Year-end is a great time to determine what strategies worked, what tech and apps you need to upgrade, and what changes you would like to make in your business for 2015. It’s also important to identify what parts of your business increased your profitability, as well as any money wasters that need to be dropped.
If you read Inman regularly, you have had a treasure chest of ideas and strategies presented to you in 2014. The question is what will work best for your business? Here are some of my top recommendations based upon my columns from 2014.
1. Block annoying Internet ads
AdBlock is my personal favorite Web tool for 2014. It has literally saved me hundreds of hours this year by removing annoying Web ads. For example, when I visited one news site, one weather site and Trulia, AdBlock blocked a total of 26 ads. AdBlock works on virtually all websites including Google, social media, and even a number of the video streaming sites. AdBlock is free but relies on donations to keep running. Please contribute if you use it.
2. Track the return on your marketing dollars
Most agents have no idea where their marketing dollars are best spent. To make this determination, calculate how much revenue you generate for each marketing dollar that you spend. Begin by taking your total revenue generated by each lead source and then dividing it by your total cost for that source. Here’s an example of how this works:
Referrals: $43,000/$12,000 costs = $3.58 net profit per dollar spent
Website leads: $23,000/$6,000 = $3.83 net profit per dollar spent
Expired listings: $21,000/$4,000 = $5.25 net profit per dollar spent
Postcard mailing program to farm: $8,000/$6,000 = $1.33 net profit per dollar spent
Newspaper ads: $6,000/$7,500 = $.80 LOSS for every dollar spent
This provides a quick way to determine which activities are most profitable to your business. Part of this strategy is to focus your efforts on the top three areas that generate the most profit. For this particular agent, those three top areas would be prospecting for expired listings, website leads and referrals. While postcard mailing showed a profit, newspaper ads represented a loss. Those marketing dollars would be better spent on this agent’s top three profit generators.
3. Prospect for shadow buyers
Alex Perriello, the CEO of Realogy, called it right when he told the attendees at Real Estate Connect that the market would remain strong through 2014. Perriello also identified a great opportunity that applies to 2015 as well.
His recommendation is to search for “shadow buyers” who have owned a home in the past and had to sell it in a short sale. To implement this strategy in your business, go back through your files from 2008-2012 and identify which clients had to sell using a short sale. Your local title company can also help you to obtain this information.
Next, personally contact these past clients to see if they are interested in becoming a homeowner again. If so, have them preapproved with a lender before taking them out. Many of these previous owners are not aware that they can actually purchase a home now. Others have diligently rebuilt their credit and will be ready to purchase in 2015.
4. Advise foreign buyers to work out tax consequences before purchasing
If you are working with an international buyer, have your clients see a tax attorney who specializes in international purchases prior to your clients making an offer. The reason for doing this is that your clients can be liable for huge amounts of taxes if they don’t address these issues upfront. On the other hand, if they set up the right structure for their purchase, they can deduct interest payments, take capital gains deductions, and avoid paying many federal, state and local taxes.
To illustrate this point, if a buyer in California takes title as an individual, up to 46 percent of ALL her global income may be subject to California state income taxes. On the other hand, if she takes title using a LLC owned by a foreign corporation, normally she will have no tax. Again, these steps must be taken prior to purchase — they cannot be implemented once the property has closed.
5. Inexpensive ways to generate leads
Before you decide to write one more check in 2015 for paid leads, consider using some of these free sources that cost nothing. First, if you’re prospecting FSBOs, visit the “Make Me Move” section of Zillow. Many people who are thinking about moving often post the price at which they would be willing to sell on this site. An important caveat: Make sure the property is not currently listed with an agent.
Also, when you go to Zillow, search by “cheapest.” This brings up the auction feed from Auction.com. This is an excellent resource for both listed and unlisted properties, especially for your investor clients.
A third source is ePropertyWatch.com. You must live in the area where you sell to sign up for this free service. EPropertyWatch will alert you whenever there is a change in your property value, as well as when someone receives a foreclosure notice. This gives you an opportunity to contact the owner to determine if there is any chance of selling the property before it goes to sale.
Need more tips for 2015? Don’t miss Part 2.
Bernice Ross, CEO of RealEstateCoach.com, is a national speaker, author and trainer with over 1,000 published articles and two best-selling real estate books. Discover why leading Realtor associations and companies have chosen Bernice’s new and experienced real estate sales training for their agents at www.RealEstateCoach.com/AgentTraining and www.RealEstateCoach.com/newagent.