Selling Soulfully with Jennifer Allan

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Why She Lost the $700,000 Buyer...

Her heart is broken. She feels rejected. She wants to hang up her real estate license and crawl under a rock.

Why? Because her $700,000 buyer prospect choose another agent.

She's beating herself up. She's asking herself, "Did I not dress the part?" "Was my car not nice enough?" She wonders if she should have worn her fancy leather boots and more make-up (this is Texas, after all). Maybe she should have borrowed her sister's Mercedes SUV.

No, no, I assure her. It's not your dress or your car. It's actually worse than that. Worse, as in, it's going to be a little tougher for her to swallow.

I'll bet 100 pennies that the Other Agent knew the market better than my broken-hearted friend. I'll bet that when the Buyer met with this Other Agent, the Other Agent was able to speak intelligently about the $700,000 market and even mention a few of the listings she was familiar with. I bet she got the Buyer all revved up and excited. I bet she said "Oh, you must see this new listing that just came on the market yesterday! It has two master suites, both with Jacuzzi tubs, a beautiful view and the most amazing gourmet kitchen!" She probably then clinched it with, "Are you free on Saturday? Around 10:00?"

Now that, my friend, is how you capture a $700,000 Buyer. By knowing the market and speaking intelligently about it. When you know the market, confidence oozes from you. And confidence draws buyers to agents like bees to honey.

And of course, closing the deal by making an appointment. As soon as possible.

But here's the good news. For my friend. Before discovering that the $700,000 Buyer had ditched her, she previewed, previewed, previewed. She now knows an awful lot about the upper end market in her Texas town. The next time a high-dollar prospect knocks on her door, the conversation will go much differently. My friend will know how many bedrooms and baths $700,000 gets you. How many acres and how many garage spaces. She'll know. She'll speak with confidence. She'll make the appointment. She'll get the buyer.

When you're new in real estate, you can't know the nuances of every neighborhood, of every price range. That takes time and experience. But you can hurry up the process with aggressive previewing. As your career matures, you will be familiar with more and more neighborhoods. You'll speak more intelligently about them, more of the time. Your buyer closing ratio will improve every year. It's something to look forward to...!

One thing I should add...this $700,000 Buyer found my friend from the Internet. Internet buyers are fickle. They tend to vaporize. Sure, some will pan out, but many will not. In fact, I wouldn't be surprised if this Buyer ditches her new agent, because she's probably still calling around. Heck, she might even end up back with my friend, you never know.

In any case, my friend is resilient, and I bet she wakes up this morning with a renewed commitment to becoming the expert in her market. Today. Let's see, it's 6:21 am on Sunday morning. I bet she already has her game plan in place.

 

 

 

copyright Jennifer Allan 2007

 

 

The New ACRE® is HERE!   

ACRE 

 

 

http://www.theconsultingprofessional.com

 

Real Estate in Jammies (part two)

(To read Part One, Click Here)

... In retrospect, I realize that the ability to work from home changed my life. For the first time, I truly flourished and discovered a creative side to myself I'd never known existed. Being somewhat shy and a bit of a privacy freak, working in an office made me feel self-conscious and ‘on display' all the time. And it was so distracting! I need peace and quiet to focus. I need a sense of privacy to recharge my batteries. Surrounded by chatter, I feel myself getting anxious and frazzled. But that's just me.

The other thing that annoyed me about working in the office was sharing equipment with other agents. The copier was always jammed (and abandoned), the fax machine always in use (or jammed & abandoned), the printer was out of toner (and abandoned) or the central computer was frozen (and abandoned). Real estate agents can be a bit self-absorbed and technologically challenged which is a bad combination when you're sharing vital office equipment.

If you're Just Like Me, give some serious consideration to setting up a true home office, and not just a corner of the dining room for your computer desk. You'll need your own room, preferably away from any hustle and bustle of the living areas of your home. And not just to ensure your peace and quiet, but so that your family doesn't feel as if they live in a real estate office. In many of the homes I've lived in during my career, my office was set up in a central location in the home and when I was married, my husband deeply resented it.

