Episode 17: How to Overcome the Discount Brokerages with Joanne Spruce
Glenn: Good afternoon. It’s Glenn McQueenie, and this is the 25-Minute Podcast where we interview people and try to find out what their niche market of real estate is, and then help them develop a great system to get perfect-fit clients on a steady stream, so they really just love the business today. And today, I’m pretty excited, because we have Joanne Spruce from Century 21 in beautiful Vernon, B.C. How are you, Joanne?
Joanne: I’m great! The sun’s shining and it’s a lovely day here. Thank you!
Glenn: Great! Well thank you so much for taking time to join me on the call today. So why don’t you just tell the listeners a little bit about how you ended up in Vernon, B.C. and what your business looks like today?
Joanne: I ended up in Vernon after selling real estate on the lower mainland in Vancouver for over 30 years, all over the place from Whistler to Hope to White Rock. And my son inadvertently ended up as a property manager. And I told him, I said, “You’ve got to open up a real estate company or go work for one. Otherwise you’re going to get your knuckles rapped.” And so he said, “Well look, Mom. You’ve got your brokerage. Come on up and we’ll open up a company.” So we did. And one thing I know for sure is I have huge respect for all of the managers out there who own their own companies, because you have to have tremendously deep pockets to own a brokerage. And, of course, my son didn’t; he was doing it on a shoestring. So eventually he had to close it down. And now I’m in Vernon, and I thought, “Well, okay. May as well sell real estate in Vernon.” And that’s what I’ve been attempting to do ever since. Now I work for a tremendous company, Century 21, but the thing that makes it tremendous is our manager. He’s innovative, he looks to the future, and he’s always coming up with ideas to further his salespeople. And it’s worked so far, but now everybody’s copying us, so we’ve got some other big thing going on.
Glenn: Well that’s good! It’s good when you’re with a great company and you’ve got a great leadership team there, right? Because this is a tough business.
Joanne: It is. And I think it’s harder to make a dint in a small town where everybody knows everybody. I ran into that one time before in Abbotsford when I was selling there, briefly. So I’m kind of like a fish flopping on the dock. I don’t know what to do to really start attracting people to come to my website, to my blogging, and to my Twitter. I have great Twitter going on. I don’t seem to be getting anywhere; I’m just spinning my wheels. And I listen to some of your podcasts, and the thing that I picked up from each and every one of them was: follow your passion. Expand your passion, and then people will start coming to you because they feel the same. So I’m at the point now where I’m trying to figure out what my passion is after all these years in real estate. I still don’t know what it is.
Glenn: Well that’s great. I’m happy to have you. So let’s spend some time figuring that out. Because the challenge (and one of the reasons I did my book), was because I was seeing that there were so many agents out there, and a lot of them are honestly flopping like a fish. They’re not sure what they’re supposed to be doing because they’re so busy trying to be everything to everybody, copying the latest trends – “Oh, someone told me to do this. Oh, I went to this seminar. They told me to do this” – instead of just being themselves. At the end of the day, just be you, Joanne. Everyone else is taken. And the whole idea is, you just bring you and your natural strengths to a group of people who you like, trust and respect, and who like, trust, and respect you, and who you’re genuinely interested in and they’re interested in you. And the more nichey you get – it’s so counterintuitive for most people – but the more you narrow your market, the bigger your market becomes. And I’m not asking you to blow up your business right now. I’m just saying, maybe 20% of the time now. Let’s come up with a game plan and figure out what your target market is, and then we’ll give you the whole, “Okay. Here’s the way we should approach it and then here’s the 12-month blueprint.” And we’ll be off this call in about 16 minutes. So, are you ready to go?
Glenn: Okay, good! Okay, so if you had to paint a picture to me of who your perfect client is, or your five best clients, what are some of the things you like? What were your five favourite transactions? Or what part of the market do you love to work in? If you could work in that area or with those type of people – if you can, just describe them to the people listening right now.
