It's time for your wake up call...

Rob Hahn of The Notorious R.O.B. put a post up about a week and a half ago that has been sticking with me ever since.  The title of his post, “The Real Estate Story Awaits the Next Chapter” was in response to a post written by Brian Boero of 1000watt Consulting entitled, “The end of the real estate story?”  Why do I feel the need to give you all of the information on where this info. came from?

Because my fiancee and I were part of the “dinner conversation” in real life that Brian wrote about… and because I don’t believe that Brian (as much as I love his writing – and 1000watt is our company consultant that we couldn’t work without) really “got” what Amanda and I had to say.  Here’s the basis of the 1000watt post:

“Have we reached the end of the real estate story now that FSBOs and discounting have lost their menace?”

A. Real estate is exceptional. The complexities and emotions that characterize the real estate transaction will forever shield it from structural change. Bill Gates, Barry Diller and about a billion dollars in VC have been thrown against the barricade with no transformative impact. The story is over.

B. We’re due for a cataclysm. The forces of change, of technological innovation, of inchoate consumer frustration, are stacked high against the dam of Real Estate As We Know It. It will not – it cannot – hold. The story is far from over.

My dinner pals were in the “A” camp. I argued for “B.”

I believe that the “camp” that Mrs. @homepartner and I were in is was more along this line.

“Real estate is exceptional. The complexities and emotions that characterize the real estate transaction will forever force the agent to provide a level of empathy and understanding that cannot be provided through technology, social media, or any other “quick fixes” discussed so often today.  The story is FAR from over, but elements of “real estate basics” will transpire throughout its evolution.”

The model is flawed.  As we are quick to point out, the largest amount of profit money (actual dollars) are generated from the lowest splits.  It’s the “quick buck” element and like a virus…  use, consume, move on.  Not all companies “filter” leads to the bottom quartile, but this “earning potential” does hinder the company desire to elevate agents to “superstar” earning status.

However, there are a number of non-measurables that you need to incorporate into your model.  The top agents (let me rephrase that – the IDEAL top producing agents) provide the following:

1.  Signage
2.  Marketshare statistics
3.  If they’re good pricing agents, good Sales to list price ratio
4.  Brand Awareness through direct mail, signage, etc.
5.  Mentoring of lesser agents
6.  Pride in brand
7.  Leads via advertising, online and print
8.  WOMM through client interaction, marketing, listings, etc.

There’s more, but I think that you get the idea.

The top producers DO however cost much more.  Support, marketing, IT, manager interaction, coaching, etc.  The top agents tend to take advantage of many of the programs, trainings, and tools that a company has to offer as well, not even touching on the fact that top agents tend to take up more physical space with assistants, team members, and often times spend more time in the office.

I talked to a broker out of Miami the other day that actually thrives on the lower producing model.  He spends all kinds of money on leads from sources like Homegain, sells the leads to his agents at 50-65% splits, and trains them to follow directions exactly from listing presentation to buyer interview.  As soon as an agent begins to think “outside the box” and is set to pass the 65% split, he lets them go, keeping their database…  talk about your churn and burn.

Here’s my thoughts for the office of the future:

1.  Get that office full of great, team-playing, top producers together.
2.  Get some killer marketing, IT and coaches together to support them.
3.  Invest in the absolute BEST CRM system on the market
4.  Hire about 10-15 Virtual Assistants to serve them with all of their paperwork, showings, generating feedback, and overseeing marketing projects.
5.  Go to the best website company out there and have them create “The Best” website for your company complete with co-branded agent sites that reflect the company brand to some level – all will utilize the same backend.
6.  Hire a professional PR company that will write all copy for the agents that would go out to their clients (newsletters, blog posts, etc.)
7.  Get involved in every single local organization that you could (softball teams, chamber of commerce, school programs, CSR campaigns)
6.  Institute a “split program” that would start at X% (to help cover your expenses) and charge accordingly for the following

% per transaction to cover the VA’s
% per transaction to cover their website
% per transaction to cover a marketing fee
etc…

I’m a firm believer that if you got a group of top producers together, told them they were going to get x,y,z for their % split and (—this—) is what I’m going to do for you to make your job easier… they would join and would do so happily.

As i said at the Leading RE event, “the time for this us versus them mentality from the broker is dead and over with.  If you approach your business like this, without love for your agents, they will leave you… and i’ll have no sympathy for you.”

Unfortunately, this type of office would take money to startup and this isn’t the market to do so.  But I am confident that 95% of the really good agents in this market would not balk at paying an additional % out of their commission check if they perceived VALUE for what they were paying.

Matt Dollinger
www.theyoufactor.com

Well, thanks to a friend I met on ActiveRain, now you have a (very) thorough list to justify your commission. Connie Olson, a Realtor with Realty World in Orange Park, Florida has put together this INCREDIBLE list entitled, “The REALTOR®’S Critical Role in the Real Estate Transaction”. These over 180 points outline everything from pre-listing activities to your part in the negotiation. Although, some of Connie’s points might not apply to us here in Illinois (as an attorney state), I promise you will still find nearly 100 points that should assist you in justifying that commission.

To access the article that Connie has been nice enough to share with all of us simply CLICK HERE Also, any referrals you might have in the Orange Park, Florida area (See the Map Below if you aren’t sure where this is), send them down to Connie.

Matt Dollinger
@properties

Her website is located at www.flemingislandsrealestate.com

View Larger Map