Selling Luxury: Secrets to Success
Selling Luxury: Secrets to Success
Who doesn’t dream about raking in millions of dollars each year by mastering a luxury property niche? Although it may sound glamorous and far-fetched, it doesn’t have to be a dream. To prove that point, we spoke with three ultra-successful real estate practitioners from very different parts of the country who specialize in high-end homes. They share how a strong business plan, a drive to succeed, and a love for real estate helped them become household names in their markets — and they offer tips for how you can do the same.
It’s All in the Business Plan
Name: Robert Shallow, CRB
Company: Owner of RE/MAX Paradise in Orange Beach, Ala.
Sales volume closed in 2006: $172.66 million
Web site: www.bobshallow.com
Success tip: Find good mentors and learn from them. “You always want to find someone who has [succeeded] to the degree you want to. There isn’t enough time in life to make all the mistakes to learn. I just find it a little easier when I can learn from a pro.”
On a typical day, Shallow wears flip-flops and a pullover LL Bean shirt, with casually tousled hair. You might not guess he’s a high-powered real estate salesperson, but that’s by design. In his beach-oriented market on Alabama’s Gulf Coast, “if you wear a suit people think you’re either nuts or you’re involved in something illegal,” says Shallow, who’s been working in real estate for more than 25 years in South Baldwin County, Ala.
Earlier in his career Shallow owned, then sold, several Coldwell Banker offices. He now works with RE/MAX, where he’s been since 1992. He serves as a broker-owner for a two-person office he opened, but spends most of his time selling. “I’m more of an agent than a manger,” Shallow says. For the second year in a row, Shallow has been named the top individual agent for RE/MAX worldwide — out of 115,000 agents. He’s on pace to sell $200 million in 2007.
What’s your secret to racking up such impressive sales figures?
A. I always seek people who are doing what I see myself doing in the future. From the very beginning I thought it would be nice to make a million a year. So I talked to the most successful real estate agents and learned from them. I attribute my high sales volume to what I’ve learned from others.
I’ve also built a loyal client base. Many of my clients have a 7-10 year relationship with me so they understand how real estate works, which helps my time management.
Why did you decide to turn away from management and return to sales?
A.I was only making $400,000 to $500,000 as the owner of a company, but I was making $4 million to $5 million in commissions from my sales. Because it took 60 percent of my time to manage a company, and I was making 10 times as much with 40 percent of my time, I knew it was time to sell. Then I went on to create RE/MAX Paradise, which is an office just for myself and another agent. I did this to continue to do what I love — which is to put deals together and not manage an office.
What’s your advice for practitioners who are just starting out, aspiring to be as successful as you are?
A.First you have to start with a business plan and model yourself after the life you want. You need an immediate plan, a 5-year plan, a 10-year plan, and an exit plan to get you out. Then you have to implement the plan and be able to adjust the plan as you grow. The problem I see is that most people don’t have the patience to work out a plan.
How did you develop your business plan?
A. Just hanging around the conventions and asking the top producers how they grew their business, how they increased sales, what made their team the most successful, how much staff they had, and how much quality time they have. I only want to model myself after those who have been highly successful with a high quality of life. My business plan is really a combination of other people’s plans — I just mix all the best parts from their plans.
What other tips can you offer busy practitioners?
A. I would suggest getting a grip on time management. People waste time. I used to feel guilty about not returning calls. The truth is it’s impossible to return every single phone call I get. So my calls get screened by my receptionist and if it’s important enough I’ll take it. Now that might sound cold or harsh but frankly life’s too short to be glued to the phone. Practitioners need a system that qualifies people to know what the client expectations are. And if you think they can’t meet the expectations, don’t do it.
And of course build your client base, but do it with care. Sell them with your heart, build a long term relationship with them, and take care of them. Be honest with them, and be sincere.
The Power of Friendship
Name: Dee Shultz
Company: Keller Williams Realty, Austin, Texas
Sales volume closed in 2006: $42 million
Web site: www.deeshultz.com
Success Tip: Build relationships that last. “I attribute the bulk of my business from establishing friendships. If you can provide a service of friendship and caring, that will turn into business.”
Schultz’s passion is making friends, and that passion has fit in perfectly throughout her 25-year real estate career. The evidence is in the numbers: Schultz closed $42 million in sales last year and is on pace to increase that figure by 10 percent this year. Slow market? Not when you have a lot of friends, apparently.
Early in her career Schultz opened a real estate company, Village Realty, which she built up for 13 years before merging it with a Prudential franchise. In 1999 she joined Keller Williams, and has since been named the franchise’s No. 2 salesperson nationwide and No. 1 salesperson for Austin. She sells mostly upper-end homes between $649,000 and $725,000, and averages about 50 sales per year.
One year after you got your real estate license you started your own company and turned it into a success. How’d you do it?
