I have a friend. She is a good Realtor, she cares about her clients, she has been at it for many years and if you ask anyone who has ever dealt with her, they would only sing her praises.
There is a problem though. She has spent years building a network at the lowest rung of the real estate market in her area. She has to sell a lot of houses to make a decent living. Based on volume, her sales propel her into the ranks of the top five per cent of salespeople but based solely on commissions earned, she never tops $100,000 per year.
I sat with her and I pushed her to broaden her marketing to the next level of pricing in her area. She resisted. “But these people I serve, they love me, I love them.”
And I told her, she is confusing real estate sales with social work. She spends a lot of time helping her clients, who are low-income Canadians. She even drives old dears to doctors or dentist appointments and I applaud her for that but she has forgotten about serving her own needs first.
One day she called me as if a light went on. She got a listing of a better real estate product, an actual detached single-family and it sold. She made over double what she was used to making and she was excited.
I told her to push hard. Go back to basics, knock doors, let everyone know that you listed and sold that property. Push and push hard.
It is now about two years later and she is selling less in volume and more per commission. She still sells the lower price point she used to service, but solely on referral and those small sales add to her volume and obviously add to her income.
For the first time in her career she earned just shy of $150,000. She cannot believe it as that achievement was beyond her grasp. She just had to get past her own fears and her own insecurities. What she had failed to do, despite her years in the business and with decent training, was take pen to paper to scribble out how to achieve her desired annual income. She never had a business plan.
I realize that my column goes across Canada and each community has its own price points.
Some of you do not have the opportunity to move up in the market because that market may not exist but there are opportunities in most markets for move-up if one seeks them out. Review this chart to see why volume should not be the main goal of a top Realtor.
Assumptions:
- you are on a high split with your brokerage
- you still have some brokerages costs, a per deal fee and annual fees. I allowed a 15-per-cent expense. This will vary as no one plan is universal
- Bonus! You do volume and you will double-end some of your deals.
Raise your price point, find the right neighbourhoods to work in and you will reduce the volume needed, your income will rise and you can have a better balance of work and life. If you are in a market that has a very low price point and if you are serious about your career, either move (not easy) or start to study the highest price point in a market. For someone in a village you may want to starting looking at selling farms or smaller commercial.
Find a strong Realtor who can guide and mentor you. Shadow them if you can or at least meet to discuss your direction. Create a business plan, know your costs, what an hour of your time is worth and how to achieve it. Do you know what a typical listing costs you and how many hours you spend from the first contact until the deal closes?
I also suggest reading Selling Luxury Homes by Jack Cotton. Yes, the book is written for an upscale market but his techniques are exceptionally good and are to be applied to all listing and selling scenarios.
If you heed my advice, drop me a line in a year from now and tell me how things turned out for you. I love success stories.
Barry Lebow, FRI, Master-ASA, ABR, SRES, is one of Canada’s most recognized real estate authorities. Now in his 54th year of professional real estate, Barry has been honoured by many real estate associations for his work in the profession. He has testified in more than 500 trials across North America. He is the founder of the Accredited Senior Agent designation program. A teacher, trainer and educator, he is an active broker at Re/Max Ultimate Realty in Toronto. Visit barrylebow.com to contact Barry.
