Everybody wants to own the U.S. real estate market.
Hey, welcome to the Tom Ferry Show. If you and I were sitting down together one-on-one, and you asked me to be your strategic thinking and accountability partner, the conversation I would have with you is the same thing I'm having with mega successful teams, right?
Top producing real estate agents, mortgage companies, and most importantly, many of the CEOs of some of the biggest brands in real estate. And that is the acknowledgement of the old slice of the pie versus the new slice of the pie of real estate transactions. I'd ask you to consider that in my 30 years of working in this space, it always looked liked this. You know, five percent, wholesalers, we buy ugly houses, you know, ten percent for sale by owners, and the balance covered by real estate professionals just like you. Well, in today's day and age, with billions of dollars being poured into this real estate business, the vast majority of which, not necessarily designed to have you become more successful.
Instead, if you look at the landscape and how things are playing out right now, my hallucination is, over the next three to seven years, there's a pretty good chance, and it's gonna be fun to watch this show three to five years from now, that the real estate industry might look a little more like this. (computer beep) Yes, we'll still always have that DIY opportunity, and certainly, there's many for sale by owner sites that are making that even more attractive for that segment of the market. There's always gonna be that wholesaler business but they're now gonna struggle because a much bigger percentage of the business could become the "I" Buyer right? The hedge funds, and all the other businesses out there and you see the announcements every single day of who's coming into this space.
Because everybody wants to own the US real estate market.
And not just the market, the houses, and the rent because at the end of the day its a phenomenal real estate or just investment. And then, we also have the hybrids out there that are looking for slicker, more sophisticated marketing to make sure that they get in front of consumers and offer a flat fee service, a discounted rate, a better technological way to navigate a real estate transaction.
And again, they're gobbing up market share. Now here's the deal: if this didn't exist, we wouldn't have this problem. And if you're watching this show right now and you looked at the headline you might be saying to yourself: Wait a minute Tom, if all that stuff is happening and there's in the US 1.
3 million agents, only 43,000 that are selling more than 25 homes a year and with America's best in the Wall Street Journal 1000 coming out we know there's only another call it all in maybe 15, 16,000 agents that'll do last year more than 50 transactions or 20 million dollars in sales volume. Just in the US. Guess what? That piece of the pie over the next 3-7 years has the big possibility of getting compressed. And the question is: what are you gonna do?
Now in fairness, if you're not planning to be in real estate in the next 3-5 years, I would just say turn this show off and go watch something else.
But if you're like so many men and women that I work with, if this is your career this is your business. This matters to your family, to your life and everything you want to accomplish in the future then you need to listen up. The game today is about what do we need to do to position ourselves to become that obvious choice. Jay calls it the strategy of preeminence.
So let me say it to you like this. Think about the average consumer today. They buy a house or they sell every 10 years. So, what are you really good at in your life that you only do once every 10 years? And if you only do something once every 10 years, how would you go about the selection process today versus say 10 years ago?
There's a pretty good chance this is going to be involved.
And if you look back over the history of real estate there was a time when NARR would say to us "Hey the vast majority of real estate professionals are found by way of word of mouth or a direct referral from someone that they know." Well look at the stats today. It's almost nonexistent. Why?
Because this has taken over the world. Now, I'm not saying this is bad. I think this is the greatest thing since sliced bread. I'm telling you though, the game has changed. (computer beep) Think about it like this.
Let's do a hypothetical. Your spouse calls you and says, "Hey go buy a bag of chips and bring them home for a little party." And let's just say, you haven't bought a bag of chips in 10 years.
Just like the average buyer or seller, you haven't done it in 10 years. So, what do you do?
You go into the grocery store, you walk down, you look at that giant aisle and you're like: "yellow, yellow, blue, red, gluten free, what's that?" All of these different bags, all of these different brands some are lime, some are tequila, some are this, some are that. Tequila? And you're like: "what?" Now, there's an old strategy in retail that says all you need to do is just keep things on that eye level, that's the premium location where you want your stuff to be.
But now the new stats show you want to be at the bottom because everybody's walking in looking at their darn phone. But even then you got this giant aisle. How do you stand out? I'd ask you to consider, that's your challenge today my friend.
That's your challenge.
How do you stand out and compete against the 16, 17 billion dollars being spent by all of these extraordinary companies with extraordinary- I mean look guys. New brands, real estate brands. Old brands re-surging themselves, recreating their story right? Legacy brands been around forever all these new start-ups, all these savvy internet marketers, all these incredible SEO experts. All these people spending a fortune to dig in to that 80 to 100 billion dollar real estate transaction or that trillion dollar plus real estate valuation.
There is a lot of competition right now. Now if you're watching this and you're getting a little nervous, good.
Let me give you three of my nine positioning strategies. I'm gonna go macro and then I'm gonna go micro. Macro, what's the big idea?
Micro, a few strategies that we've seen work in the past that perhaps you can reinvent that trigger in you this is what I'm gonna do and then you go execute. So, no order of importance, here's the first one I wrote down. If you want to stand out, if you want to be recognizable, if you want to become the one that the vast majority of people reach out to, then you need to make an offer, a promise, a claim, or a guarantee that no one else is willing to make. Think about it. You need to make an offer, a promise, a claim, a guarantee that no one else is willing to make or willing to make.
