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THE MILLIONAIRE Real Estate AgentIt's not about the money
By Gary Keller Dave Jenks Jay Papasan
McGraw-HillCopyright © 2004 The McGraw-Hill Companies, Inc.
All right reserved.
Chapter OnePart One: CHARTING THE COURSE
"I must create a system or be enslaved by another man's." William Blake
Why Are You Here? You're in Management and We're All in Sales
Several years ago at a real estate sales seminar, I had an interesting conversation with another real estate agent. The revelations that emerged from that conversation have since proven essential to my ability to consult with salespeople. Here is my best recollection of how that conversation went:
AGENT: Gary Keller, right? I noticed you from across the room and just wanted to introduce myself and let you know I've heard a lot about your company.
ME: Well, thanks. We've worked hard to get where we are.
AGENT: Excuse me for asking this, but why are you here?
ME: I'm sorry? What?
AGENT: Why are you here? you're in management, and we're all in sales. I was just curious to know what you're doing at a sales seminar.
Honestly, I was a little taken aback by the question. Sure, I was in management, but I'd been a successful real estate agent before our company was formed, and, frankly, I really still thought like one. In life, one of the toughest obstacles we can face is the difference between how we see ourselves and how others see us. What lies in between the two perspectives can be an obstacle to effective communication and a source of misunderstandings. A big part of my job has been working with top real estate salespeople, and I'd been doing this for more than twenty years. It had never occurred to me that someone might not see me as a real estate agent myself, so I decided to ask a few probing questions.
You see, if you really look at the organizational structure and the systems, there is not a lot of difference between a well-run real estate office and a mega agent's real estate sales team. Both have buyers and sellers who drive the bottom line. They have administration and infrastructure. And they have what is essentially a CEO coordinating the team's activities to increase productivity and profits.
I point out these parallels when I work with agents, and what they ultimately discover is that I do the same things they do. I am just highly leveraged through association with great talent and have thoroughly documented my systems. I'm a real estate agent living large.
Let me define "living large." Since the late eighties no other real estate broker has had more houses sold under his or her license in Austin, Texas. In fact, my two Austin real estate offices ranked first and fourth in the country in closed real estate transactions (according to the 2001 REAL Trends ranking of single office companies). Thanks to an average annual growth rate of over 40 percent between 1998 and 2001, Keller Williams Realty International catapulted out of regional obscurity to become the seventh largest real estate company in the country. And Inman News tagged Keller Williams as the industry's Most Innovative Company in 2001.
So if you see me at a real estate agent event, I sincerely hope you'll say hello. I also hope you'll understand why I'm there. I'm a real estate agent, too.
Mastering the "Game"
When we started our company in 1983, we had no idea what amazing people we would associate with in the years to come or how much we'd learn from those associations. We have had the opportunity to work with and learn from top sales associates from every corner of North America: industry leaders such as Brian Buffini, Tom Hopkins, Floyd Wickman, Bill Barrett, Mike Ferry, and Howard Brinton; and even business visionaries such as Robert Kiyosaki, Michael Gerber, and Mark Victor Hansen. Every one of these people helped shape our successes and the message of The Millionaire Real Estate Agent.
Through our shadowing, consulting, masterminding, and mega agent programs, we've had the opportunity to work one-on-one with hundreds and hundreds of top agents. Their contribution to this book and our overall success cannot be overstated. However, we knew that for the purposes of The Millionaire Real Estate Agent we would also have to draw on the experiences of top producers with whom we had not yet worked personally. So we picked up the phone and started calling. We worked our way through the top fifty real estate agents in the country as ranked by REAL Trends and set up as many interviews as we possibly could. We listened. We listened hard. We took notes and bounced our ideas off the very best in our industry.
Without a doubt, these high achievers are masters of their game. What became very clear very quickly is that they are experts on their markets and often have developed successful systems that perfectly complement their markets and their own mix of personal strengths and weaknesses. They had a lot to share. They were also very curious about what we'd find. While many would freely admit to having mastered "their game"—their personal approach to real estate—few would lay claim to having mastered the "Game" in the broader sense.
We took all that we learned, passed it through the filter of our own experience, and combined it into simple, effective models anyone can follow to take their real estate sales practice to the highest possible level. As a result, this book is not about "our game" or even a collection of theirs. It is about the "Game." We feel personal mastery is best pursued through a thoughtful analysis of the "Game" and then relating that new understanding to personal circumstances (your market, your strengths, and your weaknesses). It is an ongoing process. This book may represent the first step for some, but for many it will be yet another checkpoint in their continual pursuit of personal mastery in the "Real Estate Sales Game." Our hope is that you will take this book, reflect on it, apply the models from it, and then personalize it over time to master your game at the highest levels possible.
