Author: byronshort

Your broker is your biggest expense. Is it worth it?

Are your broker-dollars buying you the best return on your career investment?10dollars

It’s been a long-standing belief in real estate that if you want to make progress in the luxury market, you have to spend your commissions on a high-profile, high-fee brokerage. But does your clientele really feel that way? If not, is your investment in high broker fees really producing the best results for your career growth?

The 2013 annual survey by the California Association of Realtors once again asked home buyers to identify the most important reason for selecting their current agent. For several years running, the top reason cited by actual clients has been “most responsive”. This is followed by a variety of other agent-centric traits. (The full report, which includes wealth of info about industry info, is downloadable here.)

buyer survey graph

Did you notice what is conspicuous by it’s absence? There is no mention at all of the agent’s brokerage. This year, “agent’s brokerage” didn’t even make the top 8 reasons. If I recall correctly, in some previous years it has limped in at the bottom of the list.

Though they don’t necessarily want to dwell on it, the big firms know this too. In fact, there have been not one but two rather high-profile name changes among large national franchises this year. In both cases decades of name-recognition were traded for shiny new identities. Think about that. Could you imagine Coca-Cola deciding to change their name? Or Chevrolet?

So why is there no equity value in national real estate franchise names? Probably because there is no measurable loyalty by consumers to the brokerage that the agent works for. Don’t get me wrong. Your clients have loyalty — to you, the agent. The annual California survey measures that every year. But there is no measurable loyalty from the consumer to your company.

So I have good news and good news. The first good news is your clients care very deeply about picking the right agent, and will show you great loyalty when you meet and exceed their expectations. And the other good news, the even better news, is you are free to select the brokerage that lets you keep more of your commissions, as long as that brokerage provides you with everything else you need and you’ve become accustomed to.

So I have a simple question for you. If you could have all those broker splits back, all the royalties that disappear even before the splits, all of it — how would you invest your money?

Luxury real estate on a 100% commission plan.
No broker splits. No royalties. All the service and support.

Profiting From Positive Rental Karma

ForRent

Last week I wrote that “Rentals Suck”, as I very delicately put it.  The message was that although rentals don’t add up very well in terms of pay earned for hours expended, rentals can be used as a lead system, and in that regard, they can become a very profitable part of your practice.  If you missed that article, you can read it here.

But the best part of working rentals is what I call “Rental Karma”.  Stick with me folks, this is a fun ride, I promise.

Rental Redemption Reason #2 – Positive Rental Karma

Rentals are good “karma”.  Okay, I don’t want to seem all new age and mystical here.  As far as I know, there isn’t some kind of real estate agent’s cosmic bank account from which you make withdrawals providing you first pay it forward to someone else.   Or is there?

I’ve seen this happen so many times that it seems like the universe actually IS keeping score.  How can that be?

I’ve thought about it, and I think I figured it out:  “People don’t care how much you know, until they know how much you care.”  Let me explain.

When an agent agrees to take on a tenant-client, that agent has done something interesting—she’s put her client’s needs ahead of her own.  Yeah, I know, we do that with every client, fiduciary duty, etc, etc, yada, yada, yada.   True enough.  But there are some clients with whom some agents would rather not choose to work — the burden of fiduciary duty and the hours required to land a rental contract with a tenant-client is probably not going to pencil out well based on most agent’s annual income goals.  So an agent’s efforts with a tenant-client are more about helping the client, and less about helping herself to a lucrative commission.

So back to my previous statement.  It’s a universal truth that “people don’t care how much you know, until they know how much you care.”   But a tenant who knows how much you care still doesn’t pay enough to have much impact on your success.

So what gives?  The answer is, it’s not about the client this time.  It’s all about your own subconscious mind.

“The subconscious mind can’t take a joke”, as Mark Victor Hanson used to say.   That’s why the old adage of “fake it ‘til you make it” works.  We all know that if you re-tune your brain to see yourself as a success, then your brain will fall into the patterns of success.   Same for how we treat our clients.

If you focus on helping your client, your subconscious takes note.   When you know the financial reward just isn’t going to be there (even if you find the perfect rental house), you free yourself from all kinds of baggage.  Your brain gets real clear about your goal.  And your goal on that transaction is not about that $300 rental commission check.  Your one singular goal on that transaction is to make your client happy.   Quite simply, on a rental contract, that’s the only thing that matters.  It certainly couldn’t be about the money because there pretty much isn’t any!
 

So working with a rental client causes a re-tuning of your brain, a re-focusing of your subconscious on making happy clients, rather than on making huge commissions.  Please understand, huge commissions are not bad, and I’m not trying to imply they are.  Rather, I’m trying to point out that huge commissions are a by-product of happy clients.  Start by focusing on creating happy clients…and the huge commissions will take care of themselves.

