3 Myths That Are Rampant In The Real Estate Industry | Real Estate B-School

Welcome back to the Business Freedom Podcast. Super excited for the podcast. Today I'm going to dive into the three myths that I see rampant in our industry. And it's growth for growth's sake. And I see it across the board with team leaders. And these are the three things that I see all over the place that are not leading to more time, more money and less stress. Real Estate B School, by the way, this is Lars Heidenberg, founder of Real Estate B School and co founder of High Performance Real Estate Advisors. And I see this across the board at Real Estate B School. We want to build a business, we want to grow our business only if it gives us more time, more money and less stress. And that is not the case for most teams across the country. I talk to a lot of team leaders and they have, as they grow, they have more stress, they have less time and they don't have money to show for it. So I want to get into three myths. So if you're a real estate team leader and you're pushing for growth, either you're on the front end of that and you're, and you're looking to grow your business, maybe you're 500,000 to a million or so GCI, maybe you're a million to 2 million. There's these stages of growth. These three things I see at every stage. Number one, I can't decide which I want to do is number one. Number two, because they're neck and neck, Number one, I'm going to go with, I'm just going to buy more leads and by buying more leads I'll be able to grow my business. I had a conversation with a guy that was generating, yeah, stuck at 150 sides. So this is like three or four years at 150 sides, not profitable, has to stay in production to make money and super stressed. Probably doing about 50 to 60 of the 150 sides and managing four or five agents, generating five to 600 buyer leads a month. Mainly buyer focused business. So all forced registration, home search leads. And the answer has always been in this team leader's mind. I'm just going to turn up the leads and that's going to increase the transactions in my business. And so that's the belief and that's the myth oftentimes. And it's across different lead sources. So it's across Zillow, Trulia, pay per click, Facebook leads, Craigslist, it's generating a bunch of leads across all of these different lead sources. And I think of an example, a guy, Dan Jones, who was actually on my real estate team that I started working with this is back probably in 2015, he basically left my team. He wants to start his own team, which I was totally cool with. Really amazing guy. The real Estate B school didn't even exist at the time. He did it two years on his own. Sold about 60 homes each year. And then when I launched Real Estate B school, I reached out to him, I said, let me show you how to do some things. And took him about a year to believe me that I was, you know, my heart was in the right place, even though we're in the same market. And first thing I challenged him to do it was the year he did. We started working together. He went from 65 to 105. I challenged him to go from four paid lead sources to one. And when he did that, he went from 105 to 175 then. And so it's counterintuitive. And I made him double down on his database. I made him optimize his yard marketing, his yard sign calls and open houses. Like the stuff that is a little more old fashioned and it works really, really well. And it doesn't cost a lot of dollars. It costs in time. And he had some agents that could man open houses and do those sorts of things. And so went from 105 to 175. Trying to think if I have the numbers right, I may be missing a year. Either way, the challenge was to go down to one lead source and then we added back one more lead source and the next year he went to 225, then 275, and that's two paid lead source, a database and yard marketing. Essentially he went from 65, 105, 175, 225, 275 on two paid lead sources. 8 to 10 times return on those lead sources. Because we chose to really just focus on the lead source. And we're not generating hundreds and hundreds of leads. We're doing a whole lot more with a whole lot less. So the myth is I just need to generate hundreds of leads and most teams are are generating hundreds of crappy home search leads. And these home search leads are just going down in quality year after year. There's probably 20 times as many forced registrations generated on an annual basis than there are even buyers. So it's just this battle that you can't win. That's a whole nother podcast episode that I've already done probably three or four separate times about how our Marketing needs to shift. So that's number one myth. Adding leads will help me grow. It will not help you grow. Number two myth is that adding agents will help me grow. And it's this, this thought that if I, you know, I have 10 agents now. Let's say these, these are. Let me think of an example of maybe a strategy session that I've held recently. I'm thinking of a team leader that has. Yeah, okay, so I'll think of a client that we just brought on a larger team. They did about 1.5 million GCI in six months, 19 or 20 agents. And the thought is, and it's talking about the spectrum of like tight team that's consumer focused and you know, that's set up properly where everyone has a position, everyone's working the position that they occupy on the team. And if it's sales, they're actually doing the job of a salesperson. They're doing new business development every day. They're doing lead follow up every day. They're treating the leads exactly as they need to be treated. They're right fits in terms of core values. And it's scary to think that you can go from 20 agents to 10 agents and sell more homes in the process when you have this broker mentality. And the guy I'm talking about is going to know I'm talking about him and I talk about him with all the respect in the world. Super like aggressive in the right way business person, like really smart dude, just got caught up in the building a team, but more like a brokerage and you know, having 10 right fit agents on your team versus 20 where 10 and 10 like you don't even, you're putting your time into 10 agents that really don't deserve the time. And this example could be about anybody and their team could be four agents. And two are just like, did you even work today? Versus you know, two that are really going to get after it. And if I feed into those two, they can sell three, four, five, six