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The Worst Possible Way to Build a Real Estate Business

mindset Feb 17, 2024
kid resisting a plate of cupcakes

I’m going to go out on a limb here and tick off the whole real estate world.

You’re going to disagree with everything I’m about to say. You’ll think I’m an old geezer who doesn’t know what I’m talking about. You’ll want to tell me I’ve been hit on the head one too many times, and I should just retire now.

Here it goes…

The whole concept of lead generation and conversion is NONSENSE.

I know that defies everything you’ve been taught. Since day one as an agent, it was pounded into your head that you have to generate and convert leads…

As if somehow you have magical powers that can cause people to buy and sell, and to do so with you.

It’s delusional. This is NOT the nature of real estate.

In this industry, at least 80% of the business is repeat and referral. Less than 20% is an open competition…but you’ve been programmed to focus on that 20%.

These people are not committed, not loyal, and in many cases not qualified. They’re talking to five other agents, so the chances that they’ll choose you are low. 

The only thing that would make them work with you is if you promise to work the hardest for the least amount of money…which means they’ll be a nightmare client who doesn’t value your expertise and takes up all your time and energy.

Why spend your time chasing after these low-probability, low-quality prospects?

When I ask this, agents always get defensive: “So you’re telling me what I’m doing is wrong?”

YES. No one wants to hear this, but yes.

Just look at Zillow, the biggest lead generation program out there. Agents spend millions and millions of dollars on Zillow leads every year…

And the national average conversion rate is only 3%.

That means you drop what you’re doing 100 times to go show a listing that’s not yours to a total stranger, with the hope of closing 3 deals.

If you want to know why you’re constantly stressed out and feeling like you’re not selling enough, look no further.

Even if you’re not paying for Zillow leads, you’re probably doing some version of this dance. It could be social media, advertising, postcard mailing…

It’s all just a frantic search for instant gratification.

Lead generation and conversion is the real estate industry’s version of buying a lottery ticket. It keeps your hopes high, but in truth, you’re just wasting your time and money.

The reality of this business is that people buy and sell on their own time frame, and they do it with agents they already know and trust.

If you think there’s any shortcut around that, you’re sorely mistaken.

And as long as you keep chasing shortcuts, you won’t have time to do what actually works: building those trusting, long-term relationships.

This is just one of the many ways the industry sets you up to fail. 

Focusing on lead generation and conversion…obsessing over rankings…discounting your commission…relying on your listing presentation to win business…

These things don’t help you—they only turn you into a commodity.

But because everyone around you is caught up in the same game, you think that’s what you’re supposed to be doing. 

If you think I’m crazy, look in the mirror.

Take an honest look at your productivity. Can you honestly say to yourself that you’re producing at the highest level possible?

You know the real answer is no…and your next thought is that it’s because you’re not working hard enough.

No, that’s not why. 

It’s because you have a transactional mindset, not a relational one.

A transactional mindset is stuck in the delusion of instant gratification. You want to believe you can do something to get a deal today—despite all evidence to the contrary.

A relational mindset is the opposite. It’s the understanding that you have to delay gratification in order to have long term success. 

Your daily activities build and nurture the relationships that will bear fruit many times over many years—but not today.

Look at any field, any area of life, and you’ll see that the most successful people are those who are willing to delay gratification.

Yes, there are many agents out there who make good money doing lead generation and lead conversion…

But making good money is not success if you burn out in the process.

Achieving true success means building a sustainable, scalable, stress-free business. That’s what Performance Coaching is all about. And let me be clear…

Lead generation and lead conversion do not fit in that model.

It’s true that if you’re starting out cold in a new market, you may need to do some lead generation…

But you must always approach it with the intention to build long-term relationships.

Once you bring someone into your world, stay in touch with them. Don’t let them walk in the front door and out the back. Close the back door, and over time, you’ll have less and less need to bring new people in the front door.

What I’m telling you is at complete loggerheads with what the rest of the industry is telling you.

I’m always trying to stack the odds in your favor. The industry is doing the opposite—it’s stacking the odds against you. 

You can’t listen to both. You have to decide who to believe. 

What most agents keep doing is working harder, spending more, and giving their money away. 


And you do not have time to make every mistake and go down every dark alley in this business. As tempting as it is to follow the crowd, you’ll only end up going down with them.

Know this: anything promising you easy is a distraction. 

Chasing instant gratification will get you nowhere.

Only when you learn to delay gratification will you begin to lay the groundwork for long-term, lasting success.

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