• 84% of recent home buyers used the Internet in their search, up from 80 percent in 2006. Those statistics indicate that of the 84% of buyers who used the Internet, 99% of them found it to be a useful resource.
• Of the 51% of people who look in newspaper ads, about half of them found the ads a useful tool.
• Only 31% of buyers even used them, and of those, only 34% of them found home books to be useful.

At the heart of this evolution are the changing habits of our consumers (buyers and sellers). Our consumers want to see multiple photos, video tours, the latest listing information, mortgage payments for the listing and mapping. They want it to be interactive based upon their profile, lightning fast, global and real time. Print doesn’t accommodate any of those consumer needs.

In meetings with many local newspaper publishers to renegotiate our print advertising contracts, it’s clear that they are either in denial about the value of print or are hoping that brokers will continue to ignore how buyers are searching. They are sheepishly willing to admit their print revenue dollars are declining, and are scrambling for ways to recapture their revenue through on-line venues. In some cases, they don’t even have a web strategy or know how to go about it. In one negotiation, a publisher attempted to entice us with additional print venues, stating the standard line in publishing…”But, your competition is here.” 

There was a recent announcement and significant blow to print media when the century-old L.A.Times ceased to print its weekly real estate section. Staffing and production cuts are being made to offset a “continuing slide in advertising revenue”, according to the newspaper.

So, they need us (really our revenue) but haven’t figured out exactly how to provide the value. While they are thinking of how to do that, real estate brokers are smartly adjusting their strategies. The leaders in the industry are tracking their consumer habits, and understand that “marketing” versus “advertising” is necessary. They are quickly establishing aggressive internet strategies and beginning to shift marketing dollars to the web. They also have specific plans in place to reduce print significantly and take control of the change.

Like anything else, it’s a process and things will evolve with time. In this case, the evolution is happening rapidly and the prognosis is not good for print. Our consumers are demanding more interactive ways to get involved in the real estate process. If newspapers don’t adjust to the change they will go the same way of travel agents. Remember them?

Companies that lure agents with these incredible packages either don’t have a lot to offer or they don’t believe they have a lot to offer. From a broader perspective, I wouldn’t affiliate with a company that is giving away their equity (and financial stability), through inflated splits, high sign on bonuses, and other big perks. The average agent commission split for financially-healthy real estate company is 65%. The remaining 35% is a gross, not net, number for profit. From the 35% “profit” comes mortgages on the office buildings, technology, insurance, staff, supplies, advertising, marketing, telephones, light, heat, power, maps, yard signs…you get my point. The margins on profit are slim and getting slimmer as the cost of doing business continues to increase. In a "normal market", if a company is left with a few percentage points of profit, how can they offer these over-inflated packages? This is how: They find other small, yet significant ways to charge their current agent base. Adding these small fees helps them offset the huge losses they are taking on the recruiting front. Once you agree to the package, you then become one of the people that gets thrown into the bucket and gets charged these fees.

Promising that you will make a lot of money and not have to do any hard work is impossible. They lull you into a false sense of security which is serious business for you. It ultimately affects your business and livelihood. Here some things to consider when being courted by a company:

• Why would any real estate company feel compelled to offer such packages to get agents to make a transition?
• Why would the owner of the company give away the equity in the company to you…equity that has taken years to build? What’s in it for them?
• What value, other than the package, do they have for you on a day-to-day basis?
• What support do they have in place for you to service your clients? (Remember them?)
• What business development coaching do they offer you to help you grow your business?
• If they made you promises, are they ALL in writing?
• What happens if you get there the first week and don’t like the environment? What happens if you want to leave? Do you owe them the bonus? Do you owe them anything else? Are you now bound for many years?
• How do they help you reach your goals?
• Is the Manager someone who is going to help you grow your business? What systems do they already have in place?
• Have you been allowed to "bond" with the Manager of the office or are you being courted by their corporate people who you will never see again and haven't sold real estate for decades, if ever.
• What other fees have they not disclosed to you that would help them balance out your package?
• How fair is it to offer a package to you coming in when the agents that have been there for many years are held to the split schedule, roll backs and agent expenses? The shoe will be on the other foot soon with agents coming in behind you.
• What is the office environment like with the unfair system? Do you think it is happy? Do you think it's a trusting environment? Not likely if unfair and hefty packages are being offered to those coming in. Don’t expect any team support from your fellow agents. They all will know why and how you came on board.
• What happens when your contract expires? Do they allow you to renegotiate? Not likely to the extent that you could when you were just a glimmer in their eye. You have now priced yourself out of the market, because no logical-thinking company would continue to give away their company equity. Companies need to balance profit so they can reinvest in their company and stay financially sound. They are counting on your fear of making another transition and hoping you stay well beyond your heavily-bonused contract time, when they can actually make money from you.

