When Brendan Farrell moved from one apartment to another in Los Angeles a couple of years ago, the Caltech applied mathematician was dismayed to find that his new home was a lot noisier than he expected due to a 24-hour car wash down the street.
His apartment faced the front of the building, and it was much noisier than those that faced the back of the apartment complex. His landlord didn’t think to tell him — but he found out the first night he moved in.
Although Farrell ended up living in the apartment, he realized that he could do every city dweller a favor if he put his math skills to work and created an interactive sound map of North America, starting with his hometown of Los Angeles.
“Noise is a huge issue, and when we started there was no good way for anyone to know exactly how loud a place actually was,” Farrell explains. Before Farrell, now the founder and CEO of sound mapping company HowLoud, started charting the universe of noise, the best someone could do was go to a place and listen for themselves. Although some sound studies existed about freeway and street noise, they were accessible only to professionals.
No simple tool existed to measure exactly how loud a place actually is — which, as Farrell explains, is not an easy thing to objectively measure.
Noise Isn’t Objective
“Noise isn’t just measured in decibels,” Farrell says. “Humans perceive noise based on intensity, time of day, proximity and even pleasure. That’s why birds chirping, even if they’re very loud, can be a whole lot more pleasant than a car repair shop down the street. Or a jet taking off is worse than a low thrum of a distant freeway.”
Farrell wanted to solve the problem of noise measurement by using physics to propagate noise models across the environment. For example, restaurants, auto repair shops, freeways, car washes, street traffic and flight patterns all influence the urban sound profile. His 3-D noise model rolls all of those sounds into something called a SoundScore, which gives a numeric rating to a specific location. A lower score is louder; a higher score is more peaceful.
It’s a lot like a WalkScore® for noise, and Farrell says it’s so accurate that he can faithfully predict which units of a building will be quieter based on their orientation to the street, or floor. He filed a patent application for the HowLoud system in March, 2015.
Farrell started in his hometown, Los Angeles, and has also mapped Orange County. To date, he’s mapped over four million buildings between the two counties. To see how it works, go to HowLoud.net and enter this address: 3209 Descanso Dr., Los Angeles, CA, 9039
Popular Kickstarter Campaign
He’s also mid-way through a popular Kickstarter campaign (having raised about half of the $38,000 project goal). The project has become a staff pick of the Kickstarter team, giving it additional exposure. He intends to use the proceeds to map the rest of the United States and Canada, and has 31 days to go until August 12, when the project closes.
If you become a Kickstarter backer at $300 or more, you can get a custom widget for your site as Farrell rolls out HowLoud’s mapping across the country. He plans to map Massachusetts next. He’ll also throw in 20 single property detailed noise reports, or a large building report, for a year, starting in September, 2015.
For now, searches on HowLoud.net are free for Los Angeles and Orange County. Farrell plans to introduce a widget that agents, brokers and MLSs can use on their sites that will provide a SoundScore to each listing. Although Farrell hasn’t set pricing yet, he says that it will be competitive to other lifestyle tools in real estate.
Farrell also plans to sell more in-depth property noise reports to homebuyers and developers that provide a list of noise sources and decibel measurements along with a heatmap of the neighbhorhood.
For REALTORS and brokers, HowLoud could help mitigate client complaints about noisy neighborhoods before they arise. Yet the downside is that not all noisy neighborhoods are bad; for some, the crush and noise of a congested city block is part of the attraction. And, HowLoud’s technology is still evolving; not every neighborhood is fully mapped, and Farrell’s team is constantly adding new sound parameters to improve the accuracy of the SoundScore.
Yet if HowLoud can become the de facto standard for noise measurement in residential real estate, Farrell will have achieved his mission.
“No one wants to find themselves living in a really noisy area, especially by accident,” Farrell concludes. “If we can help people live where they want because they know about the area in advance, HowLoud will be a success.”
Should you win clients by discounting your commission? UpNest says yes — and 3,000 agents agree.
Competing for listings is a fact of life for agents — and the competition can be fierce. To agents, the reasons why homeowners ultimately select an agent can seem capricious and even self-defeating (if they’ve selected a weak agent instead of you). Most agents are loath to cut their commissions to get a deal. Spend a few minutes on Facebook searching for “discount commissions” and you’ll find an outpouring of angst about reduced fees.
Then there are the companies like Houwzer, that say that the costs and time necessary to list a home in a “hot market” are marginal at best. They imply that the house can practically sell itself. Houwzer goes so far as to offer to list properties for zero commission, which is an anathema to virtually every agent who makes a full-time living by selling real estate.
The truth is that commissions have fallen to a national average of 5.4 percent, and in many cases, even less. Having just sold and purchased a home, I can attest to this: as a seller, I paid just five percent, and the commission on the house I purchased was approximately 4.5 percent. In percentage terms, that’s a 17-25 percent discount over the standard six percent commission.
I’ve heard plenty of horror stories from agents that say consumers want even higher discounts on traditional commissions, and make their decision based on commission alone.
“What about the service and dedication?” these agents say, and point to the fact that they provide as much service to any home seller, regardless of the commission actually paid. Yet the cold truth is, agents are in control of what they choose to charge for their commission.
I think Leslie Ebersole, a Chicago-area agent from Baird & Warner, and a moderator of the Raise the Bar Group on Facebook, put it best in this lengthy discussion on commissions:
This conversation always makes me want to shake people. It’s just wrong to assume that the amount of commission is tied to the effort and results. If an agent or broker wants to charge some amount that another agent wouldn’t charge, that’s his business. If commission percent in the aggregate created success, would charging 2 chickens, 3 cows and a breeding sow mean my clients would get different results than if I charged just 2 chickens? Of course not.”
Yet as the industry frets about commissions (or lack thereof), plenty of online players are ready to help consumers wrest a better deal from agents.
