IRA Tips for Real Estate Agents

The Easy Way to Retire a Millionaire

I was helping some of our agents get their 401(k) accounts set up when I came across this article in INC (http://www.inc.com/john-boitnott/7-quick-ira-tips-for-entrepreneurs.html) about setting up retirement savings for entrepreneurs and the self-employed. As real estate brokers, we’re used to being fully responsible for our income, taxes, expenses, and everything else. But it’s easy to forget that we’re also 100% on our own when it comes to retirement. There won’t be a pension or retirement account unless we set it up ourselves.

Living on commission income can be stressful, and it’s easy to spend an entire commission check on ‘essentials’ before you think of putting away for retirement. I recommend paying yourself first. Just like a utility bill, your retirement account must be paid every month, and it should be paid before anything discretionary. The easiest way to accomplish this is to have a portion of your commission be sent directly to your savings or other retirement account.

Since most brokerages aren't able to offer a 401(k), the best starting place for most agents is to max out a Traditional or Roth IRA (as listed in the linked article). An IRA is the easy option to put away up to $5,500 a year. Set up direct transfer with your bank so your contribution goes in automatically each month.

The biggest thing to keep is mind, especially for younger brokers, is that compounding interest will make a huge impact over the long term. If you have 30-40 years until retirement, the impact is enormous. For example, if you were to save $1,000 a month at 10% interest for 30 years, it would be worth $2.2 million. If you have a longer horizon and do this for 40 years, it would be worth $6.3 million. The younger you start, the bigger the growth.

Keep in mind, Warren Buffett didn’t become a billionaire until he was nearly 60 years old, but through compounding interest he’s now worth an estimated $89.5 billion. Keep saving, set a long horizon, and you can easily retire a millionaire.

 

Return on Investment: Spending Money to Make Money

Would you spend $1,000 to make $10,000?

For most agents, the answer is probably yes. But what happens when that number gets smaller? Would you spend $1,000 to make $5,000? Would you spend $1,000 to make $2,000? This is called return on investment (ROI), and agents often neglect it when investing in their business.

Why does ROI matter so long as you’re making money? As I've written about previously, knowing the value of your time helps you determine what tasks you should be doing. Knowing the value of your time and your required ROI helps you determine whether it is worth spending both the time and money on certain activities. If the $1,000 will generate $10,000, but it will take 80 hours of your time, is the investment still worth it?

I recommend at least a 4x return on investment in real estate. If your marketing effort isn’t projected to return four times as much as you spend, don’t do it. It’s a classic sales pitch to real estate agents: “you only need one transaction to pay for it!” But that’s an easy way to go out of business. Before starting on a new marketing product, make sure you can reasonably expect to generate four times the money in return. If you only break even, you’re working for free. You’d be better off not spending the money and not doing the work.

Finding the right balance can be tough. Some marketing systems are worth the cost, and others are not. If your only requirement is “one deal to break even,” it can be easy to get lost in sales pitches from Zillow and the like.

To determine the ROI on your current marketing efforts, you’ll need to start tracking. For each lead generating endeavor, track:

  1. Dollars spent

  2. How long it takes to setup and maintain

  3. Number of generated leads that ended in a closed deal

  4. Time spent on each lead

Even if you’re only estimating these numbers, with this information you will be able to consistently evaluate your business, growth opportunity, and the most effective ways to spend your marketing dollars. Otherwise, you might get stuck working for free.

Written by Matt van Winkle, CEO, RE/MAX Northwest

Laws of Real Estate Productivity

I was reading an article in Elite Daily by James Clear about how you can apply Newton’s laws of motion to productivity. It’s an interesting read, and for each law I saw a clear way it can be applied to real estate.

First Law

Newton: Objects in motion tend to stay in motion

Clear: Find a small way to get going and it will give you momentum

How it applies to Real Estate: Know your starting point

I see it most often in marketing. Agents say they want to “fix” their website or “redo” their marketing. These general terms don’t tell them what really needs to happen next. For example, maybe the first step is pulling up your website and making a list of all the changes you want to make. If one of the changes is to update your photo, then it’s possible that the first step of fixing your website is calling the photographer. Even knowing what step is next may be the small start you need to get going. A big project with no specifics is likely to stay on your to-do list forever.

Second Law

Newton: Force equals mass times acceleration

Clear: It’s not just how much work you do, but the direction in which you do it

How it applies to Real Estate: You have to work on your business, not just in it

It’s really easy for agents to wake up in the morning, check their email, spend the whole day putting out fires, and go to sleep feeling like nothing got done. If you want to grow and improve your business, you need to make sure some of your energy is devoted to the business itself. You could spend all day being reactive and fixing other people’s problems, or you could spend the first hour on sphere maintenance and marketing before you even open your email. The rest of the day can be used for calls and emails, and you’ll find that you can put out the same number of fires in seven hours that you used to do in eight.