Joanne: Well, I have to go back to my days of selling real estate in White Rock. And that’s a small town where everybody knows everybody, but it’s a little bit different in that the average income was higher than the average income, say, for all of British Columbia. And I’m not being snobby about this and saying, “Oh, well I only want to deal with rich people.” I don’t mean that at all. But I found that the more businesslike they were, the better I got along with them. I like selling to people who are very definite about their likes and dislikes, and I found that I got along great with the clientele down there. Not a problem. I don’t know why. Maybe it’s because I’d been in business for so long, but I understood them, and I found them very, very easy to deal with. And of course, it’s nice when you’re always showing gorgeous homes, especially homes with an ocean view. But it wasn’t just that. It could be anything – any type of real estate. I just seemed to speak their language, and they spoke my language. So that would be my favourite client: someone who’s in business for themselves.
Glenn: Right. So your niche is more like a demographic than geographic. It’s more like, “I love working with businesspeople who make decisions quickly, and who appreciate my help. I get along with them. They respect me, because I make decisions quickly.” Is that your ideal client?
Joanne: Yeah. You’ve pretty well hit the nail on the head. And I also found (now it’s been a few years since I actually sold real estate in White Rock, because I got involved in the rental end of things for a couple years with my son, but maybe things have changed now), but I just found that they could not be bothered FSBOing their own home. They thought that as being absolutely stupid. And that was another thing I liked about them.
Glenn: That’s right. Well, what’s interesting is when you earn above average hourly pay (which most businesspeople do, if they’re running good businesses), they’re very used to paying for professional services, right? They have a bunch of lawyers, or a lawyer (corporate lawyer) and they’re billing at a pretty high rate, which is probably anywhere from $300-$1000 an hour. They’re dealing with an accountant that’s a professional service. They’re dealing with bookkeepers, and because of that, there is no hesitation for them to pay for professional services, because they’re already trained to pay for what someone’s worth. And if you compare that to someone who is more blue-collar income, where they’re making $10 or $15 or $20 an hour (whatever that number is), they have a lot more time on their hands. And so, what they’ll tend to do is FSBO a lot more, because when they look at the amount of commission we make on a house, to them, that reflects hundreds of hours of their time. So it’s only normal for them to go and try to do it. And I don’t think we help things sometimes, as agents, when we show up in fancy cars. Dealing with that type of clientele, it’s not the best. So if you just bring you, which is, like working with businesspeople, to businesspeople who are willing to pay for professional services, value what you add to the transaction, and are grateful for what you do, you could just build your whole business only dealing with businesspeople in Vernon, B.C.
Joanne: Yeah. You’re absolutely right. There’s another little glitch up here. Nowhere else in Canada do they have this situation. We have three discount brokerages, and this is constantly being thrown in our faces, as a full-service realtor. However, our manager, brilliant as he is, showed me how to run the average house price when they sell it, compared to the average house price when a full-service agency sells it like Re/Max, Century 21, Sutton, or Royal LePage. And, on the average here in Vernon, it’s around $30,000 different. We (the full-service agency) will get the client $30,000 more than if you were selling it through one of the discount brokerages.
Glenn: That’s right. Well, that’s the beautiful thing, right? The great thing about businesspeople is they don’t hire the cheapest lawyer and they don’t hire the cheapest accountant because they see the value in expert advice. And there’s a market for discount brokers, and good for them. I mean, we should have options for the consumer. But that’s not your target, right? Because their target market is a commodity: cheapest service. There’s always going to be a cheaper discount broker, and they attract people who use them and lose them as quickly as possible, because someone will always be cheaper. So I’d rather just say, “Okay, good. That’s your market. You take it. We don’t want it. There’s no profit. There’s no margin in it, anyway. We can’t stay in business long term. So, you just keep your market. Best of luck to you.” And then you just say, “Okay, I’m going to live in: who is mine?” And what you’re going to discover through this process, Joanne, is you’re actually in a mindset-attracting business. That’s really what we’re in in real estate. We’re trying to attract the values and characteristics of the clients who you most want to do business with. Does that make sense?
Joanne: Yeah! I absolutely agree.