One of those players is UpNest, a firm that originally started out as Less Than 6 Percent (LT6P). The premise, according to Simon Ru, UpNest CEO and founder and a seasoned technology executive, is that consumers should never overpay on commissions, and that it should simply be easier to find an agent when you need one. The mantra is so deeply held it’s front and center on the company’s website.
“Consumers deserve transparency,” Ru explains. “We think that consumers want to know clearly what agents have to offer, and how much they’ll charge on commissions. And since most consumers don’t know that commissions can be negotiated, we’re providing knowledge and connections to top agents who want to work with savvy consumers.”
Ru says the fundamental idea of UpNest is to connect qualified home sellers to agents. But, if the consumer can negotiate a better deal with an agent, UpNest is happy to facilitate that too, if only by making consumers aware of the possibilities.
“Agents are our first priority,” Ru says. “We live and die on their success. We’re about delivering qualified seller leads to top agents, not about commission negotiations.”
That’s why the company has massaged its message over the last year to say that commissions ought not to be the sole factor in selecting an agent — and took down the nettlesome LessThan6Percent.com domain and changed its name.
Yet since the “never overpay” message is so prominently featured on the “new” UpNest, it’s hard to disassociate the discount mentality from the site. Even the company’s intro video says that it will negotiate commissions.
While it might seem that agents would be upset about a site that patently tells consumers they can negotiate a reduced commission, some of the 3,000 agents on the UpNest platform say the direct approach actually works for them. That’s because the online advance negotiation takes away the awkwardness of discussing commissions with clients — and agents are happy to have yet another lead source available to them that it based on performance.
How it Works: Sellers
UpNest attracts sellers via search engine optimization, predictive direct mail, paid search and limited display advertising. The company is just getting going, and though it’s strongest in California, it claims to have a national presence. It’s getting just under 100,000 visits a month, according to several online traffic estimators.
If a seller decides to solicit a proposal from UpNest’s roster of listing agents, they fill out an online form that asks them to describe the property they want to sell, timeframe and location.
UpNest will then manually screen the submission. An UpNest advisor will call the homeowner to verify the details about the listing, including whether the seller is working with another agent (which ostensibly disqualifies them from working with an UpNest partner agent).
If the home is worth more than $400,000, UpNest may even throw in a free virtual property tour. Most important, UpNest confirms that the home will be ready to list in 90 days. When all the boxes are ticked that the seller is viable, UpNest will manually match up to five agents in the area to the listing.
Agents who get the call (or text or email) then have 24 hours to login to UpNest to submit a proposal to the seller within 48 hours.
UpNest makes responding to a seller on the platform easy; once you fill out your magazine-like profile, the companion listing proposal is pre-populated with whatever information you’ve provided. You can modify it as you see fit based on information about the listing. It’s slick and simple, and it’s possible to edit and submit your proposal on a smartphone or tablet.
UpNest says that agents who respond the fastest, and with the most complete profiles, are much more likely to win the listing. As an incentive to get agents to completely fill out their profiles, UpNest will create an automated marketing video like this one for you:
A fully populated profile includes biographical information, links to social accounts, Yelp! reviews and your Zillow profile. You can also upload past listings with pictures and pricing data.
Design-centric Listing Proposals
The UpNest listing proposal is presented digitally and appears in the seller’s dashboard. It’s heavy on infographics and pleasing to the eye. Since every agent uses the same tools to create a listing proposal, they’re identical except for the content you create. And that’s where, according to Ru, agents win or not.
Since the proposal is so easy on the eyes, sellers could read it in as little as 60 seconds. But Ru says most sellers will spend 5-7 minutes with each proposal — still a relatively quick process for such an important decision.
Since sellers can look at the proposals at any time on any device, Ru claims that those that are accompanied by a “voice proposal” are twice as likely to be selected by consumers. A voice proposal can be recorded on the UpNest site as you create your proposal.
UpNest allows agents to specify their commission, and provide a list of services they’ll provide (professional photography, single property website, postcards and flyers, landscaping, staging, advertising on Zillow or Trulia or even a video tour). They can also provide a suggested sales price on the listing. All without talking to the customer, pulling comps or even knowing the address of the subject property.
Submissions are final, so it’s important to mind your spelling and grammar as you prepare your proposal.
If your proposal is accepted, you will receive the client’s contact information for follow-up. Otherwise, the seller will remain anonymous. If you don’t win the beauty contest, your proposal will be moot, and it will be marked as closed in your dashboard.
Referral Agreement with a Bite
Presuming that you win the beauty contest and enter a relationship with the seller, the terms you accept as part of the referral agreement are somewhat onerous.
UpNest takes a 30 percent referral fee off the gross commission (before your broker’s split)
UpNest can collect their referral fee for up to 18 months.
UpNest collects a referral fee on every transaction you might conduct with a seller in the original 18-month period. In practice, this means that if you sell something to a client you got through UpNest, and they purchase another property within 18 months, you owe the company 30 percent on the additional transaction too.
If your broker questions the validity of the referral agreement signed with UpNest, you are personally liable for the referral fee due
UpNest’s fees are due within five days of closing. If the fees are not paid timely, there is a 50 percent penalty due, above and beyond the original fee.
If there is a dispute, all claims will be settled via binding arbitration. When you sign your referral agreement, you waive your right to a jury trial.
While the terms are strict, they make sense. That’s because UpNest also provides cash incentives to buyers and sellers above and beyond your commission discounts and rebates to encourage them to use agents on a repeat basis.
For example, the company entices sellers to list again with a partner agent with a rebate (UpNest says this averages $5,000 per listing) that is paid by UpNest when the property sells.
For buyers, the company offers up to $300 in rebates when clients periodically update their transaction in the platform. This is on top of whatever rebate the buyer’s agent offers as part of the original proposal.
