The millionaire real estate agent by Gary Keller is one of the best-seller books in the real estate world, and it’s also a must-read for all real estate agents, In this article, I will share with you 8 important lessons you can learn from this book.
“The Millionaire Real Estate Agent” by Gary Keller is undoubtedly the best real estate book which explains real estate marketing strategy, the tools you can use to execute those strategies, how to use your budget to maximize potential and not last but least how you can become a better real estate agent after all.
The Millionaire Real Estate Agent By Gary Keller Book Summary
This book will teach you, Why you need to have more sales. The relationship between being a real estate agent and the moon landing. Why do you need to have passive income? There are many helpful things that you can learn from this book. So let’s dive into “The Millionaire Real Estate Agent” book summary to learn some critical lessons about the real estate business.
Lesson 1: To become a better real estate agent you need to understand the reasoning behind motivation
Whenever someone gets a big work item or big project, the first instinct is to dive in and start working. And with this approach people underestimate the power of planning. It might work in the short term; however, to work in the long term, you need to understand the reason to do it before doing anything else.
In the chapter “Think a Million”, we learn how all the high performers function. They define their purpose and motivation and this helps them stay focused. You can witness this same power of purpose and motivation too. When you have a clear goal in mind, you feel even more motivated to plan and execute. Of course, it gets difficult to find motivation every single day, and that is why it is important to find something that gives you a constant sense of purpose.
One particularly important thing to remember is that when we think about purpose and motivation, having an internal motivation to be better at something or some skill will also be better than having an external motivation to earn more money. External motivations are goals that once reached take away all the desire to work and leave a person empty. So, when starting with something try to find intrinsic motivation.
Once you have defined that focus it is now time to set goals. When setting up a goal make sure you set an audacious goal. It is better when you set up a big goal and fail rather than setting up a small goal and failing. And this is why we teach kids to dream big and shoot for the stars. So set big goals and divide them into small milestones so that once you hit your small goals you get closer to your big goal as well. So, if you want to have a sales target of $20M it is better that you keep your target at $100M and work your way up using milestones rather than setting it up at $10M and failing miserably.
Lesson 2: For your real estate strategy to work you need leads, listings, and leverage
In the chapter “The Three L’s of The Millionaire Real Estate Agent”, we learn that the success of any realtor depends on the ability to get three key objectives: leads, listings and leverage. In the real estate business, sales drive everything, and to maximize sales, you need to have maximum leads. When we backtrack the sales process, we would find that there would be no sales without listing and no listing without leads. Therefore, every sale comes down to the lead generation process. And if you have excess leads, you can have the freedom to select the best ones for you and try to convert those. On the other hand, there are few leads, and you do not have any choice but to miss your sales target.
Once you find enough leads, you can then move to have more listings. You will have the advantage of advertising your services to people who are trying to sell their homes rather than ones who are looking to buy one. And the reason for this is that it gives you more exposure. Think of all the potential buyers who would come to your viewings and would see your brands. They would become your potential customers.
Lastly, you need to be smart to deploy people, tools, and services to cut down your work and increase your income. You can do this by employing other real estate agents and taking your commission. You could also hire someone to manage all your administration work and manage all your marketing efforts. All these activities will give you more time to focus on the sales process. Now that you have everything planned, it is time to learn to execute those strategies effectively.
Lesson 3: Using available qualitative tools effectively can help you to execute your strategy
Until now we have looked at different strategies to run your real estate business, but now we will learn about four important tools that will aid you to grow your business successfully and sustainably. In “The Four Fundamental Models of Real Estate Sales Success”, we will learn about these four models.
