by Devon Broderick | Aug 21, 2024 | Industry, News Feed
Whether it’s refining your business model, mastering new technologies, or discovering strategies to capitalize on the next market surge, Inman Connect New York will prepare you to take bold steps forward. The Next Chapter is about to begin. Be part of it. Join us and thousands of real estate leaders Jan. 22-24, 2025.
Have the commission lawsuits, lack of inventory and high mortgage rates left you feeling out of control of your business? If you’re ready to escape the quicksand, take charge of your business, and wrap up 2024 with a bang, here’s what to do.
Have you ever noticed that no matter how bad the market is, there are always agents who do well? What’s their secret — They avoid being distracted by what they can’t control and focus on what they can control.
As Coach Philip Humbert once explained in his newsletter:
“My well-being and optimism, my values and work ethic, and daily success are not determined by politicians in Washington, fighting in the Middle East, or disasters I can’t control (as important as those things may be). My daily success is determined by my alarm clock, my to-do list, my use of time, and hugs from my friends. My success is determined by whether I do the things that I know are useful or whether I am distracted by the news, by gossip, or by worry.”
7 ways to regain control of your business without working harder
One of the greatest gifts that you can give yourself is starting with a clean slate. The act of clearing out anything that is holding you back, no matter how big or small, opens up the space for you to attract more business.
Here’s the step-by-step of what to do:
1. Eliminate tolerations
To get the best possible start, begin by eliminating “tolerations.” A toleration can be something as simple as a missing button from a shirt, your car’s floormats that need cleaning, or any of the hundreds of other little things that pull you off focus over the course of your day. Tolerations are like paper cuts. They are often minor, but the cumulative effect of not dealing with them results in serious pain and loss of productivity.
The first step in ridding yourself of tolerations is to make a list. Most people can list about 20 tolerations and then hit a wall. If they persist, they soon discover there’s easily another 80 or more.
Remember tolerations can be something small such a magazine subscription you’ve been meaning to cancel or replacing a light bulb. The point is that every time you encounter the toleration, it interrupts your thoughts with, “that’s bugging me,” or “I need to take care of that.” Each time you notice it, you’re experiencing the equivalent of another paper cut.
Once you have made your list, the next step is to eliminate one toleration per day. It makes no difference where you start or which toleration you choose. The idea is to reduce the cumulative effect of these energy drainers.
2. Just say ‘no’
How many times have you agreed to do a showing when you had previously scheduled family or personal time, and you ended up resenting the decision?
Your inability to say “No,” not only creates more tolerations, it can also leave you feeling frustrated and angry, and it can even damage your health.
Even more importantly, when you do tell a client “No,” always remember that “No” is a complete sentence. There’s no need to explain or justify your reasoning.
If the client presses you about the appointment, simply say, “I have a conflicting appointment,” and give the client two other times you could do the showings.
3. Create space
When I first learned about the Law of Attraction during my Coach Certification Training, I was fascinated by the concept that to attract more business or the right personal relationship, first you have to make space for that business or special person in your life. As my first coach put it, “There’s no room for a shiny new red convertible when your garage is filled with junk.”
Since that time, when I do a major closet cleaning, clear out all my emails, or donate or dump old items I’m not using, new business almost always pops up not long after.
To illustrate this point, you’re probably familiar with the “vacation phenomenon.” This occurs when you schedule time off, and as you’re getting ready to leave, plenty of new business always seems to pop up. Why? You created all this space in your schedule.
If you’d like to test this approach, clean your closet, clean your garage, clean your office, or schedule time off. It makes no difference where you start. It’s the act of creating space that opens the door for new opportunities.
4. Finish, delegate or declare old projects complete
Another way to create more space for more business is to dump any project or task that you have been procrastinating about doing for six or more months. If it’s something that you really must do, delegate it, and take it off your to-do list.
5. Eliminate debt now
Credit card debt is a major toleration that cuts you over and over each month as you pay not only for your purchase but also interest on top of interest. If you are able to eliminate any of your credit card debt, do it as soon as possible.