Glenn: Yeah. So I don’t want to attract into my world someone who does not want to pay for professional services. It’s happened to all of us, the moment we drop our standard and drop our fear – a lot of times, the person who asks for the discount is usually going to be your hardest transaction from beginning to end.
Glenn: And the client who values it (I mean, they’ll still negotiate and that’s fine), but the person who values you the most, who responds to you quickly, who makes decisions quickly, who is grateful for what you contribute to the transaction, who says “Thank you,” and who is gracious – they’re the people that you would die for.
Joanne: Absolutely. I agree 100%. Yeah.
Glenn: Right. And so, the whole game is, how do we attract the optimum mindsets of the people who are most likely to consume your services? So, we’re not going to have a whole lot of time on this call, because we try to keep them short enough for everyone to listen and digest (I knew if this was a three-hour call, most people would just fall asleep), but the question you have to ask yourself is, looking back at your five favourite transactions, “What were the mindsets of the people who you liked the best?” Maybe pick three or four of them right now. What did you like most about those people? So one you said was they make decisions quickly.
Joanne: Oh yeah. They make decisions quickly. They know what they want. They’re not all over the place. And when they find a residence that they like, I could just tell when I walked through the front door with them, that they were going to buy it, because I knew it was perfect for them, and I just had this feeling. And sure enough, I was always right. They always bought that particular place because they described to me exactly what they wanted, and so I went out and I found it for them. The other thing I liked about them (and this is kind of a personal thing), was that they didn’t want Open Houses. No Open Houses, because they didn’t want people looking at their security systems, and they wanted Sunday with their families anyway. And if we were going to go look at houses, it was usually during the daytime, because they could get up from their desk and tell their secretary, “I’ll be back in a little while.” It wasn’t one of those things where they have to clock in a clock out. So, very little evening work, and no Sundays, which I thought was great.
Glenn: Right. So isn’t it interesting that you don’t really like to work evenings or Sundays, and so what you attract into your business is the same people?
Glenn: That’s the game. The game is just bring you and your natural strengths to a target market of people who are just like you, and then deliver a world-class experience to them so that they tell everyone they know how great Joanne is and why they should all do business with you. And you figure out that secret recipe. “I’m in the mindset-attracting business. And then I’ve got to deliver world-class service, and then I’ll have a line-up of people.” And it doesn’t matter if I’m new to Vernon or not new to Vernon. People will chase value.
Joanne: Yeah, that’s true.
Glenn: Right. So, where are those businesspeople right now? Where are they in Vernon? I’m trusting you have businesspeople in Vernon.
Joanne: Oh yeah, we do. We have quite a few. There’s a new social media thing out locally here in Vernon called Alignable, and it’s geographic. Have you heard of it?
Joanne: It’s a new thing out, and it’s like Facebook and all the rest of them, only it’s a geographically-enclosed area, which is all downtown. And that’s one way of getting to know businesspeople here. So I signed up for it, and I’m busy doing my profile and picture and all that business, actually, this week.
Glenn: So yeah, get in there. And where do they meet? Do they meet at a Chamber of Commerce? Is there a Chamber of Commerce you could join so you could get to meet these people? Where do they golf? What do they do when they’re not working? It’s just a social circle – and you know this – that you just have to somehow penetrate, because it’s hard for them to do business with you when, at that level, it’s all referral-based business.
Joanne: Oh yeah. Well, I don’t golf, but there are a lot of golf courses here. Probably they’re all out in their boats in the summertime. What can I say? The Chamber of Commerce here actually meets in our boardroom.
Glenn: Perfect. Well I would join it. And I would start trying to think of, “How can I come from contribution and help that community and help those businesspeople and add value to them,” before you ever expect them to do anything for you?
Glenn: And one way you could do it is find a great book and have an executive book club. There are so many. You’ve got to create your world and get in that group. That’s one way. The second is: how do you get more of the type of homes and listings that we think those businesspeople will buy in Vernon? How do you get into that world where they actually have to come through the door to meet you?
Joanne: That’s a good question, and that’s something I’ve been rolling around in my head for the longest time.
Glenn: Right. Could you create a Facebook page called “Vernon’s Top 10 Best Homes for Sale?”