Low Value Facilitators, or High End Advisors?
However you slice it, UpNest facilitates lower commissions, and drives consumers to its partner agents via various rebates and outbound marketing.
The company’s tagline is “agents compete, you win” — a deft setup up to the premise of UpNest’s business, which is to drive business to partner agents who are wiling to play the commission negotiation game and compete for clients (and pay a referral fee).
All of which brings me to a question: Is this the future of real estate?
Since the typical agent earns 20 percent of their business through personal referrals and repeat clients (according to the National Association of Realtors 2015 Member Profile), there’s obviously a wide gap between the actual amount of business earned through an agent’s personal sphere, and leads generated via online services like UpNest.
Yet I wonder why UpNest’s partner agents, who must meet relatively simple standards to participate on the platform (three years in the business, current license and six transactions in the last 12 months), are willing to compete on commissions — when commissions are so clearly in decline nationwide?
Is it because this is the “new” agent — one who is fiercely competitive, and will do whatever it takes to win business? Even if it means cutting commissions and offering rebates? Or is it a part-time agent, anxious to score business in every way possible? Or is it for top agents, who do dozens of deals a year and see the handwriting on the wall?
From a brand point of view, I tend to frown on discounts on service businesses (and real estate is a service business). While it’s entirely appropriate to negotiate your fees (and I do it all the time in my own business), I never go into a deal announcing that I’m offering the best price around. Fees are just one aspect of why any client chooses to work with you, and I don’t believe they should ever be the ONLY reason (unless you’re WAL-MART).
Which brings me to my fundamental question about UpNest. Why set up a business based on commission discounts in the first place?
Who is the ideal agent for UpNest?
Ru, UpNest’s CEO, told the Phoenix Association of Realtors in February, 2015, that he believes that in the next 5-10 years, the real estate profession will develop into two segments: low-value facilitators, and high value advisors. The question is, which segment is UpNest built for?
Your personal brand is your most important asset. But is it a diamond in the rough?
If you’re working full time in real estate, and are making a living at it, you run a bona fide business. That’s because you are likely an independent contractor who must generate your own business — and pay for your own expenses, like taxes and healthcare.
As such, your business is worthy of being treated as a business. It deserves to have a brand and business plan that will help you grow it. So what if you work for a large broker with an impressive brand? Can’t you just leverage your broker’s stuff?
You don’t have much runway to create a second impression. You’ve got to knock it out of the park before that first meeting. That’s best done through branding and marketing, which is a combination of a promise and a value proposition that is inexorably tied up with the way you do business.
Can’t I Just Use My Broker’s Brand?
You can leverage your broker’s assets, and you probably should if they’re right for you. But you can’t lean too heavily on your brokerage to define what makes you different from the next agent at your brokerages. One look at your brokerage’s “our agents” page will surely prove the point that your broker is interested in showcasing all of the agents at your firm on an equal basis.
It’s up to you to swim in your own lane and develop a brand that will spotlight you, no matter which brokerage you work with. It’s worth noting that many of the top agents and teams in the country work for brokerages — but they still have their own brands within their brokerages.
Top Agents with Their Own Brands
Sue Adler runs a nine-member team within the Keller Williams Premier Properties brokerage in Short Hills, NJ. Her website is highly functional. It clearly positions her as the top KW agent in New Jersey, and it’s ridiculously easy to get in touch with her with a prominent phone number, lead capture form and even live chat.
What’s particularly interesting is how Adler is utilizing a pre-defined IDX search (provided by iHomeFinder via Virtual Results) for various communities on the New Jersey to Midtown train lines, including commute times. It’s an ingenious way to help consumers visualize where they want to live in her service area — and pays off the fact that she’s a local expert. At the very top of the site, Adler makes it clear that if you’re looking to live within 45 minutes of New York City, she can make it happen.
Take note that Adler’s personal brand clearly dominates KW’s brand. Although she promotes the fact that she is KW’s number one agent in New Jersey for 10 years running, it’s not the highlight of the site. The Keller Williams logo is in the footer. Rather, Adler focuses on what she and her team can deliver for clients: Valuable local insight and extraordinary customer service.
Same Market, Different Approach
Judith Weiniger is Adler’s competitor. She’s ranked as one of RE/MAX’s top ten agents in New Jersey, and has built a site through Curaytor Systems that is focused on her track record and expertise in the area. From the moment you land on the site and see Weiniger walking through a listing on video, everything about The Weiniger Group feels warm and friendly.
The site is built for conversion, with obvious contact features, dynamic IDX search powered by Homes.com, and a well-populated blog filled with community information and open houses. But the star of the show is always Weiniger and her team, as well as a deep well of local resources designed to help buyers and sellers understand the community.
The RE/MAX logo is subordinated to the footer of the site, and isn’t even a clickable link back to RE/MAX Premier – Warren (her brokerage). Weiniger is clearly counting on the fact that The Weiniger Group has enough market presence to persuade prospects that her team is the right choice.
Investing in a Brand Called YOU
What Weiniger and Adler have in common is an obvious commitment to building their personal brands, so that they can build their livelihoods.
This approach makes lots of sense. But what if you’re not a top agent and in a position to create a brand? Poppycock. Of course you are. Everyone can create a brand; it’s just that few actually do. Here’s what you need to be successful.
Understand what a brand is: A brand is a promise, plain and simple. It’s not a logo, website, font treatment, farm mailer, platitude or ad campaign. It’s a genuine promise to your client about the way that person can expect the business to behave. For example, consumers expect Apple to introduce innovative products. That’s a brand promise. When Apple fails (and it does fail every so often), people expect Apple to admit it, fix it and make it right. For the most part, Apple has done exactly that — introduced groundbreaking products, fixed things that weren’t right, and created fanatical, evangelical customers. Apple could have introduced me-too products, like Dell Computer. But that’s not Apple — and it’s one reason Dell Computer has been marginalized in the technology business. How does this apply to you? Figure out what you’re passionate about, and deliver it to your clients. A brand without passion is crippled from the get-go. Brands are passionate promises made by individuals like you.
