Realtor Wages?




Most people think Real Estate is an easy, cushy job where we get to put signs out, talk on the phone and collect a fat check. If that's what this job offers, then point it out!

I thought I would break it down for the sake of a post to see, REALLY what do Realtors get paid.

According to NAR (National Association of Realtors) the average Realtor sells 6 homes a year. So in Atlanta, with an average price of $200K, at 3% average commission, that would be $36,000. Most teachers bring home more than that and they only work 9 months out of the year, I don't see anyone shouting about how they need to reduce their fees. I digress....

So let's assume, you are a career Realtor and you want to make a career out of it. They say on average, successful realtors (the ones that make over $100K a year), work an average of 60-80 hours a week.

So at $100K a year, you'd think you'd be making a nice $50/hr, but at 60 hours a week you're down to $32/hr. At 80 hours (aside from losing your family) you're down to $25/hr. That's not too shabby if you don't have a family.

Working like this will cause burnout and defection. So how do successful agents do it? They hire a team. Straight out of the Millionaire Real Estate Agent, comes the plan. Your first hire should be an assistant. With her salary being in the neighborhood of $30-40K, she (or he) will be taking the paperwork portion of the job off your hands.

It's only through leverage that you'll get an ultimately higher wage. As one agent put it, "if you don't have an assistant, YOU ARE the assistant."

That's another post entirely, but back to wages. The average client gets the Realtor $6,000 but it doesn't just go to their pocket. 30% goes to the Broker in most cases ($1,800), another 25% or so goes to taxes, then there are expenses which can be up to %50 in some cases.... If you did the math, you'll get a negative number. It's sad but true in some cases.

So where do these, "I made $400/hr" ads come from. This is from Leverage pure and simple. The other 80% is just grinding away (if they are full time) or just doing this for a hobby.

Sorry to ramble on like that - I just kind of went with it. Feel free to ask questions.

Real Estate Roller Coaster?

It's a bit off topic for this blog, but I thought it was a super cool video.



Shows what has happened to the real estate market since the late 1800's. We haven't dived as far as you might think!

What Real Estate Company is the Most Searched For?

I'm finding that I like to do this blog thing about our industry. As I am searching for the best keyword to use, I decided to see who is searched for the most. The findings may surprise you.

Here's the list:

1. Century 21
2. Coldwell Banker
3. ERA (might have been the word "era")
4. Keller Williams
5. Distant C21
6. GMAC popped up next in Relevance

I do not see REMAX there anywhere. However, like REALTOR.com, the name is so recognizeable that they may be generating traffic DIRECTLY to them. I also found it interesting that CENTURY 21 popped up as number one. It backs up their claim, but upon further review, it's my hypothesis that users have a hard time finding them, so they are forced to search. In addtion, much like ERA, I believe they are getting a boost on the sheer fact that it has another meaning, ala 21st Century.

To me the clear cut winner would be Coldwell Banker.

Coldwell Banker is Targeting Single Women?

RIS has the article - I may have to do a link list for these articles or an RSS feed.

Here's a snippet:

"Clearly, single women help drive real estate sales in this country," said
Charlie Young, senior vice president, marketing, Coldwell Banker Real Estate
Corporation. "This group has demonstrated their clout in the real estate market
and has the economic capability to gain the American dream of homeownership."

Here's the link: http://www.rismedia.com/wp/2007-05-02/coldwell-banker-launches-marketing-program-aimed-at-single-women/

Brian Buffini Advertisement Editorial on RIS

The article rehashes oldy but goodie ideas and can be found: http://www.rismedia.com/wp/2007-05-02/the-referral-systems-in-a-nutshell/

Help-U-Sell Adds Board Member

RISMEDIA, May 3, 2007-Help-U-Sell Real Estate, a set-fee services company, has announced that Patrick Stone has joined the company's Board of Directors.

