Monthly Archives: October 2013

Increase Your Marketing Dollars with Marketing Service Agreements?

A frequent question asked by our clients is how to generate more incoming leads without spending more marketing dollars. The simple answer…offset a percentage of your marketing budget with a business partner’s support, specifically by utilizing a Marketing Services Agreement (MSA). So what’s a MSA you ask? It’s a marketing agreement that real estate agents can enter into with a service provider like a mortgage company, title company, home inspector, home insurance agent, or pest company where the service provider pays the real estate agent to co-market the service provider along with themselves.

As the agreement’s title implies, the Marketing Services Agreement is designed to reimburse real estate agents for real bona fide co-marketing, not a fee for referrals, which would be a RESPA violation. To that end, Marketing Services Agreement’s have several points to consider before deciding to enter into one.

  1. The MSA dollar amount must be commensurate with the amount of exposure a real estate agent is giving their MSA partner via their co-marketing efforts. For example, if an agent runs a print ad in a home magazine and pays for five column inches of advertising, and the agent devotes one column inch to their MSA partner, then the MSA partner would be responsible for 1/5 of the ad’s cost.
  2. Agents that already have a large marketing budget with many advertising outlets in place may never not be able to obtain MSA dollars equal to the amount of exposure they can give a partner. In those cases how do you decide what’s “fair?” Well, with mortgage companies you can start with 20 basis points of the total amount of funded loans the mortgage company closed with the real estate agent over the previous year. Note, it’s unusual to see a MSA where more than 30 basis points of the funded loans are being returned to the agent or team in the form of MSA dollars. In the case of settlement providers, a retrospect review of title premiums will help establish the right amount. Anticipating 30%-50% of the owner’s title premiums are what many settlement providers set aside for marketing.
  3. RESPA compliant MSAs do not adjust dollar amounts frequently. Anticipate that a MSA is going to be for a minimum of one year at a set dollar amount that doesn’t adjust. Frequent adjustments (<12/mos) to MSA dollar amounts are an indication that the service provider is reimbursing the real estate agent for referral business rather than paying for bonafide marketing, which is a RESPA violation.
  4. It’s incumbent upon real estate agents and their MSA partners to keep accurate records of all the co-marketing in the event either party is audited. The MSA should have reporting provisions for the agents to report back to the MSA partner on a monthly basis with copies of the co-marketing pieces that are in print, any links to online marketing pieces, and date stamped pictures of a partner’s marketing materials that may be posted within an agent’s office.
  5. If you have an MSA you must exercise a healthy amount of CYA (cover your ass) and disclose it to ALL clients, buyers and sellers alike. Even if there is no potential that your client is going to use one of your MSA partner’s service, you still should disclose the existence of the relationship to be safe.
  6. Ignorance is not a defense when it comes to violating RESPA, statutes enforced by the Consumer Financial Protection Bureau, or state laws. That being said, if you do plan to enter into an MSA make absolutely sure you have it reviewed by a local real estate attorney knowledgeable in this field who can advise you properly. Keep in mind that several states have enacted legislation that prohibits certain classes of service providers from entering into a MSA.

While we are not attorneys, nor do we give legal advice or practice law, we can answer general questions you may have concerning Marketing Service Agreement or forming Joint Ventures. Just give us a call at 757-550-0744 and we will be happy to help.

Cultivating online real estate leads

It is estimated that there are 50 million online real estate leads generated annually in the US. Recent consumer surveys show that 40% of home buyers search online everyday, and that 50% of real estate lead web inquires go unanswered. What this means to real estate agents is that there are abundant opportunities to cultivate more clients if they are consistent, persistent, and use the right tools. The majority of agents lack one or more of these key factors to successfully cultivating real estate leads into clients, which gives those willing to subscribe to a basic plan even more opportunities. Working with real estate agents and teams has shown us over and over again three fundamentals for real estate lead cultivation success that we want to share with you.

Be Consistent

Real estate lead cultivation is much like growing vegetables. They each require nurturing on a regular basis in order for them to grow. And just like a vegetable, stop nurturing your leads and all the time and energy spent will go to waste, and the whole experience will be discouraging at best. We recommend that real estate agents start with basic goals, and employ KISS (keep it simple stupid) methods whenever possible. This type of approach makes it easier for real estate agents and teams to manage their systems and tools consistently.

Start A Conversation

Probably the single largest determinate of successful lead conversion is how fast you can contact incoming leads by phone. Responses never cease to amaze us when we ask real estate agents what their ideal lead callback time should be. Answers range from an hour or two all the way up to one or two days. The reality is that you should be shooting for 60 seconds or less once you received notification of registration. In large part, because consumers work with the first agent they talk to 67% of the time, and conversion rates go up dramatically the quicker you reach them. Realizing that real estate agents have busy schedules, whenever a lead cannot be contacted immediately make it a priority to follow up with them as soon as possible.