Nourish your brand: Even if you never build a fancy website or create a whiz-bang logo, your brand is expressed in the details of the way you do business. From the way you respond to web inquiries to the care you take in presenting a listing, it’s all in the details. But it’s also about building a passionate, fully integrated life that enriches those around you. In real estate, it’s nearly impossible to maintain a separate personal and professional life. That’s also what will help your brand thrive, because when you’re passionate about delivering on your brand promise, everyone around you feels it. Nourish your brand by engaging in business activities that pay off your passion. Kill those things that take your eye off the ball, and don’t directly contribute to building your brand.
Raise your brand like a baby: You don’t have to launch with a grand scheme and have every detail worked out far in advance. You can, and should, take baby steps. But always remember that you want your baby to grow up big and strong, so don’t cheap out and spend money on poor quality tools that detract from your brand promise. For example, you can get a crowd-sourced logo for $25 and a template website for $12. But if you’re not willing to firmly establish your goals, get a proper brand identity that works everywhere, and populate your website with unique and purposeful, useful content, your brand will be tarnished. It’s like feeding Ding-Dongs, Slim Jims and Cheetos to a baby, and expecting it to grow up healthy. Garbage in, garbage out definitely applies to brand building.
Have a plan: The reason you may not be willing to invest in building a brand, or that the idea of creating one feels extraordinarily difficult, is that you may not have done your homework. Have you honestly assessed your business, and figured out what your brand (or you, for that matter) stands for? If you’re having trouble, it’s probably because you don’t know what your unique value proposition is, so it’s nearly impossible to articulate and support. And if you can’t articulate what you’re trying to do, you’ll throw money away on marketing tactics that have little chance of working. A good plan should include an analysis of your existing business, your plans to grow (a real forecast with real numbers!), and a realistic number you can invest in marketing on an annual basis. Whether that number is five cents or $50,000, it’s an investment that can be made effective by determining which marketing tactics can best support and express your brand. If you can’t commit to a budget, how can you realistically commit to your brand and your business? (And by the way, your time is worth money too. Even if you don’t have cash to spend, every hour you invest in building your brand is real money. Everyone has a time budget — what’s yours?)
Examine your broker’s brand: How does your brand square with your broker’s brand? If you’re trying to build a luxury team but you’re working at a low-end brokerage, that’s an obvious disconnect. But have you looked at the more subtle aspects of your broker’s brand? How are incoming leads handled? Is there floor time, and who works it? Who are the other agents — and do you like them? Do other agents at your company bolster your reputation, or harm it? What is your brokerage’s reputation in the community, and among your peers at other companies? Is it progressive, or alarmingly old school? What about presentation materials, transaction management tools and advertising? Are you proud to be associated with your broker’s brand, or do you discount it and just view it as a place to hang your license? If you feel that the way your broker does business doesn’t fit with your brand, it’s time to move on. Although your brand should supersede your broker’s brand, it should also synchronize with it. Here’s what’s important: When people realize you’re associated with your brokerage, no one should ask “why are you there?”
Think about all the tools available to you. Now that you have a brand, business plan and a sound relationship with your brokerage, you can start thinking about tools. Think like a startup. You can use a variety of marketing channels to build traction for your business. Consider paid search, SEO, public relations, blogging, events, social and display ads, offline ads (billboards, bus shelters, print), email marketing, speaking engagements, community building, content marketing and even viral marketing. All of those options don’t include things you can do to build your business internally, like adding buyer or seller agents, transaction coordinators or investing in a CRM to manage your business processes. Which of these avenues will enrich your brand, draw clients and help you retain them? It’s not just about lead generation. The National Association of Realtors Profile of Buyers and Sellers says 88 percent of homebuyers would use their agent again … but most don’t because the agent loses touch over time. That’s loss — and easily preventable.
Your Brand is the Engine of Your Business
So how much should you invest in building your own brand? Everything you can. Your brand offers the very best opportunity to attract and retain clients and build the business you want.
Only you can know what exactly you can and should spend on marketing tactics based on your revenue and business plan (although typically, traditional marketing expenditures can range from 10-35 percent of your gross commissions). But remember that marketing tactics are only part of the story.
Think holistically about your brand. It’s the engine of your business. So allow it to flourish by spending money to improve how it works for you — and hold it accountable. With a plan and an understanding that a brand is a lot more than a logo, you’ll be poised for a whole new level of success.
DwellHomes.com curates modern homes for the well-heeled young professional — and a 30 percent referral fee. Is it worth it?
Let’s say you want to showcase your new listing: A high-end, multi-million dollar modern home. Of course you’ll put it in your MLS and build a custom website for it. But what if you could get it “certified” by the editorial staff of Dwell Magazine, and advertise it amongst its super-cool, mod brethren online?
That is the goal of DwellHomes.com, the latest entrant in the advertising race for high-end homes. The twist here is that all of the homes featured are modern and curated by hand by the editorial team at Dwell Media, so browsing the site feels similar to leafing through the pages of your favorite architectural magazine.
Even though the listings are handpicked by the Dwell editorial team, Dwell Homes is only loosely associated with the Dwell Media empire. The site, which was built by Los Angeles brokerage Live International Real Estate, licenses the Dwell brand, and it makes money via traditional referral fees paid on buyer leads.
DwellHomes.com launched last fall with about 400 homes, and as of this writing appears to have about 70 homes on the site, primarily in California and New York. The company says that it is launching on a state-by-state basis, and has hundreds of submissions from real estate agents from all 50 states and abroad.
