Flipping Switches: The Challenge for Real Estate Agents
The one skill real estate agents need to develop going forward
This is a random musing post. I have very few facts to back up any of these assertions. They are pure opinions based on a few decades of experiences across multiple industries.
I wanted to write this after a discussion with a friend who is not only in the industry but has a legal background as I do. I thought the conclusion we reached might be useful to the working brokers and agents out there.
The central thesis: the single biggest challenge for real estate agents, and the one skill they must learn going forward, is flipping the switch between Sales mode and Advisory mode.
If coaches and brokers are going to teach any single skill, I think it should be this one. I think we can distinguish between bad coaches and good coaches based on this one thing, but please feel free to disagree with me in the comments.
Let’s get into it.
Sales Mode
Fact is, most of what passes for training in real estate today is sales skills. But they’re not sales skills related to the house itself — as a wise experienced agent told me once, “Houses sell themselves; we just market them.”
No, what is taught over and over and over again to agents is how to sell themselves.
I got to thinking about this because of this video I posted in a previous post about steering the seller:
Yes, it’s steering but for our purposes, the important takeaway here is that the agent is supposed to be selling the entire time. The goal, the purpose, of this “script” is to get the listing agreement signed. The title of the video, in fact, is “Suffering from Listing Envy” and is aimed at agents who want more listings.
But you can go on YouTube or Google and find literally thousands and thousands of videos and articles from world famous coaches and total unknowns who advise agents on selling themselves.
I have heard it said (or read somewhere) that the average real estate agent spends 90% of her time doing lead generation, and only 10% of time doing everything else. Maybe that’s crazy, but this advice from Reddit’s r/realtors group seems true (and everyone agreed):
Seven hours of lead gen until you need to fill it with anything else.
I know that sounds flippant, but lead gen can be a lot of different things. Volunteer, join organizations, play sports, be around people. Cold call, door knock, social media content. Call or text with friends, family, former coworkers.
Since the question was, “I only have seven hours a day for real estate, what do I do?” the answer is illuminating.
The natural consequence of this education and training, which leads to a culture of sales is that the successful real estate agent is naturally and always in what I’ll call “sales mode.” I’m slightly familiar with it as I did apparel sales at Bergdorf Goodman in my youth, and I was quite good at it. At the height of doing sales, I found myself mentally and emotionally in “sales mode” all the time.
It’s difficult to describe, but I imagine that experienced brokers and agents reading this know exactly what I’m talking about. It’s a sort of mindset where you’re constantly looking for “hooks” in every conversation, every interaction, to turn to getting what you want… aka, “making the sale.” It’s not quite that inhuman; it isn’t as if you look at every person as a walking wallet. It can be used in things like convincing people to join a nonprofit, or to go camping instead of clubbing, or whatever. It’s just a mindset where you are constantly convincing others to do what you want.
It worked fabulously for dating in NYC in the early 90s, I’ll say that.
Advisor Mode
Advisor mode is something quite different. This is what lawyers, consultants, and other fiduciaries operate in — or at least, are supposed to operate in.
Advisor mode is a mindset where all you’re doing is offering professional advice, based on facts, circumstances, the client’s goals, wishes, desires, and your experience in that area. You’re not trying to convince anybody of anything; you are simply offering advice backed by your expertise.
In all my years in consulting, I operated in this mode. And the way I did it — the way I learned to do it in law — is to identify the issues, lay out the options for dealing with those issues, and then laying out the possible outcomes, risks and rewards, strategic impact, etc. so the client understood all of the options. Then when asked for my opinion, to give as honest an opinion as possible based on my personal experience, learnings, whatever wisdom I might have, etc. with only the client’s best interest in mind.
It wasn’t about convincing. It wasn’t about winning the argument or getting the sale. I already got the sale, since I was working for the client. It was only about professional expert advice, and letting the client make the informed choice as to how much risk-reward he wanted, or whatever tradeoff he wanted to make.
The best agents I’ve personally worked with in the industry do this very very well. For example, when I sold a home back in New Jersey, my agent would lay out the situation, the options, the likely consequences of those options, made sure I understood them, and then offer advice. I think I had a possible mold issue in the basement. She laid out the options, and I’m kinda sorta remembering them:
Mitigate the problem today, before listing it for sale, at the cost of $ABC and delay of XYZ days.
Disclose the problem, cut the price by $whatever, and be prepared for further concessions.
Ignore the problem (we didn’t know we had a mold issue; we just suspected it) and hope it doesn’t come up.
I believe her advice was to mitigate the problem; the cost and delay would be more than made up in the final sale price and ease of transaction. But I was free to choose any of the options; she would try her best whatever path I chose. She did not try to convince me to take her advice.
She was operating in advisor mode, not in sales mode.
Switching Between Sales Mode and Advisor Mode
When I did my summer associate program in law school at a major firm, I learned firsthand the conflict between sales mode and advisor mode.
Lawyers, like real estate agents, have to make a sale in order to make a living. The client has to hire you first before you can do much for the client.
So the first priority, first step, is to get hired. You have to sell yourself, your firm, your expertise, your knowledge, your services. You need to be in sales mode at this stage.