Modeling—The Cornerstone of Success
Two events in my life forever changed my thinking on what I believe a person is capable of achieving through God-given talents alone. The first was when a Baylor professor chided a certain cavalier young student who thought he might have all the answers. (That would be me, of course.) He said, "Son, you're not the first person to want to have a successful career. You're not the first person to have dreams you want to fulfill. You're not the first person to want to be the very best you can be in life. You need to realize that people have lived before you. And you might be wise to slow down for just a second and figure out what they learned on their journey before you start your own." I listened attentively and thought I understood what he was saying, but I wouldn't really hear him for almost a decade.
The second event happened in 1987 when our young company was faced with a collapsed economy. Up to that point we had been successful on certain levels, but there were now some big challenges that were holding us back. In the end, I found that I didn't have all the answers. In my opinion, our growth till then had been sustained through sheer hard work. Then the market turned sour, and we were faced with a new and very real ceiling of achievement. That was the year I read Unlimited Power by Anthony Robbins and finally heard my professor: "People have lived before you." Robbins' book made that point in a very powerful way. Here are some of the passages that I underlined and that I'd like to share with you:
Long ago, I realized that success leaves clues, that people who produce outstanding results do specific things to create those results.
Actions are the source of all results.... This process of discovering exactly and specifically what people do to produce a specific result is called modeling.
To me, modeling is the pathway to excellence.... The movers and shakers of the world are often professional modelers—people who have mastered the art of learning everything they can by following other people's experience rather than their own.
To model excellence you should be a detective, an investigator, someone who asks lots of questions and tracks down all the clues to what produces excellence.... Building from the successes of others is one of the fundamental aspects of most learning.
Epiphany! A lightbulb went off in my head, and I had an "aha." I then slowed down just long enough to start looking in much greater detail at what successful people were doing. I also systematically involved my team in the modeling process. The models we discovered and implemented that year helped us break through the challenges of the lagging economy and laid the groundwork for our later accomplishments. Ever since this breakthrough, it has been my goal to actively, aggressively, and continuously model the real estate business for its owners and agents.
At the same time, I do think that it would be a mistake to discard creativity. Without a doubt, we have been innovative in our real estate business. The trick to getting the most out of our creativity is always to start with a set of proven foundational models for success. Once we find success with our initial models, we can then allow for creative thinking. But only after we've followed the models do we allow ourselves to tweak, innovate, refine, and fiddle until the models work to the level of our expectations. The key to taking this approach is to avoid placing creative innovation ahead of the effective implementation of proven foundational models.
The reality about using models is that if you begin with creativity and then try to add a model, or if you try to add creativity to a model you haven't fully implemented, you risk rendering the model completely ineffective. Many people don't fully realize this. More than likely, they will try to use creativity as a shortcut or as a way to cover up for their lack of properly or fully implementing the model. The truth is that when you add creativity to a practiced and proven model, you will always have a much greater chance of achieving your highest possible results.
In The Millionaire Real Estate Agent I will present to you a set of models. They are based on the actual experiences of the very best in our industry. I strongly encourage you to accept what they have learned to be true and then, by applying these models, use their successes as your own launching pad. Once you've implemented these models and feel you have a thorough understanding of them, I encourage you to innovate around them to see if you can improve the results. That's implementation before innovation.
Reinventing the wheel every time is just plain exhausting work. And it leads to breakdowns and burnouts. On the other hand, I think you'll discover that modeling will be very empowering. In fact, it may make things appear so simple it feels like cheating. Powerful models usually feel that way.
Natural Ability and Achievement Ceilings
In my experience, people tend to predict success based largely on a person's natural abilities. This can truly be problematic no matter where you see yourself in this spectrum. Lots of natural ability can lead to overconfidence. Likewise, lack of natural ability contributes to low confidence, so much so that many never even attempt tasks that appear to be outside the realm of their natural abilities. The truth about ability is that it is neither set nor predetermined. However, it can be developed or it can be wasted.
Now here is the simple truth we must all deal with: Natural ability can take us only so far. No matter how gifted we may be, each of us will eventually hit our own ceiling of achievement. There is no "if" to that assertion, just a "when." So the most important achievement question you may ever have to ask yourself becomes: "When I hit that ceiling of achievement—whether it is low or high—how will I break through?"
