- What the heck is happening with the real estate market
right now and what can we do to prepare
for whatever it is that's coming next?
Those are the burning questions on people's mind
these days and we're going to get some answers
from our special guest, Ken Goodfellow.
Ken is the founder and chairman of Goodfellow Coaching
and he's been through a few real estate cycles
over the years.
He was a top producing real estate agent
and then he grew multiple offices and was
a broker/owner and for the last 20 years
he has coached the top of the top
real estate teams that do over a million
a year GCI across the United States and Canada.
So, I'm looking forward to hearing what he has to say
about what to expect in 2019.
If you're new to this channel, hi and welcome.
My name is Vanessa Rosenblum.
I'm the President of Pro REA Staffing.
We're a search and placement firm that specializes
in connecting administrative and sales staff
with growing real estate teams.
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your career in real estate or grow your business
in real estate, this is a channel you want to come back to.
So, make sure to hit the subscribe button
and ring the bell so that you're notified
when we post new content.
I try to put new content out about every week.
Alright, let's get into our interview today.
Hi Ken, thanks for joining me today.
- Hey, pleasure.
- Great, so what the heck is happening in he real estate
market right now and what should we expect in 2019?
Certainly lots of change.
I mean real estate's always been a changing business.
Everybody's talking about disruption and all
the new companies coming in and buyer programs
in the U.S., certainly lots of change.
I think 2019's going to continue to be, there's going
to be lots of change in the industry, but I think
it's also positive change and I think,
depending on how you handle change,
it can either be a great thing or it can be
a difficult thing.
I think 2019's going to be a great year.
- So, what should agents be doing right now to prepare?
If they feel like the market is going to start
to contract, or it's going to become more
of a buyer's market, what are teams doing
to sort of hedge their position in the market?
- Well, first of all I think what the agents need
to do is to focus on their business,
not all the distractions out there.
They need to have a great plan, as I always talk about,
a great business plan, and they need to follow the plan.
And all the disruption could go on all at once,
but at the end of the day what you need to do
is to follow a plan and not get disrupted
by the new shiny star every time there's a news flash.
You've got to keep straight on your business side.
And I think what you're, I think the agents themselves,
sorry, the market itself, is, I don't think
there's a predictable market at this particular point.
Some markets are really busy in the U.S. and Canada.
Some of the markets are slower right now
particularly because of the weather alone.
Some of the offices have been closed for two or three days
with snow and whatever, but I really believe
that the market itself's going to be good this year.
I don't think you're going to get that huge contraction.
There might be some of the upper upper end
that's not selling quite as quickly, but again,
the market's the market.
For many year, I've been in this business a long time.
For many years it's always gone up and down
and when it's busy and it's crazy busy,
everybody's complaining because they can't get listings
'cause it's too busy, they're selling right away.
And when it's slow they have too many listings.
So really, it's about how you operate and your mindset
and how you operate your business will be
the difference this year.
- Yeah, I think that's such a good point.
No matter what the market somebody turns
it into a competitive advantage, right?
- Absolutely, and that's important, yeah.
- Yeah, and I think, so if agents are concerned
that the market is going to start to contract,
what is the competitive advantage there?
Where can they shift their focus or dig in deeper
to make it a competitive advantage for them?
- Yeah, I think, so there's a few things.
I mean, listings always to me, that controls the situation.
So if you've got listings you've got to make sure
that you're absolutely getting them priced right
and if the market is contracting you've got to talk
to your sellers about bringing the prices down
which will give you competitive advantage
'cause your listings are going to sell.
The issue, most people, they never get to that point
because they don't talk to the sellers enough
and the listings expire.
They don't make any money.
The sellers aren't happy.
So, I think number one, if you want to get
a competitive advantage you got to list
at the right price and if they're not selling
bring the price down.
I think that's really important or adjust the price
according to what your market is.
I think also is a lot of people stop all their marketing,
slow everything down.
I think you got to look at the markets
and continue to market so that people see
you're out there and doing a great job.
There's a couple of thoughts for you.
