If Real Estate Licenses Came With Marketing Degrees

Most real estate agents are not marketing experts. They did not get into real estate on their way to a lucrative marketing career. In fact many agents don’t know anything about marketing and so they just do things as they have always been done. And the way it has always been done in real estate is with image advertising. This is not news. It is an obvious fact that can be found by simply looking around your own neighborhood and in your own mailbox.

One of the major aspects of image advertising employed by real estate agents is the large color photo of themselves. When I see these kinds of ads and signs, with the agent’s picture being the most prominent thing in them, I wonder why I should care what they look like. I know this will sound harsh to many of you that are currently using this kind of advertising, but I am not sure how my real estate agent being photogenic will help them sell my home. I consider myself to be an average consumer. And as such, for me to pick up the phone and call the phone number off of any advertising, I need to see the benefit to me. I don’t see any benefit to me in these ads.

So if image advertising is not the way to go, what is? Direct response advertising. With a direct response ad you give people a reason to pick up the phone and call you. You can compel people to dial into a call capture hotline with any number of benefits to them. The key is that you offer them something of value such as a coupon, a free report, or a free home evaluation. People are much more likely to call an agent that is offering them a free report on “10 Tips To Selling Your Home Fast” than they are an agent that is only offering them a nice smile.

The other important thing that you can do in a direct response ad is set yourself apart from the competition. This kind of marketing is perfect for yellow pages ads. If you look at the ads that are usually running in the phone book, they all look the same. What is going to compel someone to choose you over all the other agents in there? If you use the standard image advertising approach, there is nothing there to get the consumer to pick up the phone and call you. However, if you have a direct response ad that immediately grabs their attention and tells the consumer what you are going to offer them (a FREE report for example) and how to get it (by calling your 24/7 toll free call capture hotline) you set yourself apart from all the other agents in the book.

Direct response advertising also has one more major advantage over image advertising. You can’t track image advertising. Image advertising has its place and that is in businesses that have the time and resources that are necessary to have people recognize their name or logo on sight. Real estate agents usually do not fall into that category. They are working with tighter budgets and shorter timelines. They need to know if the ads they are using are working now, what their return on investment is, and what ads need to be scrapped. This can all be accomplished with direct response advertising. Direct response advertising, when done correctly, has a call to action built in that when acted on, can be tracked using call capture technology. This allows real estate agents to really see what is working for them and what is not.

Most real estate agents are not marketing gurus. When they got their real estate license it did not come with a degree in marketing. So it is understandable that most agents just do things the way they have always been done when it comes to advertising. Unfortunately, that is image advertising. If you want to compel people to call you, stand out from your competition and be able to track your results from your advertising efforts, direct response marketing is the way to go.

Congratulations! You Have Your Real Estate License – Now What?

Now don’t get me wrong, I commend you on getting through the process of taking the course, and passing the test. You wouldn’t believe the amount of people who fail to pass and receive their license. It’s not an easy feat, and you should be very proud of yourself for getting this far.

BUT, unfortunately what you learned in all that Real Estate Training was just to get licensed, and really has no real world worth in getting you started in this very competitive business called Real Estate.

Once you have placed your license with a Broker (and hopefully you did your homework on where you would get the best leadership and guidance), and have ordered your impressive business cards and bought all your desk supplies to get started… what now?

I know, you’re thinking in your mind that your Broker is going to have all the answers, and that you will be handed business now that you are licensed. You’ll start manning the phones during your time “up” for desk duty, and the calls will just come pouring in, right?

I’m sorry to break this to you, but you are now a Business Owner, not an Employee. It’s now time to start learning how to get in front of buyers and sellers in this extremely competitive and hostile market. You’re gonna find that no one is going to “hand you” business. It’s much more likely that there will be those who will try to make sure you don’t GET any business (and I’m not just talking about the agents in other brokerages – watch out for those you hang out in the office with).

So where do you start?

NAR statistics show that over 90% of buyers start their home buying process online. They begin by looking up listings on the internet, and seeing what is available. If all the buyers are searching on the internet, then how can you get in front of them? Guaranteed, it WON’T be by placing a flashy ad in a home buyer magazine, or putting an ad in the newspaper about how awesome of a Realtor you are.

You need to have on online presence, and you need to get it NOW. I know, you’re thinking “Well, I just got my license, and I don’t have any listings, so what do I have to offer?” “How can I get a website up and start marketing when I haven’t made my first sale yet?”

The great news is that internet marketing is now the #1 tool to getting your business in front of buyers and sellers, and it doesn’t cost a whole lot of money to get started. Sure, there are flashy things you can do online that will take money, but to get started it will actually cost you less to start marketing online then it would to place a “Love Me” ad in the newspaper. Wouldn’t you like to get more bang for your buck, especially when you haven’t made your first sale, and you need to conserve every penny possible?

Start your business off on the right foot, and begin an internet presence for your real estate business.

Everything A Real Estate Agent Doesn’t Want You To Know, A Year In Review 2006

During 2006 I have written a number of articles known as the “Everything A Real Estate Agent Doesn’t Want You To Know” series which has been a consumer oriented series of information to help home buyers and sellers protect themselves when conducting a real estate transaction. These articles are a natural extension of books I have written known as “Everything A Real Estate Agent Doesn’t Want A Home Buyer To Know” and “Everything A Real Estate Agent Doesn’t Want A Home Seller To Know”.

The first book written during 1990 was called “Everything A Real Estate Agent Doesn’t Want You To Know” and it had a fair degree of national success, much more than I thought it would, when I introduced it to the media during 1991/92. We sold the book in every state in the U.S. including Alaska, Hawaii and as far as Pakistan and Japan. This was not a bad performance for a self-published under-funded author.