As Alisa Glutz of Color My Credit advises, “Don’t rent your debt.”
To illustrate this point, Macy’s just raised the interest rate on its revolving balances to a whopping 34.49 percent. Keep in mind that this number compounds daily.
Consequently, get in the habit of paying off purchases each month. If you don’t have the money to pay for an item at the end of the month, don’t buy it unless it is an absolute necessity, like medicine or a business-related expense such as car repair or gasoline.
Moreover, credit card debt limits your opportunity for a better life for years to come. To learn more about how to eliminate your credit card debt, check out my article and interview with Glutz.
6. The ‘ideal client’ list
If you haven’t made an ideal client list, it’s time to start one now. It should have a minimum of 50 characteristics that your ideal client will have.
The coach who introduced me to this approach had generated $300,000 in profits from his business in only six months. When I asked about how he became successful so quickly, he replied, “I made an ideal client list. It was 15 pages long right down to the type of belt and tie my ideal client wore.”
When I asked if his ideal client had shown up in his business, his answer was, “No, but a lot of his brothers and sisters sure have.”
The concept here is having clarity about who you want to attract, or as my husband Byron Van Arsdale likes to say, “Be definite with the infinite.”
7. Focus on your priorities and what matters most in your life
A ship without a rudder is at the mercy of the sea and winds. Your priorities and values are the GPS that will help you steer the course that best supports you.
The difference between those who thrive and those who merely survive isn’t luck — it’s the choices they make. Embrace the strategies above, take back control, and watch your business flourish now and well into the future.
Editor’s note: A previous version of this story had Macy’s interest rate at 35.99 percent, but it has been changed to 34.49 percent.
Bernice Ross, president and CEO of BrokerageUP and RealEstateCoach.com, and the founder of RealEstateWealthForWomen.com is a national speaker, author and trainer with over 1,500 published articles.
by Devon Broderick | Aug 16, 2024 | Industry, News Feed
Beginning Saturday, new rules around commissions take effect, paving the way for the biggest shift in real estate in at least a generation. It’s a brave new world, and it begins this weekend.
Whether it’s refining your business model, mastering new technologies, or discovering strategies to capitalize on the next market surge, Inman Connect New York will prepare you to take bold steps forward. The Next Chapter is about to begin. Be part of it. Join us and thousands of real estate leaders Jan. 22-24, 2025.
Rhonda Burnett is a mom and former school psychologist. Jeremy Keel works as an attorney focusing on elder law. Jerod Breit serves as an executive director for Mothers Against Drunk Driving. Hollee Ellis spent years working as a high school teacher.
These four people come from different backgrounds, are different ages, and in a different universe might never have crossed paths. But in our timeline, they have one thing in common that brought them together: They all bought homes, then sued over the commissions they had to pay.
Burnett, Keel, Breit and Ellis are among the many consumers behind a slew of antitrust lawsuits that have rocked the real estate industry. The suits focus on how agents get paid, and after years of litigation they led to a handful of major settlements this year. The most notable of those settlements was between the plaintiffs in multiple cases and the National Association of Realtors (NAR), and it included an agreement from NAR to change various rules.
This weekend marks the deadline when those rules go into effect. The deadline has prompted something of a race to the finish line as multiple listing services update forms and issue stern warnings, while NAR scrambles to educate the public. Meanwhile, industry leaders are spending significant energy assuaging concerns while agents debate the impacts in online forums.
All of which is to say that consumers like Burnett, Keel, Breit and Ellis have forced the real estate industry into a brave new world. In venues virtual and real, the changes happening now are widely accepted as the most significant evolution in the homeselling business in at least a generation.
To understand what’s happening now, Inman reached out to key players and agents across the U.S. There are two takeaways from these conversations:
- First, multiple listing services — which are tasked with actually implementing the new rules — have already been rolling out changes. And the apocalypse has not arrived.
- But second, some in the industry’s trenches say confusion still abounds. As a result, real estate practitioners need to exercise caution as the dust settles.
What exactly is going on?