homes per month and they'll never leave you because you're feeding into them. And the fear is that you need to sort of have this portfolio of 20, 25, 30 agents. And that is going to inherently solve your problem. It makes your life a living hell. Now you have 10 people that you don't even, maybe not even like that aren't doing their job, that are gnawing at you. They're your underperformers. They're not showing up and doing anything on a daily basis. And they're just Taking away from the business, what you're looking to build and the energy that you could be putting into the A players on your team and have them just absolutely crush it and get from two sides a month to three sides a month, to four sides a month, to five sides a month. Right? That's all you really need is less. Less is more when it comes to headcount. And you know, we've run about a 50, 50 admin versus agent model. And that's not for everybody. It's not exactly what we teach in real estate B school. And the theory is that there's so it's not theory, it's fact. There's so many administrative tasks that the salesperson is not qualified to do. They actually do a bad job on most of those tasks that we take those things off of their plate. And their primary focus is new business development, follow up price improvement conversations with sellers and securing buyers and sellers in terms of bringing them into a loyalty agreement with our team. And so that's the second myth, is that adding more agents will help you grow. And I've seen it time and time again, is that if you focus on surrounding yourself with the right people that really are willing to sort of march to the beat of the drum, the drum cadence that you're putting out, you'll be infinitely better off as a result of just constantly looking at your players and which players are worth having your team, and which are not worth having on your team. The last myth here. I want to think if I can say this the right way or just think out loud a little bit. It's this concept of time and money being linked. And I'll say it like this. You know, if I sell more, if I just do more, if I, you know, if I personally give more into the business, it's going to grow. And you know, when I look back at my journey, I went from my first full year as like a team. When I added my first buyer agent that year, I did 97% of the transactions. We did 58. It was one buyer agent, one full time administrator and myself. Then we went to 118. I added two or three more buyer agents. Then we went to 178, then 248. So that was like the big push for me becoming a sustainable, profitable business. My goal from 58 to 118 to 178. The year we did 248, I only did one transaction. So my goal the whole time was to do less and less in the business and to build systems that ran the business and have good, smart, hard working people, honest people run those systems, including a buyer system, including a listing system, including all the lead generation that we did, including the daily cadence, the, you know, accountability, the tracking, all of that, the contract to close listing, client care, anything you could think of in the business was built in a way where it ran itself. And the myth is that you, as the team owner, as the team leader, you need to put more hours into the business and your time and your money are linked together. And as a result of that, your stress is through the roof. Real estate, B school, we are always having conversations and, and this is internal. The community, because this is internal to the community, because this is how I think about my professional life, is that I only want to work a certain amount of hours, I want to make a certain amount of money, and I don't want to have stress. And so I'm always thinking time, money and stress. The myth though, is that time and money are linked. And I have a lot of team leaders that primarily because they set the business up the wrong way, it's not systems driven, it's not set up in the right economic, economic model. They don't have value based commission splits, they don't have a talent acquisition system that is just keeping their, their bench, you know, deep and full at all times. They kind of, they fail to sort of launch this thing and create some sustainability in their business. And to make up for it, they need to double down on their production. And their production could be 50 hours a week. And then running the business, running the team is on top of that 15 to 20 hours. And then you're up to 65 to 70 hours and your life is miserable. And so those are the three myths. Adding agents are going to solve all my problems. Adding more leads is going to solve all my problems. And just doubling down on my time, it's going to solve all my problems. And it won't. It doesn't. Time and time again. So what do you do? If you're in this world where I don't want to be on this podcast preaching to you, I want this podcast to be a way for you to see solutions and for me to offer a perspective that maybe you're not hearing elsewhere. The only thing I can offer you as a next step, and if you've been a listener, you know that I have nothing to sell you. Literally, I have nothing to sell you except a conversation with me. You know, if you're at the point where you're, you know, we train and mentor four to $6 million teams. Most of our clients come in 500,000 or so, you know, to a million GCI, a million and a half GCI, where they just don't have these systems set up properly, they're heavy in production or they set up the wrong economic model, the wrong structure, they're leaning more toward brokerage and they have independent agents that aren't doing anything and they're forced to be in production. And it's just this wonky sort of setup. So no matter where you are in your journey, if the time money stress equation is not working in your favor, you know who you just go to realestatebschool.com, click on and apply for a business growth strategy session and we'll get on a face to face video meeting and we'll just talk about what's working, what's not working, what you think is possible, what's holding you back, what strengths do you bring to the table, what have you tried in the past and hopefully bust some of those limiting beliefs, those mindsets that might be holding you back to pursuing something greater for your business and really to your life. That's what it's all about. So go to realestatebschool.com take action right now if that's you, and we'll see you over there.