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Why real estate brokerages are not startups

(REAL ESTATE) Brokerages are popping up nationwide that are sleek and modern, and also misinformed as they call themselves startups. Let’s talk about the technical definition.

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Businesses that are just starting out often refer to themselves as startups (which is inappropriate given that startups are funded differently, scale differently, and have completely different KPIs). Take real estate brokerages, for example. An increasing number call themselves startups, but when you look at the definition of a startup, can you really call yourself one?

Small businesses and startups have very different definitions (and there’s no shame in being a small business or an “innovative brokerage”). Let’s discuss.

1. Startups have a different goal altogether.

Typically, startups are about growth. They’re designed from day one to scale extremely quickly. Small businesses are often limited by a target market or geographic location. There’s nothing wrong with that, but they aren’t scalable the same way an international software brand is. Think about scaling in terms of a beauty salon versus MatchCo, an app that uses technology to create a foundation just for you. A franchise does not a startup make.

2. Startups generally seek outside funding to accelerate growth.

Startup founders often give up equity shares to generate funds before becoming profitable. Small businesses are typically self-funded, bootstrapped into profitability, and owned by one or a select few. A small business venture is typically less risky than a startup, too. The idea behind a small business venture is profit, and you want the business to last. Startups are structured to be sold or acquired once it hits critical mass – a “startup” is temporary.

3. Startups disrupt the industry.

Think about these companies – AirBnB, Google, Dropbox, Facebook, even Apple, a long time ago. In their early days, they were startups. It was risky to invest in these companies as they were trying something new (not iterating on something like the real estate practice which is one of the oldest professions in America), but they have outshone their competitors. They disrupted the marketplace. That’s what a startup does. And it doesn’t always work. Sonitus Medical attempted to disrupt the hearing aid market. They raised almost $90 million in funding before the Centers for Medicare & Medicaid Services decided the product wouldn’t be covered. The company held an auction and closed its doors. Brokerages have experimented with paying salaries, going paperless, or having all agents working remotely – these are all fabulous innovations and iterations, not disruptions.

The takeaway

We’ve been on the forefront for over a decade of ushering in the era of indie brokerages, paperless real estate brands, and counter-culture companies, but brokerages are simply not startups, and this is not up for debate. Iteration is not innovation.

Don’t call yourself something you’re not – be an “innovative broker” and rock it, because you’re not a temporary company seeking to scale so rapidly that you’re acquired for your indisputable disruption.

And finally, don’t fall for real estate brokerages pitching themselves as “startups” when they’re misinformed and really mean they’re simply, and beautifully “modern.”

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Dawn Brotherton is a staff writer at The Real Daily, and has an MFA in Creative Writing from the University of Central Oklahoma. Before earning her degree, she spent over 20 years homeschooling her two daughters, who are now out changing the world. She lives in Oklahoma and loves to golf. She hopes to publish a novel in the future.

Real Estate Brokerage

How an African negotiation tactic can get everyone at the table to agree

(REAL ESTATE) Many fail to remember that negotiation is at the heart of any top agent or broker’s success, and even more fail to recognize that it is a science, not for the weak of heart. Let’s look to a fascinating tactic that you can begin using today.

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Negotiations can be tough, especially when parties are deadlocked. When a tough negotiation reaches its breaking point, it can’t be solved by traditional methods. If you’re involved in negotiations, the “indaba” (pronounced IN-DAR-BAH) technique makes it easier for all parties involved to find common ground and come to resolutions.

“Indaba” is a technique that comes from the Zulu and Xhosa people of southern Africa. The model of consensus building is designed to allow every party to voice its opinion, while still arriving at a resolution quickly. The transparent and credible process provides a forum for all views, while vesting decision-making power in a limited group of leaders.

While there may only be principal elders and headmen at the table in an Indaba, the meeting is open to all. As a public gathering with no limitation, it is also a participatory event where everyone has a say and the community is consulted to get their views on decisions.

The technique was recently put to the test at the climate-change summit in Paris. When the 195 countries in attendance appeared to be in deadlock, the Indaba technique helped them to build common ground. When things got particularly tricky in Paris, Indabas were held in private rooms at all hours of the day. And it seems to have worked. The agreement from the summit resulted in a historic first with all 195 countries adopting it without any objections.