“The goal is to showcase quality modern homes that match the Dwell brand,” explains Tiffany Gatto, CEO of Live International Real Estate. “We’re not about having thousands of homes that we source through syndication. We want to create a destination, where homebuyers who want quality modern homes can find the right property that is vetted by experts who know the genre. We’re about curation, not quantity.”
Gatto says that’s why the selection process is strict. To get on the site, you need to submit a property history and description, quality photography and ideally, a 360-degree virtual tour. Your listing will then be reviewed by Dwell’s certification team (which includes Amanda Dameron, the magazine’s editor-in-chief).
“There are a lot of pieces that come together to create what a Dwell home is,” Gatto continues. “They’re looking for architectural significance, finishes, flow, design — everything the modern buyer is looking for, and that would fit into the pages of Dwell Magazine.”
Gatto is careful to say that her brokerage has nothing to do with deciding which properties make it on to the Dwell Homes website.
Dwell’s team will deem it “in” or “out” — and only about 25 percent of homes Gatto submits actually make it onto the site.
“It’s really about what Dwell thinks is worthwhile,” Gatto explains. “We facilitate the process, but nothing more than that. What Dwell’s team says is absolutely final. Every house on the site has to pass muster.”
Can You Be “Dwell Certified”?
While you can point prospects to the Dwell Homes website, you can’t market your listing as Dwell “certified” or even that you’re a Dwell certified agent.
That means you can’t associate Dwell’s brand with your own as you market the property on your website, or within your other marketing materials and programs. Gatto admits the restrictions are tight, but says that it’s for a reason: Dwell wants to maintain absolute control over its brand.
Familiar Business Model
If your listing makes it past the Dwell team, it will be showcased at no charge amongst other suitably modern homes. If Dwell Homes attracts a buyer for your listing, you’ll pay a 30 percent referral fee back to Dwell Homes. Although home sellers can submit their houses to Dwell Homes as well, the site is clearly focused on acquiring listings from real estate professionals.
“We only charge the referral fee if we have procured the buyer through Dwell Homes,” Gatto says. Listings on the site are presented with the listing agent’s name. However, no direct contact information is published, so web visitors must use Dwell Home’s form to inquire about the property.
If the property sells to a prospect that originated on the Dwell Homes site, the referral fee is due.
Gatto says that if a home seller in California chooses to list a home directly with Dwell Homes, the transaction will be handled through Live International Real Estate (a California brokerage) and traditional fees will apply outside of Dwell Home’s fees.
When Gatto can place a home seller with a partner agent in a state other than California, Dwell Homes will collect a referral fee as well.
“What we are at the end of the day is buyer lead generation,” Gatto explains. “We’re just like Redfin or Zillow — it’s just that we focus on a specific type of home, and a specific kind of buyer.”
Listings begin at a minimum of $1 million, and go north of $50 million for a penthouse in Manhattan.
What’s interesting about the assortment of listings and the price points is that clearly Dwell, and by extension, Live International Real Estate, is interested in selling high-end homes to high-end buyers.
The original Dwell manifesto promises that the modern homes it presents will show the human side of living — from Pepperidge Farm cookies in the cabinet to Meow Mix kibble in the cat bowl — in real homes for real people. Yet as Dwell has evolved into a modern mega-media empire, Dwell’s homespun approach has morphed into showcasing seriously high-end homes and finishes to equally affluent buyers.
Will it work for you?
Even though Dwell’s brand is well known, and appeals to younger professionals (average age of 40, household income $110,000) with 600,000 print subscribers and two million unique visits a month, you may not benefit from that traffic and exposure to qualified buyers.
Here’s why: There’s no direct or obvious link from Dwell.com to DwellHomes.com.
That’s probably because Dwell’s main site accepts advertising from various real estate companies, and it seems likely that Dwell doesn’t want to compete with its bread and butter display advertisers. Besides, Dwell Homes is a licensed venture of a real estate brokerage, not a direct line of business for Dwell Media.
Unless Dwell Homes can generate enough traffic and exposure without the might of the Dwell brand, this niche site might continue to play in a very expensive — yet beautiful — walled garden.
If you’ve ever spent hundreds or thousands of dollars on pay per click advertising, but haven’t gotten any leads, there just might be a good reason for that.
Few marketing tactics are as attractive as pay per click advertising. The idea of putting a little ad on Google and driving thousands of visitors to your site is glorious. Think of the volume of leads you’ll create for pennies on the dollar!
What’s more, you’ll be able to knowingly fling around words like “long tail” and “fat head,” and use acronyms like CPA, CTR and CPA. Thousands of leads will magically flow your way. You’ll be the coolest kid in class. Until it all falls apart, and your money is gone and your lead base is no bigger than it was before you started.
That’s exactly why so many agents feel positively hornswoggled after spending money on pay per click (PPC) ads, whether they use a service to place the ad, or do it themselves. Thousands of dollars later, with no leads to show for their investment, they throw in the towel, convinced that all vendors who offer to place ads on the Internet are charlatans.
Set-up to Fail
Not all search engine marketing vendors are thieves, but it’s easy to see why agents might think so. Often, the lack of success in PPC is caused by a diabolical mix-up of dreamy expectations and harsh reality, mashed up with inscrutable and mushy reporting from vendors.
In a perfect world, you would be able to create a mind-blowingly engaging ad, put it on Google, and attract quality traffic to your site.
Not just your site in general, mind you, but a specific, compelling landing page that is so persuasive that all those prospects willingly give you their real names, emails and telephone numbers so that you can engage them.
At that point, you would transform them into real clients because you call them within moments of receiving their inquiry. And that how you measure results: You would tie how you got a client back to a specific ad or campaign.
In reality, though, it’s a lot more difficult than that.
That’s because PPC advertising is frequently set up to fail, because unassuming agents don’t understand the complete picture of what it takes to make PPC really perform. And it’s a lot more than clever headlines or 140 character ads.
