4 Principles to building a Profitable Real Estate Team (Part 4)

Welcome back to the Business Freedom Podcast. Lars Hedinborg, Founder, Real Estate B School and co founder of High Performance Real Estate Advisors in Charlotte, North Carolina. Part four of the Profit series. So I call this building a profitable, profitable, profitable, profitable real estate team. And the key word there, if you, in case you missed, it was profitable. And you know, there's so many teams that I talk to and I see and I really, I have a heart for it. So I don't want this to come off as preaching or holier than thou or, you know, building a profitable real estate team is really, really hard. Running a marginally profitable real estate team is really, really hard because you have nothing to show for, for the efforts, for the heartache, for the coaching you're providing your agents, for the risk you're taking with the overhead and all that. So this is my passion. This podcast series has been super fun. If you missed the first three parts, you got to get back in and listen to them. Part one, begin with the end in mind. Part two, stick to the model. And part three, don't chase growth, top line growth, that is in part four. Here we're going to talk about how the world is changing and how that change is going to impact real estate team leaders. And this is going to dovetail into our conversation this three part already. And this fourth part is all going to dovetail into, you know, why focusing on profit is everything and also how to position your business. So this is gonna bleed into my next series, which is gonna be more on some lighter stuff, some of the cool marketing things that we're doing. And so here's the question I have for this part of the podcast. It's how are you thinking about your business, about your real estate team, in terms of your ability to scale the business without paying for cold leads? So how are you thinking about your business in terms of scaling the business and not being able to pay for cold leads? That's the underlying question here. And this new way of thinking about the business, I think is really, really, really, really helpful. And I think it's going to help a lot of you sort of position your business differently and ultimately be able to achieve a higher profit margin in your business. There's a quote by Ken Blanchard. I think it's from the book Raving Fans. And he says your customers are only satisfied because their expectations are so low and because no one else is doing better, just having satisfied customers isn't good enough anymore. If you really want a booming real estate team. He uses the word business. If you really want A booming business, you have to create raving fans. There's so many really good resources right now on. And the reason I bring up this quote in a series on profit is that the world is changing. And if you look at other industries that have been disrupted by more competition, we've got 15,000 agents in Charlotte and we're up from 5,000. So more competition, you've got an economic shift. So I'm talking the shift storm, the economic shift, the technology shift with artificial intelligence coming online, the business model shift in terms of ibuyers. And you know, we'll buy your home so you can move into another home and you can do the whole thing in three days and it's not going to cost you a penny, whatever crap they're feeling. And then the consumer shift. So there's like all these shifts. I think what four shifts I mentioned, consumer shift, is they want things the way they want things. And how is your real estate team really focused on delivering an experience to buyers and sellers that is differentiated from any other option they can get in in the whole country, in the whole world. Right. Your focus really needs to be on building that client experience so that if you study like financial advisors or the financial services industry, their roster has been going down for each of the last seven years. Has technology disrupted that industry? Has consumers? Have they shifted in the way they want to work with financial advisors in that industry? There's so many good parallels to be drawn there. I like the part where the roster is declining. So I hope that comes to real estate so we get rid of the folks that really aren't going to play this game at the highest level and serve customers at the highest level. So that's what I'm talking about when I'm talking about the world is changing and the vision that I want for you and your real estate team is one that is serving clients, not just getting the job done. Getting the job done in a where. In a way where you just blow away any expectation they had of a real estate experience or real estate agent or real estate team to surprise and delight, to wow them, to whatever analogy, whatever book you've read on customer service that you likely haven't implemented deep into your operations. Are you really doing that job to the point where price isn't as important as the value that is provided? And generally our service sucks. Right. We just get through the transaction. We defend our commissions like, oh, it's always been 3%, it's always been 6 and we always co broke 50. 