The phone rang constantly and I was always working, right under his nose. He felt neglected and ignored - that my business was more important than he was, and that his home was not a sanctuary from his own busy work day. Had my office been separate from the main living area, he could have enjoyed his own solitude and peace, but the way I set it up, he could not. It seemed to him that the whole house was my office and not our home.

So anyway, if at all possible, find your own space that won't interfere with family life. Once you get busy, your phone will ring constantly and you will need to be able to escape from your office too! That's hard to do when your office is in the dining room.

You'll need a good working desk in addition to a computer desk. You'll need plenty of shelves and drawers. The more horizontal storage space you have, the happier you'll be. Storage is the secret to happiness in your home office! You'll need some good file cabinets, a fax machine, a telephone with speaker, desktop file storage, a fax machine, a postage meter, a 3-hole punch, a paper cutter, a paper shredder, a few reams of presentation paper, a box of regular copy paper, legal paper, labels, scotch tape... etc., etc., etc. A multi-function fax/copier/printer/scanner is a necessity.

One year, I got overly ambitious and purchased a $2000 color laser printer because I thought I was a big shot and needed it. Don't do it!! That monster cost me $1000/year in toner and other supplies and broke down at least twice a year. It was too heavy for me to move, even two feet across the room. I'd rather wear out a couple mid-quality multi-function machines every year than deal with that beast again.

Do not use your home phone as your business phone unless you are the only one who ever answers it AND you answer it professionally every time. Use your real estate office address on business cards. After I got to the point where I worked exclusively at home, I was comfortable meeting my clients there, especially when preparing purchase offers. You may or may not feel the same way. For me, it's just easier to put contracts together on my own computer, rather than figuring out how to work the computer and printer in an office I rarely visit. It's worth the half an hour I have to take to clean up my house! Perhaps it isn't as professional as meeting in a stuffy office, but it works just fine for me.

If you work from home 99% of the time and are willing to give up your desk at your real estate office, you may be able to negotiate a better commission split. After all, the broker can put another agent at your desk (more $$$ for him) and you aren't using the office resources to the extent that the other agents do. Many companies offer an alternative split for agents who work from home, although it may not be available to you until you've been selling real estate for a year or two. Working from home can be expensive - aside from the obvious costs of stocking your own supplies, you're also using your own electricity all day long! Don't underestimate this - my utility bills were twice what they "should" have been. But maybe you'll offset that by not eating out as much... after all, your refrigerator is just down the hall.

http://www.sellwithsoul.com/

copyright Jennifer Allan 2007

 

The New ACRE® is HERE!   

ACRE 

 

 

http://www.theconsultingprofessional.com

 

Real Estate in Jammies? (part one)

Should you work from home or from a real estate office?

For some, the answer is obvious. The majority of salespeople prefer the busyness and chaos of an office. They need the social interaction and would be unproductive at home. They claim that they can't work from home because they'd be too distracted and wouldn't get anything done. If this sounds like you, you have your answer. Start working toward getting that corner office with a mountain view.

For those of you like me, naturally introverted, you may find yourself working primarily from home already. I did. Within one week of beginning my real estate career, I had a full office set up in my home and only went to my Coldwell Banker office a few times a week. I didn't do it intentionally; it just naturally happened.

Don't force yourself to go to the office if you're more comfortable and productive at home. Being an introvert all my life, I always felt a little guilty that I preferred my own company to the company of others. I forced myself into social situations that were disastrous for my peace of mind and productivity. For example, I joined a sorority in college (what was I thinking?) and when I noticed I wasn't fitting in, I decided to move into the sorority house for a semester. What a nightmare - no privacy, no personal space, no control over my environment. For an introvert, this is Bad. We need our privacy, space and control to function.

