The problem I found is that as I continue to stay with the same format of building and maintaining this business I am finding the I am getting into a position of falling behind.
Let Me Elaborate
The industry is changing. The old model of the typical real estate agent has also changed. The time of an agent joining a company and being loyal to that company is no longer the same. Now, agents take the term independent agent literally, as they should, and the feeling across the industry is every man (or women) for themselves. Granted, that is what it should be, but where does that leave the broker who has worked hard to build a team with the hopes of gaining revenue from their agent’s sales and also from the agent’s share into the brokerage via desk fees, franchise fees, technology fees etc?
Agents have jumped from brokerage to brokerage searching for higher commissions and lesser fees. Why? Because they have taken to the understanding that they are in business for themselves and as every business person should do, they are looking for ways to increase profit by cutting expenses and increasing volume with higher commissions. If the industry is moving slowly then they are forced to become more efficient in their approach to the business.
Where Does That Leave Us?
It leaves us in a position of doing the same thing independent agents are doing, finding ways to increase profit and cut expenses. The problem is that we depend on the independent agent to help cover the overhead by bringing to the table the income revenue stream mentioned above. If we don’t have agents bringing in the sales or paying fees than we are left to our own resources and thus find ourselves in a position of either being our own top agent or expect a few big hitters to generate enough sales to keep the company afloat.
So that is where we are at today. We are looking for the magic carrot to hold in front of the lingering agent with the hopes that they will contribute to our income stream. Unfortunately, we have little to offer them that is any different from any other brokerage firm.
Sure there are agencies that claim to offer more or better training. But let’s face the facts. Today on the internet an aggressive agent can get all the training they need and if they apply what they learn they can become just as successful as an agent that sits in a classroom atmosphere. Even some of our CE can be done over the internet, which confirms the fact that even the NAR and local boards conclude the training on the internet can be just as effective.
Some of the larger franchise names can offer leads from their referral programs, but let’s face the facts. Any aggressive agent with enough ambition can put together a web site that can generate leads daily.
The Traditional Brokerage Is Quickly Changing
Many agents now prefer to work from home and find that, when disciplined, they can generate their own qualified leads and thus eliminate the fees associated with working from an office. Not to mention they don’t have to deal with all the competition and frustration of working in an over staffed firm. It doesn’t take much for the agent to realize that the fees charged to be associated with the firm are only in place to pay the broker’s bills.
There was once a time when it meant something to be associated with the big firms. When magazine and newspaper advertising made the phone ring so it was really worth it to have floor duty because it actually generated leads. Not anymore. Now an agent, even a new agent, through the internet can establish themselves as an authority in their niche and thus generate enough leads to make a good living without the branding of the national real estate companies.
So now the brokers are forced to find new ways to attract agents, offer them higher commissions, lower fees and good training without losing their firm to such a fate as closure due to lack of profits. The fact of the matter is that as the broker offers higher commissions and lower fees, the only recourse they have to generate more income is to bring on more agents with the hopes that the additional volume will offset the loss of profits.
A Long Awaited Concept Has Finally Materialized
Not necessarily a new concept, but one that has been perfected to the point of making it attractive to both agents and brokers. We have seen companies in the past experiment with recruiting and profit sharing programs much to no avail. Agents are not attracted to them because the recruiting income does not generate enough residual to keep their interest.
What if an agent had the opportunity to make money on every agent they recruited, not just on their immediate recruit, but on every new agent recruited by their recruit? Take it a little further and give them the opportunity to make residual income on 7 levels of recruits. Now, as a broker, put yourself at the top of the list. You start the cycle. Instead of charging office fees to generate income, give your agents the opportunity to generate another stream of income for themselves and thus generate for yourself, or your firm, the additional profit needed to keep your brokerage operating.
Take a look at this Revenue Share Calculator
Just for the sake of numbers put in the standings of your present firm. On the average, how many homes do your agents sell, at what price and commission? On the line for personal recruits put in the amount of agents you have in your firm.
Take the numbers a step further. For the sake of an example let’s just say each of them only recruit 1 person each. Of course there will be many that won’t bring in any new people, but there will also some that will bring in 10 or more.
Watch What Happens
To The Numbers
Now take a new look at running the business. Your overhead will virtually be eliminated. You won’t need staff people, no closers, no admin, no receptionist, no trainers, no web site etc, etc. No E & O insurance. You can even eliminate your building because you won’t need that either. You don’t have to store any files because eXp is paperless
The end result is that the bottom line of this Revenue Share Calculator is your bottom line! Go ahead – play with the numbers. What would happen if each agent brought in 2 recruits? The numbers are astounding.
I guess you can argue that you would be losing the income derived from the income splits. Not really because for that revenue to be generated it requires you to carry all the overhead. Add up those numbers and see what your bottom line looks like. I read once that a broker makes on the average $135.00 on each sale after all overhead is cleared. Watching my own numbers I found that to be close to true.
I am sure you can see that I am excited about eXp Realty. Through the virtual environment I have met some of the biggest producers in the country. It’s just unbelievable how the business is run today. I have spoken directly with the President and the CEO almost every week since I have been with the company. For those of you who work for the big firms – try to get hold of the CEO or President today to discuss business and see if it’s possible. Chances are you won’t get through.
If you have been in the business 10 years or more, you will remember the days of the big MLS books we used before the MLS went live on the internet. You will remember that there were agents that struggled with learning how to use the MLS online. Some even refused to do it. Of course they’re gone.
Now, again, there is a new shift in how we do business. We have a choice. We can jump on board with the new technology or succumb to the same fate as those agents who didn’t think the MLS would survive on that internet thing.
Take the time to go through this presentation. Play with the Revenue Share Calculator a while. Give me a call if you wish – I would be glad to talk to you. I will even share the President’s direct line with you so you can get all the details.
What you don’t want to do is wait and see what happens. You can already see that technology is moving fast in this business. Don’t you want to be with a company that is on the cutting edge?
Hit the link below for the presentation. You’ll be glad you did.
There is way too much information to share in this text. The easy way to explain to you what eXp has to offer is for us to meet in the virtual world and let me show you around.
Give me a call on my direct line and let me invite you into my office. You are going to love what you see.
Call me direct if you have any questions or hit this link to contact me privately
Nana Smith (203) 858-6727
If you don’t have time to call fill out the form below and I will be sure to get back with you.