- I love that.
Let's talk more about marketing.
Where should agents be focusing marketing dollars in 2019?
- Well again, depending on how you built your business,
I mean, some people do a lot more what I call hard
marketing, they're sending out cards, doing that kind
of stuff and then, I have a lot of clients now
that do their business online.
So again, see it's like everything.
You really got to, you got to measure the marketing
that's going out.
In other words, what is the return you're getting?
And what most people do is they just say okay,
we're going to send all this out at this period in time
and hope it works.
But you see, one of the things as I coach people on,
is you've got to adjust to the market.
So, if for example you should be sending more things out
in April, May, June or March, April May, and then
maybe slowing down a little bit in July.
You got to really look at what's giving you the result
and what the efforts that you're putting in
and the product that you're putting out
is giving you in return.
But definitely, I mean, there's obviously a lot more
online marketing, Facebook ads, the Instagram stuff
is going on, all of that is important,
but it's a combined marketing effort
and again, you've got to look at the result
that you're getting on everything.
It can't be just blind.
You got to measure the result.
- I love that, yeah.
Follow the numbers, right?
Follow the numbers and they will tell you
what you need to do next.
The same thing goes with your lead then as well, right?
So, if there are fewer people wanting to list,
how does that impact the way you choose to lead gen
and the kind of numbers you need to hit
in order to reach your goals?
Are you talking to your agents about that right now?
- Yeah, absolutely.
Again, it's based on a business plan.
Because I work with many of the top agents in the world
my people are established somewhat and so, we work a lot
on how do we continue to grow.
How do we continue to get those listings?
But, when we're doing the business plan we're deciding,
okay, this is how many we're going to get.
This is how many we got in the last few years.
And then we're adjusting our plan either up or down.
Most people adjust up and then we decide how much
business the agents are going to do to help us grow obviously.
But most important, I like to look at anyways,
I always encourage people to keep growing
because if you don't grow you get run over.
And so, I'm always encouraging people, keep moving it up,
keep moving it up, and sometimes you have to,
because of less listings, maybe you have
to expand the market.
Maybe you've got to move to another area,
start working in another area to you
to give you that volume.
But again, you got to have this in a plan
and you got to figure out how to do it.
A lot of people just go, oh well, my area is not too busy.
I'm just going to start over here.
Well, it takes time to develop that and it takes
a lot of money to develop it, so you need to do research
to make sure that it's going to give you the return.
In other words, if you start sending out and developing
a farm area that's let's say 5000 homes,
but you don't pay attention to the numbers
and then all of a sudden you look at the numbers
and you realize there were only five homes sold
there last year.
You're now spending thousands of dollars.
You're not going to get a return.
So, I think it's really critical to know your business
and plan your business and know the return.
Like you said, the numbers don't lie.
- Well, I think that's such a great segway
into what I wanted to talk to you about next
which is team building, which again is another
hot topic these days.
I think understanding your numbers is so important there
because, are all teams successful?
Can somebody have a bunch of agents that make you
less money than they could on their own?
Talk about that.
- A lot, a lot.
I always say when I speak that 70% of the teams
make little to no money simply because they aren't teams.
I mean, the definition of team is a group of people
working together in synergy towards a common goal,
yet at the same time people are working towards
their individual goals, but what I find with most teams
when I actually I do these in-offices where I go
and I spend three, four days there and look
inside the team and interview everybody and figure out
why that team, or how that team could make more money
and if it's not how to fix it, that kind of stuff.
Inevitably what I see is probably 70%, 75% of them
are not teams, they're just individuals working together
using a main person, but they're not working
in synergy, they're not working trying to drive
the business.
In other words, each one is just working on their
own thing, not towards the team.
So, really critical as you grow your business,
if you want a team that you have to know everybody
works towards, first of all you got to have the vision
of the company, where you're going.
You have to have core values.
Hey, here's who we are, this is what we're doing.
And then, you have to have that great plan
that I talk about, but you also, if you're going to
have a team, you have to have everybody participating,
everybody having production.
