Today on the Listing Agent Lifestyle podcast we have a great conversation with Justin Braithwaite.
Justin is a newer agent. He’s been a real estate agent in New York for the last two or three years, and he came to the real estate business as a way to assist in his real estate investing business to help him buying and flipping homes.
That mindset, of coming into something, thinking about it as a capital investment is an advantage that can really serve him well as he grows and expands his business. Most of the time, people coming into real estate don't think about the work they do to find business a capital investment that will provide an ROI, they think about it as an expense which has a very different feeling.
We spent a good portion of the time talking about how he can establish himself in an area of the 1,600 homes he would like to focus on. We talked about the ROI of that ‘Getting Listings’ work.
We then moved on to talk about the return on relationship with the top 150 in his life. The 150 people who know him, like him, and trust him. I think he's in a situation, like most people, where he's not necessarily in contact with those 150 people, so we had a really great scenario-running conversation, looking at the results he could see over the next 12 months, if he put those referrals steps in place.
You're really going to enjoy this conversation.
Links:
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Transcript: Listing Agent Lifestyle Ep027
Dean: Justin Braithwaite.
Justin: Hey Dean, how are you?
Dean: I'm so good. How are you?
Justin: Very good. Thank you. Very good.
Dean: You're welcome.
Justin: Thank you.
Dean: This call is being recorded. Imagine that.
Justin: Yes.
Dean: Well I'm excited.
Justin: I got to be very careful about what I say.
Dean: No, and everything you say can be used to help you build an amazing plan. That's what we want to have the warning be, so the more you share the more you win. Let's catch everybody up on the Justin Braithwaite story so far and where we think we can jump off in pursuit of a listing agent lifestyle plan here for you.
Justin: Sure. I started in real estate I would say about three years ago and the first two years I was investing. Fixing and flipping. Then I realized that being a real estate agent could be just as lucrative or more lucrative without the risk and the capital and everything.
Dean: So you got your real estate license initially to assist or aid in your investing. Were you doing investing and flipping before and you thought, "You know what, if I get my own license I could increase my profit margins a little bit here and make it easier?"
Justin: Exactly. Yeah, to get access to the MLS, and so I kind of just stumbled upon it. I mean, just looking back I used to give away listings all the time. I really didn't even want to bother with them or anything, but I was actually following up with one prospect for about a year to buy her house. I could only pay something like 375, and after a year she said, "Well Justin, you're a real estate agent. Why don't you just list my house?" And I said, "Okay. No problem."
So I ended up listing the house and I got her a great price, $500,000, and a really good commission. I was like, "Well, this feels a lot better," and so I just kind of went full speed into that. Initially my marketing plan was just marketing to the same absentee owners that I was targeting as an investor, but targeting them as ... You don't want to deal with just one investor. I have a database of 200 investors and we could market publicly and we can get you more money, so initially that worked pretty well so I was mailing initially probably about 4,000 postcards, and then it went up to 9,000 per month.
Dean: Where do you live?
Justin: In New York City.
Dean: It's in New York City. Right, right.
Justin: Yeah, I was mailing to Queens, the Bronx, and Brooklyn. Actually, originally I started with postcards but most of what I was doing was just letters, so it started with 4,000 and went up to 9,000, and initially the response was decent. I would say my response rate was 0.3%, which I guess doesn't sound good but it was okay. I was getting the volume I needed, but in December, the middle of December, my response rate dropped off a cliff and it never recovered, and I just couldn't figure out why. My response rate dropped to maybe four calls per month from twelve when I was mailing out 9,000, and it just never recovered.
Dean: You were mailing the same postcard to the same people?
Justin: Same letter. Same letter.
Dean: Same letter to the same people. Right. Okay.
Justin: Not the same letter. No, I switched it up every month. It was pretty much the same theme, but some different language but it was pretty much the same thing.
Dean: Got it.
Justin: It really didn't recover, and so then I started thinking about what else I could do and I've always been all about the listings. I didn't work with any buyers, and I'm not sure how it is in other parts of the country, but can you believe that the buyer side splits here are between 1 and 1.5%?
Dean: Right. Yeah. That's the thing. That's why I really focus on and I believe that the future is a listing centric business. They just have so many more options, so much a better base to come from, so much more leverage with a listing based business than a buyer based business. The buyers are still important and we approach them in a different way, but accessory to helping you build your listing business.
Justin: Yeah, absolutely. Absolutely. I just like it so much better on the listing side because then at least I can negotiate a fair commission with the seller and not just subject to whatever the split is or if a split is given, and in the current market where there are just so many more buyers, it just I think financially and time-wise doesn't make any sense, so I'm just interested in-
Dean: We talked about the whole thing. That's really what's changed the most is the access to information. I talk about that in the Listing Agent Lifestyle book, the beginning of it. This year is 30 years for me in real estate, and the contrast between 30 years ago where we had all the information. If you were a buyer, we were the only key to the information. You had to come to seek out a real estate agent to get all the houses that were on the market, because there was nothing aside from the newspaper and signs. That's all you had access to, so we had all the details and now it's exactly the opposite. The buyers have access to every piece of information the moment properties come on the market and all the history of it, all the data. So information is not the thing now. There's a deeper kind of thing, but still the listing side is either you've got that kind of entry into the game now if you have a listing. At least you're controlling one of the properties there and the access to get it out there is so much easier.
Justin: Absolutely. Absolutely.
Dean: Okay, and so now are you primarily ... Have you shifted a little bit into traditional real estate, or are you still doing it primarily to flip and to aid your investment business?
Justin: For the past year I've been 100% focused on listings.
Dean: Okay, great. I love it, so that's awesome. The good news is what you come into this with is a different mentality than most people coming into real estate. You mentioned that you saw real estate brokerage as a less capital risk type of thing with pretty good margins if you do it right, and that's something that is a different mindset that can really give you an advantage that most real estate agents don't come into the real estate business with a capital investment mindset because they come into it with earning commissions, but they look at their advertising or look at marketing as an expense instead of looking at it as a capital investment. So I think coming into real estate with a capital mindset and some capital is a totally winning combination, and that's what's kind of cool about it.
