Real Specialists’ Brendan Gibb follows up with his solutions to agent pain points.
Following on from last month's look at pain points for agents, it is important to highlight there are ways to overcome these and that you should not settle for something just because it has been that way for a long time. After all, how would our industry ever progress if we were not looking at alternative solutions? If you have not read last month's article it would be a good idea to read that first before continuing here.
The first topic explored was how percentage commission splits punish good agents with high average commission rates. The answer here is a flat fee per sale, not splitting commission on a percentage split. When a flat fee is charged it is fairer for everyone. After all, an office incurs the same cost when they process a $300k sale as they do when they process a $3m sale, so why punish the agent selling the $3m property? This is an interesting topic, and I think consumers will eventually start questioning percentage commission fees themselves, but I think we are years away from that. If you lived in a nice $2m house on the water and your neighbour over the road on a dry block has a $1m house would you be prepared to pay double what your neighbour would to sell his property when the agent does the same amount of work? So for you as an agent, just think about how that same concept relates to how much of your commission you have to kick back to your office when you sell higher end properties.
The other big issue we explored was a serious lack admin support in our industry. We modelled REAL so that an agent should not have to do anything except their dollar productive tasks like listings and selling. Agents firstly do not want to be bogged down in admin jobs. Secondly, they are generally not good at them and make mistakes or forget details. Thirdly, but importantly, when an agent is bogged down, they can’t focus on growing their business and that’s just wrong in my opinion. As an agent, you really need to ensure you are receiving all the service you are paying for, because I can tell you from experience that everyone says they offer “full admin support” but I seldom talk to agents who are happy with what they are receiving.
Regarding the issue of not being able to take your data with you when you leave your office, this one is pretty simple. Refer to your employment agreement or independent contractors’ agreement and see what is written in there. If it is not explicitly written in there that you own your data and can take it with you, and that the office has no claim to use that data if you do leave, approach your Principal and ask him or her to amend your agreement to reflect that.
The issue of branding is not so easy to overcome. Unfortunately, the vast majority of offices do not want you to be able to have individuality in the way you brand yourself. We all know why this is the case… Obviously they are scared that if you realise you still make the same amount of money operating under your own brand as what you did under their brand, you might leave. We have some great case studies at REAL of agents who were with top franchise brand names who came across and branded themselves independently and they actually grew their market share substantially plus increased their average commission rates. It’s clear to me that brand is imperative, but the brand is the agent, it’s not the office; that’s what too many people don’t realise.
The last topic I’ll touch here relates to an agent’s ability to build an asset base in a rent roll without needing to actually manage it day to do. At REAL we aren’t the only ones who do it, so it’s encouraging to see that there are options popping up where you as an agent can simply hand over a PM lead but still own that property’s rent roll value as well as receive management fees each month. It’s a pretty powerful thing when you can build a saleable asset amounting to hundreds of thousands in a few short years. Over the space of a whole career it represents an excellent retirement option, both passive cashflow plus a huge asset you could cash in whenever you want.
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Addressing the pain points for agents, Real Specialists