All Forum Posts by: Mark Ferguson

I just ran off to Amazon and placed an order for @Mark Ferguson 's book. If it comes recommended I will give it a shot, never too much information, Thanks @John Warren! I also liked "Your First Year in Real Estate" By Dirk Zeller. It was an easy read with some actionable items.

Referrals are great, problem is you need to sell to get them. You can get referrals from the guy at the store "You know my sister is looking"... "Oh well then give her my card". There is a fine line between shoving your business down someone's throat and letting people know you are a knowledgeable agent. If I am chatting with someone in general "What do you do for a living" comes up. The answer of "I'm a Real Estate agent" 9 times out of 10 gets a conversation going (at least in my experience). 1 time I am going to get a follow up conversation some other day with them, their family or their friend. So if I want 4 leads a week, I need to get into 40 conversations.

Essentially you are going to need to do one of three things. A ton of money in marketing, a ton of time in networking or reduce your commissions to where you are working for peanuts. To me the easiest is a ton of time in networking because if you haven't been selling a lot the money isn't there. As far as the commissions some day you will pay the piper on that one. "You did a house for my uncle Joe at 5% will you do mine for 4%?". If you reduce them on the back of the buyers agent, your clients house is not going to go for what it should. Also other agents will start to try and burn you at every corner (which hurts your clients because essentially they get burned too)

Good Luck!

@Hessa Friedman that sounds like a really rough first year! My first advice would be, don't quit. I can't give you any particular advice on your brokerage, but I can tell you that I have LOVED working for a brokerage that is a 100% commission setup. I pay a transaction fee, and keep the whole commission. I also pay a small desk fee monthly. My over head is low which allows me to net more per transaction. 

A for your deal volume, I would say you are doing the wrong things. Since you are on BP, you are probably interested in investing. Have you gone to all the local REIAs you can find? I go to three currently, and have also started a meetup. I work with many investors in my local Berwyn/Oak Park market, and love my investor clients. They are loyal, do multiple transactions per year, and don't care about paint colors (at least not when they buy!). 

I would highly recommend you read @Mark Ferguson s book on starting out as a real estate agent. That was all the "coaching" I ever received, and I am closing 17 transactions this year during my 2nd year! It was easily the best $15 I have spent on my realtor business. 

 I am on the opposite side of the argument of this debate than Mark, with a qualifier of it depends which I will get into in a bit.  I think also it's important to understand regionality in this debate.   Mark is not in a major metro area, I think Greely is about 100,000 people with 300,000 in its metro area which is going to be very different from Chicago where you @Brie Schmidt or myself is at.  I see in some of the outlying cities from DC, that could be be considered their own small metro areas that a no name brokerage can have a very good market share.

But back to the it depends qualifier....I think it depends on the type of, and amount of business you want to do.  When you look at the Wall Street Journal/Real Trends list for top agents/teams in each state or nationally.....how many of them are at no name brokerages? A few for sure....but by far the vast majority are at big name brokerages. Keep in mind, brokerages are regional, so many people do not recognize the names of big name brokerages from other parts of the country, such as Windemere in the pacific northwest, or Long & Foster in the midatlantic, 2 of the top 10 say largest brokerages in the country who are region specific.  So what the Real Trends list shows me is brokerage branding is important to a sizeable agent business. Someone may not agree, but I just say...look at the lists.

So scale of your business, whether now or in the future can play a big part in whether branding matters.  I have goals of making the Real Trends list, and so therefore I am with a big name brokerage.  To make the Real Trends list requires $20 million in volume for a solo agent or $30 million as a team to make the list. I did not make it this year, but I anticipate to next year...and I dont think Id be able to without the big name brokerage.  

Also entwined with future growth goals is profit goals. If you dont want to do $20/$30 million in volume, the cost of being with a big name brokerage might not matter. My brokerage makes somewhere in the range of $60k off of me. I could easily be a solo broker, lose the branding, and the 4 or 5 transactions Im able to get strictly from the branding and make exactly the same amount of net into my pocket, and  in turn work less without those 4 or 5 extra transactions.

So then the question becomes how big do you want your business to grow?  I obviously service a large investor clientele, but I think your business is much more sound if you have many legs to your business. Sphere, investors, geographical farming etc.  You can easily I think in a major metro area stay medium size, make $250k a year and only focus on 1 aspect. But if you want to grown to some really large amounts and make $500k, $1 million, then I think a big name brokerage adds a lot of value, as well as serving a diverse set of clientele.

@Brie Schmidt

The 1st thing you need to look into is scale ability. 

There are a lot of things your brokerage provides for you that truly benefit you if your running a smaller sized business like it seems that you are. E&O, Office space, Contracts, Brand awareness, Existing infrastructure with policies already in place etc....By providing all of these things for you the Broker is taking a chunk from you. Depending on the size of your business & how much overhead & responsibility you want to take on will determine if you should go independent or stay where you are.

The bigger you get the more profitable it can be going independent. However if you are independent you need to be an expert at all things. Especially marketing. You also need to be prepared to SPEND tons of money making the whole operation work. For example I spent $5.5 Million running Holton-Wise in 2016. At the close of 2017 that number is going to be even higher. Needing to bring in $5.5 Million just to break even for the year is a responsibility that isn't for everyone. These are questions that really can't be answered by anyone other than yourself. 

One thing I will say is that if you do decide to go independent only servicing investors is not a good strategy. When your independent you need to SCALE to pay for all that overhead that was once paid for by your broker E&O, Office space, Contracts, Brand awareness, Existing infrastructure with policies already in place etc.... Limiting your potential market of clientele is going to make paying for all of that stuff exponentially more difficult.

@Mark Ferguson - so you had no problem recruiting agents without being tied to a big brokerage?