And if they don't have production you have to move on,
you have to get somebody else that's going to.
A lot of teams have trouble not getting rid
of the people that aren't doing anything.
So, I would say if you truly are a team
a good measure of a team is, are you working together?
Is everybody, when they show up in the morning,
do they know the vision of the team?
Do they know where you're tryin' to go?
And are they excited to help the team grow
as much as their individual growth.
I think that's really important.
- I think that's so valuable.
Are there any benchmarks that you give agents?
For example, you should have a profitability of this,
if this is what you need to maintain if you have
a team, otherwise you're below standards.
- Well, profitability is the key to the whole thing.
If you're not making money, why do it?
And yes, there is, and this really varies.
There's different, there's different
levels of profitability.
For example if you don't have a team and you're
an individual agent, well your profitability
should be 60%, 65%, 70%.
But if you're a team I like to look somewhere
and it again depending on the volume of business
that you're doing, somewhere between 35% and 50%.
And 50% is hard to get because you have payouts,
but many of my teams are in the 40% range
of net profit, before taxes.
- I think that's a really important thing to hone in on
because people think, I'll just grab a buyer's agent.
They'll take care of these buyer leads I don't
want to deal with and I'll get 50% of their income
and it'll all just come off the top, right.
But, it doesn't work that way.
So, I think it's so important for people to realize
your profitability's going to go down which means
your volume needs to go up considerably
and so, what are you going to do to invest
in those people that get your volume where it needs to be?
- Right, right and getting the right people on this team
is absolutely critical because if you hire the wrong people
you're going to spend a lot of time managing and I always
say this, I just said it to a client yesterday on a call,
I say that if your team, if you feel like you have
to pull your team along you got the wrong team.
They should be pushing you along.
They should be helping you grow.
And so, I'll always use this thing,
when you're hiring people, so let me just revert back
before I do this about profitability because what I find
with a lot of people is they bring in like you said,
a buyer agent, two buyer agents, then they spend their
whole life worried about, can we give them leads?
Do we have enough leads?
Do we have this?
Do we have that?
But you see, they don't have any expectations
and they don't have any standards on the agent.
So, what happens is the agents come into work.
They're just mouths open, want to be fed, instead
of having a proper business where everybody
on the team, again the word team, is working together
to generate business so that the whole team
can get value from what's happening out there.
So, really critical that you have great standards
for your team and that people that work for you,
everybody's busy, everybody's making things happen
and if they're not they have to go and participate
and get business, too.
So critical because if you don't, no profit.
I get people callin' me all the time sayin' Ken,
I want to coach with you.
You know, we do $3 million GCI.
I go, great, how much money, what's your net profit?
Well, $50,000.
I go $50,000, wow, what are you doing in business?
You're better to sit at home.
Doesn't make any sense to me.
So, volume and GCI are great, but if you're
not makin' any money, forget it.
That's my view.
- I love that and when it comes to hiring buyer's agents
it feels like the majority of them can't cut the mustard
and it's a risk.
You bring this person on, you invest in them,
so what are some of the things that you encourage
your agents to look for when they're considering
bringing a specific buyer's agent onto their team?
What are some red flags?
- Yeah, I mean first of all, my big red flag
with everybody is that if they walk in the door
and they just want to talk about money, it's probably
not a great hire because all they're going to want to do
is talk about money.
I think the most important thing when hiring somebody
is that you have a great value proposition.
In other words, if you're going to bring an agent on
here's all the things we're going to do for you
because they are going to pay you a percentage
of the money that comes into the company.
They have to see the value in order to come
and work for you.
And then, once they come to work for you,
you can't give them all the money because if you give
them all the money you can't have a profitable business.
So what's important, with the red flags first of all,
like I said, are money, but here's what's really
important about getting great agents.
I think they got to come in and love the culture
of the company.
I think they got to really get what you're trying to do.
I think they got to really understand, hey, you know what?
They're really trying to build a great team here
and I get a chance to be part of it.
Not come in like you owe them something, but come in
excited to be there and I would say, really important
when you're interviewing people, to make sure
that the culture fit is there and it's really critical.