When you go to the office, do you feel as if you're productive? Creative? Ambitious? I found that when I forced myself to spend time in my real estate office, I could get my to-do list done, but not much else. My creativity seemed stifled and my motivation low. I need my own space to pace, to talk to myself, to do a few sit-ups if the mood strikes. Or even take a power nap.

When you spend time in the office do you feel energized when you leave or drained? Do you enjoy the other agents in your office or do they get on your nerves? When you walk in your door at night, do you stumble in, feeling as if you just put in a long day at the office? Or pleased with yourself and eager to go back tomorrow? One of the many benefits of a real estate career is the escape from the drudgery of a nine-to-five job. The euphoria of being your own boss and controlling your own destiny (in between all those feeling of confusion, anxiety and frustration). Your work environment may very well be the key to finding the euphoria.

(to be continued...)

http://www.sellwithsoul.com/

copyright Jennifer Allan 2007

 

The New ACRE® is HERE!   

ACRE 

 

 

http://www.theconsultingprofessional.com

 

Real Estate Is Not a Numbers Game

Real Estate Is Not a Numbers Game!
(at least, it doesn't have to be)

You've heard the cold caller's philosophy...for every 100 phone calls you make, you'll get five appointments; for every five appointments you go on, you'll get one listing. Therefore, if you make 500 phone calls, you can count on five listings as a result. If your average listing commission is $5,000, then every phone call is worth $50 since it takes 100 phone calls to get a listing. Supposedly you will actually start to enjoy each rejection, because you realize that every 99 "no's" equals a "yes" which leads to a paycheck, since every "no" means you are one step closer to a "yes." Sound fun?

Not to me. In fact, it sounds like an awful way to make a living. Pestering people for three hours a day asking the poor sap who answers the phone if he "knows anyone who's thinking of buying or selling real estate?" Being rejected 99 times out of a hundred, voluntarily? Ick. Phooey. Blech.

So tell us how you really feel, Jennifer!

Okay, thanks for asking, I will.

The State of Colorado's Division of Real Estate did not grant me a real estate license so that I could be a professional prospector. I have to assume that good old DORA intended for me to spend a significant amount of my time serving the clients I am honored to have today instead of tracking down the ones I hope to have tomorrow. Taking good care of my listings and my buyers. As my first priority. Not as an afterthought when I can squeeze them in around my prospecting and networking efforts.

But, but, but....!

Yeah, I know. As self-employed types, we have to ensure ourselves a steady stream of business to keep the home fires burning in the style to which we intend to become accustomed. Hey, believe me, I never took a vow of poverty and I don't sell real estate out of the goodness of my heart. I've had $50,000 months before, more than once, and I could happily get used to that!

But you know what? I have never cold called, I have never knocked on a stranger's door... in fact, I've never even asked a stranger for business. Ever. No, not even FSBO's or expireds.

For ten years I have depended on my SOI for 100% of my business. And they have generously delivered. Sure, I've picked up the odd client here and there from floor time or open houses; maybe two or three a year, which is nothing to sneeze at. But the vast majority of my business comes directly or indirectly from the people I know or meet.

And every client is special to me. Even precious. Okay, admittedly some are a pain in the ass, but I still appreciate their business and the juicy commission checks I get as a reward for putting up with them. But most of my clients are pleasant people with a real estate need who simply want to be treated as if their business is valuable to me. Not like a number.

When you depend on your SOI for business, you bow out of the numbers game. And it's wonderful. No more dragging yourself to the phone for your daily cold calling session. No more searching the real estate ads for your next FSBO target. No more beating yourself up because you'd rather take a nap than finish up your 10 HouseValues CMAs that are due today.

When your pipeline is running low, you have a little Super Bowl party. Or send out some friendly personal emails. Or ratchet up your "take-a-friend-to-lunch" campaign. You don't need 20 more clients today; just two or three good ones will restore your mood. And pad your bank account.