First is the economic model, a tool that calculates the numbers you need to hit if you want to reach your target income. Once you have decided how much money you want to earn, the economic model helps you determine how many leads you need to have to reach this goal. For example, if your goal is to earn a revenue of $100K and you charge a 3% commission, you need to sell $3 million worth of properties. If on average the closing prize is $100,000, you need to sell 30 properties. And once you have the listing to conversion ratio, say for example 25% it would tell you to list 120 properties. And once you have the list the last step would be to calculate the number of leads you would need. If you have a lead to listing rate of 20%, you will need 600 leads to reach your goal. And that is the economic model. It’s an immense help to figure out everything to reach your goal.
The second tool is the one that will help to gain and maintain long-term clients by getting those leads. Good lead generation happens when you have frequent contact with your potential client. But you do not want to be overly aggressive to the point that it becomes annoying. While contacting your potential client through email or call people are often aggressive and risk losing the lead, but when you meet those prospects face to face you can take it to the next level. You can reach out to them multiple times over a week and send them a letter along with a fridge magnet or a calendar as a gift. And for those people that you already know you can have a conversation or communication with them at least three to four times a month over birthdays, New Year, personal emails and other occasions.
These are powerful tools and next, we will learn about two more really powerful tools that you can use in your real estate journey.
Lesson 4: Use the budget and organizational models to help maximize your potential
The next two tools we will look at will help you define spending limits and help to take maximum organizational benefits.
The third tool budget model prevents you from using more money than you are making. As soon as possible you should only be spending money that your business is generating. Of course, this means that your growth curve is going to be slow, but it also means that the foundation on which it is set is also going to be very strong. And this strong foundation will help you build strength in the future. If you do not control your spending, the future of your business is going to be bleak. Just remember the dot-com boom when high growth expectations led companies to invest a lot of money to lose everything.
So then how do you know if it is okay to spend money to run after an opportunity? Think about the streetlights. When you see an opportunity to increase your revenue, you can increase your spending by having the green light. But when the light turns red, you will have to wait until your revenue grows and you can justify your spending. Once the revenue grows the light will turn green again and you can pursue further opportunities.
Whenever you have to decide which task to do and follow, the organizational model will help your business. It will help you hire new skilled people and eventually delegate some of your work so that you get some time to focus on the work that makes the most impact on your company. And the first person that you should hire should be someone who can manage administrative work for you so that you can focus on selling properties.
Always remember you get what you pay for and therefore it is better to pay more and get someone who is talented and motivated rather than someone who needs micromanagement to work. Think of it this way if you want to employ someone and they are asking for an extra $10,000 then they only need to make $1,000 extra every month to cover that cost. And this would be justifiable if the employee would free up more of your time so that you can do more sales. These tools, however, are just templates and your business will change as it grows. These tools will however help you make that journey smoother for you.
Lesson 5: The four models to help you pursue leads, listings, and leverages
In The chapter “Sustaining a Solid Lead-Generation Program That Emphasises Marketing and Consistently Increases the Number of Leads” we learn that once you have an established real estate business your goal would be to streamline and improve your strategies in getting leads, listings and leverage. Once again remember that you are in the business of generating leads, they define your real estate business. Whenever you are doing any kind of marketing all your efforts should go to generating more leads and this is exactly where a lead-generation model will help your business.
Leads are good only if you can convert them into listings. To make sure you hit the required number of listings, keep a track of your economic model. Check how many listings are required to reach your monthly goal and then convert them into the number of leads required. And if you do not do this, then you will never know how many more leads are required to hit your target and get your target income. It would be like trying to navigate an unknown city without a map. Also, define your organizational model so that it can give you more control over the work you do and give you more freedom.
Your organizational model should be according to your business need but only the need of today but what the business might need in the future too. You should know if you need to hire a person to work on an immediate need or need someone who is flexible and can adapt even the future need. Again, use the budget model along with your organizational model to make sure that you do not overshoot your budget. Implementing these models takes significant effort and having these models in place does not mean everything is fixed. It is this urge to self-improve and push to continually be better that will push you to modify these models accordingly.
