Don't misunderstand us
Gary Keller wrote perhaps the most significant book for the real estate industry in a generation. It is more widely read than any other single volume and we both respect and applaud his efforts. But Keller makes certain assertions that aren't right for everyone, and don't work for everyone. Keller's is not the only way to build a successful real estate practice, but rather it is one way to build one.
We agree with many of his findings
- We agree with his basic premise that given a choice, working to take listings is far more time and cost efficient than working with buyers.
- We agree that your business should lead with revenue.
- We agree that once you're a good listing agent, you can refer your buyers to other agents and still generate earnings.
- We agree that you will need someone to facilitate closings for you.
- We agree that lead generation is a primary key to success
We disagree with much of his methodology
While Keller instructs to "lead with revenue," he also recommends that you become a Team Leader. That means you have to accept the responsibilities of an employer: Interviewing, hiring, orienting, training and monitoring. Once all that is done, he advocates regular reviews with each team member and any necessary adjustments to your plans. We find this problematic in the context of preserving time for revenue-producing activity.
With responsibility for all that extra work, any time you would have saved is eroded by these very activities. In the end, you're simply exchanging the time that should be devoted to securing additional listings for the activities associated with managing your people. So where's the efficiency?
And when Keller said, "Lead with revenue," that's fine when there's enough to go around. In a boom market when revenue flows regularly, it's easy to commit to the overhead of salaries for administrative assistants and closing coordinators, and other fixed overhead. But once you make those commitments, what happens when the market turns south? Who do you fire first? (And who will perform that person's work?)
Let's face it. We are currently at the confluence of the worst combination of circumstances in the real estate industry since the Great Depression. Market values have tumbled as credit standards have tightened and home equity has evaporated to its lowest point since World War II. Lead with revenue? Well, yes, you still have to lead with revenue, but how many in the industry are maintaining revenue at the levels of just a couple of years ago? The fact is, nobody predicted the market would decline so far and so fast. Not even Gary Keller saw it coming.
This market wasn't like a low front that was tracked on radar well in advance of its arrival. It was more like a tornado, forming rapidly and without warning. So this is neither an accusation nor an attempt to lay blame (and we are certainly not pointing a finger at Gary Keller). Rather, it is an observation to be considered by real estate professionals as they ponder their next career moves — or even their survival. But it begs the question: If Keller didn't see it coming, how can we presume that all his advice and recommendations properly apply today? This answer is: One should not presume any such thing.
So where's the alternative?
Fortunately, there is an option that solves these problems. One company has created a system in which you get all the benefits of a team but without having to hire and manage that team. And instead of paying fixed salaries, you pay them as you earn. There's simply no better way to 'lead with revenue.'
In fact, the system is designed so completely, it addresses each of those bullet items (the ones you read above) by incorporating solutions so ingenious you'll be asking yourself why nobody thought of them before. Of course, it takes a little imagination...
- Imagine an office designed to operate on the premise that when you arrive, your team is already in place. They're already hired and trained, and waiting for you. Imagine that the cost of the team is assessed on a 'per sale' basis. You pay only as you generate the revenue.
- Imagine that an arsenal of new tools and programs are included in your package so you get more listings, more easily.
- Imagine universal advertising campaigns designed so you can claim them as your own — and they cost you nothing.
- Imagine your broker-manager acting as your full-time closing coordinator.
- Imagine a team of buyers' agents that generate income for you on clients you may never meet — and regardless of what property they purchase.
- Imagine a system that looks like a franchise, but brands you — instead of the brokerage.
- Imagine a system that rewards you for new and innovative ideas, and helps you deliver them to the marketplace.
- Imagine a system that rewards you for recruiting (which means that if you already have a team, you can bring them along with you — and continue to earn on their production).
If all this sounds good to you then maybe it's time for you to discover a new approach to real estate. Would you like to know more about how you can improve on what you learned from Gary Keller's book?