So what is the applied Indaba negotiation method?

The draft text of the agreement is produced and circulated. Those in support give automatic approval of the agreement and discussion ensues; those who agree during the discussion are incorporated in the agreement.

Those most affected or with immovable positions discuss among themselves and arrive at a solution. The solution is then incorporated into the wider agreement with changes acceptable to the whole collective.

It is important to note that the entire process is solutions-driven, with everyone speaking personally, stating their “red lines”, and providing a common ground solution.

The Indaba negotiation method can be very beneficial for conflict resolution and stakeholder engagement. However, for its success, there is an important caveat. Like all

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Real Estate Brokerage

How predators trick the most intelligent agents, make them vulnerable to assault

Predators use the same sales methods as you do, both effectively luring you in through a funnel system of questions. Fascinating.

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Getting people to say “yes” is the ultimate goal for any salesperson. Many sales trainers will recommend that you ask for a little “yes,” then build on that by getting more little “yeses.”

You could begin with a simple request, perhaps completing a simple questionnaire. By getting people to make a simple decision, or perform a small action, you can fairly easily establish a new psychological “commitment.”

Implementing the “foot-in-the-door method”

Once you have that initial commitment, no matter how small, building on that foundation and making ever increasing requests get surprisingly easy. This is called the “foot-in-the-door method,” an approach based on trust and consistency, and it’s effective.

To prove the point, a group of researchers back in the 1960s, called on a group of housewives, asking if they could answer a couple of simple questions about household products. Then, a couple of days later calling again, asking if they could send five employees to survey the contents of their kitchen cupboards. The research revealed that that twice as many answered “yes” if they had answered those simple questions in the first call.

We also find it much easier to say yes to those we have good feelings about and seem similar to us. In other words, we like them! This is why refusing to buy Tupperware from a friend or relative is almost impossible!

Guess what? Predators use these same tactics

Predators and sexual offenders in particular, work very hard to be likable and use the very same “foot in the door” techniques to troll for their next victim.

Just like sales professionals, the predator seek those little yeses, but this time for testing and probing, seeking clues as to your willingness to be directed and controlled.

“The man in the underground parking lot who approaches a woman as she puts groceries in the trunk of her car and offers assistance, may be a gentleman or he may be conducting an interview,” suggests Gavin De Becker, in his book The Gift of Fear. “The woman whose shoulders tense slightly, who looks intimidated and shyly says, ‘No, thanks, I think I’ve got it’ may be his victim.”

De Becker then suggests, “Conversely, the woman who turns toward him, raises her hands to The Stop position, and says directly, ‘I don’t want your help,’ is less likely to be his victim.”

You may not be able to spot their deception

Offenders are also professional liars, truly skillful at what they do because they have had plenty of practice over the years. They’ve lied to themselves and everyone else in their lives. According to most experts who work with sexual offenders, not only is their lying hard to detect, but it is often very convincing.

“Even the guilty liar probably won’t avert his gaze much, since liars know that everyone expects to be able to detect deception in this way,” observed Paul Ekman, an American psychologist who is a pioneer in the study of emotions. “Amazingly, people continue to be misled by liars skillful enough to not avert their gaze.”

“’Declining to hear no’ is a signal that someone is either seeking control or refusing to relinquish it. With strangers, even those with the best intentions; never, ever relent on the issue of no, because it sets the stage for more efforts to control,” said De Becker “If you let someone talk you out of the word no, you might as well wear a sign that reads: You are in charge.”

Using this be aware of potential problems:

Predators meaning you harm will seek to control the narrative. They will make some positive statements and seek small yeses to gain what they eventually want – to get you to a place where they feel safe enough to assault or rob you.

Obviously not every conversation is going to occur just like this following example, but that said, let’s look at this scenario:

Potential predator calls you from a cell phone and the conversation goes something like this:

  • From the street I like the house at 123 Main Street. Are you familiar with the neighborhood?
  • Are you available to show me this home?
  • I’m preapproved with XYZ bank. Will you bring the paperwork, as I might want to make an offer.
  • Then, the final question: I’m actually here in the neighborhood. Can we meet right now?

If you got this far and found yourself answering with a string of small yeses, you’d better be ready to redirect and assume control or the outcome may not be pretty.