Third Law

Newton: For every action there’s an equal and opposite reaction

Clear: Your productive and unproductive forces push against each other

How it applies to Real Estate: Streamline your processes

In the busy summer season it’s easy to just keep pushing along, doing everything exactly the way you’ve always done it. But occasionally you need to stop and ask: what is getting in the way and what could I do to eliminate it? If you hate having to track down your downloads folder every time you get an attachment, maybe it’s time to change your browser settings to download somewhere else. If you never want to work in your home office because the Wi-Fi signal doesn’t reach, look into buying an extender. And don’t forget about emotional forces. It might be time to stop working with a needy client, or perhaps you could distance yourself from an overly aggressive lender. Real estate is full of unproductive forces – make sure you’ve eliminated as many as possible.

Could physics help you with your business? It’s worth a try. The people who stay ahead of the curve are the ones willing to try new things.

https://jamesclear.com/physics-productivity

Written by RE/MAX Northwest CEO, Matt van Winkle


Asana for Real Estate Agents: Make Task Management Work for You

Several years ago I stumbled upon Asana, a new task management software designed for small businesses. I had the staff try it out, and it quickly became our tool of choice. It has almost eliminated internal email, and allows me to see the status of projects and tasks without bothering my staff. But we’ve also found Asana to be a great tool for real estate agents. Here are a few of the best ways our agents are using Asana to get their lives in order.

Listing & Buying Templates

Too many agents try to re-invent the wheel every time they get a listing. They try to remember all the things they did last time and track what they think of on a scrap of paper (or worse – in their head). With Asana you can make a master list of everything that has to happen with every new client: arranging the stagers, calling the photographer, setting up the sign, etc. Once you have your master list in a project, click “Use as a Template” to create a new project you can name after the current client. At RE/MAX Northwest we’ve gone so far as to cultivate two sample lists (one for sellers and one for buyers) that our agents can copy and paste into their templates as a starting point. They get to edit the list to match their process, and they never have to waste time trying to remember what to do with a new client.

Assign Tasks to Your Future Self

One of the problems I see agents struggle with all the time is tasks that they can’t complete yet. They can’t send out the inspection response because the inspection isn’t for another week, they can’t order business cards until after they get their new headshots, they can’t start their farming campaign until school starts, etc. With Asana, you have the option to assign a date to any task. Once it has a date, you can move the task from your “Today” section into “Upcoming” or “Later.” When the due date arrives, Asana will automatically push the task right up to the top again. This allows you to get it out of your way while ensuring it still gets done.

Batch Tasks with Tags

Making tags such as “Calls” or “Errands” allows you to tag tasks that are best done all at the same time. When it’s time to run errands, all you have to do is click on the tag to see everything you added as an errand. No more wasted gas, no more wasted time. You may find other areas in your life where batching is helpful. Maybe you have dual authentication and it’s a pain to login to your bank account. Why not tag all banking tasks so you only have to log in once a week?

Store Long-Term Ideas in Projects

Make a project for books you want to read, or movies you want to watch. Make a project to capture all your ideas for the porch remodel, or that marketing plan you’re hoping to start in the fall. Whatever it is, make a project in Asana and have a central place to store all your ideas and thoughts. Once it’s time to start on the project, just assign the individual tasks to yourself and they’ll pop up on your main to-do list.

Asana is free for individuals, works in any browser, and has a matching phone app. The best way to understand how it works is to make an account and start adding tasks, so I encourage you to try it out. You may be shocked by how much time it can save you.

Author: Matt van Winkle, CEO RE/MAX Northwest

Jesse Gibbs
What Happened When I Paused My Inbox
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I’ve known for a long time what how time-consuming checking email can be. In the real estate industry, people tend to leave email open all day long, never giving themselves a chance to get anything else done. A few years ago, I found that if I started limiting the amount of time I had my email open to 20 minutes at a time, I got the same amount of work done in email and way more work done in the rest of my business.

As an experiment, I decided to try a more extreme version of this same principle: checking email twice a day. I put an auto-responder up letting people know my plan:

"Thanks for emailing! I’m trying something new to increase my productivity and I will only be checking email twice a day.

My email will be monitored while I’m working on other tasks, but if this is urgent you may call me at the number below."

So what happened?

#1 – Nobody Cared

Despite a common belief in real estate that we all must respond immediately to every request, very few of us actually hold others to this standard. No one expressed anger or frustration with me delaying my responses a few hours. In fact, most people said nothing at all.

