RISMEDIA, May 12, 2009-I don’t think I’d be going too far out on a limb to suggest that there has been a lot of “soul-searching” within the ranks of real estate licensees.
In fact, it is hard to imagine anyone in the business who has not occasionally thought wistfully about regular hours, a steady pay check, and benefits, maybe.
And, then there is the money thing. Who didn’t enter the real estate business expecting to do great and make lots of money? But, good times-bad times, at least eighty percent of new licensees are doomed to failure by the 5 to 1 ratio of agents to closings.
And, for all the real estate gurus, there isn’t a single one who can tell you exactly how to go about not failing. Not everyone, no matter how ambitions, smart, good looking, ethical, and motivated they are, can succeed no matter what…it just isn’t possible. Only seven percent ever renew their license. And, when you factor in the number of people who renew their license but do not use it, work part time, or are on the verge of quitting; probably only three to five percent are actually earning a living selling real estate.
Local market conditions are beyond your control, and if there is high unemployment, tight money, and fear, these are difficult for even seasoned professionals to overcome
No loaves and fishes magic happening here, there just isn’t enough to go around, period! No miracles, just simple math, five dogs, one bone.
So, do you stay or should you go?
Is there anywhere to go? Another broker? Another job even? It is an important decision because most people never go back once they leave. And, among the readers of this piece, there are a large number who will sooner or later be forced to choose.
First of all, just because you are thinking about giving up, doesn’t mean you should or even that you will. Every business should continue to reevaluate and respond to the market. General Motors comes to mind. But, when the thought of quitting occurs to you repeatedly in a short period of time, it is a sign that you need to do some introspection. If you are unhappy with the results you are getting, that is one thing; if you are unhappy with duties and responsibilities, that is another.
Both are symptomatic of a need to change, but it may be that personal change and not situational change are the real prescription. Where ever we go, what we tend to find is what we bring with us.
Nor, is this the time to rush into anything. With high unemployment plaguing many regions of the country, suitable opportunities may be hard to come by.
The thing about real estate is that once you are licensed and in good standing, no individual can stop you from conducting business. Here are some points to consider and steps to take to make certain that you choose the right road going forward.
Get a deeper perspective on the business.
For all of the “gee-whiz” gadgets and devices that have found their way into the real estate business, it is still being done the same way it was done a hundred years ago. In my thirty plus years, I have always felt that the business was out of sync with the needs and desires of the consumer. That means that there is still untapped business for you to capture. The business just isn’t being done as well as it could be, and that means that there is always opportunity for some.
Real estate is an industry that rarely looks back. There is no awareness of how the specialty derived or how business was conducted as the industry evolved. Today’s real estate leaders are students of their games, but not of THE game.
The industry isn’t much for innovation. It tends to do the same things over and over again. Industry leaders are actually dependent upon the over-surplus of marginally effective associates. That is their business plan. When I started to manage my first office in 1980, my regional VP gave me two pieces of advice, “Ya got a third comin’, a third stayin’ and a third goin’ so ya gotta’ keep recruitin'”; and, “If they can make steam on a mirror…hire them.”
And, that is where perspective comes in. Most practitioners are affiliated with large brokerages which tend to be in the real estate agent business. The benefit is that they often have the nicest offices with the best equipment, but they also tend to have high turnover. The focus isn’t on helping existing agents succeed as much as it is finding their replacements.
Being aware of the difference, you can now determine if that business model best suits your needs.
I know for a fact that most agents would rather have an experienced person to provide training as needed than all the formal training in the world. If that person isn’t in your office, you need to find someone.
In 1921, award winning author Sinclair Lewis wrote a book about a fictional real estate broker, George F. Babbitt. This is a must read. What is noteworthy is the authors disdain for, not only, the man but his profession, and how little the business has changed in nearly ninety years. http://www.fullbooks.com/Babbitt.html.
Which raises an important question, do you like the business? I once had a former agent explain her decision to leave this way; “Everyone lies, everyone is angry, they expect me to solve all of their problems and, in the end, everyone tries to screw you out of your commission.”
Ouch! But, that was her experience; it was very disheartening and understandably so. Real estate is a slice of life. All kinds buy it and all kinds enter the business. The experience one is having is often a reflection of the methods one is using to develop business.
If you are dependent on others to generate your clients, you have little control over who you will be working with. While you may be tempted to take anybody, anytime, you will waste a lot of time and emotional energy for not much money.
As you continue your search for perspective, watch the movie version of Glen Garry Glen Ross. This is the “Scared Straight” of the real estate sales business. You’ll never want to work “leads” ever again. For you to feel comfortable that you can always make a living, you need to figure out a way to develop your own business.
Determine your unique value proposition.
In order to stand out from the herd of look alike/sound alike agents, you need something of your own that has value to the customer. What do you bring to the table that the best customers want?
What’s hard about real estate? You may think it’s hard, but the customer doesn’t.
Discount your fee?
Doesn’t that make your entire value proposition that you work for less? At a time when fewer sales are occurring that makes little sense from a business perspective. Besides…what’s unique about it?
Remember, your ability to convince a client to retain you and your ability to obtain a fee comparable to your value are the same.
Are you diligent?
Well, that’s worth something at least. Too many in our industry are slap and dash artists, who miss important deadlines, toss the paperwork in the trunk and rush off looking for the next pigeon.
Are you pleasant?
I know it doesn’t sound like much but a lot of agents succumb to the stress and anxiety, and lose either control of their emotions or their respect for others. Oddly, it seems to work for some, but I don’t recommend it.
Do you provide expertise?
You can’t if you don’t know anything. But this is the one place where you are in complete control. This could be your market advantage because there isn’t much competition. We need to be honest about this; there are an awful lot of agents who haven’t got a clue.
Target an area of homes you really like. Learn everything you can about them and the surrounding area.
Develop a niche
What do you know that others don’t? Where are you strong where others are weak? Is there some aspect of the business that you find particularly interesting or personally rewarding? Do you have a particular passion outside of real estate? The answers to these questions may suggest some niche opportunities, such as specializing in golf course homes, horse properties, resorts, investors, or any other direction your imagination can take you.
Have a clear focus
You want listings. Markets come and go but, in most states, listings involve a contractual obligation to pay a fee when the listing sells within the term specified in the agreement. But, unless you are contracting with the buyer, still not the norm in most states, they are free to shop around with anyone.
Plus, listings can produce buyers as well as other listings if you go about the marketing with that in mind.
Real estate isn’t hard. There’s no heavy lifting, and you rarely have to dodge bullets. But, it is extraordinarily competitive, highly demanding, and there is math involved. It isn’t the best choice for many people, and if your enthusiasm is gone, it’s time to go.
George W. Mantor is known as “The Real Estate Professor” for his wealth building formula, Lx2+(U²)xTFP=$? and consumer education efforts. During a career that has spanned more than three decades, he has amassed experience in new home and resale residential real estate, resort marketing, and commercial and investment property. He is currently the founder and president of The Associates Financial Group, a real estate consulting firm.
Mantor can be reached at GWMantor@aol.com.