Gary’s Words of Wisdom (WOW):
I’m not that smart, but I’m smart enough to know that I can’t do it by myself.
In the real estate industry, I have come across so many clients and I have been able to categorize these clients into this concept, “The 4 Levels of Real Estate Clients”.
I have noticed that these levels aren’t necessarily limited to the real estate industry. I’ve seen the similarities in other industries as well.
See if you can relate to one of these levels. You probably know some people who are at a certain level.
Level 1 – Ignorant Iris
At this level, clients have a very preliminary knowledge and understanding of the industry. They often learn of the industry only through what they hear through friends or family and are often CLUELESS about what REALLY goes on.
These clients also don’t take the time or effort to learn the basics of the industry. Basically, they’re the ones who buy and sell real estate and get BURNED.
With a little research through asking some industry professionals, they can easily learn the basics but these people don’t make the effort or are just plain lazy.
Level 2 – DIY Dana
DIY Dana refers to the clients who try to do everything themselves to “save” money but end up making the wrong decisions and it “costs” money to fix their mistakes. They are determined to go the “DIY” route.
They don’t rely on professionals. Instead, they rely on the advice of friends and family or rely on other inaccurate sources for information.
For example: Some watch real estate renovation shows on TV and try to replicate the results. They think that it must be real because it’s on TV, but don’t know that many of the scenarios on TV are staged for entertainment purposes. The costs are often subsidized so they don’t understand why their costs are far higher than what was shown on TV.
Another real estate example would be clients who try to sell their homes by themselves in order to save on the Realtor commission and often encounter a number of obstacles and are hesitant to accept the feedback from professionals.
Level 3 – Savvy Sally
Savvy Sally refers to the client who knows that she can’t do everything by herself. She leverages her time and effort by working with a professional. She knows that the professionals have inside tips and tricks that only those within the industry are aware of and so she takes advantage of that.
This kind of client knows that she’s not the smartest person in the world but she’s smart enough to know that she needs to hire and work with experts in the fields she needs help in.
For example: Instead of doing her taxes all on her own, Savvy Sally would hire a professional accountant who is constantly informed of new tax laws and is very experienced in terms of what is or isn’t allowed and can advise her of the benefits and risks in certain decisions.
In terms of real estate, Sally hires a Realtor to help her sell her home. She doesn’t have the tools or network that Realtors have and so she would wasting her time trying to do everything on her own when she could use that time to do other things like going golfing or shopping.
Level 4 – Investor Ivy
Level 4 is where Investor Ivy resides. Not only does she work with professionals in helping and guiding her in the areas she needs help in, but she constantly thinks of ways on how to leverage the expertise of those professionals to help her make money.
These clients are actively working with the professionals. They act as a partner and client rather than simply a client.
For example: Instead of just employing the services of a Realtor, Investor Ivy tries to actively look at real estate, community development plans, city hall websites, and keeps an eye out for potential investment opportunities. She works with the Realtor to see if they have any contractor contacts and tries to build relationships with contractors for the purpose of pursuing buy, renovate and flip investment strategies in the future.
She creatively conjures up strategies and asks the Realtor for feedback and asks the Realtor to help her in the implementation of the strategies. Thus, she is able to establish a long term relationship with the Realtor and it becomes a very profitable WIN-WIN relationship in the long term.