Joanne: I probably could, if it isn’t already done. I don’t think it is. “Vernon’s Top 10 Best Homes.” That’s an idea.
Glenn: Right. And could you go and videotape those 10 homes and put them on your Facebook page and say, “Here’s my pick of the week” (if you can get the permission from the other agent, obviously – all the bureaucratic crap that we have to go through). If you can do your pick of the week, you can start building an audience of people who will start coming to you because you’re seen as a value creator.
Joanne: Yeah. Okay. That sounds really good.
Glenn: Right. Could you create “The Top 10 Secret Homes in Vernon, B.C.” that are for sale, but nobody knows about? Because a lot of people, especially the wealthier they get, the more secretive people get. A lot of them don’t want people traipsing through their home. They don’t want to do this. Could you almost create what we call the “Secret MLS” (the private MLS), where you could find some people who are looking for those executive homes and send a flyer out to those areas and say, “Listen, I’m working with the buyers who are looking to buy your home. I’m very discreet. No one else will know about it. If it’s a match, it’s a match; if not, it’s not.” And then you could start building a contact where you become the resource for them, right?
Joanne: Oh, I see. Yeah, okay. So you’re not suggesting that I go out and list them, just that I go out and talk to the people and do the old hook: “If I can bring somebody who will give you what you want and pay you what you want, would you deal with me?” That sort of thing?
Glenn: Yeah. And just say, “I’m going to start the Secret MLS of Vernon, B.C. right now,” because there are homes that sell in Vernon, B.C. already that don’t hit MLS, right? People know it just happens, right? One neighbour buying another’s house. “I’m selling to my son.” It already happened. But imagine positioning yourself, like, “What do I need to do first of all to attract buyers to Vernon, B.C.?” And that’s the Top 10 Best Homes in Vernon, B.C. So now you start getting your buyers in, and they’re going to start coming on your page and commenting. And then you’re going to start saying to them, “Well what are you looking for?” So now we’ve got the buyers coming in. Now you start marketing out to the sellers and saying, “Listen, I’ve got nine out-of-town buyers right now who are going to be moving to Vernon, B.C. I’d love to show your house. I don’t know if you want to sell or not, but if you want to miss the muss and the fuss of putting your house on MLS, I’m happy to, on a very discreet basis, show them your home.” And then from there, you might get people going, “I’m thinking about maybe selling,” because that’s when they put their hand up (the seller puts their hand up). They go, “I’m thinking about maybe doing it. I’m not sure.” And then you market back through your Facebook page. You go, “Have you heard about the hidden MLS in Vernon, B.C.? I have eight sellers of beautiful homes who don’t want to put their house on MLS, and if you’re interested in buying them just give me a call.” And now you start creating this private MLS system, and it just becomes so much fun.
Joanne: Yeah! The one question I have is how do you protect yourself? How do you protect your commission? How do you make sure that the owner doesn’t start dealing with it on his own?
Glenn: Well, you can live that way, or you can just come from contribution. Will people go around you? Yes, of course they might. There are ways. I don’t know what the B.C. rules are, so I’m sure you’ve got different forms, like an agreement to pay commission for a non-listed property. There are different ways you can do it. My mindset on this would be, “I’m trying to create a tribe of 100 best friends, and I’m the connector to those best friends.” And I’m going to talk to those sellers and I’m going to say, “Here’s the deal, and here’s what I’m going to do,” and you can protect yourself from the buyer agents. I hate the bureaucratic side of real estate; it’s just for bureaucrats. I’m on the marketing side, and I’d just show up in excellence, come from contribution, show those homes, and build your network. And the more you keep giving to those business leaders in Vernon, the more they’ll give back to you constantly.
Joanne: Oh, I see. Okay. It sounds like fun!
Glenn: It is going to be fun! No, it’s great. So listen, Joanne, our time is up here because we have to keep it right within the time, but I just really wanted to say thank you so much and I really look forward to seeing what’s going to happen there. It’s really exciting!
Joanne: Well thank you very much, Glenn. Stay in touch.
Glenn: Okay. Have a great day, Joanne. Bye!