Stone has over 32 years of experience in the real estate industry, most recently as vice chairman of the board of directors for Metrocities Mortgage. Prior to that, he enjoyed a lengthy career as president and chief operating officer of Fidelity National Financial, where he was credited for growing the company into the number one title company in the country.

"To add a person with Patrick's breadth of real estate experience and proven leadership will be a tremendous advantage for Help-U-Sell," said Steve Ozonian, Chairman of the Board. "We are excited that Patrick has agreed to join our Board of Directors and expect that he will play a key role in moving the company forward."

"Help-U-Sell is clearly at the tipping point in the real estate industry," said Stone. "Transparency in the real estate transaction is as important as ever, and Help-U-Sell's set-fee model and focus on the consumer experience is the wave of the future, and I'm excited to be a part of it."

An alumni of Oregon State University, Stone is on the Oregon State University Foundation Board of Trustees, serves as Chairman of the Board of Trustees of the Santa Barbara Museum of Art, is Chairman of The Stone Group, an Austin, Texas-based commercial brokerage and development company, and is an audit committee member for Direct Relief International, a non-profit organization based in Santa Barbara, California.

Help-U-Sell Real Estate reports having nearly 1,000 offices in 46 states, and operations in South Africa, and the Philippines. The company was recently rated the number two "new" real estate franchise model by the 2006 Swanepoel Trends Report. For more information, visit www.helpusell.com.

REMAX GREATER ATLANTA TO ACQUIRE REMAX HORIZONS

RISMEDIA, May 2, 2007-RE/MAX® Greater Atlanta announces its agreement to acquire RE/MAX Horizons. Their three offices, located in Gainesville, Buford, and Braselton, all reside in Hall County and house approximately 120 RE/MAX® professionals.

"We are extremely delighted to enter one of Georgia's fastest growing counties," said Steve Graham, President and CEO of RE/MAX Greater Atlanta. "[RE/MAX] Horizons agents' dedication to real estate excellent is a perfect fit for our organization and I believe the transition will be quite seamless."

Hall county, with access to the popular Lake Lanier and the foothills of the Blue Ridge Mountains, has seen a near 25% increase in population since the year 2000. RE/MAX Greater Atlanta sold more than 16,700 homes in 2006 equating to nearly $4.4 billion dollars in sales. Honored as the nation's 18th largest real estate brokerage by RISMedia's 2007 Power Broker Report, RE/MAX® Greater Atlanta will comprise 15 offices and more than 1,300 agents once the acquisition is complete.

For more information, visit www.remax-greateratlantaga.com.

Why Remax?

Remax has a great little comparison chart that explains why they are still one of the better traditional companies out there. It barely scratches the surface, but is definitely a good start.

Check it out here:
http://www.remax.com/inside_remax/become_an_agent/why_remax.aspx

Is your company supporting your business…or are you supporting their business?

As I do more and more research on the different Brokerages it amazes me that no matter how much a company is more cutting edge in their methods, they still are doing business the traditional way. That is, they spend money, AGENT'S money, promoting THEIR brand and generating THEIR own leads ... which in turn are sold back to the agent or given to the top producers.

Let's examine their business model.

Recruit new agents - Take 50% from their sales and hopefully they will become good. If they get big, they will be rewarded with new business opportunities that were generated off of their split. They'll get perks, such as parking spaces, offices and key opportunities.

Worst case scenario, the prospect doesn't pan out and the company gets some free advertising while they were working.

Last time I checked, 100% of my clients wanted to work with me, not my Broker or my brand. When I switch companies, my clients come with me.