Justin: Absolutely. I mean, you got to do something to drive the business.
Dean: Yes, exactly. Okay, so what's been going on for the last year then? Let's go through some of the elements of the listing agent lifestyle. Right now if you take a snapshot of your business of what's going on, do you have any listings right now?
Justin: Yes, my goal for this year was to do 52 listings, just one per week, and so far this year I'm running about 50% of that, which is why I have to kind of switch up my marketing because the marketing I was doing wasn't working, so year to date I have nine listings and we're up to 19 weeks, so like I said about 50%. Last year in the final six months of the year I had 15 listings. That's where I'm at.
Dean: Then, have you calculated your listing multiplier index?
Justin: Yeah, I mean after listening to your podcast I've thought about it.
Dean: Where do you think you're at?
Justin: I would say I'm on both sides probably about half of the time, and I would say roughly 75% of my listings are closing. I'm working with a lot of absentee owners so there are different complications that come into play. That's why that's 75%. Then I have two referrals from existing clients that I have listed. So I guess-
Dean: Alright, so you're in the 1.2-
Justin: Well like 1.4, because .75 plus .5 plus .2 get me to 1.45.
Dean: Okay, perfect, so that's right in the range of what I say when I first present this to people. They're somewhere in the .8 to 1.5 range, and that we've got some opportunity to take that, get that up into the over 3 range is where we've seen what we lovingly call the clubhouse leaders kind of thing, because we track all this stuff and so the people who are winning at that are up in the 3.5 range meaning, so if somebody's listening for the first time and hearing that, meaning that out of 10 listings they are averaging 3.5 transactions per listing, and you can see how quickly that makes a difference. It's total leverage because you have a competition-proof sort of opportunity. You're the only one that has that listing right now. You've got that advantage.
Justin: Yeah, it's great and-
Dean: So what are you doing?
Justin: For the listing multiplier. Well the first thing is I'd like to back out of that working with buyers, unless they're on my listing, because it's just a part of the business that I really just don't want to do. Again, just because of the splits. It doesn't make any sense from a time standpoint. When I look at how I spend my time I just can't get involved in that.
Dean: Do you have a showing agent? Do you have somebody that works?
Justin: No.
Dean: No. So there's an opportunity right away that I understand that you don't want to work with the buyers, but any great, the residual that you're going to get from this is going to be buyers who are not necessarily going to buy your listing but are bona fide buyers who are looking for a house and will buy something, so it would be a good idea to have-
Justin: Yeah, I mean I thought about referring.
Dean: Right.
Justin: Getting a referral fee, because I don't really have any agents that I work with. So I went inside my brokerage. Also went with different contacts that I had met in the business that I thought did a good job, and none of them were even interested in a 25/75 split. Again, it's probably getting back to the fact being that literally almost all of the listings are paying 1% to 1.5 on the buyer sides and most selling agents want to take both sides, so it's even hard to get your offers in, and there's not a lot of inventory so I couldn't even find anyone to do that.
Dean: Part of the thing, well let's talk about some of the listing multipliers that you are using, because I always look at the buyers as an opportunity to get more listings. I don't know whether you've seen in the Go Go Agent blog or in the forum the postcards that we use with a buyer who's looking at a specific neighborhood to generate more listings, but that's one of the great opportunities that we have.
Justin: I like that idea. Totally. The triangulation that you've talked about slowly will help working with the listing presentation to get more listings.
Dean: That's exactly right.
Justin: It'll also help to get both sides of the sale once I get the listing, so I like that idea a lot.
Dean: Yes, that's exactly right.
Justin: In a specific neighborhood. I don't necessarily like the idea of working with those buyers in a specific neighborhood, but again if the price point is high enough, like the neighborhood I'm focusing on the price points like $900,000. So if the price point is high enough then even at 1.5% then it might make sense if the buyer is really serious. So yes, I wouldn't rule it out in my specific neighborhood that I'm focusing on now with your program.
Dean: Yeah, because one of the multipliers of course is that you get the opportunity to get another listing because of the marketing that you're doing from that, so I could see how the staple of all of it is there's a lot of leverage rotating around our instant open house landing pages so that you create the instant open house landing page for your listing. That allows you to then have the info box flyer, to do whatever Facebook ads, Craigslist ads, any kind of print ads, online ads. Anything that you're doing driving people to that instant open house where now you're building a list of people who are interested in that house specifically, but probably the more important thing is that you know that they're interested in that category.
Justin: Right, absolutely. It's funny. Yesterday I actually created my first Facebook ad for a property that I listed that's probably priced a little bit too high and it's not selling, and what I did was I just had the form within Facebook for them to submit their information to me.
Dean: Yeah, yeah. Perfect.
Justin: Yeah, but also I think I'm going to create that landing page for that particular property and try to drive some traffic over to that through Facebook.
Dean: Of course. One of the great strategies of course is getting your sellers involved in that as well. By having them post the info box flyer that we create as a JPEG version of it. Having them just post that on their Facebook wall with a note just saying, "Hey, we're selling our house. Pass it on." And that is a way that we address this goal of getting a referral from the sellers. That they're getting involved in this process as well so that whenever they've got friends who both live in the neighborhood or live in the area that can help spread the word and they also are going to be running into people, so equip them with that info box flyer JPEG on their smartphone so that when they see somebody they can just text them that, the info about their house too. All these little things are all adding up as this collective wall of marketing activities that are all driving people to the instant open house.
Justin: Yeah, absolutely. When you're doing Facebook ads for a specific property you're promoting, have you tested different demographics and interests?
Dean: In a lot of ways you're not allowed to do demographic targeting for real estate ads on Facebook, so you can't do any sort of discriminatory selection of people that you're showing the ad to. You can show to the general geography, to the area, and the approach that we take on that is really one of two things. We either do it as the info box flyer where it's the basic information about the property, or promoting and saying we're having an open house this weekend, or what we've been focusing on is the daily tours, or telling the story.