A. First off, I was an absolute sponge during my first year in real estate. I listened and watched everything my broker did. It was all trial and error. I’m also involved with a lot of community affairs, and I built a lot of business through that. Another thing that I feel helped was that I constantly kept in my mind that I never was going to let the commission be my driving factor, and I think that always shows.
How have you dealt with slower markets?
A. During my career I’ve experienced three peak markets and three low markets, and I’d have to say that the late ‘80s were the toughest years. During that time, I decided to close my firm for a couple of years and work with the occasional client and refer any listings. It was a very difficult market. There were very few buyers during those times. But it worked out for the best because I was able to spend those two years with my family. Right after my sons graduated, I reopened the office and the market took off — and so did my office.
Do you have any assistants to help you?
A. When I was at Prudential, my sales volume was $20 million and it stayed like that for five years. I couldn’t seem to get over the $20 million threshold. It was like trying to lose weight, you reach a plateau that you just can’t seem to get past. I was able to double my business once I switched companies and moved to Keller Williams because I started viewing my business as a business and setting up good systems. I’ve always had assistants but it always felt like chaos. Now I learned how to start thinking as a businesswoman, understanding profit and loss statements, and I have four full time assistants; three are licensed and one is not.
Out of the three that are licensed, one is in charge of replacing lockboxes, signs, flyers, brochures, delivering contracts, and things like that. Then I have another full-time assistant who is my tech guru — she keeps my Web site up-to-date, helps with market analysis, and coordinates marketing material, tours, and open houses. My other assistant is my contract-to-close coordinator who oversees everything from the time a home goes under contract until it goes to closing. I’m also chairman of the Keller Williams Luxury Home division so my fourth assistant helps me run that division.
Do you have any secrets of success you can share with us?
A. I know sometimes as real estate professionals we go through tough times, but the sacrifice is worth the reward. So keep working hard. I remember when I first got started I worked open houses every Saturday and Sunday for years. A lot of those people who I met never bought from me, but they became my closest friends — plus I learned a lot. An open house is a great classroom. Think about it, an open house teaches you how to meet people, find out about their lives, and learn about their needs.
My other piece of advice is to respect your peers as much as you do your buyers and sellers. Build a good relationship with your peers. Remember, they show your listings so you have to establish a good rapport with them, too.
It’s Not About the Money
Name: Pedro Castro
Company: Century 21 Atlantic REALTORS®, Roselle Park, N.J.
Web site: www.newjerseyrealestateprofessional.com
Sales volume closed in 2006: More than $100 million
Key to success: “Attitude, attitude, attitude. I try to think positive and always remember that I’m nothing without the people who use my service. I give them my best in satisfying their needs and always put their needs ahead of mine.”
Pedro Castro moved to the United States in 1998 from Columbia, South America, with only $2 in his pocket and a limited English vocabulary. He was a farmer in Columbia and the thought of ever becoming a real estate practitioner never crossed his mind — that is, until a friend in America showed him an “Agent Wanted” sign. He decided to give it a try.
A few months later, he earned his real estate license and started working as a sales associate for Century 21, establishing a niche serving Spanish-speaking clients. It seems that real estate is his calling; a decade later, Castro is closing more than $100 million a year in sales.
Take us back to your first listing. What was it like?
A. I remember I was sweating, my hands were sweating, I was nervous. I talked to the people and they were very nice. I got the listing the same day and I felt it was easier than I thought. The very next day I had it under contract. It was a very smooth deal and it gave me the confidence I needed to go after more listings. I sold about 50 or 60 homes my first year.
Wow! That’s a lot of sales volume for a rookie. How did you manage to get so much business so fast?
A. I didn’t take things for granted. It was a lot of hard work, a lot of discipline, and a lot of pain. I knocked on doors, did farming letters, cold calls, everything you can imagine, even talking to people on the street. When I had time I would go to downtown and talk to people. I’d do anything to find a deal anywhere. I’d work between 16 to 18 hours a day, seven days a week.
Were listings the main focus of growing your business?
A. Yes, in the beginning I felt that listings were the easiest way to build my business and gain some experience. Then, after a few transactions, I felt I had a good understanding of all the basic steps.
Did you have a mentor?
A. No, I never had a mentor. I never had anyone go to a listing with me. At that time the office was one of the smallest in the area, so there wasn’t a lot of support when I was starting out. I learned from reading biographies of very successful people. One common denominator I noticed was their faith — sometimes it wasn’t even faith in God that got them through, but they all had a strong belief that they could accomplish the vision in their mind.
What are some of your good business habits that other practitioners can emulate?
A. As business people we tend to focus on the money, and that’s not good. This is a personal, intensive business with clients that need service. I focus on the human need instead of the money. Money follows fulfilled desire. I would also tell other practitioners to stay focused. Unfortunately, in our business we have too much flexibility, and that flexibility allows us to lose the focus, self-discipline, and the burning desire to succeed with our plans. Focus, discipline, and sticking to a plan are the keys to success.