One of the basics of business success is simply this – what you don’t waste, you keep.
Volumes of business books have been written on the subject of excess and the benefits from cutting back.
And if there’s one industry where I’ve seen an extraordinary amount of money and time being thrown down the drain, it’s real estate.
It isn’t so much the fault of the agents, but rather that the industry had entrenched itself in old and ineffective ways of doing business.
Like taxis before Uber and hotels before Airbnb, real estate does things the way they do them because… well, that’s how we’ve always done them!
But once you break free of this outdated mindset there are immediate, substantial savings on offer that will make you a better agent AND put more money in your pocket.
Here are my five tips for cutting the crap and making more money.
Cost/benefit is key to maximising your profit on each dollar spent – and one way to boost your income while reducing outgoings is to outsource those tasks that are neither you’re forte nor bring you a return.
While administrative support, marketing co-ordination and accounts management are essential for an agency, the fact remains they aren’t income generators – you, the selling agent, is.
Instead of burning long hours of your precious time attending to these mundane tasks, find an efficient way to outsource them.
This frees you up for your essential work – finding leads, securing listings and making sales.
2. Cut useless advertising
The way in which we expose listings to the market has seen a major shift in the past 10-15 years.
Having a shopfront display of your listings is pointless. Every single one of your buyers has been hunting the internet in a bid to unearth which homes will tick their wish-list boxes. None are wandering door-to-door across the suburb, looking in windows and chatting with agents.
Stop wasting dollars leasing expensive retail offices, and putting up window placards and start being more strategic around how you promote.
It’s the same with flashy full-page advertising in newspaper lift outs. While some listings may deserve the extra exposure hard copy provides, there are few buyers who rely solely on this approach.
In short, be selective about how you spend advertising dollars. It will win you more clients and reduce costs.
3. Stop paying franchise fees
Regular readers will already be aware that I’m no fan of the big-box franchise approach to real estate.
Paying franchise fees to some interstate head office is, without doubt, the biggest and most useless drain of an agency’s income.
I’ve talked to hundreds of agents over the last two years and the tales are all the same. They contribute close to half their GCI to an agency. In return there’s limited support and disappointment.
In addition, the benefits of operating under the label of a big-name franchise are non-existent in today’s environment. No seller is choosing an agent because they work for a particular franchise brand. They are selecting an agent based on that agent’s name and reputation within their suburb.
So, lose the franchise and make more money.
It’s that simple.
4. Office space is dead space
In the previous century, being attached to a shopfront office where buyers and sellers walked in off the street may have brought some benefit, but we are in 2020 and the game has been turned upside down.
Ask your sellers, “Did you select me as your listing agent because I worked out of a bricks-and-mortar office?”
I guarantee, none did.
Vendors choose agents, not agencies, and modern technology makes the idea of having an office redundant.
I literally can’t remember the last time I saw a buyer or seller doing business in an agent’s office. In fact, it would be poor service to make a client come to you. Today’s agents are mobile and will attend people’s homes, places of work or even via the internet in order to do their job.
Stop paying for space and keep more of your cash.
5. Be agile in your service
Another flow-on problem from being attached to a large agency is company policies.
There’s restrictions on how you service your clients and advertise their listings, which bring no benefit to either you or your sellers.
Big agencies have fixed processes and their own agendas – such as pushing for auctions on every home.
The fact remains, not every home suits an auction campaign. Not every property fits in with standard listing guidelines either. Many homes need to reach a wider audience via video and digital marketing.
As long as you work under rules set by a head office based well away from your service area, you’re wasting time and money.
Instead, learn to be agile in your service. Pivot to new ways or promoting your listings. Do something different that both you and your clients think will bring the best benefit.
Shun the rules and make more money.
Cutting waste isn’t difficult and opening an agency where you set your own agenda might feel risky, but it isn’t.
We’ve been brainwashed into thinking there’s only one way to operate a real estate office – but that’s patently wrong.
I say break free of the past and become part of real estate’s future, or risk being left behind with less dough, more stress and outrageous waste.
By Dan Argent