I like this idea of telling the story, but I also realize that that takes skill to do it, so my thing Justin, if you're looking in Go Go Agent you'll see that there are things that I think a couple of weeks ago we put up a couple of examples of the story ads that are telling the story of the seller from the standpoint of giving people a reason why people are selling in a way, which is kind of a big win, but it takes a little thinking and a little effort to do that and I always have to balance that out with, what's the easiest thing that somebody could do? When you look at the instant open house and you look at the info box flyer, those things are the fastest to execute things that don't require any creative thought at all to put into them.
You put a picture and I've already done the entire layout and the format and the words, and as a matter of fact you probably know. We have an easy button service where we'll actually do it all for you, because it's easy to execute that way, and it works but on the other end of that what I often show out as ideal is to tell the story of that listing, and so I start with I showed there's a couple of examples of this on the Go Go Agent member blog that are, "I need to sell these six Muskoka home sites in the next 30 days." Those type of ads.
Those types of ads are very effective, but they require some creative thought to put into creating them. Now I've tried to, and have, created the templates for those, so the story of the format of it. I need to sell my Jamaica, Queens bungalow in the next 30 days and I'm willing to sell it for $5,000 below current market value, or whatever the story is that we're telling. And going through and laying that out for people and sharing the story of what's actually going on, because there's the psychology when people are buying.
Justin: Yeah, that could be very effective.
Dean: Yeah. It is very effective. It's very effective, because it helps address and direct the narrative.
Justin: Good point.
Dean: When people are buying a home, the first thing they want to know is, "Well what's the deal? What's the story? What's going on here? What's going on with the seller?" And they make up their mind. There's a narrative being told, right?
Justin: Right.
Dean: It's like being able to shape the winning story for the buyer in a way, and people are often very guarded about the real reason and they posture, and I imagine that this is even truer of New Yorkers in a way, right? That you put on this face of, "Well, we're not giving it away. We don't have to sell. If they don't want to pay our price we're not going to give it away." All of those things are stories that are geared to protect the seller's ego, right? To make them feel like they-
Justin: Right. To protect their negotiating position.
Dean: Yes. That they won, but the reality is it goes back to the fact that winners are magnanimous. That it's almost like you see these and you see it play out so many times that if there's a story that we're telling, like there is an urgency around something, then that's all that people are really concerned about is that they get to tell the story that's still going to make them seem like a winner. Like to be able to say, if you say to somebody, "Listen, we got transferred. I got to be in Philadelphia by the end of the month. We need to sell our house to do that." That's the story that the buyer will be able to say to somebody, "Yeah, they had to move to Philadelphia. We got in there just at the right time. We were able to take it off their hands." That protects their ego because nobody knows whether somebody got a good deal on a house just by the price. It's kind of an interesting thing.
Justin: Yeah, so you're kind of saying it'd be a good idea in the Facebook ad to incorporate part of the story, maybe just one line on their motivation for selling and even in the description in the listing.
Dean: Yep, that's exactly it. There's examples of Facebook ads that we've done up there too that do that same thing. Tell the story and then say, "We set up all the details at 22Greystone.com and you can contact," or we often do it from the seller's voice, that it's the seller. They've written this saying ... Because it's almost like it feels now that they really want to get this story out there and, "We've set it up and our realtor Justin has set up a special website with all the details at 22Greystone.com."
Justin: Yeah, that's good. That's good. It's definitely interesting. I could definitely test an ad that has that information in it. We'll see. I understand what you're saying, so the demographics for Facebook advertising may violate fair housing laws, right?
Dean: Yes, that's exactly right. So you can't say, "I want to show this to people 30 to 45 with $100,000 income." You can't do that.
Justin: Wow. I think everybody's doing that.
Dean: Yeah. I mean that may be, and sometimes you may be able to get away with it or whatever but they'll often just shut that down right from the get go. Especially if you start doing-
Justin: You know what I did which was interesting? If you look at interests, you're able to target people that went to certain websites, so like for example Zillow, Trulia, Realtor.com, so I thought that was an-
Dean: Yeah because they've got a category likely to move. That's a certain thing. And the guidelines are constantly evolving and changing. I run into this myself because we're doing all kinds of advertising and stuff so it's almost like riding this wave that you have to stay on top of and it breaks and then you got to get back on top and figure it out and keep riding the wave til it changes and you adapt. You definitely have to be adaptable to stay in this world of online advertising, but right now Facebook is an amazing opportunity.
Justin: Absolutely. You know, another thing I want to talk about Dean, in my mailing for the past year I have about 150 absentee owner prospects that I've been speaking to, and part of what is really attracting to the mailing is like right now I'm reaching out to them at different intervals. Maybe weekly, monthly, quarterly, depending on how close they are to selling, and it's really time consuming and it's true. I mean obviously I want to keep in touch because I know when they're ready to sell, pretty much whoever contacted them last is probably who they're going to go with, right?
Dean: Right.
Justin: So it's important to stay in constant contact, but I also feel like I'm bothering them when I call them up.
Dean: Not at all. So-
Justin: I try to put it out there and say, "Hey, I'm not calling to force you to sell. I just want to keep in contact." That sort of thing, but what I wanted to do is to figure out some way I could mail to all of them and we spoke about this briefly on your last call that you had, and what I could do, because they're all in different neighborhoods. And so what we said was I could send them out just some statistics about the borough as a whole, which I think makes sense, and then along with the other two inserts, like the call to action inserts, so I think that's cool but I don't know. Part of me is saying that might not be specific enough, because I mean, just using Queens for example, it's so big. There are so many different neighborhoods, and the neighborhoods are so different. So if I have a condo in one part versus a single family or a three family home in another part, it's so different so I'm worried that it might not be specific enough. Like you said, the horoscopes suck, right?
Dean: Right, and there's the thing. It's almost like either you set up contexts that make it manageable for you in a way, right? So you look at it. If you zoom out you can have the macro trend of what's going on in Queens for instance, so you've got the Queens report that shows the sales volume, shows the days on the market, shows absorption rate. Shows all these statistical things of what's going on in the market as a way of ... It's really information that's valuable, but then when you couple it with your offer or a pinpoint price analysis, that is now going to scratch that itch that people have for, "Well what's my house worth?" Even if you were to do information about a specific neighborhood within Queens, there's still that next level of, "Yeah, but what's my house worth?" We find that even in super narrow niches, like if we said lakefront homes here in Winter Haven. If you tell people what's going on, there are only 2,000 lakefront homes so you give people all the updates, all the information on it, but what they still want to know is, "What is my specific house worth?"