Realtor-affiliated MLSs have until Aug. 17 — which is Saturday — to comply with the rule changes set by the National Association of Realtors. The changes have the potential to upend how real estate agents and brokers are paid nationwide and, backers say, may also lead to tens of billions in savings for consumers if overall commissions decline.
NAR’s leadership set the August deadline ahead of a Nov. 26 hearing, during which a federal court will consider whether to grant the settlement final approval.
In the next few months until then, industry watchers — including the U.S. Department of Justice (DOJ) — will likely pay close attention to how the new rules play out, and to their impact on consumers, before deciding whether to potentially seek further changes.
Until then, these are the main changes MLSs must put in place by Saturday:
- Eliminate any requirement of offers of compensation in the MLS between listing brokers or sellers to buyer brokers. Previously, NAR’s Participation Rule, also known as the cooperative compensation rule, required listing brokers to offer buyer brokers compensation to submit a listing to the MLS.
- Forbid agents, brokers and sellers from making any offers of compensation in the MLS to buyer brokers and from disclosing listing broker compensation or total broker compensation in the MLS. This requires the MLS to eliminate all broker compensation data fields in the MLS.
- MLSs must not help agents, brokers or sellers make offers of compensation to buyer brokers through any non-MLS mechanism, such as by providing MLS data to websites that function as a platform for offers of compensation from multiple brokers.
- Require brokers working with a buyer to enter into a written agreement before the buyer tours any home. If an agent or broker will receive compensation from any source, the written agreement with the buyer has to specify the amount or rate of compensation to be received or how that amount will be determined. The amount has to be “objectively ascertainable” and can’t be “open-ended.” The deal also specifies that the compensation an agent or broker receives for brokerage services can’t exceed the amount or rate agreed to in the buyer’s agreement.
- Require agents and brokers acting for sellers to, in writing,“conspicuously disclose” to sellers and get their approval for any payment or offer of payment that the listing broker or seller will make to a buyer representative. They also have to specify the amount or rate of the payment.
- Require agents and brokers to conspicuously disclose to prospective sellers and buyers “that broker commissions are not set by law and are fully negotiable.”
- MLSs must not provide the ability to filter out or limit MLS listings that are communicated to consumers based on the compensation offered to the buyer broker or the name of a brokerage or agent.
In order to comply with these settlement terms, some MLSs are instituting hefty fines. Some are also giving subscribers the ability to advertise that sellers are willing to consider concessions to buyers, the latter of which buyers have the choice to use for buyer broker compensation.
Additional resources:
MLSs race to change
With the Aug. 17 deadline looming, many MLSs began rolling out rule changes in recent weeks and months. And the world has not ended, executives indicated.
- For example, MIBOR, a broker listing cooperative serving Indiana, pushed its changes live on July 1. When the changes went live, there were 5,000 total residential listings in MIBOR. In the 30 days since removing fields for buyer agent compensation, agents added another 4,400 listings.
- “In that month there were about 9,000 opportunities to do something wrong,” MIBOR CEO Shelley Specchio told Inman. “We only had 39 compliance tickets — 39 people we had to reach out to and explain to them why they couldn’t do what they tried to do.”
- The California Regional Multiple Listing Service, the largest MLS in the U.S., went live with its updates on Aug. 13. Art Carter, CRMLS’s CEO, urged agents to play by the rules: “Don’t add an addendum. Don’t add anything that can be displayed to all of the users of the multiple listing service because there will be a fine attached to it.”
- CRMLS general counsel Edward Zorn told Inman he felt confident that most MLSs were prepared for Aug. 17 and had communicated with their members about the changes: “The MLSs have stepped up and done what they needed to do to be ready for the change.”
- Brian Donnellan, CEO of Bright MLS, the nation’s second-largest multiple listing service, spoke with Inman Tuesday — the day before Bright was set to implement its changes — and said his organization would take an “educate first” approach to addressing potential violations.
- “We’re going to do our best to make sure that we educate folks prior to fining them,” Donnellan said. “At the end of the day, I would imagine we’re going to have to fine people because this is a really big issue. Everybody’s looking right now.”