Think through any outlandish offer you may get. It may be the latest “gimmick” or "slight of hand" from that company. Recruiting is getting more aggressive and outrageous, but it’s the time to take a step back and make sound, long-term business decisions for your growth. Don’t get “taken” by promise to make a lot of money and build your ego. Your long-term vision should include a solid business plan with the tools, guidance and support of a fair company that values your clients.

As we think, so we become.
We can enrich our interior monologue. We can seek the company of people who inspire us with a loving approach to life. We can absorb the written thoughts of writers who encourage our positive emotions. We can decide to be cheerful and optimistic, just for today.
Whom would you rather be around - someone who chronically complains and talks about what a mess everything is, or someone who finds joy and delight in watching the antics of two squirrels in a tree? You are your constant companion. Your own company can be a pleasure or a drag, depending on the thoughts and feelings you permit to linger in your consciousness.
Sort out your thoughts, getting rid of those that depress your spirit. Continue a daily mental housecleaning so that residues of resentment and discouragement are not allowed to accumulate. We need an infusion of the kind of thinking that nurtures the person we want to become…..we become what we think . Source Unknown.

Cheshire Cat: “That depends a good deal on where you want to get to.”

Alice: “I don’t much care where.”

Cheshire Cat: “Then it doesn’t matter which way you go.”

Alice in Wonderland, by Lewis Carroll

Which way?

It's that time of year to ask yourself that question. Which way or direction will you be taking on your business? Have you developed a sound plan for success or are you waiting to see what happens. Unfortunately, some agents believe the term "independent contractor" relieves them of doing anything that they feel uncomfortable with or don't like doing. Having a business plan of strategy lays the groundwork for success. It doesn't always ensure success, but not having one definitely increases your odds of failing. Business plans include your goals, objectives. strategies and the tactical stuff (activities) that most of us don't like to commit to. Establishing goals it gives you focus, motivation and energy. It's exciting to reach benchmarks that you have set. It also sets expectations for yourself and holds you accountable. Business plans are fluid and can and should be adjusted during the year. Since our market and business is changing, it's even more crucial to have a plan. There will continue to be challenges in the market and even more reason to set some structure and hold yourself responsible for your business. It's up to you.

So, which way will you be going?

This leads me back to the discussion of how we all need to continue to learn new things including how to do business. It's interesting watching some agents that are fearful of what's going to happen 2008. They're listening to way too many newscasts and reading way too many articles with a negative twist on the market. So, what do we need to do as an industry to report and reflect accurate information about the market? First, you should know what the accurate information is. This comes from knowing market statistics broken out by town, and specifically by neighborhood. Then, taking this information and feeding it to her clients who are also, by the way, on overload with negative information about the market. Once you see the statistics, it's clear that the market is making a simple adjustment and not in a downward spiral. The second part is understanding the ever-changing technology and being able to apply it to your business. In order to learn anything new, it's easier to break it down into manageable pieces. By prioritizing your business, and identifying what you need to learn will enable you to focus on technology tools that you will need most immediately. When you to begin to learn, your pace of learning quickens. I think it has to do with having an open mind. As the saying goes, the mind is like a parachute. It works best when open. Bottom line is that our clients are more savvy on a technology level than many agents. The traditional buyer used to be separate from the Internet buyer. The traditional buyer is now the Internet buyer. Since 84% of all buyers begin their search on the internet, are you equipped to deal with the 84% that are out there? Are you proactively trying to capture that business and when you get business, are you capable of communicating with them on their terms. Get ahead of your clients and embrace the advancing technology.