So that's the macro idea. The micro considerations, things we know, in real estate. What are we seeing? Hey if we don't sell your house in 90 days we'll-- yeah. You remember this.
We'll buy your home. When that came out no one else was doing it.
It was super controversial. Red flags everywhere, but you know what? Whose phone was ringing?
Who was getting the listings? It was a unique enough promise or claim or hook that people were like "that makes sense to me." Now certainly that was not during the fiery times that we're experiencing for most of the world right now with shorter average times on market. But if you're selling, my friends, down in like Australia and I hope you're still watching this because we're talking so USA here, that there are certain market segments throughout the country of Australia and New Zealand where the average time on the market now is five, six, seven months, right? So maybe that strategy is applicable for you.
Another one is, we've seen this and this is certainly newer: "Hey if you list with me I'll get it on TV or I'll get it on the front cover of who-vee-doo magazine." And you know what? Even though it's not as strong as the first one, right it's not as strong, it's still different if you're the only one doing it.
Another one is, "Hey I'll do a mega open house." Well listen, when we started teaching that in 2010, and really making it a part of the strategy of helping all of our clients grow it was so unique and different.
Today, maybe not so much unless you do something extraordinary. But I wrote down-- here's one to consider. What if, and this is actually a part of another one of my strategies called do more right for the same, do more for the same. Check this out. What if you said, "Mr.
and Mrs. Seller before we go live one of the things I'm going to do is I'm going to have a team of people come in, they're gonna redo the carpet, the paint.
We're gonna stage, we're gonna declutter, we're gonna make your home absolutely show perfect to get you the highest possible price and sell in the shortest amount of time possible. And I prearranged nearly 50% of discounts on all of these services on your behalf to get it done in the next two weeks to have your property show-ready. And the best news for you is, if you say yes, it can all come out of the close of escrow.
Now, I said that and it was kind of long but I want you to think about what I just said there.
We know the studies around the home being show-ready, we know what it means when it's staged versus not staged. Could that be a simple offer or claim and if not that, then what? What are you going to do to stand out when some of these hybrid companies are now just saying, "Hey we'll just buy your home. Heck, we'll buy the next home and make the transition for you, no problem" Because they're thinking about mortgage, title, escrow, and all the other services plus the spread on buying that property for a little bit less, fixing it up, and selling it for a higher margin.
Am I talking too fast, or are you with me on this? This is an interesting time right now to be in our business.
And its gonna be really interesting for those of us strategic thinkers who are now looking at the market and saying, "Hey, you know what? Probably gonna need a little more than on the back of my card, oh by the way I work by referral." Which by the way, wasn't that an awesome thing like 18 years ago?
But when everybody started to do it, it didn't matter anymore. No one cared because, listen, when everybody's doing it, what's the old line? When you're not unique, you're weak.
When you're not unique, you're weak. Let's look at the second one.
Ready? This is a good one. Number two strategy for positioning yourself against all these threats is to clearly articulate who your service is for and therefore who it's not for. To clearly articulate who it's for, that's the macro idea. So I gave you just a couple examples, right.
Who are you for, versus who are you not for. If I said to you, the brand name Sotheby's, who would you say they're for? The 20,000 dollar trailer park in Oklahoma? Probably not. Is it the penthouse listing in Hoobydill Upscale Marketplace?
Probably yes. Why? Because a brand like Sotheby's is synonymous for luxury. What do you stand for? When people think about you, what's your brand?
Who are you for, who are you not for? They made it very clear.
But then I thought about one from a few years ago with one of our clients Kurt Wannebo. Now, back in the day known as Short-Sale Kurt. Kurt was so aggressive in his short sale strategy that he was even running television ads where you would see him zhoom "I'm Short-Sale Kurt" I mean it was, sorry Kurt, it was like cheese ball on steroids, but it was unbelievable the phone calls and the inbound, people going online emailing and calling.
So much that it was overwhelming, and we needed to create a better strategy. A better strategy to have people go through a process before they got to him because you know what was happening. He had to answer the same 37 questions over and over and over and over and over and as exciting as that sounds, not at all, in a little strategy session I said, "Well what if we just recorded a bunch of videos and you basically pre-qualified them, answered all the questions, told them all the pitfalls, all the things that are going to happen, what going to go on with their taxes, when will they be able to buy a house." He goes, "I know everything I need to tell them." I said, "Put that in a series of videos and then when someone calls in, or they email, or they request a meeting with you, they can't do it until they watch all that.
" Guess what happened.
Soon as he produced that, it made it where his conversion was so high and more importantly the clients understood exactly who he was, exactly what his services, what his degrees of separation were and how he was gonna manage the process, and bam. I think this last year he closed nearly 400, it was like three hundred and some ginormous number of short sales. See, go from the macro idea: who is my service for, who is it not for? And remember this, I wrote down hint: if you're for everyone, which is what everybody tries to do, "condos to castles baby, I'm licensed in the state of California, I'll go anywhere.