The reason most agents fail with PPC is that they don’t have a complete solution to make it a success. This consists of four components:
A creative strategy, which is clearly defined, with a set budget and duration so that you are not lighting dollar bills on fire with no possible means of measurement
A website set up to manage inbound leads generated from PPC advertising: Typically, this means that you have the ability to set up a lead capture landing page per PPC campaign
A tracking mechanism (usually a CRM, like Realvolve or Followup Boss) that enables you to seamlessly pass the lead into your platform, so that you track it, manage it and convert it
A commitment to treat leads generated via PPC as if they are as valuable as prospects generated through personal referrals or your sphere — meaning that you call people back within minutes of getting an inquiry
If you’re not set up with all four components before you begin your campaign, it’s doomed. Here’s how not to have this happen to you.
There are three terms you need to understand before you start any PPC campaign.
Click through rate (CTR) is the percentage of people who click on your ad after having seen it on Google (or any other search engine on which you’re advertising)
Cost per click (CPC) is the amount it costs to buy a click on an ad you’re running. It’s also the maximum amount you’re willing to pay for a click. Since you only pay for each click, this can be very inexpensive, or very very expensive, depending on the search term you’re bidding on.
Cost per acquisition is what it costs you to acquire a customer, not just a click. This is a very important number to pay attention to — because it’s really a measure of your effectiveness at PPC advertising. Let’s say that you spend $1 per click, and 10 percent of visitors who hit your site after viewing your ad actually become your clients. That puts your CPA at $10:
CPA = $1/10% = $10 customer
You’re paying just $10 to acquire each client, which is a pretty good deal. But it’s easy to see how this number becomes extremely expensive if you’re spending $10-15 a click, and just two percent of your visitors convert:
CPA = $15/2% = $750 per customer
Suddenly, small numbers become huge, and more than a little disappointing.
So when a PPC vendor pitches you on cost-effective lead generation via PPC, it’s time to start asking some hard questions.
Is it “Branding” or Lead Generation?
It often seems that PPC vendors in the real estate space say that paid search (another term for PPC) is more about branding than real lead generation. This is especially the case when they’ve got a client that is unhappy with the results.
“PPC is really about brand exposure,” they stammer, as they try to explain why your $1,000 went straight down the drain with no measurable results. While it might serve some folks’ egos to have their ad on Yahoo! Sports in third position, it’s not worth much if it doesn’t generate a lead.
Brand exposure, where leads are not important, is for brands — and most agents are not in the position to run branding campaigns for their individual businesses.
Despite what some PPC vendors in the real estate space say, branding campaigns don’t generate leads. Branding campaigns get broad exposure for a product or service. But most agents want leads, not brand exposure.
Yet PPC can work for agents and brokers. Venerable vendors like Curaytor, Real Estate Webmasters or Boomtown generate massive amounts of leads and prove the point that PPC is a valuable tool, if you use it for the right purpose and are set up to succeed.
It’s also important that you don’t have to use a vendor to get great results, but if you’re not an expert you’ll need to spend quite a bit of time learning how to leverage PPC.
Setting up for Success
The first thing you need to do is consider your budget and goals. PPC is pure math, mixed in with a bit of savvy creative.
Here are a few things you can do to get going:
Establish your budget. Most agents in most markets probably need to allocate at least $500 a month to get any traction at all, and preferably closer to $1,000. If this seems steep to you, save your money and try something else. Don’t fall for anyone who says they can get you results for less than $100 a month, and wants you to sign a year-long contract.
Decide how long your campaign will run — and shorter is probably better. If you’re new to PPC, it’s best to run a short test so that you can fully gauge what a campaign can do for you. Measure, measure and measure again, but go the distance so you can really see if PPC works for you.
Choose your objective. Is it to get visitors to give you their email? Look at specific properties? Get a free home valuation? Whatever your goal, stick to it — and it alone — and build a landing page appropriate to your purpose. Landing pages should be short and sweet, not lead to other pages on your site, and capture email addresses and contact information of visitors.
Do your homework. Whether you decide to run a PPC campaign on your own, or use a vendor, look at the competition in your market. Who is running a PPC campaign on Google, or Microsoft’s ad network (Bing and Yahoo!)? What are they advertising? Which keywords are they targeting? How can you stand out?
A Word about Keywords
By this time, you’d have to be living under a rock not to have heard about keywords. But just in case you’re not completely sure what a keyword is, here’s the simplest explanation:
A keyword is a search term a user enters into search engine to get a result. It can be one word (“houses”) or a combination or words, or terms (“blue houses on Elm Street).
However, not all keywords are created equal. Some are more popular than others. For example, very broad keywords, like “houses” or “shoes” return untold millions of results, and are very difficult to dominate (or rank for).
This means that it would be extraordinarily difficult for you, as a sole agent or broker with a limited budget, to have your search ad (or even content on your website) come up first in your market when someone enters the term “houses” with no modifying terms such as the location or other features of the property.
That’s not a bad thing. Consider this: there’s a hidden benefit to ranking for more obscure search terms, like “mid century three bedroom two bath houses Evanston IL walking distance.” This much more specific term is probably less expensive to bid on, and it’s also easier to rank for since fewer people are entering that exact term into the search engines.
This type of term is known as a “long tail” keyword — and typically, the people who enter these terms are much farther along in their buying process than someone who simply puts “houses” into Google.
Your mission is to optimize your ads against the way you think people will search for you, and bid against the terms they might use to find your ad. There are a zillion tools you can use to figure out what people are searching for, and how much it might cost you to rank for those terms. Those specifics are for another post — but you still need to be knowledgeable enough to be dangerous about keywords. Here’s why.
You’ll need to tweak and tune your advertising to continuously optimize your ads to achieve the highest click through. (Or you should hold your vendor accountable, particularly if you’re not seeing results.)
