By Mark Leck, CEO
I want to challenge agents to think differently about their business strategy in 2015. I want you to acknowledge that in each of your markets, there is a relatively fixed number of people that are going to list and eventually sell their home at any given time. Yes, there are ebs and flows. Yes, this number varies year over year, especially given certain macro economic factors — but ultimately, there is a measurable and predictable number in each of your markets.
For example, let’s say in January 1000 people are going to list their home. What % of that market opportunity do you expect to get? How do you expect to get it?
Most agents approach their business with the naive goal of being the first and only agent a seller should list with: a First to List, First to Sell™ strategy. Only to be disappointed and frustrated when their friends and family fail to call them to list. Or to realize they simply don’t have enough friends and family to sustain their business.
We propose a Second to List, First to Sell™ business strategy that acknowledges the fixed market opportunity, and refocuses to the greatest potential within that market.
Define “Fixed Market Opportunity”
What we mean by “Fixed Market Opportunity” is that ultimately there is a set number of homes that will list and sell each month. Because there is a sufficient number of agents in each market, as well as the opportunity to list as For-Sale-By-Owner, most people who intend to sell are identifiable because they are either listed with an agent, or have decided to list their home on their own as a FSBO. The importance of this concept is to make clear that in each market, there may only be 1000 properties that list (even if there are 4000 agents in that market), and out of those, let’s say that 50% of them will sell in a given month.
The question is, how large of that market opportunity can you as an individual agent expect to get? Is it 1% (10 listings per month)? Is it 0.5% (5 listings per month)? The answer is this depends on the size of your sphere of influence/past client database.
For some agents, that answer is 0-1 listings, because they have no Sphere of Influence/Past Client database. But if you can only list less than 1% of the market from your SOI, what about all the other properties that are listed for sale, but don’t actually sell? This is a huge market opportunity, and one that should be apart of every agents business strategy.
If you can’t be the first to list the property, you should be the second to list it — and make sure you are the first to sell it! Hence, a Second to List, First to Sell™ strategy.
What is a First to List, First to Sell™ real estate business strategy?
The goal of this strategy is to be the first and only agent a seller chooses to list and sell their home. This strategy is dependant upon having a large sphere of influence (friends and family), and more importantly, a large database of past clients. This strategy is most often successful after an agent has been in the business for several years and has developed a large SOI and past client database through prospecting with a Second to List, First to Sell™ strategy to Expireds and For-Sale-By-Owners.
Unfortunately, many new agents begin their career in real estate attempting this strategy, which often leads to low production and disappointment, because their SOI is not sufficiently large enough to sustain them.
What is a Second to List, First to Sell™ real estate strategy?
A Second to List, First to Sell™ real estate business strategy is the fastest strategy for growing your sphere of influence and can ultimately lead to a long-term First to List, First to Sell™ strategy. This strategy acknowledges the Fixed Market Opportunity, and identifies the largest opportunity available for agents is targeting homeowners who have an intent to sell, and have previously listed with another agent (expired listings) or are listing their home on their own (For-Sale-By-Owner listings).
An ideal agent for this business strategy is someone who doesn’t have any past clients, or someone who’s past client database isn’t sufficiently large enough to generate enough repeat/referral business to achieve their business goals. We believe this is the best strategy for real estate agents to create a sustainable real estate business.
Again, our challenge to you in 2015 is if you haven’t reached a level of production within the industry that you are happy with, change you strategy! My father use to always say: “If you do the same thing as everyone else, expect the same results.” So let’s not do that. Having a First to List, First to Sell™ strategy is fine, but if it can’t sustain your business or doesn’t succeed in helping you to achieve your goals, then make the focus of 2015 to have a Second to List, First to Sell™ prospecting strategy.