And that's the level that gets to when people are ready to actually sell. We just want to be in touch with them. Now, when you look at that, that's something that we do every month for people, and that's viewed as valuable because every month we send a cover letter, and every month we send a Get Top Dollar newsletter, and every month we send the updated report, but you can also add into that specific things. Helping people on the move, or the info box flyers of the new listings that you're taking in that area. Along with, "Whenever you're ready, here's three ways we can help you."
Because any of those absentee owners, they're either going to want to know how much their house is worth specifically, what they're going to need to do to fix it up, or if you've got a buyer they might sell it. That's why we talked about our silent market. The most valuable thing you can do is to start gathering buyers for them without having to list their house. That's why we talk about category buyers.
Justin: Yeah, and that's where the focusing on one neighborhood comes in really handy.
Dean: Absolutely. That's right.
Justin: Very manageable.
Dean: So now whenever you're connecting them, if you have these absentee owners who've responded, your 150 people, if you have them set up in your Go Go Agent account, we can create a Google map view for them that drops a pin that shows where they are so that whenever you're generating buyer leads you know that somebody's looking in a specific area that your connection with the sellers is not just calling to go, "Hey, just checking in. Are you getting our newsletters? Are you enjoying them? Is there anything I can do for you?" All of that kind of passive checking in with people. It's so much better if you called them or every time you connected with them it was, "Hey, I've got a buyer who's looking in your specific neighborhood. I'm going to be showing him this one. I thought I would check in with you and see if I could tell them about your house." That's a much more action oriented. It's doing all the right things for you. It's making you, "Boy, that Justin. Every time he calls us he's got buyers coming out the woodwork."
Justin: Yeah, it's terrific and that'll just definitely come from focusing on the same neighborhood because even if I have multiple listings in the same neighborhood, buyers are going to carry over.
Dean: Yes, and that reestablishes your information advantage. This is what we've got. The information advantage that you have is not the homes that are on the market right now, which used to be the advantage. The wall or the curtain was up and the only people who had access to the houses that were on the market were the real estate agents. Well that curtain has dropped and all of the houses that are on the market are available to all the buyers right now, but what you have is you know 150 people who may be going to sell their house, and nobody knows it except you.
Justin: Sounds good.
Dean: That's your advantage.That's your information advantage.
Justin: That'll come with time now. That'll come with time with focusing on that one area.
Dean: Yes, that's exactly right.
Justin: But it just makes me think though. It makes me think that I should in addition to focusing on this one area, that I should probably continue to focus on the absentee owners, maybe with the same postcard but instead of-
Dean: Listen, there's nothing magic about the absentee owners. It's one great niche, but there are just as many owners who are going to sell their houses in those neighborhoods, you know? Nothing magic, and the absentee owners are not any more likely to sell than the people who are living in those homes right now, so take the neighborhood, take the category, take the whole thing and go for all of it as opposed to just focusing on the absentee owners.
Justin: Well with the absentee owners I have a lot more leads because I'm focused on a bigger area. I think the benefit of absentee owners also is just a lot less competition in terms of when they're listing. That's just what I've found, but I really don't know because I haven't focused on non absentee owners so I guess I'll see, but part of me feels that-
Dean: Right. I'm saying take an area and look to dominate it.
Justin: Right. Yeah, I'm just worried because in this area I've got 1,600 single family houses. Could be possible that I won't get anything from that for a year. A year's a long time.
Dean: 1,600 in one neighborhood or are you talking about the absentee owners?
Justin: One neighborhood. I was like, focus on this one neighborhood.
Dean: Let's do the analysis, because the time's going to pass regardless, so here's the truth. There are 1,600 homes in there. They're not building any more. They're not going to go away. Those are the 1,600 homes that were there last year. They're the 1,600 homes that are going to be there for the next 5, 10, 15, 20 years, so those 1,600 homes are a lock. Now, what's the turnover rate in that area? How many of those 1,600 homes sold in the last 12 months?
Justin: 8%.
Dean: What's the percent?
Justin: 8%.
Dean: 8%. That's great. That's double what it was for lakefront homes. Here, the lakefront homes in Winter Haven. 2,100, 4% turnover rate, 84 sales a year so you're looking at 8%. There are over 100 sales of these 1,600 homes, right?
Justin: Yes.
Dean: Okay, so there are the facts. We know that if we just right now, we can magically transport one year forward, there's going to be 120 of them that sell in the next 12 months. Those are the ones that are going to have sold, whether we do anything about it and get those listings or not, right?
Justin: Certainly.
Dean: So the thing is that if you look at this, if we start now, it's really like, is it an area where you want to long term dominate? This is where when I looked at the four-year case study that we did with Tony Kelsey. Started out in one area of 2,000 homes, and when you look at it, that area over that four years, he was able to generate an almost 11 times ROI by consistently going into that area. Now, we'll update all the numbers here in September for our five-year case study, but let's just look at it. You talked about it may take a year. Well, let's just say that it's $1,000 to mail to those 1,600 homes for every month for the next 12 months. What would be the price range of those homes?
Justin: Average $900,000.
Dean: So you're getting $25,000 at least on the listing side of those, right?
Justin: Yeah.
Dean: Okay. Times, if we can get your listing multiplier index up to three, that could be $75,000 per listing that you take in there, right? So let's just do the math. It costs the same amount of money for you to send postcards to the $900,000 homes in Queens as it does for us to send postcards to the $400,000 homes in Winter Haven on the lakefront, with a half of the turnover rate. But you look at it and you think, "Okay, so if I spend $1,000-"
Justin: Not telling you what my neighborhood is.
Dean: That's what?
Justin: I'm not telling what my neighborhood is.
Dean: Right, exactly, so you look at that and it's like-
Justin: And my turf.
