Real Estate Agents - Best Marketing Practices - Best Business Increasing Practices

Local and Localization is about sustainability and no group defines Local better than Real Estate Agents and Brokers.  This creates unique opportunities for agents and brokers to market themselves and marker their brand.  Remember, even though the product is the home, it's the agent that we hire.

Because Your Customers
are your Neighbors

In Real Estate, the Cost of Customer Acquisition is high whether it is for a listing or for a buyer - much higher when you consider the time invested to both obtain the client and maintain / service the client (time is a real cost).  Agents and brokers market themselves in many ways - each serving a different purpose.

Internet and Social Media - A necessary evil.  MLS, Zillow, brokerage website and your own website are all things you need to get going.  There is plenty of help available as these are the easy ones to begin your business venture.  People may also "check you out" on Yelp or Facebook.  High labor cost - low direct / measurable return is the norm from Internet marketing.  I don't want to underplay this; your Internet presence is required in supporting your brand - ask me why (for another article).

EDDM with a Call to Action

Direct Mail - EDDM (USPS Every Door Direct Mail) has the highest return for real estate agents, but is the most overlooked.  Let's analyze a few scenarios. EDDM, if you are unaware, is a USPS service that give you the capability to target, not only Local, but a neighborhood - making YOU a neighbor.  NO mail list, or cost of a mail list, required.!  What better return can you have; Retail EDDM is inexpensive in that it is less than HALF first class postage rates, and your message touches all the homes around the one you just listed or sold.  It's targeted by the mail carrier route that your listing is within.  It contains a very custom message about THAT LISTING.  It contains a "call to action" on that house ("Open House on Sunday, June 3rd from 1-3 PM).  It contains a message about YOU.  YOUR SELLER WILL LOVE THIS.  Neighbors will visit your open house (because it's in the neighborhood (Curiosity)) and you will meet a lot of people - isn't that what the real estate business is about?  Does this generate some ideas?

EDDM is also a very cost effective way to introduce yourself to the neighborhoods you want to specialize  - the neighborhoods where you are an expert.

Return on EDDM marketing is huge.

Referral Marketing - This one is not a new concept in the real estate business and is definitely the big winner.  Your good relationships (goodwill) with local mortgage companies, banks, the Chamber of Commerce and local businesses will put you on their referral list

So how can you add to your referral marketing opportunities and returns?  Do some proactive referral marketing.

1. Everyone you know (have touched) at mortgage companies, banks and The Chamber of Commerce should have a referral card - one custom to themselves.  Why?  First, because it is also about them, thus they are more likely to use it.  Second, you can measure the return.  Provide some sort of motivation to each side - a home evaluation, free local packet of info /coupons (from friends) to prospective clients and maybe a referral  reward to your referrers / friends.  I purposely use the word "Friends" here - "we all like to do business with people we like" first.
   

2. 

   Referral Cards

   On the sale / buy of a home, print a set of thank you / referral cards / announcement cards that are specific to that client - One with their big smile and the words "The Williams New Home"; these will go everywhere.  Your referral card will go from your customer, to their friends and colleagues.  Remember, include a call to action  - several - about both you and the new homeowners:
   "Directions to The Williams New Home".  Cool approach, huh.
3. Possibly the most important task you have to improve your referral selection: Be Part of the Community - Be a Recognized Face = Be a Recognized Smile.

Call Me for advice - We Consult and We Build your referral program.  We Print and we will measure (count your money) if you like..

Bob Leonard
561-371-4113 (Call My Cell) 
512-593-8830 (in Austin)

EDDM and Referral Marketing Programs
are Services Provided by all LightsOn / Time4 offices.

 Connect to me on LinkedIn
www.linkedin.com/in/robertleonard5699 Follow me on Twitter
@T4Leonard
 Add me to Your Google+ Circles
https://plus.google.com/+RobertLeonard5699/about 

Why a House to Live in is Always a Good Investment.

Another off topic article, but good information for equating personal finance and business financial decisions.

Our homes are typically our largest purchases in our lives.  I try here to add a little business thought to the process.

To understand and project a return-on-investment, the investment must be looked at from and with a business mindset.  This is true whether we are in business or making personal investments.  This is not a simple process when our home is the investment - there are intangibles and emotions to consider (which I won't here).  There are also location and demographic considerations (big ones).  These complications are compounded by the fact that the economic environment is different and more volatile than in anytime I know of in modern history.  Subsequent articles will utilize this information to determine whether real estate, be it commercial or residential, is a good business to be in beyond the home you live in. I will make several assumptions in these articles and will identify them so you can use your own assumptions. A final note - buying a home is not this complicated; being in the real estate investing and/or the property management business is far more complicated.

The first thing that needs to be determined is a baseline number - that being the cost of a place to live - it's a requirement.  This is a major factor in making owning the home you live in an attractive investment.  Let's say the cost for you to rent a place to live is $1500 per month; this is your baseline number.

Assumption One: We have the 20% down payment for the house we can afford (No PMI) and $0 closing costs.
Assumption Two: We intend to be in the house for 15 years.
Assumption Three: An average of 6% inflation and a opportunity cost of money of 4.25%.  These two items traditionally track each other pretty closely and it's better to assume this than predict why they may not in the future.
Assumption Four: We are in a 25% incremental tax bracket.

We are purchasing a $350,000 home, putting 20% down and paying a fixed 4.25% on a 30 year mortgage.  This equates to a $1,872 monthly mortgage payment including taxes and insurance.

Assumption Five: approximately $8,600 in interest and $7,500 in property taxes per year (note: interest is not straight line and taxes are different everywhere).

This is a $16,100 deduction and in a 25% tax bracket this represents $4,025 reduced tax bill.or approximately a $335 savings per month.

The net difference between renting and buying is $1,872 less the tax benefit of $335 less out baseline cost of $1,500 equaling a net difference of $37 (seems close).  Lets add $300 per month for maintenance and repairs (roofs, water heaters, furnaces, etc over 15 years). total difference is $337 per month (this is really really rough).  The present value of $337 over 15 years (using the assumptions above) is approximately $44,800.

At this point we can project our total investment $114,800 for our $350,000 home ($70,000 Down payment plus the $44,800).

At 6% inflation, the future value of the home will be approximately $839,000 after 15 years (super oversimplified - many other factors including and especially location).

The return = The $839,000 value less the total investment of $114,800 (for the $350,000 home) equaling $724,200 or a 14.2% annualized return over the 15 years - not bad for a very conservative investment (this is not the way you calculate your capital gain nor is it the way the IRS thinks as maintenance costs generally do not go back into your basis, but they would be considered in a businesses P&L).

Just note, that my article last week on gold prices predicts both high inflation and high interest rates in our near future.  This volatility increases the risk in any investment (as well as the reward if you guess right).

A forthcoming article(s) will consider the additional elements of real estate / property management as a business (income, depreciation and capital gains taxes).

Bob

Advertisement to Real Estate Professionals:

Agents and brokers, get the business card that clients never throw away.

Watch the Video

LightsOn Graphics - 866-452-3531