SOI business is good business. It's loyal business. It's fun business. The success ratios are more like 50%-75%, compared to 5-10% from traditional lead generation (and that's being optimistic!). So if you get 100 leads from your SOI, that will result in 50-75 closings from you.

So how does it work exactly? Glad you asked.

SOI business comes in one lead at a time. But the leads are good leads, leads that will likely result in a closing. And, depending on your market and your broker split, each lead-that-will-probably-result-in-a-closing is worth thousands of dollars to you.

So let's say you have 20 close friends. If you have implemented a respectful, consistent SOI campaign, you, obviously, are the agent of choice for most of them if any happen to need a real estate agent this year. Maybe that will only get you one or two sales; or maybe your friends are a restless bunch and you'll get five or six.

You should also get the family business of your 20 nearest & dearest. Katie's grandma moves to town to be closer to her grandchildren. Fred's brother-in-law needs a referral to a Las Vegas agent. Maria's sister gets engaged and needs to sell her condo. Her fiancé wants to sell his too. There's a good chance you'll get first dibs on this sort of business. So let's say you pick up three family members.

Let's not forget everyone else your 20 friends know. If just half of your friends refer you to just one person, that's 10 more clients for you. What if all of your friends refer you to one other person? Or if three of your friends each refer you to five of their friends? What if you have 30 friends? 50?

Oh, and what about everyone else in your SOI? The other 150 people you know and stay in touch with? Your husband's assistant? Your dog trainer? Your massage therapist? Depending on the strength of your SOI campaign, you might see 5-15 sales a year from these folks.

And we haven't even talked about the NEW friends you're going to make over the next 12 months! If you're out there in the world, with your antenna up, you will run into people who happen to be in need of real estate services. If you approach them right, that business is yours. Maybe that's another five sales for you.

So add it all up and you're selling some real estate! All without treating anyone like a number.

Unless you're striving to be a mega-producer with 10 buyer agents scurrying around underfoot, you really don't need to go after every buyer and seller in town. This is what I mean when I say that Real Estate is Not a Numbers Game. The business that you can generate from your SOI and from your own social encounters really ought to be enough.

And the best part? If you spend a few years building a strong cheering section (i.e. your SOI), you can coast through the rest of your real estate career. NO prospecting, NO marketing budget, NO sleepless nights worrying about where your next closing is coming from. Now, that's a lifestyle I could get used to (and I have).

Sell with Soulhttp://www.sellwithsoul.com/

 

copyright Jennifer Allan 2007

 

The New ACRE® is HERE!   

ACRE 

 

 

http://www.theconsultingprofessional.com

 

I'm a Reluctant Prospector

What's the Difference Between an Extrovert and an Introvert?
An Extrovert is someone who gets his or her energy from being around others; an Introvert is someone who is energized by being alone. When an Extrovert is left alone for long periods of time, he becomes lethargic. Conversely, an Introvert will be exhausted and drained after a day of social interaction.

I'm naturally shy. Not wallflower shy - I'm not afraid to speak in public and I was even a cheerleader in high school, but shy as in... socially uncomfortable. Small talk is a foreign language to me. I've faked more than one twisted ankle to get out of attending a wedding or baby shower, and in college, I was placed on "social probation" by my sorority because I didn't attend enough parties.

So in 1996, I made the obvious career choice and entered the world of real estate sales. Funny, huh? No, actually, I did it because, like many other budding real estate moguls, I planned to buy and sell my own properties and get rich. Perhaps, if I had time, I would try to squeeze in a few clients here and there to make sure the bills were paid while I was building my own empire. But I never planned to be a "Real Estate Agent." No, I knew I was too shy to succeed in a business dominated by charismatic extroverts.

Fast forward ten years. I am a real estate agent and a darn good one. A successful one. Yet I've never made a cold call, I've never knocked on a stranger's door to ask for his business. No, not even in my first year.