So who am I talking about? Let's call some of them out:

• Remax - Still on a traditional split - never caps, or if it does it's coupled with exorbinant "desk" fees. Recently they developed LEADSTREET where they generate leads and sell them back to the agents. They also came out with REMAX University. Sounds very familiar with another University.
• Coldwell Banker - This is a company that is owned by Cedant. In any case, the split is the same traditional one, 70/30 for most agents with no cap in site. All branding must be CB and not the SMITH TEAM.
• C-21 - Again, owned by Cedant. C-21 is becoming the red-headed step child of brokerages. On one page you'll see a recruting ad, proclaiming how successful people will be by joining. On the opposing page, there's an undermining ad of "SAVE OUR COMMISSION" explaing C-21 Flat Fee franchises. To me this is the bottom of the barrel for a company.
• Prudential - Works the traditional system as well. They would love for their agents to buy into their other products and sell them as well. Overall, they view agents as employees.
• ERA, Exit & GMAC - These companies are copying the KW model but getting it all wrong. Instead of actually sharing profits, they dip into agents pockets -- forever. At GMAC, people who recruit you will receive 1 to 2% of your total earning. This does not go levels deep and never caps out. ERA and Exit have similiar reward models.

In some cases, these brokerages will offer lockboxes, signs and other resources. The downside is that all of these items keep you dependent on them and, oh yeah, "would you like some JOHN SMITH with your Coldwell Banker sign?"

So who's not doing this?

• Keller Williams - Doesn't spend a dime on brand building or recruiting. Each agent caps out at a predetermined number, in Atlanta it's 18K. After that it's strictly 100%. This renews itself every year. This also creates equality and quality control. No agent is worth more than the 18K so unethical agents will be "dehired." That's unimaginable when brokerages would hire monkeys if allowed. It's more about YOU the agent. KW spends their money on training agents how to do the business. If you've ever met a KW agent, then you know it's about being professional and having a career worth having.
• Solid Source (Local) - A Per Transaction based company. Their "Christian" foundation makes them an interesting study.
• Flat Fee/100% Companies - They offer no training or support but you keep everything. Typically you can do what you want as well, even as far as creating a sub brand.

This was pretty down and dirty but it should give you some insight. What has your Broker done for you lately? My guess if they aren't teaching you how to fish, their causing you to be dependent on them. If that's the case, ask yourself this, "what happens when the market shifts and it's no long profitable for them to provide these things at this price?" Prices go up, ethics go down and you'll be looking elsewhere.

At the end of the day, when you look at your business, are you supporting YOUR brand of Real Estate or your BROKERS?

Keller Williams Profit Share Model Demystified

In my last post I had a few things wrong. Namely, everything. I recently sat down with Aaron Kaufman the leading recruiter for Keller Willliams and discussed what KW is about in great detail.

Aaron was adamant about not talking about Profit Share. His philosophy is that when he talks with prospective recruits that it's not about the money. After spending time with him I would tend to agree with this, that profit share is the gravy for joining KW and not the reason.

However, this is the internet and people want to know. So here goes the profit share model again:

Let's Say Bob sells a $1,000,000 home and nets a $30,000 commission. For the sake of being easy, lets also say Bob is on a 70/30 split with KW (keep in mind that it caps out at $18K - so he's half way to capping). So he's giving $9,000 to the market center. Now let's say after all is said and done for the month that the Market center that Bob is in makes a $40,000 profit out of a GROSS of $90K. Now that (the $40K profit) gets split up between the owner and the agents (yes, the agents!). Now you take the $20K and you take Bob's contribution (10% of the overall gross), you'll get $2,000. Now for the fun part.

Now, using our previously incorrect post as an example, John (Bob's recruiter) would receive a whopping $1,000.

Levels 1 thru 7 are as follow: 1. 50% 2.10% 3. & 4. 5% 5. 7.5% 6. 10% 7.12.5%

Now that I've posted this I hope you see how valuable this system is. The genius is that if your with KW you're paying out the 18K to the market center to use all the resources. It's a bonus that you'd get anything back. As you'll see in upcoming posts, that this system will actually promote equality and comraderie.

It's becoming more obvious that the jaded opinions I had of KW were false and that beneath each "business" idea that seems to take away from the agent, it's actually another tool to be harnessed by a savvy business person.

Next Time: The Pyramid Scheme of Keller Williams!