50 and I'm worth 3% like really on a $500,000 sale, you don't have an assistant, you have no support whatsoever. You earn $15,000 on that transaction as a buyer age really. And so I think thinking about your business that way will keep you in business. And then the truth is we really don't have any, any friends at this point. Everyone is after our commission check. And so for you to really draw the line in the sand now in terms of I'm going to be a high touch, high consumer experience, highly profitable real estate team. That's this fourth part, that's this fourth part of the podcast series is really impressing upon you that you've got to focus on the consumer, not on paying for leads, not on throwing bodies agents onto those leads. It's shifting your focus to making sure you're blowing the expectations of your clients away. So they're the engine of your business going forward. And you know, we're not in a position like many of these companies where, you know, I don't know how someone comes into Charlotte, buys 300 homes and none of them are under contract. One of the Ibuyers had like, this is probably like nine months ago I checked, they had 240 homes that they had purchased. So they're all active on the mls. One was under contract, one was under contract. We, that means by definition they put them on the market at a price that the market's not responding to. So they're screwed. Like to me it just doesn't seem like a great business model. I know they're well funded, I know why they're doing it. So I'm not heading the sand on some of those things. But the other thing too, I think that the shift we're going to see which is going to help our profits and protect our profits is that we need more cattle and less hat. Right. You know, the guys in your market that are like just all hat, no cattle, you know, like you don't know if they're profitable. I talked to guys that are doing 4 or 5 million GCI and they're single digit profits and you'd never know it because of the way that they're acting, the way they're, they're advertising. And so we need more substance and less, less of the, of the, of the show. And really I read a book by Gary Vaynerchuk, it was called the thank youk Economy. You know, where it's just getting back to the basics of business and treating people really well and just interrupting their day with being nice and kind and delivering you know, making big promises, but also over delivering on those promises. And so the things I really want to sort of help you think through is, you know, there's just a few mindset things that I want you to consider. And in terms of like building a profitable real estate team, the first thing is to, is to really rethink your funnel. You know, I talk a lot about, you know, leads and we talked about set, met, sign by agent and by lead source. And like knowing your numbers is super important. Really. It's to deliver an experience through all of that very deliberate at every touch point in such a way where they're just over the moon about how they were handled. You know, we're getting some reviews and testimonials coming in now that if you gave me a day to write these testimonials, I couldn't come up with the words that our happy clients are coming up with. They're so good. And so that that's, I really want you all to focus on doing a great job. Gives you this asset in forms of a testimonial that you can now slice up into radio. You can now slice it up into a social post. You can now use that to just have social proof, you know, Google reviews, if you Google Charlotte real estate agent or best Charlotte real estate agent, we haven't spent a penny on SEO and I think we come up in the top three of the Map View and all of our reviews, I think we're at like 350 Google reviews or something like that. So that's the first thing I want you to consider to rethink the funnel. The funnel is all about getting someone to the finish line where they're over the moon and then to think about what makes you special. We call it in real estate B school, we call it X factor. In our market we have a driving range called topgolf. It is like the coolest place ever. And so compared to a regular driving range, it's just not as cool. I also go to Lifetime Fitness. It is the Taj Mahal of fitness centers. We also have one of our Apple stores here. Just went through a multimillion dollar renovation and it was really nice before the renovation just so they can enhance the client experience. And so they got away from the, from the checkout space that was in the back of the store. You know, you think about all these businesses that are one, upping and totally displacing an industry with what they do and the experience they provide clients, their clients. And are you thinking about your business the same way Just think consumers are going to these businesses and then they're coming to you and they're totally deflated. They're like, this wasn't. I'm paying $15,000 for this. Really, you know, it just doesn't, it doesn't, it doesn't add up. And you know, consumers aren't stupid. That's not going to last for a very long time. You need to make sure you're providing that value. And every touch point leads to this legendary level of service, you know, that just blows your clients away. And that's really what I want for everyone. And then I mentioned it, you know, that social proof does matter. Social proof equals profits. You know, you do a great job. You design this experience, you execute this amazing experience and you get people to talk about it. Getting people to talk about, you know, and having a process in place with all the touch points to secure those referrals while they're in your world before they leave the closing table. There's nothing cooler than that. Nothing cooler than that. And then that person now becomes the next testimony that brings in the next client. And then we made a shift. There's a book by Donald Miller called Building a Story Brand. We used to be just like every other real estate team. And number one, number one, number one, look at me, good looking dude. And we've shifted our approach in the market from marketing standpoint to making our clients the heroes. And so if you look at our website, highperformancerealestate.com you'll see that it's really not about, it's not about high performance real estate, it's about the experience that our clients will get and the visual images on there. And so the story brand, I think is really the thing that's going to help us in the future become a really sustainable business that has this sort of virtuous cycle of bringing someone into our world, giving them an experience that leads to more to people they know coming into our world. And it's just this really cool cycle and talking about those victories for our clients in a way that brings in even more business. And so the only advice