- Donnellan said he expected to hear mixed emotions about the changes once they’re implemented and Bright members interact with the updated system. “These guys eat what they hunt. They’re probably a little bit more stressed than anybody else. I can see where their stress comes from.”
Additional resources:
Agents scramble — but questions (and frustration) linger into the 11th hour
Multiple listing services may have scrambled to roll out changes, but some in the agent community — echoing recent comments at Inman Connect Las Vegas — told Inman the process has been nothing short of confusing.
- Courtney Poulos of ACME Real Estate in Los Angeles, whose firm has long specialized in exclusive buyer agency agreements, has seen mixed messaging at times. She specifically criticized the lack of “any true protocol for open houses,” among other things.
- “It has been a very confusing rollout,” Poulos also said. “I think that [NAR] announced the proposed settlement changes before they had a good plan for rolling out the procedural stuff. Our association [the California Association of Realtors] had educational seminars with new forms that they then had to revise, and then had a new seminar saying, ‘Forget everything we just told you, we revised the form.’ So the rollout has been very sloppy. It’s causing a lot of confusion.”
- Over in Orlando, Florida, Veronica Figueroa and The Fig Team have already been dealing with rules changes because the local multiple listing service — Stellar MLS — put those changes into effect on Aug. 6. Figueroa’s team has been fine, but she said that isn’t the case for everyone in the area.
- “If I’m speaking honestly, I don’t think we can say we’ve been fully prepared to the point that we weren’t going to have some breakage or some friction,” Figueroa told Inman. “We’ve already seen fines in the MLS, and there’s a lack of transparency as to what those fines are for.”
- Meanwhile, Andrea Geller of Berkshire Hathaway HomeServices Chicago told Inman that she is “as ready as I can be.” But, she added, others aren’t. “I’m concerned about the other agents around me.”
Additional resources:
What happens now?
Though the deadline has arrived, a number of questions remain unanswered. Will sellers generally keep offering commissions? Will buyers pay out of pocket? Will the DOJ push for bigger change? Will commissions meaningfully trend down? No one knows at this point, but those are all issues worth watching in the coming months.
The future of NAR is also an open question. The settlement came after a period of tumult for the organization, with scandal and executive turnover dominating news cycles in 2023. Now, a rival organization is making a bid for new members, some industry players have cut ties with NAR, and the organization still lacks a permanent CEO. The coming months, then, will act as a critical test for an entity that has defined real estate for decades.
Agents and the organizations that serve them will also have to exercise caution lest they run afoul of the rules in the immediate future:
- CRMLS, for example, told its members that they should expect a $2,500 fine if they include language around compensation within the MLS.
- Michael Ketchmark, the lead plaintiffs’ counsel for a case known as Sitzer | Burnett, told Inman in an exclusive interview this week that he will be watching the situation closely: “If anyone thinks they’re going to be able to avoid the application of this settlement agreement and the law by creating some new forms or hiding this cooperation on new websites, they’re wrong. If we get any sense that people or corporations are doing that out there as a way around this, we plan on taking swift legal action.”
- Agents who want to make it through this period of change, then, need what Figueroa characterized as a “mindset shift.” “I think what’s important right now is confidence in your consultation, competence and being able to truly articulate how you’re going to get [consumers] to the finish line by getting them the best price, the best negotiations, and that you’re an expert that has proven results.”
Email Inman’s editorial staff with your feedback.
by Devon Broderick | Aug 10, 2024 | Industry, News Feed
Inman Connect is moving from Las Vegas to San Diego in 2025 and it’ll be bigger, better and bolder than ever before. Join us for Inman Connect San Diego on July 30-Aug. 1, 2025 with the brightest minds in real estate to shape the future of the industry. Reserve your spot today for an exclusive discount.
In 2012, at the ripe age of 28, I had the bright idea to open my own real estate brokerage just as the country was emerging from the greatest real estate recession in modern history. I rented a swanky storefront office on the main street running through Downtown Orlando.
