O Ö Ùã ® Ê Ä Ý 1 0 1 CÙ®Ä G®ÙÙ®Ä, SÄ®ÊÙ V® PÙÝ®Äã HÊó TÊ RçÄ A SçÝÝ¥ç½ RÝ®Äã®½ R½ EÝãã BçÝ®ÄÝÝ Real Estate Business Basics: Talent Invest in quality not quantity. Economy of Scale A community-centric sales team will sell the community first, and the house second. TALENT This sounds cliché but good people make a successful business. DMB Realty Network believes in hiring the brightest and hardest working people, creating a culture where they can succeed and empowering everyone. However, in a services industry, like real estate, it is essential to never underestimate how much one person can accomplish. We have sales people who earn close to a million dollars because we have the best in the business and create an environment where they can continue to grow. Here are the biggest mistakes you can make when running a residential real estate business: • • • Sacrifice Sacrifice needs to be supported by a management model that is committed to their people. • • • • Don’t Do It Like Everyone Else Hiring a sales person who is not motivated by money. Limiting a sales person’s income, if they make more money than the CEO, then you are successful. Reactively hiring. Don’t use traditional ways of hiring, job sites, postings and letting people come to you. It takes a lot more effort, but go out and get the good ones, don’t sift through those who think they are right for the job. Creating a support/corporate staff that doesn’t understand the value of your “Rainmakers.” They make it rain, you grow, everybody profits. Not recognizing that the truly talented sales teams are populated by very Type A individuals and if they are not supported by management, you will have chaos. Most great sales people are not good managers (and usually don’t want to be) so don’t let anyone convince you they can sell and manage people…you will be disappointed by their performance in one of these areas. If you don’t have a formalized training program, don’t convince yourself you can hire inexperienced people that will grow into the job…this is a skilled profession, you deserve professionals. Customize your approach to your current environment, rather than just what has worked in the past. 2013 Copyright DMB Realty Network LLC S½Ý T½Äã ECONOMY A skilled sales force has no less than 10 years of experience today The success of this industry comes in many shapes and sizes. There are big brokerage houses, small developer run sales teams and everything in between. There is no right or wrong way of doing things. However, DMB Realty Network’s success in this business is predicated on tight, dedicated sales teams structured to fit the needs of each community. OF SCALE Some of the mistakes developers have made when creating a sales environment are: Must have a modest base, health insurance and paid time off • • $150K to $300K is the most common total comp package • • Outside brokers in a deal expect to get paid on built product upfront not when it closes Resale should be included in the overall earning potential Team compensation is still the norm Building big, expensive sales centers that may be supported through high velocity launches but cannot be cost effectively sustained through the final phases of the community. Underestimating the investment in your online presence. The sales process today starts with a prospect in Chicago shopping on line at midnight in the middle of a snowstorm for somewhere warm to spend their winters. Overestimating the investment in your online presence. You still need a sales person to navigate with a client through the process. Relying on big brokerage houses to understand your community, the amenities, the value proposition and your vision. In one of our projects in Arizona, our community-centric sales team continually sells at a higher price per square foot than the project directly adjacent. We sell the community first and the house second. Understanding the developer’s commitment to the master plan and educating the prospect on the overall benefits of the community is key to continually maintaining value in the property. SACRIFICE Multi tasking, working long hours, holding people accountable and doing things that may not be in a normal job description allow businesses to thrive even during tough economic downturns. This culture of sacrifice can only exist in an environment that is totally committed to their people. One of the commitments DMB Realty Network has always made to their sales teams and corporate staff is eliminating risk as much as possible. Traditional sales staff have been expected to be independent contractors, responsible for their own employee benefits, staff support and expenses. Some of the most successful teams have enjoyed: • • • • • • 2013 Full employee coverage for health and dental benefits Support staff employed by the broker to make sure sales people sell High tech CRM programs with the latest hardware and software 100% funded marketing programs that drive qualified leads All licensing and expenses reimbursed Corporate support staff dedicated to creating an extremely efficient model 2 Copyright DMB Realty Network LLC Oçã Ê¥ ã« BÊø MÙ»ã®Ä¦ Real estate runs in a ten year cycle with a seven year memory. Poll your