Is Real Estate Transactional or Relational?
I remember being in North Carolina for a wedding. The groom, another friend and myself found ourselves wandering around a nearby mall. We didn’t know the area, this wasn’t our town, or even our state.
The groom’s bride to be was from North Carolina and the wedding was there for her.
As we wandered around the mall we came across a t-shirt kiosk. You could get your picture taken and then added to a t-shirt with some extra designs and graphics, right there on the spot.
We started flipping through the example book and laughing at some of the ridiculous examples that existed. This annoyed the kiosk owner. I assumed he was the owner and not just an employee because his annoyance level seemed like he was taking it personal.
The kiosk owner snapped at us, “Are you going to buy some t-shirts or just stand there and laugh!?”
My friend Joe, the groom, in an instant had the best come back for that situation, “Both! We’re going to do both!”
HA HA! I started laughing even harder!
We got three t-shirts printed up. The same picture on each but with different words printed on them. Travis's shirt said BEST. Joe's said FRIENDS. And mine said FOREVER.
BEST. FRIENDS. FOREVER.
We walked around the rest of the day in order, with our t-shirts one.
Is real estate transactional or relational?
I think my friend Joe’s response fits here.
Both. It’s both relational and transactional.
And the cool thing, is sometimes it starts off transactional and becomes relational later. ANd other times it starts off relational, but you can’t avoid or ignore the transactional aspect of the home buying or home selling process.
In this article I want to dive deeper into this idea of transactional vs relational and what that means to real estate agents as they look to grow their business.
I’ll share with you the two broad categories of real estate agents, what that means to you, and three questions you can ask yourself to assess what type of agent you are and how to best succeed as that type of real estate agent.
45%
First, let's start with a number.
According to Paul and Sarah Edwards -- they wrote a book called Getting Business to Come to You -- they say that up to 45% of most service businesses are chosen by customers based on recommendations of others.
And I would say that real estate is a service business, wouldn’t you?
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And we know that based on NAR stats and reports that average real estate agent gets about 42% of their business from referrals. So this 45% number is pretty in line.
In a training workshop I shared with the group that there are two broad categories of real estate agents that I identified.
Category number one is the numbers-based agent, how many transactions, how many leads do I need to get to get my transactions, that kind of stuff.
And then there was the service-based mentality where people just want to give their clients the absolute best of them. One hundred and ten percent, if that was even possible, that's what these people would give to their clients.
Over a decade I’ve worked with real estate agents on their business. And I’ve worked with some really high producing transactional volume agents, agents doing 300 transactions a year. During this process and then through some other programs, I have identified these two categories.
By the way, I’m not saying one category is right and the other is wrong. I’m not say one’s good and one’s bad. They just are, right?
A service, relational oriented agent needs to do “X” transactions just to stay in business. And the transaction based agent can certainly give an exceptional level of service.
What it comes down to is when you wake up in the morning, if you find yourself thinking about: how do I generate more leads, how do I set more appointments, how do I convert more, how do I get my transactions from 100 to 200, you're the quantity-based, transactional category.
And if you're waking up in the morning thinking to yourself: how do I take care of these buyers, how do I make sure that they don't get stressed out, how do I make sure this is a smooth transaction, how do I solve their problems for them… and you're putting them in front of even where does your next closing come from, are you going to go generate any leads today, are you going to follow-up with anyone from your sphere, are you going to set any appointments, or are you completely focused on just taking care of the client that you have at hand, then you're a quality-based, relational agent. You have the servant's heart, a servant mentality of just taking care of people.
My wife, Katherine, who is also my business partner at PersingerGroup.com, and I were just talking this morning about why I read so much, why I listen to so many podcasts, why I go to conferences and listen to webinars and I try to soak up so much information.
It's really because I'm pretty dense. I'm not an intelligent person at all and I need to get things from multiple angles and a lot of information before it really starts to soak in. So
It took me a long time to realize that there's nothing wrong with either category. But what I was trying to do through coaching - when these agents, who have the servant's heart - I was trying to get them to think transactional-based.
I was trying to get them to stop prioritizing their client and start prioritizing themselves a bit more. Like,
“Hey, don't you need some leads today? Wouldn't that be nice? Wouldn’t it be nice to know when you’ll have your next appointment? Wouldn't it be nice to know where your next closing is coming from?”
But many agents are not wired this way. I think that's one of the reasons why we developed the Referral Getter Strategy, is for those agents that have that servant's heart, that put their clients in front of everything even before their own income goals. It's how we can help those agents that are focused on helping their clients more so than even helping themselves.
Three Tips for the Relational vs Transactional
Number one: Identify, just being really honest with what category you fall into, Relational or Transactional?
Number two: Ask yourself: is that serving you and your ultimate goals?
Let me break that down for you really quick, what I mean by that. Let's say you fall into the category of focusing on transactions. Well, one of the exercises that we give our agents at Persinger Group inside the Referral Getter Strategy, Module One. Session Five, is the "Lifetime Value of the Client" exercise.
If you are really focused on the transactions and you understand the lifetime value of your client based upon the exercise, you will realize that it would serve you in being even better in the transaction, of giving a higher level of service because you would generate more referrals, get more introductions to people who would cause your transactions to go up and your expenses to go down.
On the other category of agent, the relational agent, the one who has that servant's heart that's putting everyone before them, if you go out of business gradually then suddenly -- and that's how you go out of business.
Two months go by and no closing. Three months go by and no closing. Six months, no closing. You can't pay your bills anymore, you're out of business.
So is it really serving you by being timid, by playing small, by not focused on, "Hey, I can really help and serve people who you know. Would you introduce them to me?" You’ve got to play a little bit bigger and not be shy about how great you are in a transaction.
Number three:Talk with me about how Persinger Group works and serve the agents that partner with us. Learn about the Referral Getter Strategy and how much of the heavy lifting is done for you.
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