I wrote this book because I was a licensed real estate agent in the state of Ohio and, more importantly, I was a residential mortgage banker for a few years and I saw many home buyers and sellers experience financial damage from dealing with inexperienced and unethical real estate agents. Many of the agents were either totally incompetent or so self interested that they would mislead buyers and sellers, anything to get them to sign a purchase offer or a listing contract. Many of these home buyers and sellers who were cut through the neck and didn’t even realize they were bleeding because they lacked knowledge and insight into how the real estate game is played.

These books have always caused friction between real estate agents and myself because many agents resent the title of the books and the ill conceived premise that my position is that all agents are bad crooked people, which is false. In fact, whenever I did a media gig I always made it a point to clarify this is NOT a blanket indictment against real estate agents. There are good, honest, knowledgeable, full time real estate agents in the business who are highly professional. The problem is they are the minority and not the majority.

The major problem with the real estate industry as a whole is the ease with which a person can get a real estate license. While the educational requirements vary from state to state, in most cases, anybody can get a license to sell real estate in about 90 days. This just doesn’t make sense to me. Consider that many agents are little old women who operate part-time, have no business or selling background, go to school for 30 or 90 days and are licensed to represent home sellers in property transactions from around $50,000.00 and up. I mean, a lawyer has to go to school for seven years to get a license to write a fifty-dollar will or represent somebody in a petty traffic accident. But silly-sally can go to school for 30 days and list a $250,000 house for sale? That does not compute in my mind. What kind of representation will a seller get from a part time agent with one toe in the tub? And the full-time pros know what I am talking about.

I have had many close discussions with agents while I was in the business and the bottom line is that part timers are often the weakest link in getting a deal done, unavailable for showings, etc. The bottom line, part time agents give part time results whether you are a buyer, seller or a full time agent trying to make a living.

And the truth is that most people, especially first time home buyers and sellers don’t know what is going on…not really. How you select an agent to sell a home, the nature of contract law and the negotiable elements of listing contracts, purchase contracts, etc. is way beyond most first time buyers and sellers. The result is that sellers sign stupid long-term listing contracts with the wrong agents and the wrong companies and buyers pay way more for property then they would if they had more insight into the workings of real estate transactions involving commissioned real estate sales agents. I didn’t originate the problem, I just identified the problems and the solutions for home buyers and sellers.

CAVEAT EMPTOR is legal jargon which means “buyer beware” and it means what it says. Whether you are a home seller or home buyer, you better know what you are doing when you are making decisions and signing contracts because, it is your duty to know and ignorance is no excuse under the law. If you do a stupid real estate deal, it’s your fault. Which is a shame because buying or selling a home is a BIG business decision. It is a business transaction composed of people, emotions, contracts and cash and those are all the ingredients for legal and financial pain if you don’t know what you are doing, and most people don’t. And how are people supposed to get access to this information that will protect their legal and financial interests before they buy or sell a home anyway?

THE POWER OF THE NAR OVER GOVERNMENT AND MEDIA

What many people don’t know is the National Association of Realtors  (NAR) is one of America’s largest special interest groups who have incredible lobbying power over our politicians to write real estate laws that benefit the real estate industry, not consumers. Thus, the caveat emptor clause… state and federal real estate laws are written in the interests of your local real estate company and not you.

Something else people are not aware of is the tremendous advertising influence the NAR has over print and electronic media to manipulate the news you read, hear and see because of their advertising dollar power. There is an article written by Elizabeth Lesley of the Washington Journalism review called Demand Happy News And Often Get It and it exposes the corruption and manipulation of the news consumers count on to make decisions about buying or selling a home. I strongly urge everyone to read this article.

Real estate is like the stock market in some ways. When you hear of a fad like “flipping” you are probably at the tail end of that gimmick bubble, kind of like the dot.com days… everybody jumped in because they thought it was hot and it was really the end of the dot.com bubble. A lot of people have gotten caught with their pants down on the flipping angle.

Home foreclosures are up across the U.S. because real estate agents and the lenders who cater to them (the real estate industry has tremendous influence over the lending industry because the are the source of so many home loans) have qualified otherwise unqualified borrowers, by putting them in gimmick loans. In the mad dash to milk the market, people have been steered in to interest only loans, negative amortization loans or attractive teaser loans like low interest adjustable rate mortgage (ARM) and other stupid financing that is NOT in the best interest of the buyer. That’s why many of the foreclosures are happening. Naïve and gullible people were sold a bill of goods based on unrealistic property values. The market got hyped and the agents and lenders were right there to exploit buyers and sellers. Did some people make money? Sure. But many people have found themselves against the wall with too much “house”, too big a payment and a housing market that looks pretty bleak for a while…

All it takes is one ripple in our fragile economy to turn the real estate market into a landslide. Here’s a news flash: The economy is on shaky ground. The economy has been kept strong by housing sales and corporate profits and both are an illusion. The real measure of the economy is durable goods, like automotive sales, which are in the tank causing massive restructuring and layoffs. People can’t afford to buy cars because they are scraping the enamel off their teeth trying to make house payments…

So, whoever you are, and you read my real estate articles, keep in mind that the reason I have done what I have done, and will do what I do, is because I am on the side of the consumer. I am on the side of the person who wants to be a better, more informed consumer. I am on the side of the person who wants to save a few thousand on their real estate transaction by being smart and on a more level playing field with real estate agents.

And you know what? By educating people and teaching them how to do deals more intelligently, how to weed out the part timer agents from the pros and save a few bucks in the process, I am actually helping the professional full time agents. The truth is that honest agents won’t have a problem with my position because it will get rid of the riff raff.

Thanks for reading!

Jim Hart

Copyright © 2006 James W. Hart, IV All Rights Reserved