current residents and keep great data on your prospect’s interests. This dedication to supporting the sales efforts may force sacrifices in other areas. Through the toughest, and best times in real estate, the dedication to spend wisely and hold people accountable for their performance is a simple formula for success. However, in DMB Realty Network’s assessment of teams, the most common mistake is allowing non performing personnel to be retained. Even great managers struggle with the process of assessing and adjusting staff. DON’T DO IT LIKE EVERYONE ELSE One of the most common mistakes DMB Realty Network identifies early on with Developers is the temptation to go back to what used to work. The following are essential to success: • • • Community Based Market Testing to create a Data Mine Don’t survey your recent buyers and residents on how their buying experience was, survey them on how they plan to live in their new community Sales office needs to become an Active selling process DESIGN TRENDS The real estate industry is in a recovery and we have a different consumer. This is the “thinking man’s time” and we need to provide offerings that speak to that home buyer. Here are some examples: • • MARKETING RESOURC- • • 1. • 2. 3. 4. • • • • 2013 Smart Homes – Technology Next Gen – Second unit (aging parents, returning kids, man cave) and/or elevator shaft built in and used as closet to begin Flex Design – Move your walls in a predesigned product Net Zero – Premium isn’t working, need to build into every home as a differentiator (Generation X likes sustainability but not willing to pay for it) Every buyer is negotiating not necessarily on the base price but on the upgrades so you need a very involved design center as part of the sales team, therefore a trend toward offering a design center credit is working. These buyers see the amenity infrastructure as a potential burden. Community Facilities need to be maintained in perpetuity considering operation costs and updating assessments. “Overdone Amenities are like throwing cotton candy at buyers.” Diversity of Product in the same master plan may speak to the same buyer at different stages of their life. If you are not in the resale business, you may not be able to service the new buyer. This new buyer may have upwards of eight real estate transactions in their lifetime, not including a second home. 3 Copyright DMB Realty Network LLC FÙÊÃ SÊÃ O¥ OçÙ TÊÖ S½Ý PÊÖ½... AMENITIES Problem: Excellent client service should never be underestimated, but knowledge and unparalleled expertise of your product is vital to the sales process. Debbie Beardsley, Associate Broker The Silverleaf Group Building and maintaining relationships is paramount to a successful real estate business. A quality lead will most likely be a referred lead. Mike Sweeney, Associate Broker The Silverleaf Group The burden of HOA fees as well as the transition of master plans to owner run HOA’s has produced a problem. Current buyers have a very low tolerance for fees and many mature communities have such mammoth amenities, the HOA’s are struggling to run them. Solutions: • • • • • • • • Fully integrate Mix Use into the Master Plan Use the amenities around your community (partner with the city parks, libraries, etc.) Have mobile amenities (Example: Gourmet food trucks with wine every Friday) Agriculture is the attraction (Examples: Back yard green house as an upgrade option, edible landscaping, community garden, etc.) Soft programming should dominate – parks, hiking trails with technology built in (Example: Having QR codes at trail heads) Bring in private businesses to run amenities Wellness Programs and Outside Activities Programming It’s not just about Golf anymore Become an expert on the community you are selling and clients will have no choice but to turn to you as their real estate resource. Mike Collins, Director of Sales Rancho Cielo Realty CÊÄãã DMB Realty Network LLC 20789 N. Pima Road Suite 250 Scottsdale, Arizona 85255 (P) 480.515.0148 (F) 480.502.6903 Donald D. Kent President & CEO [email protected] Carine Girardin Senior Vice President [email protected] 2013 A B O U T D M B R E A LT Y N E T W O R K L L C DMB Realty Network is an international 360° Marketing, Sales and Operations company providing solutions in the residential real estate industry. Specializing in the affluent and lifestyle markets, DMB Realty Network offers premier services from launch to legacy. Our Marketing and Sales services, offered under the Encore 360° Network, provide clients effective, strategic and tactical marketing and sales solutions at any phase of a Community’s lifecycle. Our team works with clients to ensure all variables are aligned for success, establishing tried and successful processes and systems; incorporating our holistic approach to marketing, sales and operations. DMB Realty Network is an independently owned and operated service provider and Brokerage Operations company working with premier Developers, Financial Institutions and Property Owners to create, market and sell some of the most coveted residential properties throughout the United States, Canada, Latin America and the Caribbean. 4 Copyright DMB Realty Network LLC