Article

The latest  article by David Disick deals with how fractional developers can establish productive relationships with real estate brokers.

Last week, I described some of the elements in familiarizing the general brokerage community with the profit opportunities for knowledgeable brokers in fractional ownership.  This paper elaborates on those thoughts.

1.    The Process of Familiarization:  How to Make it Most Effective

General real estate brokers are busy folks—and especially focused on their core business to endeavor to generate commissions in the current climate.  The general brokerage community can produce a wealth of prospects for your fractional products—if you communicate with, and relate to, them effectively. 

We are in favor of "drip marketing", a term that originates from the agricultural practice of continuously delivering small amounts of water to crops.  This technique calls for a steady, low-pressure series of communications that stimulates high-involvement responses from the target market. 

For example, a series of emails to the general brokerage community may proceed from (a) an initial overall familiarization with fractional ownership and the announcement of your project; to (b) a series of progressively more detailed facts about your project and the fractional market to generate a dialogue including specifics of your offers to broker clientele and compensation to brokers. And compensation should, I submit, include incentives recognizing timeliness of generating sales and sales volume.  We find this more effective than a detailed initial presentation or two since it conveys information in manageable bites and incorporates a dialogue and networking initiative to stimulate high involvement responses.

2.    Broker Remuneration and Reward/Recognition

The remuneration issue is self-evident—compensation sufficiently high to stimulate active interest by comparison with the general broker's perception of whole ownership commission potential.  I use the word "perception" because realistically, fractional real estate is and will likely continue to outperform whole ownership and "a lot of little ones” can add up to significant commissions promptly.

I also advocate intangible but necessary rewards.  Brokers value recognition among their peers—which can be generated through contests for top performing brokers and acknowledging those brokers in newsletters and in other respects.  I recall when my wife was a top producer at a major Manhattan real estate brokerage firm.  In addition to rewarding high producers monetarily, these high-energy and high-producing agents valued the little yellow ribbon placed above their desks to signify the top producers. 

3.    Personal Networking

As effective as your messaging campaign may be, it isn't a substitute for personal relations between your in-house staff and the brokerage community.  I would encourage you to "match" each of your in-house folks with particular local brokers to establish an on-going lunch or cocktail-type meeting program.

4.    "Protecting” the Local Broker Names and General Real Estate Business

I recommend a client reservation program so that the first local broker to "reserve" a particular client is protected and the possibility of disputes is prevented. 

A second form of "protection" relates to the general real estate brokerage business.  If you are a fractional developer coming into a tightly knit real estate community with your likely significant marketing and sales budget, you don't want your project and your in-house brokers to be perceived as competitive for general real estate business.  Accordingly, I recommend that you include in contacts with your in-house staff a prohibition against engaging in general real estate and that you establish a program to refer any general real estate inquiries to the local community on a fair rotation. 

        *******************************************************

This Paper will be followed by an elaboration upon the growing trend and profit opportunity for agents in fractionalizing single family residences, whether they be developer inventory or owned by individual real estate buyers. 

        *******************************************************

An additional personal note—Fractional Summit USA, August 31 to September 1.

At the risk of being redundant of prior notes, I would emphasize that the Summit is a “must attend” event if your schedule permits. The program focuses on (a) timely issues; (b) with information packed presentations; and (c) the unique current opportunities for developers, capital sources and professionals in the fractional real estate market.

        *******************************************************

Mr. Disick is an active coach to the fractional industry.  He can be contacted at ddisick@msn.com.