Dean: Yeah, yeah. That's an advantage, that kind of information, so when you look at it now, if you look at that infographic of the four-year case study, it was episode one of the Listing Agent Lifestyle podcast. We talked all about that case study, but you look at it that Tony mailed for five months before he got his first closing and from that time forward, after that closing, that one closing, he was wildly profit forward on this. Because those are $650,000 homes let's say in that area, so he mailed for five months which was $5,000 and made $15,000 or whatever his first transaction, so he's already very profitable from that. Never went below the profit line on this, right?
It was just now a multiple, self-sustaining out of profits from the initial listing that he sold, all the way through for the next three and a half years turned into spending $50,000 and making $550,000. And when you look at it, of all of the transactions that he did over that next four years, the three and a half years after he did the first one, he did transactions with 13 people who responded in that first five months over the next three and a half years.
So the asset that's being built is the inside knowledge of who those future sellers are. That's your advantage now, and if you're in an area where then you can triangulate and start looking for in advance the buyers who are going to buy that home once it comes on the market, that's really establishing yourself as the dominant guy in there, and it doesn't matter whether it's a competitive market because 99% of the time the way that the top agent in any market has gotten there has been personal promotion over a long period of time. That they're the name that you know, and that's the thing. People look at those things. Who's the guy for that area? You know the name of who you're talking about when you're thinking, "Yeah, but somebody's already established in there." Right?
Justin: Right.
Dean: And so you think about that and the only thing, the thing that is the most valuable thing that you could bring to a listing presentation kind of thing, a listing opportunity, is your checkbook. If you brought your checkbook and said, "When would you like to move and how much would you like?" And you said, "Okay," and wrote the check, that other guy would never get any of the listings, because you get them to the finish line faster. So the next best thing you could do to bringing your checkbook is bring a buyer with their checkbook, before the house even gets on the market. That's the thing. When you look at it, it's an investment strategy. If you've got the money to put $5,000 into something over a period of that amount of time, or maybe you take 1,000 of the homes or 500 of the homes or whatever you can comfortable use to jump start, all you need is the seed money to get to the first listing, and the only thing that more money allows you to do is speed up the process of identifying who more sellers are. It doesn't speed up the process, you know?
Justin: Yeah, as long as it hits in the time I need to. It's a cash flow issue, right?
Dean: I got it. Yeah, and there's the thing is that's why I get people to look at it. It's a capital investment. It's a thing that it's not something that you're looking to put the money in right now and then you need to get it back out to pay the credit card bill real quick. If you're going to do that, go to garage sales and flip stuff on eBay. That's what that's about. We're talking about, what else could you do that gives you the opportunity to make $75,000 from one relationship, you know?
Justin: Question. Have you measured the return on investment from the postcards in a particular neighborhood for Getting Listings?
Dean: That's what we're talking about.
Justin: No, versus Facebook advertising to getting listed postcard.
Dean: Yeah, we're doing the same thing-
Justin: I was thinking of both.
Dean: So we're amplifying both, yeah, so we do micro targeting. If you're in an area of 1,600 homes, you could. Has it got a name? Like if it's a defined area, you can do micro targeting on Facebook one-mile radius from the center of Ashton Lakes. That's one of the neighborhoods here. If we put a pin in the center of that, the one-mile radius encompasses all of Ashton Lakes and there's a little bit of spillover, but I don't care about that. All we're doing is focusing the same Getting Listings postcard as a Facebook ad targeted to a micro group of people who live in this geographic one-mile radius.
Justin: What are you setting as your daily budget? What's your cost per lead? What are you seeing in that?
Dean: We're able to get them for three or four dollars that way, but there's not ... I'd look at it just the same as postcards. I look at Facebook ads as a ... I look at them as doing EDDM basically. The way I look at it, that most of the exposure that you'll get is mobile, so the mobile news feed I look at as your mailbox in a way, if we treat it like that. That means that you're spending the money. It costs about $50 CPM to narrow down to 1,000 homes, so I look at it. If you look at the end of the day, you had a reach of 1,000 homes if you spent $50 kind of thing, and that's similar. It's about five cents per delivery, and I treat the ad like a postcard that's showing up in their mobile mailbox. It's no different. It's the same thing.
Justin: Yeah but it'd be interesting to see what the convertibility is of those, because it's much cheaper, right? I mean if your long term response rate on the postcards is 3% and it's costing you six cents per postcard, then you're looking at probably $18 per lead that's coming back from your postcards. You're getting 3 to 4 dollars on Facebook. It's a lot more economical.
Dean: Right, but it's all things in the long term. You look at it that I'm more concerned about the overall ROI, and so I like the micro targeting ability better than just blanketing, and to be able to if you're getting mailing addresses from people, now you know you've turned an invisible seller prospect into a visible seller prospect.
Justin: Yeah, exactly. Exactly. It'd be interesting to see what the convertibility is so you can measure the ROI on both the Facebook versus the postcard.
Dean: Yeah.
Justin: You're targeting the same people really, right?
Dean: That's it.
Justin: With the postcards you're targeting that one specific area and you're just mailing to them. With the Facebook you're targeting people. Not necessarily the homeowners. Just people that are in the area, right?
Dean: Right. Exactly.
Justin: You're just doing solo geography. Nothing else, right? When you're doing the Facebook ads.
Dean: That's exactly right. Yep.
Justin: Just geography. Nothing. So they could be renters, homeowners. They could live there. They could be passing through. They could be working there.
Dean: Oh no, we do target homeowners. We do target homeowners in there, yeah.
Justin: That makes sense. Of course. Alright, so homeowners in that geography. That's it.
Dean: Yeah.
Justin: Interesting.
Dean: What you run into, and I look at it as a suite, right? So I look at it that, that kind of ad is going to tail off quickly because there's only 1,000 people that you're showing it to and you're not going to reach all of them, so the reality is that you reach 300 of them kind of thing and you reach them three times, and then those people have seen it so you have to watch it that I look at we cut it when we reach that level of frequency. So if I see that in the first time you do it, the first day or two you get most of the value, right?