Lesson 6: Failure and its acceptance is an important milestone in attaining personal success
Everyone wants to succeed and this is a natural ambition of life, but what is also true is that you will only achieve success when you do not fear failure and start learning from failure. All of us are naturally fearful, but in business, you need to let go of this fear of failure. In the chapter “Weighing Your Options— The Process Of Discovering What Works And Doesn’t Work For You”, we learn that we need to be ready for failures and learn what works and what does not work for our business from the failure itself.
In business as in real life, you will fail many times before you succeed. And you ought to have the perseverance to go hard enough to achieve your goal. So instead of having a negative approach and mindset, see failure as a stepping stone to success and as necessary for teaching.
It is important to accept failure, but it is equally important to conquer self-doubt, especially those self-doubts that are not based on truth and facts. People used to think it was impossible to go to the moon before Buzz Aldrin and Neil Armstrong did it. And once they did this, psychologically and technically everyone knew it was possible and we saw many countries sending people to the moon. Before this ever happened, many people thought that it was impossible to send people to the moon.
In real estate, a lot of your success is about visualizing yourself as a victor and only a few can do this without any self-doubt. But only the greats know that there is no finish line. You always strive to be a better version of yourself.
Lesson 7: Work on the business rather than in the business
While the most skilled agents have some limits on their time charges, there is no actual limit to how successful your real estate business can be. Although you have the most successful business and close the biggest deal, your most valuable asset will always be your time.
In the chapter “Active vs Passive income” we learn that when the time comes when you decide to earn more passive income from your business, you must decide to work on your business and not necessarily make sales for yourself. For example, you might come across a time when you do not want to expand the business and a passive income of $100,000 a year might be enough. This is the way you can achieve that. If right now you are making $300,000 per year, you can pay a business manager anywhere between $100,000 to $150,000 and hit that target. And this would not require any kind of work from your side.
As a teenager, the author used to charge $15 to mow the lawn and as his business grew, he hired his friends to help him. He used to pay them $10 and keep the rest $5. Thus, he earned it without doing any active work. It is possible to earn millions by creating multiple businesses and hiring managers to handle them. To become a successful real estate agent, you can define and strategize your business using the four models, define your target passive income and then determine the number of agencies you need to reach to reach your goal. At that scale, your organization would be big and would include managers, administrators, and people who could help both sellers and buyers. This model can then be replicated in other units and entities as well. Once you make that decision to switch to a passive income, your focus will be on how those decisions affect your business in the present and future.
Lesson 8: You need a high level of focus for long-term success
Why do some people produce entirely different results even after getting the same kind of training? In the chapter “Create a Personal Plan And Then Make Process Your Focus”, we learn that a major difference between successful people and people who are very successful is the way and direction in which they focus their energy. As a manager, you cannot focus on every remote aspect of your business and you need to focus on what is most important for your business.
Why is it that, even after receiving the same training, two people will produce entirely different results?
While working, keep the Pareto principle in mind. 80% of your success and outcome come from 20% of your time and resources. Therefore, when you are getting started, you might have to work with many parties to keep yourself afloat. However, once you have established your business, you can start picking the leads that are the most important ones.
You do not need to run around and focus on everything, you should be focusing on the main leads and let your agents focus on the other leads. As your agents bring you more business, you will still make money. This way you focus on other parts of your business. The important lesson here is to focus on your goals and success and not feel too bothered by failure. You can achieve success in many different ways, but one thing is certain: to win in any way, you need to be highly focused.
Here is the conclusion of The Millionaire Real Estate Agent By Gary Keller
In real estate, your success comes down to leads, listings, and leverages. Once you have your business up and running based on these principles, you can change your focus. You can try to grow your business while nurturing other agents to bring more business for you. All the while you should be planning and budgeting based on your earnings and the financial goals that you have set. Take help from the economic model to determine the leads you need to reach your goal. Once you follow these results, you would be seeing results instantly.
I became a realtor when I was 25, Right now I’m a digital marketing expert helping realtors, brokers and real estate agents generate more leads online.