People attending classes to obtain their real estate license often form their impressions of the real estate industry from the things they learn in class. Like newly hatched chicks, they’re imprinted with a set of beliefs that they carry with them as they begin their real estate career, and sadly, none of them are told the secret of success as an agent.
The real estate schools, trying to prepare their students for job hunting, exhort agents to interview companies before choosing on to work for, making us the only industry where a potential associate for a company interviews the company instead of the other way around. The new agent is told that they’re a commodity and that to be successful, they should only associate with a firm that allows them to negotiate the highest commission split. And with the best of intentions, these schools send the newbies off in the wrong direction, failing to tell them the three truths of the business and often potentially ending great careers even before they begin.
Here are thos three truths – written plainly for you to assess:
The only people who make a lot of money in real estate are people who sell a lot of property.
I have met with a number of agents who started their career by choosing companies that attract agent attention by competing on price, starting agents with no experience at 60, 70, even 100% commission splits. In every case, the agent struggled because the focus on the commission split took their eyes off the prize. Instead of working with the agent on prioritizing their prospecting and helping them focus on selling the most they can, the connection between production volume and compensation is completely lost. Once they were provided with an environment where they received support and opportunities, their production increased, they earned higher commission splits, and their compensation was increased.
All agents aren’t equal, and people who sell more property should be paid at a higher rate than people who sell less property.
Though brand new agents are taught to be aggressive about negotiating commission schedules, and even agents with limited production are taught to subscribe to the theory that they may need to switch companies to get the most money from each sale, we only believe that because we haven’t thought it through. Obviously, the more you do something succesfully, the more experience you have and the better you become at that thing. Your consumer values knowledge and experience in their consumer, so why wouldn’t you?
All real estate companies aren’t the same and your ability to build a career and be a success varies from company to company.
Most agents need to learn, practice, and be supported to find their highest potential . Really good companies provide support, training, mentoring, and coaching to their newer agents. Great agents are grown and developed. They are taught regulatory compliance, risk management, negotiation skills, and a variety of other skills. Good companies provide support for agents, allowing them to concentrate on the activities that make them money, rahter than constantly being bogged down in the minutia of the business.
The conclusion? Nobody makes a lot of money in real estate because of the company commission split or the low cost of someone’s desk fees. Those business models try to compete on price to attract agents, without making sure the agent has the secret to success. Leading a salesperson to believe that their compensation isn’t tied to their commission split is an almost criminal act because it distracts the salesperson from even knowing that there’s a real secret to success.
When an agent becomes proficient at their craft, and works with a company that allows them to concentrate on increasing their volume, through support, technology, sources of business, or adminsitrative and management support and accountability, their success becomes assured, their job becomes a career.