#2 – People Were Envious and Inspired

The few times someone did mention my auto-responder, they usually said something like, “Good job, I wish I could do that.” Others told me they’d been considering something similar for a while, and felt inspired to finally give it a shot.

#3 – I Got More Done

As expected, I got a lot more serious work done when I wasn’t wasting hours on email. Despite waiting half the day for the inbox to fill up, I was still spending less than 30 minutes in my inbox during my two scheduled check-in periods. This left the rest of the day for important meetings, discussions, and focused work.

Eventually I stopped putting up the auto-responder and allowed myself a bit more freedom in my email time. In the end it’s not about twice a day versus 20 times a day, it’s about you controlling your email instead of your email controlling you. Too many people assume they can’t do this, or can’t do it unless they have an assistant to screen the inbox “just in case.” But even without outside help, you can still be proactive about the time you spend in your inbox. If twice a day seems too drastic, try checking it every two hours. You’ll still be very response and catch things quickly, but in between you’ll have more than 90 minutes of focus to work on your business.

Did you know that email is the most cited productivity killer? Check out these steps to help increase your own productivity on Inc.com

Written by Matt van Winkle, CEO RE/MAX Northwest

Listing Presentation Dos & Don’ts

 Lately, we’ve been revamping listing presentations here at RE/MAX Northwest. After running a few collaborative seminars and checking in with our agents about what they do, we came up with some tips that seem to be applicable across the board.

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DO

be prepared for a listing appointment to come up at any moment

If you are waiting until you book a listing appointment to finish your presentation, you are putting yourself at risk. Be ready to take the opportunity as soon as it presents itself. This will also protect you in case an appointment comes up while you’re in the middle of another difficult transaction and can’t give much time to your preparation.

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DON’T

forget about bad comps

When looking for comps on a property, you may have found a house that you knew wasn’t a fair comparison. Just because you knew to throw it out doesn’t mean the client or another agent will. Be prepared to justify why you don’t think a certain property should be included in price calculations.


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DO

treat every listing as competitive

Even when talking to your own past clients, never assume you’re a shoe-in. You don’t have to give a hard sell to close friends, but make sure they know you’re serious about what you do.


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DON’T

trash talk other agents

Being nice means respectfully disagreeing. Use phrases like, “I understand where that price estimate is coming from, but I would suggest listing lower because…” It’s possible to counter what another agent says without calling them wrong or stupid. Be the bigger person – it’s a sign of a true professional.


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DO

ask about their expectations and motivation

If they have an unrealistic price or timeline in mind, you want to know that right away. For new clients, ask why they aren’t using the agent who sold them the house. Always find out why they are selling, and what’s most important to them (a minimum price? A quick close?). Knowing what matters most to your potential clients gives you the chance to highlight how you can help them.


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DON’T

offer a price right away

If possible, save the price for a second appointment, or follow-up call/email – it’s another opportunity to build rapport and strengthen the relationship. If you feel like you need to give them an answer at the first appointment, wait until you’ve already sold them on you and your approach. It should be one of the last things you talk about. If the client is pushing for a number (or telling you that the last agent they interviewed gave them a number), try suggesting a large range and explain why choosing the right price is important and can’t be rushed.


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DO

get rejected

If you get every listing you try for, you aren’t going for very competitive listings. The science is clear: we learn best from our mistakes. If you’re getting everything you try for, you’re not pushing yourself.


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DON’T

treat a listing as a “buyer machine”

Sellers are clients, not just a way to get your phone ringing. Buyer leads are a great benefit of listing a home, but your priority should always be the client you already have.


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DO

leave them with something

Whether it’s a copy of your testimonials, a professionally printed presentation, or an outline of your marketing program, make sure you're memorable by leaving a little something behind.

 

 

RE/MAX Northwest: Growing to Serve You Better

In August of 2018, RE/MAX Northwest joined forces with RE/MAX Professionals to become the fifth largest RE/MAX in the United States. Infusing innovative technology with a personal approach to real estate, we are now home to 375 agents and 10 offices locations to serve Washington State. 

Our journey started in 2011 when Matt van Winkle founded his first brokerage, RE/MAX On the Lake, with just one office in Seattle. Starting as a solo agent, he was soon joined by other high-quality agents and the brokerage quickly expanded to include offices in Bellevue and Issaquah. In 2015, RE/MAX On the Lake acquired RE/MAX Northwest to become the largest RE/MAX in Washington State, servicing clients with six office locations and 250 agents.