The other thing is is that are they driven to be a champion?
Are they driven to get business?
Are they motivated?
Do they want to make money?
Do they want to move forward?
Those are critical parts because it's kind of
the eye of the tiger, right, go get it, get things done,
not sit around and wait.
Again, really important things.
If somebody wants to just, so I always ask people,
what's your goal.
Well, my goal might be, I'd like to make enough money
to buy a TV.
Okay, you've got a problem.
No ambition, no goals, really.
And then, the next person you interview says
you know what?
I want to make a million dollars and I know it's
going to take time and I know what I'm going to do,
but I'm going to go work at it every day.
I'm excited to be on this team 'cause all the things
you just showed me.
I think those are things and I think,
I think it's really important that if they come on the team
that you have a great onboarding process to help
them succeed.
Even though they're experienced they have to succeed
in your environment.
- I completely agree.
And do you have any concerns about people who
may eventually want to go off and have their own team,
someone who's new in the industry, wants
to be on a team, but seems like a real go getter
who won't stick around?
Would you recommend somebody hiring a buyer's agent
like that even if they're probably going to
be there for three years and then become a competition
or just don't even go there?
- I want people that can grow to make money
and do things right.
But, you see here's what's happened
with a lot of the teams I coach.
I have teams I coach where their agents,
the agent, not the main agent of the team,
not the team leader, but the buyer agent
or his listing agent, make $500,000, $600,000, $700,000
a year, but when they started they were like,
okay I'm going to really get this going and you could see
they're a go getter, whatever.
See, that's who I want though.
But you have to have a trust that your business is,
you have enough systems in place, you have a team contract,
which I think is important.
You have systems in place so that allow people to grow.
See, people leave teams for three reasons.
Number one, in this order.
Number one, lack of recognition.
Number two, lack of growth.
And number three, money.
Well, one of the things that I'm always talking
to my big team leaders about is you have to continue
to allow people to grow and if you allow them to grow
then they're going to stay with you and they're
going to make you a lot of money and they're going to make
themselves a lot of money.
So, what most people do, oh my God, I don't want
somebody that's going to come in and build and lead.
See, you can't think of it that.
You got to think about, nothing is forever
and if you can get three great years out of somebody
they may stay with you forever, or they may
go do their own thing.
It doesn't really matter as long as they're
a great team player and helpin' you build,
I think that's the differentiator.
I think many people are afraid that they're going to get
run over by these aggressive agents
that are trying to make it.
I think that's a mistake.
- I think that's a good problem to have.
How do we challenge somebody to keep them on the team
versus how do we drag this person along who's just
going to stay here forever, but is never really
going to rise to the level that we need?
- Exactly, exactly.
I think it's exciting when they get great people
because I see huge growth in the teams.
I see the teams really catapulting ahead
and other people that get agents that do okay,
do five deals a year, okay, that's not going to
make him any money.
So, get somebody that really wants to be there,
but the other part of that is, you have to continually
sell them the value of the team, right.
'Cause if they start losing, they don't understand
the value anymore and they just game over.
- Yeah, and that again, goes back to culture
like you were talking earlier and I'm always
harping on this with people because a lot of agents
come to us and they don't really know
what their culture is.
They don't have a set of core values that they operate from
and you can't differentiate yourself,
you're not creating a unique value proposition
and people want to be around people that share their values
and that are going in the same direction they are.
So, you can't keep people.
You'll have to pay them a lot of money and they're
still going to leave you if you don't create a culture
and maintain that culture and see yourself
as the culture keeper, right?
- Exactly, 100%, and that's what it's about.
100%, I mean you see it in your business, you see it.
It's having that culture that is a differentiator
as far as I'm concerned.
I use this example and I think it's a great example.
I have some clients that people actually
line up to work for and they don't take 'em all,
but they, hey, can we work for you, can we work for you,
can we work for you?
And then I have other people that recruit every day.
They're on the phones, they're trying to get people,
boom, boom, boom, boom, boom, and the people come
and they go and they leave and they don't stay.