The agent responds in kind:

  • Sure, I’d love to show you the home, but I need to swing by my office first to grab the keys, OK?
  • Would you please bring your pre-approval letter along?
  • I’d like to meet at the office first so we can review your pre-approval, OK?
  • Then, the final question: Before we can meet, please send me a copy of your photo ID – management likes to know just who we are with and where we will be, for the safety of everyone involved, should there be a problem.

A prospect’s reaction to this request is important. If the final question is met with lots of bluster and indignation, this could be a big red flag.

Take measures to protect yourself in the field

The “foot in the door” is a well known and effective sales tool, unless it’s misdirected by someone who means you harm. Never ever allow a strange prospect to take control. Be mindful that most predators are accomplished and very convincing liars.

Always take precautions. Don’t meet strange prospects at the property. Always meet at your office or a neutral location such as Starbucks.

Always ask for and verify the photo ID of strange prospects, preferably before you meet – that way you have a chance to review pertinent information.

You should bear in mind that several of those arrested and charged this year for assaulting real estate agents were convicted sex offenders who managed to insert themselves into the lives of real estate agents.

All the measures we have discussed here are preventative, so take appropriate precautions when you actually meet with strange prospects. Here are some suggestions.

Does your Broker have a safety policy for its agents? If not, why not? Visit the NAR site for more information on safety courses and keeping safe.

Disclosure: the author is founder of Verify Photo ID, an app that verifies prospects ID’s and checks against a national sex offender database.

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Real Estate Brokerage

13 quotes on discipline to keep you going

(EDITORIAL) When it feels like you’re going against the current, it can be difficult to keep on. These quotes on discipline will keep you fighting.

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The importance of discipline in all aspects of life cannot be overstated. And if you want to be successful as an agent or entrepreneur, discipline becomes that much more important. While it’s easy to hustle at the beginning when you are excited about your new venture or when you hit that first success milestone, every entrepreneur knows that success doesn’t come easy.

When success isn’t coming as quickly as you had hoped, it can be easy to lose momentum. Practicing self-discipline is the key to continuing forward even when the payoff is hard to see. If you could use a little inspiration to start practicing self-discipline, why not take a cue from some of these great minds.

1. “Discipline is based on pride, on meticulous attention to details, and on mutual respect and confidence. Discipline must be a habit so ingrained that it is stronger than the excitement of the goal or the fear of failure.” – Gary Ryan Blair

2. “We must all suffer from one of two pains: the pain of discipline or the pain of regret. The difference is discipline weighs ounces while regret weighs tons.” – Jim Rohn

3. “Endurance is one of the most difficult disciplines, but it is to the one who endures that the final victory comes.” – Buddha

4. “The discipline of writing something down is the first step toward making it happen.” – Lee Iacocca

5. “There will have to be rigid and iron discipline before we achieve anything great and enduring. And that discipline will not come by mere academic argument and appeal to reason and logic. Discipline is learnt in the school of adversity.” – Mohandas Gandhi

6. “It’s easy to have faith in yourself and have discipline when you’re a winner, when you’re number one. What you got to have is faith and discipline when you’re not a winner.” – Vince Lombardi

7. “Talent without discipline is like an octopus on roller skates. There’s plenty of movement, but you never know if it’s going to be forward, backwards, or sideways.” – H. Jackson Brown Jr.

8. “Discipline is the refining fire by which talent becomes ability.” – Roy L. Smith

9. “It’s not that I’m so smart, it’s just that I stay with problems longer.” – Albert Einstein

10. “When you are tough on yourself, life is going to be infinitely easier on you.” – Zig Ziglar

11. “In reading the lives of great men, I found that the first victory they won was over themselves. Self-discipline with all of them came first.” – Harry S Truman

12. “Discipline is the soul of an army. It makes small numbers formidable; procures success to the weak, and esteem to all.” – George Washington

13. “Courage doesn’t always roar. Sometimes courage is the quiet voice at the end of the day saying, ‘I will try again tomorrow.’” – Mary Anne Radmacher

If you want to accomplish great things, you must be disciplined. If you aren’t sure where to start, simple things like practicing meditation, exercising regularly, coming up with measurable goals, and sharing those goals with others are all great, simple ways to start boosting your own self-discipline.

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