It's funny that no one ever admits to hiring a salesperson based on their ability to B.S. their way to a sale. Yet high-pressure, can't-be-bothered-with-the-details sales people get hired every day because they're likeable. Bully for them. There are plenty of sexy programs and glitzy seminars out there for the extrovert to develop their natural skills of prospecting and networking. If you're shy like me, don't waste your time or money. The strategies directed at extroverts won't work for you. You might even be discouraged from a career in real estate if they convince you that you can't succeed without putting their high pressure tactics into play.

Don't misunderstand, there's nothing wrong with being socially adept. I wish I were. With all my heart, I'd love to be a social butterfly. But I'm not and yet I have succeeded in a business that has traditionally been lead by dynamic, outgoing, ‘natural' sales people. You can too.

Contrary to popular belief, you can succeed in real estate, even if you're not an extrovert. In fact, you can be great, but only if you're GOOD. Good at the details, good at the paperwork, good at negotiating, good at the follow up. If you can't distract & dazzle them with your charm, you can still blow them away with your competency. And isn't that more rewarding anyway?

You are probably already a bit of a stickler for details. You are probably already reliable, organized and efficient. These skills will take you much further than you might suspect in your real estate career. And you know what? Your shyness might actually be a big factor in your success. If you consider traditional real estate prospecting and closing techniques too invasive and assumptive for your personality, you will develop your own style that, as a by-product, shows respect for your prospects and clients. You will treat them as if they are intelligent human beings, which they will truly appreciate and find refreshing.

Throughout my ten years of successful real estate sales, I have come up with many techniques and strategies that are well suited to a less-than-bold personality style. I'd be happy to share my ideas with you... just drop me a note with your specific question or dilemma and I'll respond as soon as I can.

Just know that YES! A Reluctant Prospector CAN succeed in real estate. And love every minute of it.

copyright Jennifer Allan 2007

www.sellwithsoul.com

 

The New ACRE® is HERE!   

ACRE 

 

 

http://www.theconsultingprofessional.com

 

Are You Tired of Pestering Strangers for Business?

In response to Loreena Yeo's blog, Do You SOI?...

Nine Reasons to "SOI"

1. Generating business from your Sphere of Influence is fun. A good SOI business model includes lunch dates, housewarming parties, afternoon BBQs, friendly email exchanges, cocktails and football games. Conversely, mass marketing to strangers involves stuffing envelopes, paying for postcards, licking stamps, disturbing day-sleepers, shaking off rejection and designing newspaper ads.

2. Generating business from your Sphere of Influence is relatively cheap. Getting your SOI campaign up and running will cost you a few pennies, but no where near what you'll spend promoting yourself to strangers. You'll probably need to design, print and mail a newsletter or two, which might run you around $500 depending on the size of your SOI. You'll probably do Christmas cards and send out some cute "Spring Forward!"-type postcards a few times a year. You might create some high quality magnets and implement a strategy to encourage referrals. You might want to send birthday and anniversary cards, and to invest in a good website and email stationary.

But otherwise, all the money you spend marketing to your SOI will be used on entertainment! Hot wings and beer on Sunday afternoon! All-you-can-eat jumbo shrimp at your house on Friday night! Sushi and sake after work with your best friend!

3. Implementing an SOI business model encourages good habits. When you commit to developing and maintaining a contact database, you're always aware of the new people that you meet. You remember to ask for and write down their contact information, and to input it into your management system. Because the success of your business depends on keeping your SOI current, you tend to be more vigilant with updates (even if you aren't perfect).

You don't forget about the nice lady you met last week at your friend's pool party who said she'd like to talk to you about buying an investment property. You can even find her phone number!

4. An SOI business model minimizes rejection. I don't think anyone, even the most outgoing, charismatic sales dynamo enjoys rejection. Sure, maybe you can develop a knack for shaking it off, but rejection hurts, even if only for a moment. And when you market yourself to strangers, you encounter rejection all the time. Even if it's nothing more than a lack of response to your expensive advertising, it's disappointing and discouraging.