I believe that when you train your brain to focus on your client’s happiness, you become a better agent.  You can’t help but show that you care about your client.  I believe your client, and even your next client, can pick up on that.  So your next client is able to see “how much you care” and respond exactly as the old adage predicts.

When I have an agent who is in a slump, I often recommend that they work some tenant lease transactions.  It gets them out there wearing their Realtor® hat.  It creates positive activity and positive habits.   But most importantly, it re-tunes their subconscious mind to focus on what matters to the client.  It’s good karma.

Final point – At United we don’t want you to pay big broker fees on teensy rental commissions.  Creating a happy rental client will have a positive effect on your future earnings.  And when that happens you’ll get a real adult-sized commission check, and that’s our mutual goal.  So to encourage you to take on those rental clients and generate some Positive Rental Karma, we take just $49 and cover all of our costs including E&O with that.  You get the rest.

So, do rentals as a crafty lead system, or do rentals for the good karma.  But now matter why you do them, I don’t want you to be frustrated by a punitive split or a high transaction fee.  And that, I believe, is good karma for all of us!

Rentals Suck — Or do they?

Part 1 of a 2 Part Series

Most successful agents will agree, rentals are not much fun.  On a rental transaction you get to do pretty much all of the work, but receive very little of the reward that you would get from a sale contract on the same property.  If you have the Tenants, it’s even worse.  Very likely you’ll drive them to home after home, and expend all the same energy (not to mention gas) that you would for a sale transaction.  And when you are all done, you get a few hundred dollars, often times about enough to cover your gas bill and leave you about fifty cents an hour in “profit”.

It’s true! Rentals suck!  So why do I recommend you do them?  There are two redeeming reasons to take on that next rental client who calls.

Rental Redemption Reason #1 – Today’s renters are tomorrow’s buyers.

Not only are they future buyers, but you probably know the exact month he or she will be in the market to buy.  How many leads do you have where you know they’ll buy something, sometime, but they just aren’t ready right now.  With a renter, that doesn’t happen.  You know EXACTLY when their lease ends, so you know exactly when they need to start shopping in earnest.  Usually you know this before the renters themselves even realize it.  So you can guide the transaction from the start, and keep the process moving along smoothly, assuring your clients (and your commissions) are safely under control.

Given that most busy real estate offices have very few agents who really want to work rentals, you’re likely to find lots tenant rental opportunities just by letting the other agents know that you’ll be happy to work them.  As we’ve already established, most successful agents don’t want the hassle of a tenant client, and most won’t even ask for a referral fee.  In that situation, you should consider renters to be one of your best lead programs.  So work them like leads.  Put them on a carefully planned follow-up system based on their lease ending date.  Ramp up your marketing efforts to them as their lease end nears. 

But keep in mind that unlike most leads which require a monetary investment on your part, these leads pay you for the privilege of being in your database.  Sure, lease commissions are nickels and dimes, but that beats the heck out of shelling out hundreds (or thousands) of dollars for leads that may or may not ever result in commissions.

Imagine—a lead system that pays you, just for signing up!  That’s the right way to view a tenant client!

By the way, just as a side note, at United we provide the lead follow-up system for your tenants.  Our full featured CRM includes several types of prospect follow-up drip campaigns, including a system designed around turning your tenant-clients into buying clients.  Because it’s not enough to be a 100% commission brokerage.  We also want to be the brokerage that helps you with the best tools and best service to help you sell more.

Look for Rental Redemption #2 in next week’s Hot Tips Tuesday email!

About United Real Estate

They said it couldn’t be done.  They were wrong.

 A true high-end brokerage experience on a 100% commission plan.
United Real Estate, the fastest growing franchise in the country, comes to Scottsdale.

JoinUnitedRealEstate.com | 100% Commission | Training | Leads | Technology

 The Perfect Storm

What do you get when you combine a team of techno-geeks, with a hand-picked team of top national real estate gurus?  Okay, I’ll get there…but first, let me set the stage.

This all started with the techies.  These aren’t just your basic, every day, run-of-the-mill geeks.  These are the high tech all stars who built a world-wide technology company that was so successful it was awarded Microsoft’s Global Partner of the Year…right before Microsoft bought them out.  They could have bought their own private island.  But instead they decided to buy a real estate company…and break all the rules. 

What they found was a company with 500 offices throughout North American, that had been doing it the old fashioned way since 1925.  That company, called United Country Real Estate, was successful by any measure, but had two huge opportunities.

First, they had no technology.  The techno-geeks loved that!  ‘Cause, you know, technology was kinda their thing.