" It's such a huge mistake because hint, when you're for everyone, you're for no one.
When you're for everyone, you're for no one. So what do you do? You ask yourself, "Who's my ideal client?" Now when you ask that question, you can't say "the person that is totally compliant with me, that will give me all of their money, they'll never give me objections, and they refer me 50,000 people every single year.
" Okay hold on. First time on the Tom Ferry Show. (inhales as if smoking) Good luck with that. Right? Why don't we be a little more sensible.
Hey my ideal client is someone that is studying the marketplace, that understands the ins and outs, the transactions, the prices.
They are aware of what's going on. They've already met with their lender. They've been pre-qualified. And they selected me because I understand that much more about the real estate world, and the negotiations, and the agents than anybody else.
So we've got this mutual respect of both understanding and value that I deliver to the table. Who's your ideal client? Then the second question is, "What are their pain points, what are their needs, and what are their ambitions?" What are their pain points, what are their needs, what are their ambitions? And if I can articulate what their pain points are, I can then create content around their pain points and how we solve it in a beautiful, elegant, provable way.
Does that make sense? Which is kind of the last question. Which is once you identify their pain points, and their ambitions, and their needs, how do you articulate how you solve it in provable way? Measurable, statistics, data, you know eight out of ten as an example in a systematic way for your clients.
Then you can push that into the marketplace as your degree of separation and stand out amongst all the noise on that bag of potato chip aisle.
Does that make sense? I can't wait to see the comments on this because this is interesting. Alright let me go to the last one and I've got so many to share but I'm just sharing three because I know its just kind of one, two, three too many whoosh your brain explodes. So here's number three. If you want to stand out in a marketplace, you gotta totally dominate a niche.
Now, I have been a huge fan of this from day one in marketing 30 years ago. The old line was niche to riche, right? Niche to rich. Again, when you're trying to be all things for everybody, then you're usually for no one. So the macro point is, what niche do you want to dominate?
Where do you want to become the recognizable expert? And here's what I wrote down. It could be for example a geographic farm, it can be that you bought every zip code from every portal in a certain territory so on the online space you totally dominate it.
Number three, it could be something like expired listings that you are the queen of when you tried to sell and it didn't work, I repackage, reposition, get the home sold in the shortest amount of time at the highest net proceeds and I've done it 197 times this year. Actually I don't even want you to call me first, I just always want to be number two.
I'm Avis we try harder, as an example. Number four, maybe you become the niche king or queen of first time buyers with mediocre credit. Now you say, well wait a minute, wow, that sounds almost kind of obscure not sure if I want to work with that group. I want you to think about a group of people that would refer you more than anyone else. My FICO score was 11, you helped me get it up to 640 and then I bought my first house.
(melodically rejoices) You're a saint to them. You don't think that they're going to call every one of their friends and say, "No listen to me, you gotta call Shawn, you gotta call Jillian.
They're unbelievable! I mean I was down in the dumps--" It's the zero to hero and you were the cause of that. And that's your niche.
It could also be hey, you're the king of helping them invest in real estate. You're Mrs.Duplex, Triplex, Fourplex, you're the one that says, "Hey I love the fact you've been living in your home for 20 years, you've got this much equity. We need to sell that house and get that capital moving for you. What's your retirement plan?
" So you're looking for the "non-sellers" not the sellers. You with me? I want the non-sellers. You've been there for 20 years, you've got a ton of equity, it's time to sell that house, go buy a new home that's going to get greater appreciation versus the old dog you live in now, and we're gonna go buy you a duplex or fourplex.
So now you've got cash flow coming in in your retirement.
So that becomes your niche or it could just be non-owner occupied. You're the one that knows all the people that own all the two, three, five, seven, 10, properties in your area, and you become the expert of that. The bottom line is this my friends. The bottom line is this. The wave of the institutionalization of real estate has started.
Now that wave may only be this big, but if that wave continues to grow and the market, and this, and consumer behavior continue to say this is the direction we're going, it's just easier, why go through the stress, etc. If that's the way it goes, then it doesn't mean the end of real estate.
Be really clear, I'm not saying it's the end of real estate agents at all. Am I saying of the 1.3 million agents in the US that there's a good chance that a lot of them are gonna become obsolete?
1000% yes. I think it's gonna become very focused brokerages, it's gonna become hyper focused independence, it's gonna become unbelievable teams that are utilizing all the assets at their ability to go out and dominate. And those single agents that stand out like that gluten free tequila bag of potato chips-- gluten free tequila bag of potato chips? You know what I'm talking about. You gotta stand out like sore thumb, because if you don't-- (claps loudly) Listen my friends, it's just going to be hard.
So, this is a fun show for you. What are you thinking about? It's 2019 (quick snaps) the world is speeding up and I gotta tell you, I don't think there's been a more exciting time than right now to be in this business if you're a strategic thinker. (upbeat music) Hey, it's coach Tom Ferry. Have you been considering hiring a coach?
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