I treat it like a mailing kind of thing, like we're going to do it for two days. I may spend $50 to do that, $25 a day for two days. Get that in front of people and then you're not going to in perpetuity get any more value from that by continuing it. They'll still take your $25 a day but you're not getting the response now because you've been in front of them again and again, so you run it almost like doing a postcard mailing. I'll look at it and I'll get it in front of people two times and then stop, and then next month do the same thing again. I just look at it as another mailing.
Justin: It's interesting. Right, so you kind of just put it on when you're mailing the postcards, just for maybe a week or a few days per month.
Dean: Yes, that's exactly right. It's great.
Justin: Wow, that's interesting to know. So you can actually see metrics on how many times people have seen ... What is it, the average number of times that people have seen your ad in your target audience?
Dean: Right. The exact number of times. The thing that they show you is the reach, which is the number of people who saw it, and the frequency is the number of times they saw that, so they break the reach down to different variables like total reach meaning we showed it to 1,500 people, but when you look at now the frequency, we showed it to 1,500 people an average of two times. That means you've had a true reach of 750 people.
Justin: Right, so your exposure was 1,500. Two times was the frequency, so 750 people.
Dean: Exactly, and the reason is that we look at it that those 1,600 people that you were talking about in that neighborhood, those are the 1,600 people and there's going to be 120 of them that are going to sell their house in the next 12 months, and 80 of those 120 it's not even on their mind yet. They don't know right now that they're going to sell their house. For some number of them it doesn't even come onto their radar til six months from now, but the first thought.
This is why we always use the report on Winter Haven, the May 2018 report on Winter Haven lakefront house prices is because the first thought that somebody who's going to be selling their house is going to want to know is, "Well how much is my house worth? Oh, here's a way for me to see what the neighborhood is doing, market data, without having to commit to having a real estate agent come over and tell me what they think my house is worth. I can get the market data and I get to see. I can surmise from that what my house is worth."
That's why because it's a softer offer it gets more people to raise their hand, but the advantage that we have is that we know sooner. Wouldn't it be valuable if I could say, "Just listen for a second, okay? If we had this choice that you could do nothing with those 1,600 people, or you could give me right now $12,000 and I'll give you a list of the 120 people who are going to sell their house in the next 12 months. These are the people." If I had the ability to go forward in the future, would that be valuable to you?
Justin: Of course. I mean I already really like the idea. It makes a lot of sense. I actually sent out my first batch on Monday.
Dean: Oh perfect. Good.
Justin: Yeah, so I'm already going with that.
Dean: I like it.
Justin: I definitely like it. The other thing that I was looking through and I saw on my list to do is world's most interesting postcard, 150 friends. I like the idea of thinking the people that I would recognize in a supermarket and that I would say hello to. The thing is a lot of these people-
Dean: Yep. Have you grown up in that area?
Justin: No, not in the particular area that I'm focused on. The thing is a lot of the people that I could think of on that list I haven't spoken to in a very long time, and it would be very awkward to call them up and ask them for their address, so is this something that I-
Dean: Just get their address. You know where they live.
Justin: Yeah, hopefully. I mean, so just go and get their ... And all of a sudden they're just going to see a postcard from me-
Dean: Yeah.
Justin: And they know that I didn't know their address?
Dean: Yeah. "Hey, look at that. Look at Justin. Hey, there's Justin. I didn't know he was in real estate." Right now, what's the alternative, Justin? We're looking at these, right? You're making these advanced arguments for it. I'm using argument in the positioning thing. I'm not saying you're being argumentative or anything like that. I mean, you're making this argument that okay yeah, what if it's awkward or whatever? So let's just go to the facts. Just like there's 1,600 homeowners and 120 of them are going to sell their house in the next 12 months and if we knew who the 120 were it would be an advantage, right? Okay, let's just draw a line there. Now let's transfer the thinking over to your top 150. Are there 150 people that if you saw them at the grocery store you would recognize them by name and you'd stop and have a conversation with them?
Justin: Yeah.
Dean: Yeah, so those people exist, right? Of those 150, since you're new to real estate and you haven't talked with some of them in a while, is there a possibility that some of those 150 people don't know that you're in real estate right now?
Justin: A big possibility. Most of them probably don't.
Dean: Let's take it the next step. Is there a possibility that those 150 people are in the next 12 months going to be in conversation with somebody who's thinking of buying or selling their home?
Justin: Sure, yeah.
Dean: Yeah, and if they're in that conversation and in order for there to be a referral, the next step that has to happen is that they think of you, if they don't know you're in real estate, what are the odds of that happening?
Justin: Zero. I mean I understand that whole train of thought.
Dean: So let's look at it that we're talking about the highest, highest, highest probability ROI on spending $1,000 to communicate with 150 people for 12 months. That even if some of the ... Like when you look at it, how many of those 150 people are going to buy or sell a house themselves over the next 12 months? There's a better than strong chance that it'll be more than zero, right?
Justin: Of course.
Dean: And so at the very least if what happens is that those people now every month know that you're in real estate and are seeing all the different types of people that you help, that they'll think of you. It's such a ... What's the minimum sort of price range? You're talking about $900,000 homes in the area. What's the median price where you are in that whole market?
Justin: 500.
Dean: Yeah, so 500, so we're talking about a minimum, if one transaction comes from it, of 10 to 1, 15 to 1 ROI on this for a $1,000 investment. Without doing anything other than setting in motion a process that mails them a postcard once a month, that I've already written. You don't have to do anything.
Justin: And so you ... I think I know the answer to this but, so you think that putting that postcard in an email would not be effective?
Dean: Not the same. It's not the same. You still want to email people. That's great. But there's something else about getting something physical in the mail, you know? It's real. And it's inexpensive and easy, and it's fun. It's the world's most interesting postcard, which it really is. That's the fun thing is that every month there's at least three or four things on there that ... That was my instruction to the writer. I said, "Listen. I want to put just 16 or 18 really interesting things on there, and three or four times out of that I want to audibly go, 'Huh. I didn't know that,' or, 'Wow, that's interesting.'" And it's amazing, but it's so easy to consume that way too, you know?
