Cultivating Relationships Instead of Real Estate
My $200,000 lesson…
I would like to think at my ripe age of 60, I have learned my big lessons in business. But I haven’t. Just recently I had a setback, or better stated, an insight that made me stop and examine my bar, and take a step to raise it to a better definition of Me.
Here’s what happened: I was doing my daily research on properties that have just come on the market and had closed escrow the night before in my neighborhood when I came across a home on the Newport Beach Bayfront that closed escrow for $7.5 million. I wasn’t surprised at the price of the home since it came with an unusually large boat dock. I was instead jarred to read that the purchase was done by a client of mine; or at least I thought he was as a client of “mine.” And why wouldn’t I? I had closed over $20 million dollars in properties for him. The problem was, that was 9 years ago.
So, what went wrong? Why did my annual Holiday gift basket, or occasional phone call not keep me on my client’s viewfinder? The answer I discovered, was the importance of visibility; specifically, our clients visibility.
In our fact conversation he said, “Spyro, you have always done an amazing job for me and I couldn’t have been happier with how the deals went down. I have made great investments because of your advice, and you have made me a great deal of money. However In the past 9 years, outside of my annual holiday gift bag and occasional ‘Hello’, I have had limited contact with you. You have never called just to ask how I am doing, or if I have any needs that you can assist me with.”
Apparently, while I was busy looking for gift bags, not only had the other realtor sent him monthly market updates, pocket listings in his neighborhood, and even brought him a real, unsolicited offer, which in turn got his foot in the door, but he asked one very important question that I failed to ask, which was “Mr. Client, if you were to ever move from this amazing property (that I found for you and thought was your dream home forever) what would excite you enough to do so?” My clients response was, “A Bayfront that can accommodate a 75 foot yacht”; that subsequently closed for 7.5 million dollars and earned a paycheck of just over $187,500 for the other realtor.
So what is the moral or lesson of this story? It is a 3-part “Raise the Bar” lesson that I write more to myself, than to my readers, as a reminder of how to do things better.
Relationship (n): “the action of making a mental connection”
1. Cultivate the Relationship instead of the Real Estate. In our industry, we certainly have specialists, but let’s not fool ourselves. We are not necessarily “special.” Meaning, the ratio between Realtor versus client is massive. Therefore, when we get the luxury of representing a client for the purchase of their next home or investment, make sure you know your client. Meaning, know what makes your client take notice, and understand your client’s needs and wants, so that when real estate comes on the market you will know immediately if it fits in your clients box. Contrary to what I’ve heard other agents say, it is not about the spin and putting your client in a deal. It’s about matching a deal to your client’s needs and wants; which this awareness happens only if you have a relationship with your client that goes beyond the showing of the properties, emailing new listings, or even Holiday gift bags.
2. Celebrate the Relationship After your Deal Closes. Nine years before my client’s latest purchase, I sold him a house on the golf course that was a gem. He and his family were happy beyond belief, and I, as a competent Realtor was proud of my stellar “Realtor” performance. However here was the problem: My short-sightedness told me that I found them their dream home. But never did it cross my mind to ask him what his next dream house might look like: Be it then, be it in a year from the sale, or as my lesson taught me, be it 9 years later. Just because escrow has closed, your relationship with your client has not. As a professional Realtor, your job therefore is to stay connected. Meaning, send your client monthly market updates, birthday wishes for the family, and treats for their dogs when you go back to visit. Above all, cultivate a long-term relationship that is built on genuine caring. Visibility, long after the sale is what will keep you on your client’s viewfinder not only as a friend, but as a trusted Realtor who can be called upon to guide and direct them on their next purchase.
3.Foster the Relationship to Expand your Referral Base. Marketing and branding is certainly important for a continual and successful pipeline of business. But there is no better formula to securing new prospects than a referral form a happy and satisfied client. Your existing clients have the power to transfer their trust, which is a priceless gem in our industry. We always focus on the transfer of title but instead we should be focusing on the transfer of trust if we want to expand our business.
My very dear friend Paula Steurer (Sterling Public Relations) posed a very interesting question in one of her recent seminars. It was, “What is your WHY?” As I sit on the reality of my very expensive $200,000 lesson, I am reminded that my WHY is not just selling real estate, but instead it is building relationships; relationship that will keep my clients visible, and where I meet their personal and professional needs.