When your business is made up mostly of people who know you, or who were referred to you, you are rarely rejected. You may not get every piece of business that crosses your path, but when you don't, it's usually for a reason other than a lack of salesmanship.

5. An SOI business model increases your accountability. When you are working with friends or referrals, you want to do a GREAT job! Contrary to what some might believe, you won't be tempted to let things slide just because you have a personal relationship with this person. You will want to impress them and even show off a little. This is good. When you do an exceptional job for one client, you've raised your own bar a little and will feel the need to do as good a job for the next... and even better for the next. Before you know it, you're an extraordinary real estate agent!

6. Business generated from your SOI is easy business to get. If your friends and your friends' friends think you're a competent real estate agent (or even just a generally competent person), "interviews" will be a slam-dunk. You'll rarely have to compete for listings and buyers; they're already predisposed to hire you.

7. Business generated by your SOI tends to be better business. Assuming that the people you know are people you respect and would like to do business with, it just makes sense that the business generated by them will also be business you'll enjoy. On the other hand, people who wander into a real estate office, visit an open house, or answer a newspaper ad may not be as qualified, motivated or loyal as you would like. Agents who depend on such marketing venues often find themselves working with buyers and sellers who aren't ready to move, or who are working with several different agents around town.

8. Once your SOI is "built," you can coast through the rest of your real estate career. Sure, your SOI will need ongoing maintenance, but you'll never have to do another day of prospecting. If you spend your first 4 years building a truly great SOI, it will take care of you the rest of your days. In the last five years of my career, I relied solely on business generated by my SOI. Thus, my personal promotion expenses were next to nothing and all my working hours were devoted to my (many) clients. I was able to make a six figure income working less than 30 hours a week. It was a beautiful thing.

9. And finally... and most importantly.... An SOI business model WORKS. It just does. The people who know you and care about you really want to help you. Truly, they do. They are much more likely to remember your name when the topic of real estate comes up in conversation and they are certainly more likely to put in a good word for you.

sell with soulhttp://www.sellwithsoul.com/

copyright Jennifer Allan 2007

 

The New ACRE® is HERE!   

ACRE 

 

 

http://www.theconsultingprofessional.com

 

Unsoulful Attitude #1: "Open Houses are Great for Picking up Buyers!"

 

"The Only Reason Agents Hold Open Houses is to Prospect For Buyers"

Yes, this may very well be true. That doesn't always make it right.

One of the first prospecting techniques new agents learn is how to "pick up buyers" at open houses. Agents are urged to be on high alert for open house visitors who don't already have a buyer representative. Pushing sign-in sheets and personal brochures, agents strive to make their open house "productive" by walking away with a fistful of names and numbers of potential buyers who dropped by. The more contacts an agent makes at an open house, the more successful it was.

But aren't we forgetting something? Or someone? Your seller client, perhaps?

Remember that you are in that home to sell that home. That is your first obligation. Put yourself in the seller's shoes - he or she is excited about your open house and is imagining that you are enthusiastically marketing all the special features of the home - not hungrily trying to build your business. Imagine that the seller is watching you with a hidden video camera (who knows...?) . Don't do anything the seller wouldn't approve of.

Once I showed up at an open house with color printouts from the MLS of other comparable homes for sale. Of course, I was planning to share these printouts with interested visitors to demonstrate my expertise in the market, as well as my willingness to show and sell other homes besides the one I was holding open. The seller saw my printouts and was horrified. It had never occurred to her that I wasn't there solely for her benefit, and frankly, it hadn't occurred to me that this might bother her. But of course it did. Right or wrong, sellers put a lot of stock in your open house and they truly expect the offers to be rolling in by 4:05 pm.