Once you have made the sale and gotten hired, you need to switch gears and go into advisor mode.
And then, as happens quite often, during an engagement, the client discovers he has additional needs. If you’re doing a big office building purchase, the client might discover tax issues he hadn’t thought about. Then you have to smoothly switch into sales mode to convince the client to give your firm the tax business as well.
At my firm, some lawyers specialized in sales mode while others — who weren’t as good at the whole sales game, but were amazing legal minds — specialized in advisor mode. As one of the hiring partners told me over lunch one day, it is rare to find lawyers who can do both sales and advice.
The Challenge in Real Estate
I think that the biggest challenge in real estate today — perhaps it’s always been the challenge — is that switching between sales mode and advisor mode has to happen constantly, oftentimes in the same interaction.
As my friend put it, think about a listing presentation. You need to sell. Your primary goal in that interaction is to get the listing agreement signed; everything else is secondary. If you don’t get hired, then all of your expertise is meaningless. Sales mode it is!
Except that in the midst of your sales presentation, you need to switch gears into advisor mode when it comes to something like “Should I offer compensation to the buyer’s agent?” Or when you’re asked the key question of pricing the property. (We all know and have heard of agents “buying” a listing by promising unrealistic and ridiculous list prices.) Or you need to talk about necessary repairs or updates.
You need to do this because (a) possible liability, but more importantly, (b) it’s the right damn thing to do for your prospective client.
My issue with the video above, or other methods I have discussed here and on Industry Relations, is that the agent is still in sales mode. The agent is supposed to convince the seller to offer compensation, to “overcome the objection.”
The right approach is the advisor mode, one where you lay out the options, the possible consequences of those actions, the risks and rewards, and then let the client (prospect) make the informed decision. And offer your opinion only if asked.
There is a subtle yet important difference between “You don’t have to offer compensation, but if you don’t, see how many buyers show up to your house” and “Let me lay out the options and the pluses and minuses of each one for you.”
The former is Sales Mode; the latter is Advisor Mode. The real estate professional has to be able to switch gears instantly and smoothly, and then switch back to get the listing agreement signed.
With buyer agency agreements now required, the same switching needs to happen with buyers as well.
The challenge is knowing when you need to be in Sales Mode and when you need to be in Advisor Mode.
A Word to Trainers and Coaches
I would like to suggest to the trainers and coaches in the industry — who are often the managing brokers of an office — to discuss this issue with your peers and come up with a solid program for training in this skill: switching mindsets on the fly.
You likely offer great training on lead generation and on sales; you can’t be in business as a coach or trainer for long if you don’t. Some of you — not enough, but some — offer training on providing professional advice. I don’t know if many of you offer training on this “switching” between the two.
Please do. This skill is about to become even more important for practicing real estate agents, and the consequences of screwing it up are higher than they have ever been.
Wrapping Up
I would love to see industry events have panel discussions with top agents discussing this specific issue: switching between modes. It is quite likely that the best agents in the business know how to do this, and they likely do it subconsciously after years of practice. It is worth the effort to draw out what might be subconscious for the best of the best, so that the rest of the agents can learn those skills consciously and hone them until they become subconscious.
I have most often practiced what is called “consultative selling” though my initial training in sales was the hardest of hard pitches doing telemarketing for industrial chemicals. I don’t know if it works in real estate, and I don’t know if it’ll work for you, but it’s what I’ve done the most in the consulting world. It’s what a lot of attorneys use, when that initial “consultation” is filled with them offering advice, understanding challenges, etc. etc. and showcasing their knowledge, expertise, and experience. I just don’t know if it applies to real estate, since I have never sold a home.
But whatever approach works best for you, I do firmly believe that the new environment we are entering demands learning how to switch from sales mode to advisor mode and back, fluidly and on-demand. That implies that institutions from brokerages to associations to coaching/training companies should start preparing to teach and support the working agent in the field in learning both modes, how to recognize when to be in what mode, and to switch between the two.
Your thoughts are welcome. I’ll open comments up to the public on this post.
-rsh
I am a seasoned agent and I am in advisory role most of the time as my reputation takes care of the need to sell myself. My first priority in attending a listing appointment is to determine if we want to work together, not to get the listing. I want to size up the client and determine if I think we are a good fit. If the client is not desirable, I know more like them will invade my business. So discernment is my first priority. Then I work to acquire the listing. I realize the majority of agents don’t have the benefit of lots of experience and the luxury of choosing who they work with. I remember those early years. Become an advisor and your business will succeed. You have to be able to tell the client the truth. Just read a true quote, not sure who said it “When you want to help people, you tell them the truth. When you want to help yourself, you tell them what they want to hear.
I have watched our industry move heavily toward teams from individual agents since I started in 2010. You hit the reason on the nose. The team model allows for groups to be built around the specific strengths, rather than one agent having to be a jack of all trades. A lead agent can go out and generate new business, then plug their clients into their system, without having to worry about the liability, compliance, accounting, overhead, etc. that you'd need if you started your own firm.
The client gets a consistent experience and the business can scale in a way that doesn't obliterate any semblance of work-life balance for the agent.