There’s another reason that you want to optimize your ads. Google will reward you for quality ads, and give you the best rates and premium positioning if your ads are effective. That can give your campaigns the extra lift you need to get the most out of your PPC budget. Google’s Quality Score is based on the expected clickthrough rate, ad relevance, and landing page experience.
Why doesn’t PPC Work?
Frequently, when a PPC campaign is very expensive with few results, the issue is in the basic strategy, keywords or campaign structure.
That’s why you need to understand how your campaign is structured in terms of keywords, bidding strategy and duration in order to fix the issue. Even if you’re using a vendor, you need to stay involved, because you’re in charge of your budget and marketing strategy. PPC is most certainly not a set it and forget it medium.
Yet if your click throughs are high, and your cost per click seems reasonable, and you’re still getting a bad conversion rate, the problem could be on your landing page. If you’ve managed to get a user to click on your ad, but lose them at the front door of your site, that’s a waste of a click.
What’s important to remember is that PPC is really a troika: Great creative, smart bidding, and compelling landing pages. When you hit all three, you can knock it out of the park.
In a limited inventory market, many of our professional conversations center on multiple-offers situations for sellers. There are plenty of courses and guides on how to position a home to receive the maximum return based on competitive offers, as well as how to present multiple offers to our sellers in an organized fashion.
There is very little literature, however, on effectively writing simultaneous offers for buyers. This is a unique approach not widely practiced, and therefore, it must be done with great care and full disclosure.
Full Disclosure on Simultaneous Offers
For the buyer agents willing to go against the grain, writing multiple offers for one client in the same weekend for different houses might work. They may risk blowback from the listing agent, however. Full disclosure is imperative. Written acknowledgment from the listing agent and the seller is even better.
Most listing agents are protective of their sellers and do not want to disappoint their clients with frivolous offers. Most sellers of their personal home want a buyer who falls in love with their house and negotiates in good faith to secure it.
However, this multi-offer approach could work in the best interest of a frustrated buyer tired of making offers and being repeatedly outbid, and every REALTOR® is charged with working for his or her client’s best interest.
Advantages of Simultaneous Offers
Making simultaneous offers on multiple homes at the same time can be labor-intensive and isn’t appropriate in all situations, but it does provide some advantages to certain segments of our home-buying clients.
Investors are one set of buyers that can benefit greatly from the practice. They’re often looking for a certain style of home—in a certain price range—and hoping to purchase multiple homes within a short time frame.
Agents who represent buyers know in competitive markets like we’re seeing today in many cities, each week’s listings are met with multiple buyer offers. Running clients around to see new homes every week, selecting one, and being outbid by other buyers can be a vicious cycle.
For an investor who has a bit of latitude in terms of style and price, writing offers on multiple homes at the same time can create the opportunity to lock up a number of properties in a short timeframe or—at the least—to improve the probability they will secure one property in a given week.
But for the traditional home buyer looking for a primary residence, the tactics may require more research and some nimble paperwork. Buyers searching for their own home will usually be much more specific and critical about the home they’d like to buy.
There are often those who are searching in a fairly homogenous neighborhood or development in which the majority of the homes are within their desired criteria. If you’ve already been through a number of unsuccessful bidding wars with them, they may be ready to start pursuing a more aggressive strategy with simultaneous offers.
Buyer Must Have Intent
To be clear, writing simultaneous offers should only be done when the buyer fully intends to buy any of the homes involved.
This is a process that works within the professional standards of our industry when the buyers present a good-faith intent to buy—and don’t intend to fish for seller contracts only to decide later which ones were worthwhile. Buyers should be of the mindset that whichever seller signs the contract first, that’s the house they’re buying.
Homebuyers can gain a significant advantage in a market leaning so heavily toward sellers. A typical showing schedule includes visiting the week’s new listings with our clients on Saturday and then writing a single offer for their top choice on Monday or Tuesday when the sellers are reviewing offers. If, instead, we write offers on two or three homes during the weekend, we may be able to force a seller’s hand a bit.
Two Ways to Present Simultaneous Offers
There are a couple of distinct ways to present these offers.
The first is more of a power play, which may or may not be to your advantage depending on the situation. If the home sellers in a neighborhood are regularly waiting to review offers until after the first weekend on the market (usually Monday or Tuesday at a specified time), you might submit multiple offers on Saturday. Let the sellers know your strong buyer has three offers on the table, and you’ll be pulling the other two offers as soon as one seller signs. It just might be the bold move to shift a bit of power back to your buyers.
The other option is less aggressive, yet still strategically significant. You can simply write three offers for three homes and triple your clients’ probability of securing a home on any individual weekend. Given the amount of time, travel, and emotional effort buyers in these ultra-competitive markets go through on a weekly basis, the comfort of securing a home meeting most of their preferences may be more attractive than endlessly hoping for the perfect-home scenario that might never materialize.
I’ve personally handled these situations myself, as have agents on my team. This tactic requires much more upfront discussion with clients as well as with listing agents as to the ramifications of each offer and the strategy for dealing with them upon having one accepted.
Manage Simultaneous Offers the Right Way
Out of respect for our industry associates and their clients, we should be prepared to immediately rescind any other open offers once our buyers have reached mutual acceptance on a home. Writing simultaneous offers might give us some leverage, but the goal isn’t to unduly burden sellers and listing agents with offers that won’t come to fruition.
As long as unaccepted offers are pulled quickly and the sellers’ agents are informed in a timely manner, agents can create a strategic advantage for their buyers and still leave all of the sellers involved in a position to consider other offers. Based on the current market, they’ll likely have plenty of them.
Writing multiple offers for buyers isn’t always the right answer, but in some cases, it’s a very valuable tactic.