When speaking with real estate leads focus on assessing their needs, providing value, and solving problems. Most calls are filled with many details which you don’t want to forget or overlook. We recommend logging into your real estate lead management system before making follow up or initial response calls. This will allow you to see your lead’s search behavior, capture pertinent details, and set important follow up reminders. If you are not in a position to log into your lead management system when making calls, make sure you always have a pen and paper ready to take notes . Having a buyer information sheet can also help you with asking the right questions, and capturing valuable information too.

Be Persistent

Persistence is what really separates the rookies from the pros in terms of converting real estate leads. A study conducted using 20 million leads shows that 6 or more contact attempts are usually required to reach a conversion. Many agents, if they even call at all, will give up after the first time if they don’t reach someone. Utilizing scripts and practicing through role playing can help you immensely in this area, and make the quality of your calls much more productive for the your real estate leads and yourself.

In summary, you will be well on your way to dominating your competition by following a KISS plan, master fundamentals, and utilizing highly effective real estate lead generation and management tools.

Similarities between Miley Cyrus twerking and successful Realtors

While surfing YouTube this morning I came across a video of Miley Cyrus with the title of “Twerking.” Not knowing what the term twerking meant I can tell you I was surprised by the video, and the subsequent “how-to” videos that I saw on performing the dance move. After laughing hysterically for several minutes while watching a couple of clips, it occurred to me that there are some similarities between twerking and successful real estate agents. Now before you say “SERIOUSLY?” follow me here for a line or two.

1. Like a good twerking performance, successful Realtors are the ones who really put their heart and soul into what they do. Whether its working with a first time homebuyer, or with baby boomers selling their fourth home, they know the right steps to helping any type of client achieve their dreams. These agents are the ones who captivate their peers with their passion.

2. Some people are naturally good at twerking, but with others it takes practice, and lots of it. Realtors are not any different in that there are a very select few who are “natural sellers,” but for the rest, practice and repetition is the order of the day. Let’s face it, you can not excel at any challenge or task if you have not properly prepared and practiced for it over and over again.

3. Adaptation is required to be really good at twerking, or real estate sales. Like switching up dance styles to compliment the music, successful agents are adaptable to changing market conditions, shifting client expectations, and unforeseen transactional problems. They give less focus to what’s happened versus what’s the best solution to move forward. Remember this; it’s awfully hard to navigate forward if you’re constantly looking backward.

In summary, you will excel at real estate sales by being passionate about what you do, practicing to be the best, and staying focused on moving forward.

How Real Estate Agents Can Take Advantage of Parkinson’s Law

The productivity proverb Parkinson’s Law dictates that work expands to fill the time available for completion. If you are given a week to complete a short two hour task, then (psychologically speaking) the task will increase in complexity and become more unnerving. I experienced this phenomenon myself, and I see it frequently with real estate agents. It doesn’t necessarily mean that there is more work added to the task, but rather the addition of stress and tension about having to get it done. By limiting the amount of time to complete a task or assigning specific deadlines, we get back more of the most precious resource we have: time. Taking this approach also reduces the task’s complexity, associated stress, and gives you a sense of accomplishment.

Here are some personal tips I’ve learned over the years to address Parkinson’s Law.

Make a daily list of your tasks

I like to use a legal pad in part, because it can run away from me like an electronic task manager. Each day I identify the top three to five tasks that must get accomplished (no excuses). I also use this paper method to list my daily appointments, take notes from phone calls, and to document anything that prevented me from accomplishing my task (more on that later). Below is an example.

Give yourself deadlines

When starting out, give yourself a reasonable amount of time to complete a given task, but don’t go overboard. As you develop the habit of implementing time constraints with your task, the next step is to start drawing down on the allotted time for each task to increase your efficiency. Using the countdown timer on your smart-phone’s clock app can really help you with this.

Document barriers to completing task

Tracking distractions and barriers gives you insight into the activities, or lack thereof, that rob you of time. Documenting these daily will help reveal patterns that need corrective action to help you stay on task. One of the biggest distractions I’ve found is checking email, voice mail, text messages, facebook, twitter, etc while in the middle of a task. Each week review the barriers that you documented, so you will be aware of the time robbing bugs you need to squash.

Ultimately, your goal is to gain more of your time back by becoming more efficient, but be conscious of the fine line between ‘bare minimum’ and ‘not enough time’ – what you’re aiming for is efficiency and less stress, not a disaster that’s going to cost you transactions or clients.