Most likely, you chose to get into real estate or are thinking about a career change into real estate because you are an independent person wanting to enjoy the benefits of running your own business. Real estate allows you to be your own boss, set your own schedule, and generate levels of income reflected by your efforts and not a corporate hierarchy. These benefits—coupled with a relatively low barrier of entry and financial investment without the headache of employees—make real estate a very attractive career path.
The challenge for many is not “if” I should do real estate, but “how” I should do real estate. If you don’t make the right decision, you may find yourself disappointed and frustrated with your results. In fact, the median gross income for Realtors was $39,200 in 2015, as stated in the National Association of Realtors’ 2016 Members Profile. At the same time, agents at this income level spend, on average, $8,400 in expenses. Then once Uncle Sam gets his cut, the take home pay for the average Realtor is less than satisfactory.
Here are the biggest problems that often lead to this result:
- Lack of support & direction from their broker in charge
- Lack of systems & technology
- Low commission splits
- Monthly fees (nickel and diming)
- Marketing expenses
- Non-collaborative work environment
- No leads
- Lack of freedom to brand yourself and protect your referral base
- Losing out on buyers and listings to other agents
Out of necessity, many agents look to webinars, real estate conferences, Facebook groups, or the latest lead generation programs to help them discover the “secrets to success.” Education and knowledge are extremely powerful and helpful, but if you don’t resolve the underlying issues, the problem remains.
The structural issues that will prevent you from making serious money over the long term are:
- High expenses in the form of low commission splits, monthly fees, franchise fees, marketing expenses, etc. At the end of the day, it’s how much you take home.
- Investing your time and effort to build someone else’s brand—not yours. Past clients and their referrals are critical to your success. For Realtors making over $150,000 a year, 57% of their business comes from past clients and referrals from past clients.
My name is Frank Free, and in addition to being the broker in charge and the owner of Lake Realty for 26 years, I have taught as a North Carolina licensed real estate instructor. I have advised many agents on how to grow their business and thrive at real estate. In fact, several of my agents have gone on to run their own successful brokerages.
Through the years, I have seen hundreds of models and firms and watched agents struggle to find the right fit. Like most things in life, real estate is about tradeoffs. Often these tradeoffs feel like choosing the lesser of two evils.
On one end of the spectrum, you can choose a transaction-based model that simply charges a fixed transaction fee for each deal. While the 100% commission is alluring, there are two areas in this model where I see agents run into trouble.
- Lack of support and response from BIC. Let’s face it, the model only works if the firm has lots of agents doing lots of deals. However, if you are in the middle of a deal and you need help, you don’t have the time to make an appointment.
- Out-of-pocket expenses. You are responsible for covering all of your expenses (marketing, lead generation, CRM, etc.), so when you factor in these expenses, your actual cost is higher than the transaction fee suggests without getting the support you need.
On the other end of the spectrum, you can join a team whose team leader will act as your mentor. For many independent-minded people, the low commission splits and lack of freedom is a major negative. On top of that, you’re spending your time and effort to build someone else’s brand instead of your own.
As an owner and as a Realtor, I felt like there had to be a better, balanced alternative. My goal was to take all of the benefits of a full-service brokerage and match it with one of the most attractive compensation plans around.
I’m thrilled to share what we have developed. Here are the benefits of our full-service brokerage, at no extra cost to you: Watch Video on Benefits & Compensation Plan
- A personalized website with an integrated CRM powered by TorchX. The individual agent package costs $399 a month plus the $949 setup fee. For more details, visit torchx.com (Your Cost=$0)
- Circle Pix’s hassle-free marketing program, which costs $500 per year. For more details, visit circlepix.com (Your Cost=$0)
- A branded newsletter, which costs $20 to $45 per month. For more information, visit mynewsletterbuilder.com (Your Cost=$0)
Office & Print Materials:
- Announcement cards & envelopes (Your Cost=$0)
- A pre-listing package, including: (Your Cost=$0)
- A biography insert
- A “What Others Say” insert
- A “Home Selling Insights” booklet (Click Here to view)
- Nine home selling tips
- Standard copier usage (Your Cost=$0)
- Office space to meet clients (Your Cost=$0)
- Open house signs (Your Cost=$0)
- A transition package (if coming from another firm) (Your Cost=$0)
- From Frank Free, you will have direct access in office or by cell phone to the broker in charge of 26 years.
