Wow, Gary Keller, the co-founder of Keller Williams wrote a book called The Shift (2010). I decided to start plotting what I know about my performance as an estate agent in line with The Shift principles and I must say I have already learned so much. I am not the best agent out there; in fact, I work exclusively in the lead generation model. I know that The Shift has sharpened my focus and I am sure that as I move through the book and in line with the MREA, I will soon have a very clear focus on my business.
What I have struggled with to a large extent is The Shift and how to stay on top of it. Learning more about The Shift has sharpened my focus and I am more in tune with my business than ever.
What Are The 4 Business Models At Play Within Keller Williams
The documented business models published in the Millionaire Real Estate Agent or MREA are:
- Economic Model.
- Lead Generation Model.
- Budget Model.
- Organisational Model.
Over the weeks let’s unpack these models to see which one works for your business. The models are real. They have been studied. The learnings from all 4 have been documented and implemented successfully across the world. There are even formulas that can be applied to get you out on top. And the Models show you how to stay on top. The Ignite training offered by over 30 market centres across the country all provide Ignite training which covers the entire process as an estate agent from end to end. This training supports what is done across the world as the Number 1 real estate company in the world. KW also has the best and most innovative technology and the best training in the world for our industry. But don’t take my word for that, see for yourself. Click here to see how Keller Williams ranks globally in almost every category that is important within the industry.
But Let’s Get Back To The Shift
My biggest challenge in the Real Estate industry is volatility. There are so many things we can influence as estate agents and so many things we have no control over. I now concern myself with the things I can change and understand fully the things I cannot change. The things I can influence I do influence. But it’s the things I cannot influence that are my Achilles heel. I want to start a series that really starts to unpack what Gary Keller has to say in his book, The Shift. And, I must say the puzzle pieces have started falling into place for me already.
There Are 2 Types Of Shifts In Real Estate
Gary Keller in his book The Shift maintains and we all know this, that there will always be Shifts. There are cyclical shifts that come with seasons and there are economic shifts.
Real estate is a cyclical business. What goes up must come down. And what is down won’t stay there. Shifts are never unexpected but rarely predictable. You know one is coming. You just don’t know when. They are, in fact, inevitable—shifts happen. But we forget. Each time a shift occurs, we act surprised, as if it had never happened before. Once the shift is over, we act as if it’ll never happen again. It’s like we have amnesia. And that’s odd since we deal with something similar every year. It’s called seasonality—the seasonal cycle of sales that repeats each and every year. From month to month there is an ebb and flow to the real estate business. Within each year, there is a time to make money and a time to save money. It is so natural most simply take it in stride. Need your free copy of The Shift, click here and get your copy in PDF free of charge. It really will change the way you see your business as a real estate agent.
The graph above represents my sales. These are certainly not “Town Report” stats but we all know how seasons affect our income in SA.
We Know The Seasonal Shifts
Furthermore, Gary says that if we know sales are high from Jan to April then low from May to August then up again from September to December that also means as an agent your income will lag. From sale to concluded transfer can take 4 months, maybe a little more. This means your income also lags. No, it’s not you, the trick is to find a way to keep this cycle in focus and plan better.
The numbers represent the lag we all know is there. The lag between list and earn. Let’s work loosely on about 4 months from list to sale. Some transactions take longer but you get the picture. And a cash sale is nice and quick.
Make Hay While The Sun Shines
The Shift confirms that for real estate agents, these graphs are a heads-up and give meaning to the phrase “make hay while the sun shines.” The fact is, every year, real estate agents have to deal with the seasonal sales cycle and its impact on their cash flow. While seasonal cycles occur within a single year, economic shifts happen over several years. Seasonal market cycles are month-to-month and economic market shifts are year-to-year. Just as the seasonal cycles dictate a rise and fall in your income over a period of months, the larger economic shifts create a rise and fall in your income over a period of years. Seasonal cycles feel predictable, short-term, and manageable. Economic shifts feel unpredictable, indefinite, and overwhelming. One feels like business as usual and the other feels, well, downright scary. The real estate industry has learned to live with regular seasonal cycles, but it is always challenged by irregular economic shifts.
