Seven Mistakes of a New Salesperson
1) MAGIC BEANS
Just as Jack traded the cow for a handful of magic beans, many real estate sales representatives are vulnerable to trading their valuable time for the promise of easy results. There are hundreds of promoters looking to take advantage of the gullible. In this business you are selling your time. If you want to be earning $100–/hour You need to be doing $100–/hour work and creating $100–/hour value. Your highest value time is when you are face to face with a prospective buyer or seller. Unsuccessful salespeople tend to spend a lot of time getting ready to get ready and avoid real play time.
2) LIVING BEYOND THEIR MEAN$
Remuneration in this business is variable. As an independent contractor the cheques come gross i.e. including the income taxes and G.S.T. This can make it difficult to manage cash flows, if funds are not set aside for these eventualities. Budgeting needs to be incorporated for promotional and operating expenses. In a classical pit fall scenario a sales representative works hard to get the ball rolling and in time successfully makes several sales. The time line can be as much as 6 months from initial prospect contact to pay check. Once the money comes in they forget how long it took to get it to happen and become distracted with life and spending the money. By the time they realize that the money is running out, it will take another 6 months to get to the next pay check. Worse still, there are promotional and operating costs going forward and Revenue Canada will be looking for their end. The solution is in budgeting and setting up reserve funds.
3) TOO MUCH EGO
Where as much of what we sell in this business is confidence and perspective, too much ego can be too much of a good thing. Some times when a sales representative is successful, he can begin to believe his own press releases, leading to his ultimate downfall. In the end, it is about giving and helping that makes one memorable and successful.
4) DISCOUNTING DOESN’T ADD UP
Many sales representatives fall into the trap of thinking that by lowering their fees they can buy their way to success. Many have tried only to be proven wrong. The assumption is that by lowering their fees they will get all the business. The reality is that they will get a share of the business as will their competitors. In the end, their share of the business is most often only slightly greater than they would have got under a higher rate of commission. However, they also typically give their fee reduction to clients that they would have had without the fee reduction. The net result is that the volume of work increases but the net revenue falls. This strategy may limp through in a fast market when listings only take 2 weeks to sell, but as the market flattens out and time to sell takes 60 to 90 days, costs escalate and discount strategies make especially bad business strategies. In fact, smart sellers today are using higher incentive commission to enhance the attention and buzz about their property.
5) PARTNERSHIPS ARE LEAKY SHIPS
Aside from the inevitable instability of the vast majority of partnerships, there is the spectre of King Solomon cutting the baby in half when the divorce arises. Should you wind up in such a situation I pray for you that you put your agreement in writing including an exit strategy. Even if you are one of the 5% that finds a match that can work for any sustainable period of time, the math is not great. Together you have to do minimum two times the volume of transactions to earn what you could on your own. The time you spend working together equals the time input of only one, so probable production for each is cut in half. Often when one doesn’t or can’t work, the other backs off, so that is minus one on the production time score card.
6) FAILURE TO PROSPECT
The most significant aspect of a real estate sales person’s day is prospecting. The one element that separates the unsuccessful, from the successful, from the fabulously successful is the ability to prospect. By prospect, I mean to proactively go out into the world and ask for business. When assessing the quality of prospecting, 2 aspects come to mind: Effectiveness in terms of scripts, strategy, timing etc, and consistency or should I say persistency. In terms of significance, the latter consistency and persistency is the ultimate factor.
7) FAILURE TO BE IN CONTROL
If there is any element that is a mark of a top sales person, it is that of control. Control of one’s self, control of one’s time, control of the transaction, in working with a prospect you find that you are out of your league. Refer them to on to someone who is more experience than yourself, or draw upon the support of your broker or colleagues. Part of something is better than all of nothing and what you learn from the experience of working with a proven professional will be invaluable.