What I've discovered is that by starting with models you can push your ceilings higher and, eventually, break through them. But even great models will have limitations, so eventually you'll hit a new ceiling. This is when I encourage creativity. This is when I encourage you to start adapting the model. Don't abandon it—adapt it. Once the right amount of innovation is added, you will more than likely experience another breakthrough and move forward. That is the cycle. Each improvement will have its limitations, and, sooner or later, you'll have to tweak your model to ensure continued progress.
So the trick to having breakthroughs in your life is to adopt the right foundational models. In our experience, these models need to be as big and ambitious as you can possibly find. Typically, the bigger the model the further you can ride it before hitting a ceiling. And that is one of the most exciting advantages big models offer. The foundational models we present in The Millionaire Real Estate Agent are founded on three cornerstones, which we call the Three L's of the Millionaire Real Estate Agent.
The Three L's of the Millionaire Real Estate Agent
When we first started grouping our findings by category, it appeared that we might have eight core issues. On closer examination, we were able to eliminate three and narrow the list to five. Ultimately, we discovered the finish line lay at three core issues that support our model—Leads, Listings, and Leverage. We call them the Three L's of the Millionaire Real Estate Agent.
Leads—Everyone Has Two Jobs
You can have a doctorate in real estate, outfox a professional litigator in a contract negotiation, appraise property better than anyone in your market, and have more financing knowledge packed in your head than a mortgage guru, and it won't do you a lick of good without clients. To succeed in real estate, you must have client leads. It's that simple. Until you have enough leads (to meet or exceed your goals), there is no other issue. No matter if you are a doctor, lawyer, or entrepreneur, everyone has two jobs—their chosen profession and lead generation.
I remember reading an article written by a fellow real estate agent who was distressed to learn he was also in the lead-generation business. His article was a lament. He was personally distressed. He somehow thought that with his professional certification, he could sit back and the world would find him. It was easy to identify with this guy. I earned a four-year degree in real estate and never once did a professor mention lead generation. No one told me. Later, to my horror, it became clear that if I wasn't any good at lead generation, no one would ever know what an educated and knowledgeable real estate professional I was. It was time to face the facts. To succeed as a real estate professional, I had to learn to generate client leads.
Listings—The "Gift of the Real Estate Gods"
Listings are the high-leverage, maximum-earning opportunity in our industry. Conventionally, your income from having a listing sell is no different than closing on a similarly priced home for a buyer. What separates the two is the amount of time necessary to work them. In our experience, a highly productive individual can personally obtain fifteen to twenty-five seller listings per month. The same agent would be hard-pressed to sell homes to seven or eight buyers a month for any prolonged period of time. With the right approach over time, you should be able to secure and sell as many as two to three listings for every buyer you could sell.
So from the very start, by concentrating on listings first and foremost, you could potentially double or triple your gross income on the same amount of work. If this isn't incentive enough, then consider how listings provide a lead-generation platform through direct mail, ads, signage, and open houses. It is a fact that being in the listings business begets more business. Our research shows that one listing properly marketed should generate enough leads to produce a minimum of one closed buyer.
At the end of the day, listings give you better control. They give you better control of your time, your marketplace, and your future. That's why we affectionately call them the "Gift of the Real Estate Gods."
Leverage—Time vs Money
We've all heard that time is money. Well, that simply isn't true. In fact, it is one of the worst mental maps perpetrated on us by unknowledgeable people. The truth is that time does not always translate into money. Those who work the longest hours are not always those who make the most money. As business-people, we look at the time-money relationship in a different way. We're continually trying to net the maximum amount of money for each hour of time invested. In the beginning of our careers we spend time to earn more money. Then we learn to work smarter and begin to earn more in the same amount of time.
Just like in our discussion of ceilings of achievement, we've discovered that there are limits to our personal efficiency. The ultimate key to tilting the money/time ratio in your favor will be leverage. Leverage can be divided into three categories: people, systems, and tools.
By far, the most important of these is people. While good systems and tools can help average performers consistently contribute more to the bottom line, nothing comes before hiring and keeping talent. If you're like most salespeople, then designing and implementing systems and tools may not be your strong suit. The best way around this is to hire someone who is proficient at details and systems. That's why we recommend hiring administrative support talent first. When you've put in all the time you have or are willing to give and still want to increase your income, add leverage.
Excerpted from THE MILLIONAIRE Real Estate Agent by Gary Keller Dave Jenks Jay Papasan Copyright © 2004 by The McGraw-Hill Companies, Inc.. Excerpted by permission of McGraw-Hill. All rights reserved. No part of this excerpt may be reproduced or reprinted without permission in writing from the publisher.
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