The second opportunity was that United Country had very few offices in large metro areas.  In fact, their business model had been to avoid big cities.  So when they eventually rolled out stores in major metro areas (and they knew they would) they would not be shackled to a legacy of overhead, bureaucracy, and stagnant thinking.  Instead, the technology team could develop systems that match the way the world, and especially the highly successful agent, works today.

It was a chance to take the real estate industry by storm.  Some might even say, The Perfect Storm.  (See…I told you I’d get there)

The Perfect Opportunity

This is Dan Duffy, the head of the
techno-geek team. Okay, I’ll admit
it… I searched a while to find a
picture that made him look this
geeky. But rest assured, it’s a fair
portrayal. Dan is the CEO of
United Real Estate. He’s also a
pretty darned savvy business man.
Dan was named to Inman’s Most
Influential Real Estate Leaders
in 2009, and to Swanepoel’s Most
Powerful Real Estate Leaders in
2014. This guy’s got the goods.

I know you’re probably not as geeky as these guys, but imagine for minute that you were in their shoes (probably Birkenstock sandals…with socks).   You have 500 functional, working offices — and those offices are mostly technological virgins.  And your team is one of the world’s best at rolling out integrated tech solutions down large, national and international pipelines.  You can build and tweak and test in real time, with a real world group of successful real estate offices.

And once you have the technological backbone in place you have nearly all of the country’s metro areas available, where 80% of Americans live and buy and sell homes, a vast, wide open, clean slate … with no rules, no bureaucracy, no burdensome legacy.

It was a techie-business-geek’s dream.

The tech guys knew they had an amazing opportunity to change the way real estate works.  But to do that, they needed some real estate industry horsepower.  So they did what any good entrepreneurial tech firm does. They raided some of the top firms in the industry.  Companies like Realogy (owner of Sotheby’s, Coldwell Banker, and a half dozen more top brands), and RE/Max.  They hand-picked the forward-thinkers, and poached the top executives with the ability to see their vision.

The combined team decided to name the metro-market version of the company United Real Estate. This wasn’t going to be like those other companies.   This was going to be a game changer.

The Perfect Fit

The geeks and the real estate execs got to work, forging their mutual vision into a business plan.

Any good businessperson knows that when it comes to technology, the size of the buyer pool determines the price.  More buyers of the product means more sales to spread that initial cost over.  The same is true for real estate offices.   An office with just a few agents has to amortize the cost of the office and the broker over just those few agents.  This is how real estate was done for decades.  In fact, for centuries.

Franchise fees have become just as bloated as broker fees.  In fact, most of the legacy-based national franchise systems have huge fees in both areas, leaving the agent footing the bill.  The result is the old-school thinking of rather abusive broker splits.

This is Peter Giese, the President of
United Real Estate. He’s the leader
of the real estate guru team that was
largely poached from competitors.
But don’t let that corporate
red-tie-white-shirt portrait fool you
–this guy gets it. Peter drives the
company’s agent-centric model,
which is something he just couldn’t
do when he was with the other guys.

The world has gone mobile.  And the typical real estate agent is more mobile than most, just as happy to work from their home office, or from their favorite coffee bar, as they are to drop in to their broker’s office.  So why the emphasis on the office?  Instead, what the agent needs and relies upon is technology, support, training and marketing.   You can see how the United Real Estate team saw a fit.

The United Real Estate vision is simple.  Keep costs contained.  Spread those costs over as many agents as possible.  Provide the agents with the tools they really need to succeed. And build those tools with the economy of scale of a national real estate franchise, so the costs are not prohibitive to broker or to agent.

This allows United Real Estate to utilize a 100% commission model for its agents.  No splits.  None.  Oh, and no franchise fees either.   Instead, agents pay a low monthly fee and a low transaction fee when they have a closing.

Of course, the 100% model has been bounced around with varying degrees of success by various regional companies.  But they all lack the financial heft to build the complete technological and marketing systems of a major franchisor.   So until now, the agent had to choose—did they want a top quality broker experience at the expense of punitive broker splits, or did they want a 100% commission plan at the expense of any meaningful brokerage systems?   With United Real Estate, you don’t have to choose.

It’s simple.  Get more.  Pay less.

Just like the old legacy brands, United Real Estate provides full offices when you need them, with a live broker, and with outstanding technology and support for every aspect of building your successful real estate career.  Beyond most of the other major brands, United owns its own exclusive real estate marketing company which provides world-class collateral materials, including internet and social media based systems for your listings, and even for branding yourself.  And United provides not only leads, but also the complete system for incubating, landing, and closing those leads.  We have the systems, technology and support to help you land more listings and make more sales than even the old-guard companies.  We just do it on a 100% commission plan.

They said it couldn’t be done.  But United Real Estate did it.