Protect Your Real Estate Business with These 6 Foundational Principles

"Right now, if you study the U.S. economy, everyone is wondering when the music is going to stop and when interest rates are going to go up. When the music stops and there's only so many seats; have enough money to buy a seat." This is what real estate coach Tom Ferry said in a recent interview where he skilfully compared the current real estate market to a very scary game of musical chairs.

All jokes aside, his point is clear; as it stands, this real estate market is not sustainable. The combination of too low inventory, too high demand, and home prices that continue to climb to match this demand is a recipe for disaster. At this stage, it's not a matter of "What happens if the market shifts?" — it's a matter of "What happens when the market shifts?"

As a real estate professional, the most important question you should be asking yourself right now is, "What do I need to be doing to prepare for this and ensure my business and livelihood will survive?" If that's the question you're asking; you're in the right place.

Let's dive in.

The Mindset: Scale the Unscalable

There are six basic foundational principles that every successful real estate agent is practicing that is helping them to prepare for whatever real estate market uncertainties lie in our future—but let's start by first establishing the right mindset.

You need to be thinking, "How can I make this bigger or better?" when it comes to every aspect of your business—or as Tom Ferry says, you need to "scale the unscalable." Ultimately, you need to be focusing on how you can save the most amount of money in the most efficient way possible.

So, start to think about how you can be making more phone calls, how you can create better relationships, add more value, invest more money in marketing, create more content, send more SMS messages—you get the idea. The main difference between the agents who are crushing it right now and those who haven't sold a single home yet this year is this mindset of "scaling the unscalable."

Principle 1: Make Your Phone Calls

You didn't get into this gig thinking that there wouldn't be any phone calls, right?

The first thing real estate agents need to be doing to have even a single iota of success is make phone calls. Call your database. This is one of the most basic principles of real estate—so basic that we don't think there's need to elaborate much further.

Principle 2: SMS

The second thing agents must be doing as a foundational principle is sending their database text messages. SMS helps you to tap into your prospects' real estate journey when they're still in the research phase; this is where the money is!

In this video, Tom Ferry shares his favorite SMS script.

Follow this texting strategy as described, and you can easily fill your pipeline of leads for the next two years!

Principle 3: Create Content and Email Marketing

Now that you've made it past some of the real obvious principles, let's move on to content creation and email marketing. Here is where you can really start adding value for your audience.

One important thing to keep in mind when creating content is that the global pandemic has displaced so many people from work and school, causing their perspective of what "home" means to them to change. And with so many people working from home, what people actually need in a home has also changed.

Here are some things to consider when creating content. Make sure your content is:

• relevant to your audience
• applicable to various platforms (social media, email, blog posts)
• providing value of some kind (helpful information, demonstration of community involvement, etc.)

When creating content, video is your best friend. Do as much video as you possibly can. Tom Ferry advises his clients that their marketing spend should be at least 10% of their estimated gross revenue (no more than 20%) and to invest about one-third of that budget directly into content creation with a focus on videos.

Your videos can be simple—think FaceTime or Bombbomb—or you could go the more professional route and hire a videographer to create videos of you being active in your community, investing in your industry, or giving back through heartfelt charity work.

Finally, when it comes to creating content, switch your mindset away from the idea that the purpose of your content is to "generate leads." You need to go into content creation with the idea that the purpose of your content is to "build relationships." This will differentiate you from your competitors and encourage people to feel a sense of loyalty for your brand.

If content creation is not your forte or is simply too time-consuming, your best bet would be to outsource it to a reliable digital marketing company.

Foundational Principle 4: Referrals

The next thing you need to focus on is the easiest money you can ever make as a real estate agent—and that's the referral check you get through agent-to-agent referrals.

Not enough agents are leveraging their contacts to make them money.

Foundational Principle 5: Set Up Your Google My Business Page

Here's where things get a little more technical. Right now is the most important time for you to be defending your brand. If you haven't done so already, claim your business on Google and set up your Google My Business page.

According to the National Association of Realtors® 2020 Profile of Home Buyers and Sellers report, 97% of home buyers use the internet to search for a home. To add another layer to that stat, statista.com reports that 92.5% of all internet searches are done through Google.

If these stats aren't enough to convince you to get on Google right now and set up your Google My Business account, listen to what Tom Ferry has to say about it.

FOUNDATIONAL PRINCIPLE 6: GET CLIENT REVIEWS

We made it to the final foundational principle, and it's not usually a crowd favorite.

As a real estate professional, you NEED to be asking your clients for reviews and ask for a review every single time. Reviews are worth their weight in gold.

Here is a pro tip when it comes to asking for reviews: Against popular belief, the best time to ask for a client review is not necessarily at the closing table; it's at the moment when your client is ecstatic with the service you're providing. For example, it could be after you spend the day showing them houses, write an offer, and get an acceptance. Ask for a review when your client is the most elated and give them the option to provide their review in a text message or email.

The more reviews you accumulate, the better your credibility will be with prospective clients, other real estate agents looking to refer clients, and with Google. Reviews will progressively improve your ranking on Google, which will help you become more visible when people search for an agent. Having reviews is a win any way you look at it.

Above All Else: Provide Value

Now that you made it to the end, it's time to execute.

Here are a few closing thoughts:

• Get the right systems in place to support your business and make sure they integrate with any other key industry technologies you'll need along the way.
• Think about investing in a coach (a coached agent converts 3 to 4 percent higher than a non-coached agent).
• If one of the aspects of your business that you're scaling is your team, consider these best practices for recruiting.
• Focus on lead nurture or outsource an ISA if you're overwhelmed.

Hopefully, you feel like you can now more effectively arm your business and yourself to withstand the inevitable market shift that will impact the real estate industry in the not-so-far future.

Now go scale the unscalable!

For more content like this, click to watch the full interview with Tom Ferry.