- From Chip Free, you will have direct access in office or by cell phone for tech support and general support.
- A collaborative work environment—yes, our agents really help each other.
- Opportunity to receive internet leads.
Perks Available to You & Your Clients:
- 15 foot moving truck (Your Cost=$0)
- Lake Norman boat tours (Your Cost=$0)
- Branded Lake Realty display tent (Your Cost=$0)
- A power washer, cornhole boards, and more. Check out perks.lakerealty.com for more information. (Your Cost=$0)
Cutting Edge Compensation Plan:
- An 80/20 split until cap
- An $18,000 cap and then a 100% commission with a $500-per-transaction fee*
- A revenue sharing plan where you’ll receive a percentage of revenue from recruiting up to seven levels deep.
Your only required expenses are a $20 per month errors and omission insurance fee (which starts when you have first contract), MLS dues, a supra key fee and the requirements for a NC Licensee. Internet leads from our leads program pay a one-time 25% referral. *Lake Realty-generated sales are excluded from cap total and cap program (i.e. internet leads, walk-ins, and company phone leads).
How do we get results?
To answer that, I want to share the story of two current agents of ours—Sue Nichols and Ana Sturt.
Sue Nichols started her real estate career with Lake Realty three years ago. Before real estate, she was a successful business analyst for an insurance brokerage firm. She made the career change because she was tired of all the traveling and “living out of a suitcase.”
- In 2014, Sue had 14 transactions which generated $3,512,190 in sales volume and $74,706 for her commissions. Six of her transactions (43%) came from the Lake Realty leads program.
- In 2015, Sue increased her sales to 23 transactions—$5,400,225 in sales volume and $107,857 for her commissions. Seven of her transactions (50%) came from the Lake Realty lead program.
- In 2016, Sue closed 23 transactions again, but the average sales price jumped significantly. This drove her sales volume to $11,470,199 and her commissions to $229,896. Nine of her transactions (39%) came from the Lake Realty leads program.
In addition to the deals from the Lake Realty leads program, she had two deals from office call-ins and seven deals from clients calling her directly from the Lake Realty website. She’s also had four sales over $1,000,000. She accomplished all of this while spending a minimal amount on marketing.
Sue’s success has not only had a positive impact on her life, but on others as well. It has given her husband, who is the pastor of small church, the financial freedom to pursue his calling while also allowing them to help friends and families in need.
Ana Sturt joined Lake Realty in 2015, making the switch from a transaction-based firm due to the lack of support and the high out-of-pocket expenses.
- In 2015, Ana had 10 transactions which generated $2,449,650 in sales volume and $54,480 for her commissions. One of her sales (10%) was from the Lake Realty leads program.
- In 2016, Ana had 12 transactions which generated $4,158,839 in sales volume and $92,078 for her commissions. One of her sales (10%) was from the Lake Realty leads program.
I shared these stories for two reasons.
First, in addition to working hard and taking advantages of the opportunities presented, both Sue and Ana realized an increase in income in part due to a rise in the average price per sale. Because we’re Lake Realty, we receive a lot of inquiries from buyers and sellers whose interests lie in properties on or near the lake. In general, these properties are more expensive, resulting in higher commissions.
Second, both Sue and Ana are relatively new to Lake Realty. On average, our agents have been with Lake Realty for seven years—well above the industry average of three years, as noted in the NAR’s 2016 Members Profile. Your income and growth are determined by your effort—not your tenure.
I would like to extend the opportunity for you to join Lake Realty.
We have a limited number of positions available in our leads program for well-qualified individuals. If you want the benefits of joining a local, full-service brokerage with a cutting-edge compensation plan, then apply today.
Frank & Chip Free