So don't make the rookie mistake of trying to talk to visitors about other homes while they're still taking in the details of this one. Any attempt you make to lead potential buyers away from the home you're holding open would certainly be interpreted with displeasure from your sellers, should they happen to overhear you. If a visitor truly is not interested in the home you're holding open and seems open to hearing about other properties in the area, by all means, offer to help. But not at the expense of other visitors who might be interested in finding out more about your open house.

Something that might help keep you honest (besides the possibility of a hidden camera!) is to remember that some of your visitors may be observing your behavior to evaluate you as a potential listing agent for their home, should they decide to sell. If they see you aggressively marketing yourself and not the home you're holding open, they may decide you are not the right person to sell their home.

Another area of confusion and conflict when holding open houses is when a visitor announces that she already has a buyer agent. This is especially disconcerting to the agent who is not the listing agent of the home, but is simply holding it open FOR the listing agent. Yes, you still need to graciously market the home to this represented buyer. Show her around, politely answer her questions and, if you sense real interest, please don't fuss that you're "wasting your time" on someone who isn't going to become your client. Every once in a while, you might even get to write an offer for a represented buyer, if the buyer is anxious and can't wait for her agent to come back from vacation.

Open houses can certainly be a source of business for you and if handled respectfully, no one will object to your prospecting efforts. Just remember to always put your client first, and everyone wins.

http://www.sellwithsoul.com/

copyright Jennifer Allan 2007

 

The New ACRE® is HERE!   

ACRE 

 

 

http://www.theconsultingprofessional.com

 

Discount Brokerage - Can It Work For You?

I just had a long conversation with one of my consulting clients who works at a well-known discount brokerage. We both had several Ah-HA moments during our discussion and I thought I'd share some of them here since the topic of discount brokerage comes up from time to time.

First, let me disclose that I am in full support of the discount brokerage concept. I owned a discount brokerage that offered full service (above and beyond most full-fee companies) and was proud of my ability to provide terrific service for a lower-than-market fee. And, I made great money. Coulda made more, certainly, but I have no complaints. You can read more about my feelings on the topic in my blog "Our Sacred Commissions."

But back to my conversation. My consulting client has always raved about all the leads she gets from her brokerage firm. She has minimal marketing expenses and claims that her entire business has been built from the leads she gets from her office. She feels a strong loyalty to the company and their model and has claimed that she could never leave them. Fair enough.

But today, I asked her to send me her stats for 2006 so I could prepare a letter to send out to her 2006 clients. I was stunned to see how little her net was... after split. I know how hard she works and how smart she is and she made less than $40,000 in a market where the average price of a home is $300,000.

Two observations come to mind. The first is that in a discounted commission model, there simply isn't enough pie to go around. Her company pays for lots of national advertising that brings in leads and they want and deserve to get paid for it. That's fair. But, since her commission is so low, her company needs to take a big chunk of that commission to pay their bills. Her net commission after split is hardly worth getting up in the morning for! In my humble opinion.

My second observation is the only way for a discount model to really work for an agent is if the prices of the agent's listings are in the upper ranges, rather than entry-level. BUT, who do you think all that expensive national marketing generates calls from? The upper crust? Nope. The vast majority of her company-provided leads were in below-median price ranges. Most agents agree that sellers in upper price ranges are not nearly as concerned with a commission percentage as those in lower ranges. And besides, how comfortable is a $600,000 seller going to be with a "Discount-Broker-For-Hire" For Sale sign in his yard? 

My own discount company worked for me because, as the owner, I got 100% of every commission I brought in. I worked primarily from my strong SOI and my overhead was quite low.

So the moral of the story seems to be... if you want to be a discount broker (and there is NOTHING wrong with that) you may need to do it on your own. If you want the full support of an office (and are willing to pay for it), you will need to charge market-rate. I don't think you can have it both ways.

Am I wrong? Argue with me!!

Jennifer Allan, GRI
http://www.sellwithsoul.com/

copyright Jennifer Allan 2007

 

The New ACRE® is HERE!   

ACRE 

 

 

http://www.theconsultingprofessional.com