The foundation of the brokerage was built on one simple mantra,

 
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There are many challenging aspects of the real estate industry, and we feel strongly that these two rules can conquer any obstacle. Keeping those values close to heart, Matt and his colleagues have blazed a trail in the real estate industry by capitalizing on technology advancements intertwined with providing the highest level of customer service. We are excited for what our future holds as we continue to create new opportunities that aid in the growth of our agents.

Work Hard. Be Nice.
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Our office mantra is simple: “Work Hard, Be Nice.” But with so many different people involved in every transaction, one of the biggest challenges in real estate is working with people who aren’t following the same advice. The barrier to entry in real estate and lending is so low; from time to time we encounter unprofessional or ill-equipped agents.

When our agents are faced with rude people in a transaction, we encourage them to seize the opportunity to really shine and show their value. If they can stand out, they’ll be able to provide better service and in the end, generate more business.

While reading Inc.com, I came across this article about the “10 Habits of Remarkably Polite People” and saw how easily this could apply to real estate agents. It was uncanny because I was also in the process of re-reading Dale Carnegie’s classic “How To Win Friends and Influence People” and in 80-years, not much has changed.

As agents, we need people to want to be around us. If people don’t gravitate towards us, it is hard to build the relationship and trust necessary to do a good job and maintain an active sphere. We highly recommend checking out this article for some tips. Remember, being polite is a great way to increase your gravitational pull, and it fits right in with the four words that define everything we do - 

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The Five "Whys" in Real Estate

As a real estate agent, you are on a team. For every transaction you’re on a team with the other agent, the lender, the clients, the inspector, etc. But at the same time you’re an independent business owner, working to manage your sphere, your marketing and your deals. This means you may end up with the same problems that can come up in teams, but with few of the team-based solutions. This is why it’s vital for you to be on the lookout for any problem you CAN solve by yourself. That’s where the Five Whys can help.

The Five Whys has its origins in the Toyota Production System, but can be applied to all sorts of businesses. The core idea is to keep asking the simple question “why” until you find the core issue. For example:

The deal I was working on fell through.

Why?

We didn’t get funded in time.

Why?

The bank required 15 days and they only had 11 days.

Why?

My client took too long to get the paperwork in.

Why?

They forgot and no one reminded them.

Why?

I thought that was the loan officer’s job, and she thought it was mine.

And there it is. A problem that seemed to be out of the agent’s control is turned into a simple option: either talk to the loan officer about reminding clients, or add the reminder to your own task list (or both!).

There’s nothing magical about asking five times, but on average it’s the number you have to go through before you get to that critical, actionable, real answer to what caused a problem. The trick is that this isn’t a process you can casually think about in your head. You have to form the actual words. Write it down, type it up, or say it out loud. Seeing your thought process in real words is the best way to make sure you’re staying honest with yourself, and not placing blame when you should be looking for solutions.

If you find that your Whys aren’t getting you anywhere, here are some other questions to consider:

What made this time different than other times?

When was the earliest time we could have fixed this? When was the latest?

Whose actions affected (or could have affected) the outcome?

What prevented alternative solutions from working (extensions, addenda, price changes, etc)?

And most importantly:

What can I do right now to prevent this from happening in the future?

In these busy summer months, it’s easy to let the busy pace of the market get in the way of reflection and development. But learning from failure is key if you want to earn more, work less, or do both. Next time you’re hit with a big failure, take five minutes to talk through the problem and find your solution.

For more info on the Five Whys, check out the articles on HBR and the Asana blog.

Is the Pacific Northwest in a "Lull"?

Call it whatever you want, the fact is that home sales dropped during the end of July creating a serious buzz in the market. The inventory in King County has doubled since March, but the market is still well below a more balanced market of 4-to-5 months of inventory.

2140 W Lake Sammamish Pkwy NE, Redmond | Offered at $2,078,000

“Home sellers throughout the Seattle region are experiencing a reality check and the days of multiple offers are days of the past,” was how one director with Northwest Multiple Listing Service summarized the market upon reviewing the statistical report for July.

"The 'lull' was short-lived," says President and CEO of RE/MAX Northwest. "We are already seeing the market come back in a big way. Prices are taking a breather, but the summer fun is far from over."

 
The Springtime Market Heats Up
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Seattle's springtime market continues going up, as inventory continues to drop. It's the perfect seller's market for the 17th month in a row - the longest streak since San Francisco's 20-month run that ended in 2001. According to the Seattle Times " With the spring homebuying season gearing up, there should be an uptick in new listings in the coming weeks, and with it, more buyers coming out of the woodwork. Prices typically rise in the spring, and brokers are expecting more of the same this year."

Jesse Gibbs