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Archive for November 27th, 2005

The Times has a report on how Manhattan has 27,500 real estate licensees but only 10,000 transactions annually.
THE name of the game in real estate is amassing listings, because they mean money. But thousands of brokers have no listings at all – not surprising, when there are far more brokers and sales agents than there are properties to be sold.
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So how does someone attract clients? For those without substantial track records, it is very difficult.

"It is frustrating when you see some agents just rolling with listings," said Elizabeth Marks, an agent with Coldwell Banker Hunt Kennedy who owned a travel agency specializing in safari and scuba diving trips until business was slowed by the Sept. 11, 2001, terrorist attacks.

Ms. Marks took several real estate courses, including one called Sweat Hogs, which dealt with getting listings. "You must really work for listings," she said. "It is hard because if someone wants to sell an apartment, they are bombarded by brokers. Everyone knows a friend or is loyal to someone they bought their apartment from and don’t want to give you a listing because you are new."

She has tried a variety of tactics, even cold calling. "Nine times out of 10, people hang up on you," she said.

But she is not deterred. "I will call a particular building and say: ‘Maybe there is a buyer interested in your building. Are you interested in selling?’ Then I say: ‘Can we set up an appointment. I would love to see your place.’ I direct them to my Web site if they want referrals from the last six months."

So far, she has not gotten any listings that way. Nor has she reaped any from the mailings she has sent out, "but that isn’t to say it doesn’t work," she said.

If this agent has been doing something for six months and not listed a single property, then either she sucks or her plan is ill-conceived. She needs to find an area where she can get results or  else she’ll be selling insurance, peddling mortgages, or working in a framing shop by this time next year.

Real estate sales, like any other sales, is hard as hell. Getting established in this business takes more than the gift of gab or connections. You have to have a business plan and a strong work ethic. Otherwise, you become a name on a long list of licensees who don’t even work in the industry. Many of those 27,500 licensees without listings are inactive; they hold a real estate license because they took the class thinking they’d be active someday, or they were active and then gave up but held on to the license out of pragmatism.

When I was a new licensee in 1996, I was trained by a friend from college who mentored me closely. Personal connections were not an option because I was 300 miles from home. I knocked on the doors of For Sale By Owners and unsold listings whose contracts with other brokers had expired. I was relentless, and I never considered that cold calling in person was below my BA. After a year I figured out some easier ways to make the phone ring than knocking on doors, and in 5 years I was selling 30+ houses a year. I had a market niche.

Real estate agents who want to get established typically waste their time chasing golden geese instead of finding a market sector where they can win. Everyone is chasing Brownstones in Brooklyn or Midtown co ops while some very happy nobodies are kicking tail in places like Rego Park, Long Island City, and Marble Hill. There are tons of obstacles besides just raw rejection- print advertisers will bilk them out of money with "can’t miss" ad campaigns that flop (if they really knew how to generate real estate leads would they be selling advertising?), sales managers will get free work out of them by promising great results from "floor time," and they’ll generally spend more than they make until they quit. Getting traction in this business is hard, and even if they do get lucky at first, their expertise may not be enough to earn referrals- rookies are notorious for screwing up deals.

I applaud the Ms. Marks for taking the "Sweat hogs" course, but you have to know more than how to do the job right, you have to know how to do the right job. There are licensees who specialize in all types of specific needs: divorces, certain languages, veterans, health care workers, you name it. If I were her I would get a day (or night) job pronto, read The E-Myth Revisited, and apprentice as a go-fer for a well established agent until I knew what I was doing. Then, instead of having nothing but bills to show after 6 months, she’d be knowledgeable, experienced, know what aspects of the business where she excels, and be well on her way to establishing her very own niche.

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