Justin: Sure. That makes sense.
Dean: Yeah. But those are the things right now. What's your return on relationship right now? If we look at of your top 150, how many repeat and referral transactions did you do in the last 12 months?
Justin: Just the two from the listings that I had, so it's pretty low.
Dean: Right, and so that-
Justin: Outside of my clients I haven't really spoken to a lot of people about what I do.
Dean: So then there's a really good chance that they're not speaking to people about what you do.
Justin: They aren't. A really good friend of mine actually. I caught up with him and I told him. I said, "Hey, this is what I'm doing." He said, "Oh, my brother just sold his house."
Dean: You see what I'm saying? If you all of a sudden get over this awkwardness of saying that somebody's going to be, "Hey, wait a minute. How did he get my mailing address?" That's not going to happen. It's going to show up in their mailbox. They're going to see it. "What's this? Oh, the world's most... Oh, Justin." That's really what people are going to be saying. They're not saying, "How dare he get my publicly available mailing address for the home we've lived in my entire as long as he's known us." I mean that's not the way people think, you know?
Justin: Good point.
Dean: Yeah. How would you feel if somebody mailed you a Christmas card or a birthday card or something?
Justin: I would be incredibly aggravated.
Dean: Yeah, of course.
Justin: No, I hear you. It makes sense.
Dean: But I think those things, I mean what we're looking at. If you listen to the episodes, I don't know if you've listened to all the Listing Agent Lifestyle episodes but you listen to them and some of the people that we've focused on the after unit are our gold standards to get you to a 20% annual yield from that group of 150 people.
Justin: It's amazing. What are you seeing as the average and the low in the range? What's the low side?
Dean: You're at the low end of the range and-
Justin: That's the no existent level of the range.
Dean: Exactly, and you're debating and wondering whether you should do something, right? Well let's see what happened. So I know that with Julie Matthews when we did it here, she went from 13 repeat and referral transactions after having been in business for 20 years to doing 33 transactions the first year after, and all we did was add the world's most interesting postcard. We've got numbers of people who our after unit focused, like getting referrals. That's one of the top things of the Listing Agent Lifestyle. Getting listings, multiplying your listings, getting referrals is right there as the next thing that we put in place, and that's really the reason for it is that it's one of those things you can easily set up the baseline of to go from zero to something by just sending out the world's most interesting postcard.
Justin: I mean I'm pretty much already sold on it. I love the idea. My question was just more around, would it be more convenient for people and less awkward for me to send them email? Emails or Facebook, but-
Dean: It's not about convenient and less awkward. It's about impactful and effective, and that's really the thing. It's a pattern interrupt than when you're not just one of the things that was streaming through their inbox that they're going to glance at. It's something that physically arrived in their mailbox where there's far less competition for their attention. You're unique and novel and it's going to be the most exciting thing they get in the mailbox that day.
Justin: Makes sense.
Dean: And we establish then your return on relationship. Right now it's anemic, so let's make it a point that at least those 150 people are thinking about you once a month just from alone if they're going to do a transaction themselves, or their brother is going to sell their house. Do you think that guy that told you, "Man, my brother just sold his house," if he got a postcard from you that said, "Hey, just a quick note in case you hear someone talking about selling their house this spring. If you hear someone, give me a call or text me and I'll give you a copy of our How to Sell Your House for Top Dollar Fast book to give them."
If you're presenting that every single month, all these different conversations, that's going to be an amazing thing and then you layer on top of that all these market maker activities that we talked about of paying attention, dropping pins to see where physically your top 150 are located, and you're going over to see somebody about selling the house that's two doors down from somebody in your top 150, or you've got a buyer who's looking in that area.
Justin: Yeah, it makes perfect sense.
Dean: It really does, but it all starts from that foundation of the minimum viable keeping in touch with 150 people of sending the world's most interesting postcard. You got so much potential.
Justin: Yeah, I think it's great. I'm looking forward to implementing it. I know. I have all this. I mean I should be able to wrap everything up by June 11th. I have everything all planned out.
Dean: I love it. That's perfect.
Justin: I will track my results.
Dean: Alright, what's your big takeaway? What's your big takeaway here?
Justin: Hopefully in two years you'll be talking about my results at the top-
Dean: Yes. I know we will.
Justin: Stop talking about Tony so much.
Dean: Well you know, here's the difference is that we've had people. This is the interesting thing is that Tony, the reason that we talk about him is that he takes action and records what happens. He's a disciplined executer, and that's the thing, right? There's a big thing. It's like, yeah, I've been doing this for 30 years. I've got the track record of having this experience of knowing that this works. I know it does, and so now we've got the documentation of it in addition to the knowledge of it, and it's really just a matter of doing it.
Justin: Yeah, and it's really great that we have all that information because like you've said, on month five, six, seven if the results aren't there yet it's going to be pretty tough to keep it going.
Dean: Yeah. It's unlikely to go that long with nothing, that there's nothing happening, especially if we're doing the triangulation. If you start looking, things start percolating. You got to make them things happen, and the more that we do, it's like mailing the Getting Listings postcards to that group of 1,600 homes and layering on top of that the Facebook ads, and then layering on top of that ads looking for people who are looking to buy those homes. It's all this percolation that makes it happen with you as the only one who sees what's going on here. You're the only one who knows who the people who've responded are. You're the only one who knows who the people who are looking to buy those homes are. You've got the information advantage and you're in that very, very powerful position of being a market maker.
Justin: Dean, when you talk about calling them. So, "Hey, I'm showing this property similar to yours. Is it okay if I talk about your property?"
Dean: I email.
Justin: You email it. Okay.
Dean: Yeah.
Justin: But now so when we're originally getting these leads though, we only have their name and their address, right? So are these the people that you're calling or emailing for that information and triangulation-
Dean: We get their name, their address, their email address, so we get all of that.
Justin: Got it. So that's what you're capturing on-
Dean: Yes.
Justin: Well if it's through your 800 number you might not capture it.
Dean: Exactly.
Justin: But if it's through the landing page you're saying you're capturing it.