The Anatomy Of A Shift
Gary Keller in his book The Shift also indicates that Shifts are easy to understand. They occur whenever supply and demand move out of balance. When seller supply exceeds buyer demand, it’s a buyers’ market. When buyer demand exceeds seller supply, it’s a seller’s market. A shift occurs when the market moves from one to the other. Think of it this way. If over time more listings are selling, you’re moving toward a sellers’ market. If over time fewer listings are selling, you’re moving toward a buyers’ market.
Why does the shift to a buyers’ market create pain? Gary Keller in The Shift, says for two reasons. First, it leads to fewer sales and less available sales income in your market. Second, it tends to be abrupt and precipitous. The misleading aspect of an economic shift is that it seems relatively natural and gradual when looked at nationally. When experienced locally it is usually dramatic and fast.
Furthermore, The Shift confirms that the national perspective rarely, if ever, matches the local experience. This example comes from the USA but we all have the reports for our Farming Areas and we all know how things roll in the areas we work. The hard truth is local market shifts are seldom slow and local landings are almost never soft. It’s a lot like a pendulum or a golf swing, beginning relatively slowly but accelerating very quickly through the middle. Some local shifts can actually take your breath away. As a golfer myself the insert below is perfectly true about the pendulum.
The Shift Also Outlines The Factors That Cause An Economic Shift
- Currency exchange rates and political climate are the primary global factors.
- On a national level, it’s interest rates and inflation.
- Population, jobs, and household income take centre stage at the city level.
- And at the most local level, it’s neighbourhood dynamics and housing prices.
- All of this simply boils down to buyer demand, which is driven by affordability and perception—how many buyers can afford to buy and how many think it’s a good time to buy.
In South Africa, we seem to have a few more factors to contend I will not go there – we all know the curve balls we have had to deal with.
So, are all shifts bad?
Well, it depends, according to The Shift. For the real estate industry in a particular market, it certainly can be—the available income for everyone in that market has dropped. For any single individual in their local market, it doesn’t have to be—there is still enough available income for them to achieve their goals.
What Are The Challenges For Individual Agents?
As agents, we often fear how we will respond to The Shift. When shifts occur, fear runs rampant, although not everyone responds in the same way. Some individuals, though they do feel the fear, also know they are in an equal opportunity, unequal reward business.
80/20
Gary maintains it’s really the 80/20 rule at work—20 percent of the people will do 80 percent of the business in any entrepreneurial endeavour. Those who understand this know that they must be better than average to earn better-than-average rewards. If individuals understand a shift or have actually experienced one, they know they have to push past the fear and face two tests—first to survive and then to thrive. They have to hang tough until the Law of Equilibrium reasserts itself. Then it’s opportunity time.
Next Up We Will Cover The Law of Equilibrium
Because the Law of Equilibrium is when we start to talk about real opportunities. I will come back to add the link here for those that are keen on finding out more about The Law of Equilibrium.
Are You Looking For A New Agency That Knows How To Get You To The Top Of Your Game
No matter what model you have in mind, KW Select can and will help you pick the right model for your business. Building teams is extremely relevant at the moment. Also presented in the MREA, teams work on a set commercial model and KW Select can help you make the most of a team structure to close more sales and increase your profit margins.
Visit Our Website For More Info
All the info that represents a strong value proposition are presented for all to see. The models and the comm splits are all transparent. Be sure to read up about the CAP, because you will never end up working for KW Select, KW Select will work for you. The reason I say that is that KW Select can only keep for themselves R140,000 in a year. So if you are closing more than 2 sales a month, chances are you are your agency given a 70/30 split is earning far more than R140,000 per year. Chances are that if you add all the 30%’s you have paid away to your agency you will find that what your agency has earned for your efforts is a great deal more than R140,000 in 1 year. For the record when you CAP that means the maximum amount that KW Select can earn from your efforts has been earned. That also means that when you CAP you then earn 92% of your commission. Bank on the Best with KW Select.
Need Your Copy Of The Shift
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