with the phrase “how are you today?” Rubbish, I say. I ask every one of my new contacts how their day is going the second they get on the phone. It’s what I ask my friends when we connect, so why not my clients? Sure, it may put strangers on guard, but when was the last time you got a door slammed in your face for asking how somebody was doing? I can’t remember either…

It’s my belief that if you are sincerely…well, sincere…it is not at all a mistake to start out with a “how are you doing?” The positive responses I receive to this greeting, even from strangers and new contacts, greatly outnumber the negative ones, and often pave the way for a smooth, free-flowing conversation.

Which brings me to my next point: in order to maintain fluidity within your conversation, it is important to listen. Just like every zebra is two-toned, every conversation has two ends, and both must work together to keep the conversation going. Listen. React. Suggest. Listen to what they have to say after you shut your yap, react to their objections, and suggest a compromise or, better yet, a solution. The other end of the line needs to feel that what they have to say is just as important, if not more, than what you can offer. In order to achieve this level of interaction, you must know when to stop talking and start listening. Take pains to speak slowly and speak lightly. Ask questions. If you both begin to speak at the same time, give them the right-of-way. NEVER talk over your prospect.

Think: ‘Tired Sloth’…What? Tired Sloth? That’s right. You should speak at the same pace as that of a tired sloth. Remember that while you know your product inside and out, by very definition your cold call target does not. In fact, it could be their very first taste of your industry so it is best to keep the technical jargon (i.e. ACRNYMS, abbrs., and anythingthatishardtopronounce) to a minimum, while at the same time uttering your layman’s terms with the image of a slow-moving tugboat in your head. The moment you begin to cram your words together, mumbling through your pitch at a pace rivaling most auctioneers, will be the moment your potential client loses interest and drops the receiver in your ear. This is especially applicable to those of you with easy-to-mess-up names. Nothing makes you feel less effective than when one of your prospects, somebody whose name you recognize and can associate with his/her organization on the spot, brutalizes your or your company’s title. Take, for example, my associate Lon: Ron, Don, John, Fawn. Or Goomzee: Gooney, Groomzee, Goodzee, Coomzee. To avoid the uncomfortable situation of correcting your new contact, slow down and take the time to pronounce each syllable of every name throughout your conversation.

Beyond simply enunciating and speaking slowly, it’s important not to push your prospect too fast. Don’t be afraid to shoot the breeze; talk about the weather in their area (however cliché it may seem), joke about a recent news story, talk about anything that helps to ease the formality of what is obviously a solicitation. Remember, the purpose of a cold call is not to make a sale, but to secure the opportunity to make a sale. This means your focus should be less on receiving a cut and dry commitment from the prospect, and turned more towards ascertaining their unique needs and wants. By doing this you will not only be better equipped to offer them the most productive proposal possible, but the overall tome of the conversation will be a lot less constricting than the usual cold call. When Joe Smith calls with his fake Cubanos, it is inevitable that you feel tied to the phone for as long as he is pitching his Jersey knock-offs. This is not the way you want potential clients to feel: trapped, under attack, and on the defensive. Instead, keep in mind that they are people, just like you, and enjoy a real, rewarding conversation, just like you. It is, then, your responsibility to come to them in a subservient matter, ready to do whatever you can to help them (and their business) out. This sort of approach will lead to valuable interaction that yields more than just a rejection-sore ear.

So what sets me and my co-workers apart from every other telemarketer interrupting your dinner hour? Well first off my office closes at five. Second: ‘consumer centricity’. When I pick up my phone in the morning, I mentally prepare myself. I remind myself who I am calling, what end result I would like to achieve, and then I put a smile on my face. I realize that my call is probably the last thing these people want to receive, thus my goal is to make the experience as painless as possible for all parties involved. I am polite, I lament their sorrows (most often the weather), and I constantly remind myself to not be too pushy and keep my prospect’s interests in mind. I can take constant rejection, but I have a hard time swallowing a bad referral because of my negligence on the telephone. I hope my lessons learned will help you to be all the cold caller you can be. Happy selling…

It is common knowledge that REO and foreclosure properties are selling like hotcakes, and that new home sales are lower than they’ve been since 1995. That’s all well and good, but how are we supposed to get a cut of the action? Those of you who are interested in buying decent properties at highly discounted rates: step into my office.