Buyers aren’t the only ones who get burned out in this inventory-crunched market—our agents do, too. Getting buyers into contract and headed toward a successful closing often requires some creativity, coaching, and even extra paperwork.
Writing simultaneous offers might just be the tactic that works for your clients and your agents, but it needs to be done with great care and full disclosure.
Real estate is a relationship business. It is a people business with a service attached.
Successful real estate agents understand that working their connections is the only way to profitability. They mine their family, friends, and past clients for business. They stay on top of people’s minds through handwritten notes, personal phone calls to check in and friendly visits.
Agents who work their sphere do not suffer the peaks and valleys of under-performing agents because they are constantly filling their pipeline with people who might one day become clients.
Using a Customer Relationship Management (CRM) platform can help streamline this process of staying in touch and top of mind.
With the right CRM, agents should be able to drive more closings and realize steady business and higher sales.
If that sounds too good to be true, try implementing these five strategies and see how your business responds.
1. Focus your efforts on lead generation and prospecting. Find new people to speak to about your business and the value you offer. You can buy leads, host open houses, do community service or network with alumni. Whatever you do, the goal is to add more names to your database. With a CRM like Top ProducerTM, those names, email addresses and phone numbers then become action items.
2. Concentrate your attention on past clients. Agents tend to spend most of their time juggling the daily tasks of current clients. They busy themselves with updating their listings, scheduling showings and managing the never ending flow of paper. They focus on the here and now. By making your past clients—people who already trust you—a priority, agents can increase their chance of generating more business. The odds of selling to a new prospect are always lower than the chances of getting a referral from an existing customer or having that existing customer call on you for another transaction.
3. Relationships matter. The most valuable asset agents possess is their database. Mine it. Use and cultivate it to deliver business on a consistent basis. The lifetime value of a past client is five times greater than an unknown prospect. Every closed client should generate four referrals and repeat business.
4. Integrate social media as a prospecting tool, rather than a time vacuum.Top ProducerTM links Facebook, LinkedIn, Twitter to contacts so agent can mine life events. Whenever a friend, family member, past client or prospect updates their status that they are getting married or divorced, having a baby or taking in an aging parent, those are life changes that could also spur a real estate need. Using a CRM that highlights important life events on social media helps agents keep in touch in a meaningful way that has less to do with sales and more to do with connecting to people—and filling a need.
5. Track your day-to-day communication with past clients and new friends. With a CRM like Top ProducerTM that offers daily prompts of five people to call, email or text, agents can systematize their follow-up. Make five calls every day. That’s 20 minutes per day, and at the end of the week there are 25 people who have had a personal interaction with their agent. It’s a reminder that you did a good job helping them in the past—and you’re available to help them again, when needed.
While it was once common for REALTORS® and brokers to divide their time between office space and field work, times have changed. Now, agents and brokers spend more time working from their laptops or tablets, and less time occupying those pricey office suites.
As a broker, switching to a virtual office space and working from home (or at a listing, or in a coffee shop), may seem like a cheaper way to manage the business, but is it practical?
If you are currently leasing office space for your team, switching to a virtual space could save you money. But the real advantage to going virtual and working in the cloud is that you and your team can always be connected.
“Being able to be very dynamic and having everything at your fingertips—always—is the biggest advantage,” said David Newcombe, designated broker for Habitat Urban in Arizona.
While most offices exist in a 9 to 5 world, having your office with you wherever you go makes it easier to work around your clients’ schedules, or to set your own schedule.
If you do decide to go virtual, you will “have to work harder on broker communication,” Newcombe says. Without the water cooler around, you will need to set up times to talk with your agents and your office staff, send regular memos to keep everyone in the loop, and find more inventive ways to train new hires.
Virtual offices may also create some inconveniences on the client side. “The client needs more than just a Starbucks to meet in,” Newcombe said.
That doesn’t mean you will risk losing clients. You just need to find another way to meet and finalize deals.
“Think forward as to what affiliates might work with you to provide conference rooms for occasional special client meetings,” Newcombe said.
“Don’t always go for the obvious old tried and tested solutions,” he said. “There are many great new products on the market that you can customize to fit your brokerage like a glove.”
Once you have a CRM system in place, a handful of productive tools will keep your business running smoothly. At the very basic level you will need an email client, online-based cloud storage, compliance and filing software, and word processing software. Newcombe recommends looking into:
Google Apps to manage things like email and appointments.
With the right planning, transitioning to a virtual office could be completely painless. Start by setting regular meetings with a time and place for all of your office administrators, marketing specialists, Web designers and REALTORS®. Having regular meetings will help smooth the transition.
Before you lose the office entirely, Newcombe says to “make sure your REALTORS® are as tech savvy as they can be and used to working without paper.” Also, offer training on any software you will be using and provide agents and staff with a list of equipment they will need to buy.
“Should I sell before I buy or buy before I sell?”
“How much do I need to have saved for a down payment?”
“Do you know how much you’ll REALLY be paying?”
These questions and so many more are asked by consumers each and every day. Wouldn’t it be great to supply your members with the answers, along with an easy way to share them through their social media channels?
Realtor.com now offers this free service to state and local REALTOR® Associations to help you deliver relevant, sharable content to your members. All you have to do is click the link below, press send and we’ll get you (and your members) started.
You will receive an email from us, twice weekly, such as the one shown above, which you can share internally and forward to your members. They can simply click on one of the share buttons and provide valuable information to their social circles anytime, day or night.
We’re always searching for ways to collaborate with you, and help you deliver value to your members. Offering regular social content in an easy to use format will help them educate their clients and make more connections – it’s a value-add that we believe will be welcomed with open arms! Get started today.
The Northwest Mississippi Association of REALTORS® (NWMAR) is one of the largest and most influential trade associations in the state, representing more than 800 members involved in all aspects of the real estate profession.