Q: What are my costs in creating a profitable real estate business? How much money am I going to need?
If you’re wondering if this is one of those brokerages where you need the particular $300/month website, a franchise fee, printer/copy fees, etc., etc., no, you don’t.
Early on, I made a huge and regrettable mistake in thinking you needed fancy websites and killer technology to compete.
The result was, after paying the monthly brokerage and office fees, website fees, branded and unbranded, on the 1st of each month, I was at $1,200!
Learn from my many mistakes!
I printed, licked, sealed, placed a stamp, and sent just a few letters a day when I started. I know, I’m old because the email method was starting, I was one of the first to use it for marketing, and I don’t mean spam.
Your marketing will be effective, and your marketing costs are minimal; we cover 95% of it and produce immediate results! If you’re spending a ton of money on websites, marketing and prospecting and not getting 10 x the results, you’re blowing money away! There is a better way.
Most of you reading this are not happy with your income and present lifestyle. You know and understand you need guidance, coaching and perhaps, at times, a kick in the butt! For that training and hands-on approach, we could be a good fit.
Our team philosophy is not for most of you who are stuck in the old-fashioned ways of real estate. 100% of nothing is still nothing!
Why are you doing this? Why not focus on your own business, and relax?
There certainly is no shortage of “coaches”; seminar givers and assorted self-anointed gurus in brokerages selling themselves and their information to agents because they must. The income from their commissions is slipping, so, hey, why not be a weekend guru? They see others’ promoting re-hashed 20-year old leftovers and other 2000’s cold-prospecting techniques and figure- hey, why not me too?
Early in my real estate career, I was led down the primrose path. I gladly followed; why reinvent the wheel? I worked long hours, the 60, 70, 80 hour weeks, taking any client I could get (too often, ungrateful, disrespectful, unqualified buyers, tire kickers and more interested in me being their taxi driver. At the end of most weeks, a low bank account and low self-esteem!
Some told me to advertise more and be patient, by others to work harder and be patient, by most to keep getting better as an agent and surely “my time would come.”I need to “get my name out there” more.
I joined several leads groups in hopes of getting referrals (I’ll tell you a ‘horror’ story about this in a minute) but, what I discovered is, these groups were little more than ‘support groups’ for the struggling…more of a ‘pity-party’ and place to complain than anything else.
The on-site brokerage training and ten-year-old marketing plans were not sufficient!
I attended a Chamber of Commerce meeting, only to discover that nearly 70% of the people in attendance were real estate agents like me, searching for prospects, worse, like vultures competing for the same picnic basket.
I joined the Rotary club, the BBB, the London Property Managers Association, the London Chamber of Commerce, etc. I met some great people and learned a lot, but in truth, it cost me more to join than what I ever earned.
After months of this, I finally decided to bite the bullet and attend a high-priced seminar. Desperate, I ended up buying a $10,000 per year plus coaching program -here’s what I learned: how to generate hundreds and hundreds of terrible leads.
I (regrettably) flooded my business with “wannabe” investors and buyers who didn’t give a shit about my time, who stood me up, one appointment after another- and never bought a single property.
Beyond struggling, I even went down the path of the “mind power secrets”-you know, the Tony Robbins stuff, mystically attracting clients and prosperity if only I could get my thinking right.
The fact is, these ”solutions” have been peddled since the days of the hula hoop back in the 1960s. The failure rate of Realtors hasn’t improved one iota, the security of agents hasn’t improved, and the average # of homes sold by agents hasn’t improved- and this suggests that the best way to stay a ”poor person” is to continue to tow this line and operate like everyone else.
According to CREA’s latest report, the average median income for Realtors is around $38,00- but what’s more telling is, Realtors with two years’ experience or less make just $8,600, while those with 16 years experience, only $53,900. When most Realtors can’t earn a decent living, it suggests a need for radical change.
In Ontario, the range of employee compensation is $35,000 to $80,000 per year; paycheques are weekly or bi-weekly, less stress, less worry, less uncertainty, perhaps weekend off or 35 hours max a week!
If I were taking all the risk and enduring all the pressure of being the provider, and if after 16 years, I was only taking home $53,900 per year, I’d be embarrassed, depressed and demoralized.
Hopefully, you are making well above $50,000 per year, but it is evident just how flawed the traditional approach is, and you must ask, even if you are doing well, how much better could you be doing?
Or get this, I had a realtor speak with me the other day, he told me he made $46,000 last year, and his expenses were $47,000! A former top producer told me, in tears, that her one-time “strong referral” base is no longer referring enough and feels helpless, with no control over her income. Her home is heavily mortgaged, her credit cards maxed, and her nights sleepless; this is not uncommon.
Dedicated and hard-working Realtors live on the thin ice of low commissions and debt, now paying the price for having created a business dependent on others to bring them business instead of implementing a model that puts them in total control over their fate.
Watch For Part 4