I'll give you here as I close out this four part series is that it's really about acknowledging where you are and being realistic about what does your team look like currently in terms of are you grinding out crap leads and that's what you consider your business model? Are you holding your agents accountable so you can actually drive profitability and impact their lives as well? Are you, do you really have a handle on what's going on in your market in terms of some of the shifts that are going on. And then with your profitability, are you any further along in your net worth, you know, with your net worth goals than you were three years ago? And if you're not, we've got to draw that line in the sand and we've got to, we've got to, got to create a plan for you to end up somewhere different three years from now and really focus on the two or three things that you need to get to work on right now to turn around the profitability of your team. And it's not, it's not an easy process. And you have no choice. You have to go through a process where you're looking at all these different bits in your business so you can ultimately make a commitment to change. Making the commitment to change is the hardest part. You know, once you make that commitment, you know, it's just going through the process, you know, so building out the capabilities and have probably having the courage, you know, and once you get through all of that, you know, you'll be in even better position to take on the next, the next challenge and then just living this thing out in such a way where it is, you're following a plan, it's built on the right model. And there, you know, the blind spots or, you know, the dark, the holes in the business where profit can leak out. Profit can leak out because you don't have a good training program in place or an ongoing cadence with agents. So they're not producing what they could. They're not handling your leads the way they should. A hole in your business and profitability could be leaking out because you haven't made the shift to being a more referable business. And you're still paying for a bunch of Zillow leads whose prices just continue to go up. And you have agents that want more split and the only value they see in you is buying leads. And it's just sort of revolving door because they don't see other value in your team. You could be losing profit because you're just not tracking your lead sources. So you don't know how much it costs per lead or per set or per met. And you don't have the ability to cut out the half that is not performing. There's always half of the stuff you're doing that's not performing very well. Your job as the team leader is to figure out which half it is and get rid of it. Same thing with your people. You know, you could be losing profit because two of your five agents are C talent and you don't have the courage to have a difficult conversation with them. Coach them up or coach them out. Either way, you're losing money and you're thinking that, well, they're not really taking my time or they're selling, you know, they sold 12 homes for me last year. They're just taking up space in your world and they're taking away from time you could be spending with your A players. You could be losing profit because you're refusing to take steps to ultimately give up some production where you don't have the ability to lead and manage your team well and set a vision for them that they can raise up to. That's a profit loser. So the goal here in this series was just to identify opportunities where you can really be honest with yourself about what you're doing on your team with respect to the model you're following, respect to the cadence and culture and accountability that you put in place on your team, with respect to just where you're getting your lead sources or if you're holding your people accountable just to shine a light on those things that might not be where they need to be for you and just for you to take consistent action toward turning it around. And it's not a difficult process. So there's a very straightforward process to go through to sort of get to the other side of this. And doesn't mean it's going to be easy, but if you're running a marginally profitable business, like I've said before, chances are it's not easy anyway. So if I can help in any way, any way, the only thing I can give you is a 45 minute conversation. It's the only thing I have to offer you. And there's no agenda. Well, there's literally an agenda. So there's an agenda for 45 minutes together. It's just a conversation around what's working, what's not working, what do you see for your future, what's holding you back, what are some of the things that have tripped you up? And then what strengths and opportunities do you see? You know, maybe what weaknesses do you have as a leader? So that's the agenda for the call. Yet at the same time, there's, there's. The only thing I want to do is keep having conversations with team leaders that know there's an easier way. They just don't know what that way is. And they're sort of just trying these different paths and they don't know that there's an easy path, an easier path that's proven to have you living out the life you want to live because you built the business in such a way where it does serve you, your team members, your community and ultimately your family. So that's all I've got for you. Go to realestatebschool.com if that's you. If this hits you I promise you it's not a hard pressure sales situation. That's not the point. If a conversation about real estate B school makes sense we will have it. I promise you that. And we also have a pilot program where you know we're offering for folks that qualify 30 days of highly like really intense training to help you set up the core systems to build this thing foundationally up. 30 days for free, no obligation whatsoever. So we can talk about that program as well. So that's all I've got for you. Much love and respect until next time. This is Lars Hedinborg and I am out.