So what can you do to ensure that your next REO-aimed offer yields a deal? A number of things. First off, Get Approved. That’s right, it’s finance time. It will inevitably be brought to a head at some point throughout the transaction, so you might as well sidestep the land mine before it’s an issue and get pre-approved ASAP. Being pre-approved allows you to be move quickly as far as the transaction goes, quickness being a major factor in who wins and who loses. It’s also a good idea to keep your bank’s approval letter handy at all times, as it will serve well to soak up your tears of joy at the time of closing.

Some may think their offer will have a better chance of being accepted if they seek to be approved from the same bank that owns the sought-after property. Others may think that the listing bank prefers financing only from another bank, as opposed to a mortgage broker or private lender. These points of view are simply untrue. The listing bank could care less from where in the ‘lend-o-sphere’ you received your funding, just so long as you’re funded. To a bank in this scenario, cash is cash, and a buyer with cash is as welcome as Christmas morning.

Another sure-fire way to put some muscle behind your offer is to do a bit of research. When a bank acquires a property, the executive cadre immediately hosts a picnic, complete with fire pit, skewered pig, and seed-spitting contests. After the last raffle prize is given away, they then seek out a ‘Lost Mitigation Company’. The mitigation personnel provide several services to the bank, and are a main reason for the snail’s pace most REO deals move at. Lost Mitigation personnel (hereafter referred to as L.M. personnel) will immediately enter the home in question and do what they call ‘securing the residence’. This includes winterizing the home, cleaning anything that warrants a scrub, taking out the trash, and generally all the chores the former owner neglected but still must be performed in order to make the home saleable. L.M. personnel will then hire a broker to list and, hopefully, offload the property. In order to accurately price the home, banks realize the importance of discerning the property’s current comparative value; because of this, L.M. people will normally contact a few agents in the immediate area to get independent opinions of the ‘comp value’. This is called a Broker Price Opinion, or BPO, and each BPO scenario is taken into account when the bank lists an REO.

This is the point where a lot of people fail to help themselves. It is always important to do just as much, if not more, research than the listing bank has already done, and you can start at seeking out the comp value of your target home. A good rule of thumb is to make an initial offer that is roughly 88% of the current comp value. But keep in mind, comparative values are constantly changing. When offers on an REO are received, banks re-task their L.M. personnel to once again analyze the comp value. Because of the fluid nature of comp values, it is important to stay up to date so your offer doesn’t run the risk of becoming too low, thus defunct. Know this: low-ball offers for REO properties are unproductive. Period.

While you still have your research cap on, go ahead and contact a title company so you can acquire the title record of the property in question. This will give you a good financial history of the property (liens, back taxes, final amount owed at time of foreclosure), which may or may not illuminate how much the bank has invested in the property, but either way will help you to put together the optimum offer.

Caveat Emptor…”Let the Buyer Beware”…Perhaps the most important thing to remember is that when buying REO properties, you are buying at your own risk. Dealing with the remnants of a low-income household isn’t always the best experience, but alas, ‘tis the nature of the beast. Most foreclosed-upon tenants delight in leaving their refuse behind when they vacate, so be prepared to factor some repair costs into your initial offer. The bank doesn’t care about the quality of the home, so beyond whatever cleanup they sponsor through L.M. people, don’t expect to get much in the way of restoration reimbursement. An REO buyer buys as-is, so it’s not a bad idea to dust off your nail bags when considering an REO. Another thing to remember is that most REO transactions take a loooong time. There are many people involved, but they are spread out amongst several organizations. Because of this disjointed sort of ‘assembly line’, it is imperative that you as the buyer remain patient. To stress the importance of being patient, I will restate myself. It is imperative that you as the buyer remain patient.

Step up to the net and implement the above best practices next time you serve up an REO offer. Game, set, and match; enjoy your new home.