Dean: That's right. Yep, but on the 800 number when we're saying, the voice message is, leave your name, address, telephone number, and email address.
Justin: So on your landing page, do you not have telephone as a required field?
Dean: I don't make any of them required. Now, you can do whatever you want on that landing because you can make each field required, but my intention is to never call them anyway. The whole thing that I did when I created the Getting Listings program, my whole provocation is, how can I get it so that realtors can get listings? How would I do it if my phone only accepted incoming calls? That's how I've set it up and that's what happens is people call you.
Justin: My only question is about the triangulation. So you're not calling them anyway for that. You're just emailing them.
Dean: Emailing them, and I'm saying, "Hey Justin, I'm showing houses in River Run this weekend and I remember looking up your house online when I sent you the River Run report a couple months ago. It seems like your house might be a match. I'm not sure what your plans are, but I thought I'd check in and see if maybe I could tell them about your house?"
Justin: Interesting. Okay, so I should think about whether I should remove telephone number as a required field. Right now I have it as a required field on my landing page. Maybe I'll reduce the response rate if I have that there.
Dean: Yes, it definitely does for sure. Because then it immediately breaks the thing. "Ah, I don't want anybody calling me."
Justin: Right.
Dean: This is where I look at it. It's more valuable. I'd rather sacrifice. I'd rather know that the person at 22 Greystone is thinking about selling their house, even if I don't have their phone number, than be all hardline and require their phone number and not know who they are because they don't want to give it to me. More valuable for me to know that the person at 22 Greystone is thinking about selling their house, because I can always email them or I can always mail them if I don't have their email address even. I don't care. If they want to just give me their mailing address, I'm fine with that.
Justin: Dean, a thought just occurred to me. We don't have our telephone number on our postcard, the Getting Listings postcard, or the landing page or anywhere like that. If they want to sell or speak to an agent before they receive our first market watch package, would we be losing opportunities that way?
Dean: It's not that ... This is still moving forward, right? That they're not going to get this and then call somebody right away. They're not going to not take the easy step because they only want to talk to somebody right now, but what you could do is put your phone number in the return address.
Justin: Right, exactly. Right on the back of the postcard.
Dean: Yeah.
Justin: Alright.
Dean: Well that was great. So much potential, Justin. So much potential.
Justin: Yeah Dean, thanks. I really appreciate everything you've put together here. It's all really good stuff. It makes a lot of sense. You kind of reinforced a lot of the things that I've heard on the different podcasts and everything and that I've read on your site, and I'm really excited to put all this into practice.
Dean: That's so great. Well it's nice to have you aboard. I can't wait to see what happens.
Justin: Definitely report back. Thanks again, Dean.
Dean: Okay, Thanks Justin. Bye bye.
There we have it. I really enjoyed that conversation. That was a little bit longer than we normally have but it was such a great conversation to really get down to the ROI of things, I mean the expected payback of something and Justin of course has that investor mindset so it was good to really attach that kind of thinking to the programs that we're talking about. I mean we're talking about his Getting Listings program and what's the expected ROI on that? Well, if you're going to measure ROI you've got to look at the expected ROI of not doing it as well. When you look at an area where you want to get listings, if there's 1,000 homes with an 8% turnover rate, that means that whether you do anything or not, 80 of those people one year from today are going to have sold their home, and if you don't know who they are, then there's no advantage, but if you did know who those 80 people are, that could be an advantage in the right hands.
That's where we really talk about it that you've also got to measure in when you're talking about return on investment, you've got to equally counter that with a return on inaction. A return on not doing anything. If you don't do it, there's still going to be 80 people that sell their house regardless of what you do. Mailing these postcards isn't magically going to affect the systemic outcome of how many people in an area are going to sell their home. What it is going to do is give you the advantage of identifying those people with enough of a head start for you to build a relationship with them that they view you as a helpful advocate who's been serving them without an expectation of trying to get them to list their house right now by hammering them the moment they respond to something, and that's a big advantage.
It also gives you the opportunity to start a triangulation process of starting to find buyers who are looking for lakefront homes so that now you've really got the ultimate advantage. You've not only got a list of people who are thinking about selling their lakefront homes. You've also got a list of people who are looking to buy lakefront homes, and that's the third best thing to having you buy the house for them, so that's really the way to think about it and the faster you get started with that the faster the return comes.
We're not arguing whether it works. We know it works. Planes fly. The theory of aeronautics works, right? It's a matter of you applying it and doing it. Same thing with your return on relationship with the 100 or 150 people that know you and if you saw them at the grocery store you'd stop and have a conversation with them. That if they're not thinking about you as being someone who's in real estate and could be very helpful, they're not referring you because they don't think about you when conversations about real estate come up. If we can get them to think about you more, the odds of them thinking about you at the time it matters and knowing what to do when they do hear people talking about buying or selling, that's going to be an advantage for you.
So the two tools that we use to do that. We have a whole complete system for getting listings called Getting Listings. It's got all the postcards that you need, the landing pages that you need, the 12 monthly followup newsletters and cover letters that you send to follow up with those people. All designed to just get you that phone call that says, "Can you come over and help me sell my house?" We've got all of that for you. On the return on relationship side, we have a subscription to the world's most interesting postcard, where every month we send a postcard that is like a newsletter from concentrate. It's got very interesting stats or facts on the front, and on the back there's a note where we're programming your clients for referrals, and it's just a magical thing. We send that to your top 100 or your top 150 every month like clockwork and your referrals go up.
Those two things alone are both available for you at GoGoAgent.com. I want you to come on in, take a look around. We have a free trial. It's no credit card required. You can come in, see everything that we're about and if you'd like to continue, it's $79 a month. So you look at that for less than $1,000 a year, access to all of the tools and all of the things that you need to live this listing agent lifestyle, so I look forward to seeing you over there at GoGoAgent.com.
If you'd like to be a guest on the Listing Agent Lifestyle podcast, walk through a plan for you, then go to ListingAgentLifestyle.com. You can download a copy of the Listing Agent Lifestyle book and if you click on the Be a Guest link you can be a guest and we can build a plan for your business. That's it for this week. I'll talk to you next time.