And so, they get frustrated, but the people
where they line up to work for, I said,
what's the difference?
- Yeah, they attract.
They have a unique culture.
They're present in who they are and they attract people
and what I love about this and love working
with real estate agents is your culture can be
whatever it is, as long as you're not a complete jerk,
as long as you own who you are, there are people
out there who want to be a part of that.
You don't have to be a certain way
or have a certain mission, just whoever you are.
It's sort of that, know yourself first, right?
Because you are your culture, right?
- Absolutely.
The person I said that they're always calling people
and people coming and going and they get one
and two leave and they always call me and go, hey,
I got a problem here.
I go, you're right, look in the mirror.
There's the problem because it's a problem
in 90% of the cases is the culture's horrible.
People don't want to be there.
They just see it as a churn and get in there
and do things.
There's no great culture.
There's no great value.
There's no great fun and enthusiasm
because you got to enjoy, you got to love what you do
of it's not going to happen, right?
So yeah, I think that's important.
- Last question.
If somebody doesn't have a good culture
and they're struggling with that, can they change?
Ken, have you seen somebody go from that churn and burn
environment to pullin' it together and creating
a strong culture?
- 100%, but it takes work.
You have to change who you are almost
because, when I say change who you are,
if you're just a pounder and that's who you are
and you got to get people that fit into that culture.
Personally, what I've seen is that that culture
is difficult to work in.
So, can they change?
Yeah, I've seen lots of it, worked lots that have changed
because we talk a lot about it.
We work a lot about hey, how do you change your culture?
What do you do?
How do you get the right people?
I start by core values.
I start by their vision.
I start by hey, you know what?
Let's talk about how you could be better
with the people that work for you right now.
Let's change right now and we start working through that
and then all of a sudden I'll get a call
and they go hey, I can't believe it.
Two people called me last week and wanted to come work here
because we get them to change and a lot of people
you see, can't see that on their own.
They're thinking oh my God I'm working hard,
I'm working hard, I'm working, it's nothing at all
about working hard.
It's about having a great culture because that's
obviously the attraction.
- I always say if you think it's all of them,
you have hired all these horrible people,
they're all terrible, they're miserable,
if that's the common theme
then you need to look back in the mirror.
- 100%, yeah, and that's so true in every business, right,
is that if, and times have changed, too, right.
I mean, we have different cultures.
We have the millennials coming now and they occupy
a good part of the workforce now.
So, you have to change as times change and if you
don't change, if you're operating in the 1980s
and we're now 2019, you got a problem
because it's not going to work, it's not going to work,
plain and simple.
- Absolutely.
Well, thank you.
This has been great.
How can people learn more about you
and the coaching that you do.
- Sure.
Goodfellow Coaching.
We've been around 20 years in the coaching business.
We have great coaches.
Our coaches are all highly experienced.
We work with top producers, so we work with many
of the top agents in North America.
That's who we've worked with for 18 years.
We've been very specific.
It's $500,000 minimum GCI to get into our programs.
But the one thing I think that makes us different
is we do have that experience of working
with the top agents and we're able to pass that along
to people that join our program.
I've always prided myself saying hey, you know what?
We're not the biggest program in the world.
I don't want to be that.
I want to do a great job for people and I want
the people that are with us in our coaching
to go to those next levels.
So, I think if you, the best way to get a hold of us
I think, are you going to put it up there, Vanessa?
- I will, yes.
- Okay, yeah so, our coaching, we have lots of,
if you go on our website, goodfellowcoaching.com
you'll see lots of testimonials.
You'll see the people that we deal with.
We deal with like I said, the high end
and I know most coaching companies say, yeah, yeah, yeah,
we deal with.
No, no, we truly do and we truly have.
So, I would recommend you check out our website,
goodfellowcoaching.com and have a look at what we do.
- Fantastic.
Well, thanks so much for your time today.
Coach Ken, I will talk to you soon.
- Look forward to it, thank you.
- Thank you.
- Okay, bye.
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