Today, Mainframe Real Estate is one of Central Florida’s top brokerages. When people ask, “Why did you open your own brokerage?” I tell them the truth: I was young and naive.
I’ve given advice to many who have asked about opening their own brokerage, and I’ve encouraged almost all of them not to do it.
Opening a brokerage seems like the next natural step in a successful real estate career. Truly though — it’s the biggest backward step most could probably take. Here’s why.
Pick a poor reason
There are two main reasons someone might want to open a brokerage. First, they are naive, though maybe not young, and completely underestimate the complexities involved.
The other reason is ego. They think they can do it better as their own boss, want to have complete control of their brand, and don’t want to be held accountable to anyone. You might guess someone would open their own brokerage to make more money, but that would fall under the category of being naive.
If you think owning a brokerage means being your own boss, that is a naive assumption too. Now, you are under the command of every agent you hire.
Especially at the beginning, each agent who joins will come with a new list of requests, and you’ll quickly realize how much it takes to keep everyone happy. Ultimately, being a business owner means everyone else is your boss, and you’re accountable to more people now than ever. A true leader is always last after the needs of everyone else are met.
Master of never done
Being young and naive, I didn’t realize that opening a business is creating a monster. It grows arms and legs and ugly heads. It eats your money and ravages your time.
Just when you think you checked something off your list, four more things get added to it. As soon as you think you’re about to become profitable, you desperately need to hire more support staff. As your business grows, so do your problems. It’s impossible to simplify things as the organization becomes increasingly complex and expensive to operate.
If you’re successful, you’ll eventually have the support staff to delegate responsibilities and reclaim your sanity. If you can’t, you’ll drown in a quagmire of projects and tasks that aren’t your strengths or producing profit.
Every business owner must have a grasp on every aspect of the business: operating procedures, marketing, branding, accounting, technology and more.
As a small business owner, you can’t ignore any of these things and should become a semi-expert in all of them. If you can’t comprehend how every aspect of your company functions, then you surely can’t grow and scale. Most agents don’t excel in all of these vital functions, and if they open a brokerage without these skills, everyone in the organization will suffer.
If someone insists that they absolutely will open their own brokerage, then I provide the most serious yet counterintuitive advice imaginable: Don’t hire agents or open an office.
Those are the two things that are emblematic of having a successful brokerage but will kick-start the never-ending list of expenses and growing pains. If you must open a brokerage, don’t go big. Go tiny!
Agents come, stay and go
If you thought prospecting for home sales was grueling, welcome to the most unfortunate part of being a broker: Recruiting. Convincing new and inexperienced agents to join your company might be easy, but the training and turnover will be tortuous.
Persuading experienced and producing agents to join your company is challenging, even with the best value proposition in town. Making a career change is a high-stakes consideration, and it doesn’t happen quickly most of the time. Because recruiting is the lifeblood of a brokerage, this very slow sales cycle can be far more discouraging than the fast-paced nature of real estate sales.
Once you start hiring, keeping a healthy culture at an office is more important than anything else. Happy agents are complacent agents. It’s the perfect recipe for retention. However, keeping a wide range of personalities happy at once is a challenge that almost nobody is educated to handle.
As a broker, you soon discover that you’re more of a politician and therapist, managing egos and emotions more often than transactions.
If you’ve ever felt like a buyer has sucker-punched you with betrayal, it won’t compare to that of a die-hard loyal agent and long-time friend leaving your company. You can pour your heart, soul and trade secrets into the people you care about, but it doesn’t mean they will stay forever.
Go big, but why try?
When it comes to opening your own brokerage, I say go tiny, go big — or go home. If you’re going big, good luck.
Understand that on your first day in business, you are competing against goliaths in the industry who have incredibly established brands, technology, processes, recruiting strategies and more.
You are starting from scratch. How will you compete against the endless army of competitors? What’s your value proposition for hiring agents? Going from zero to hero is a treacherous journey, but what’s your end goal anyway?
Commission compression is a reality for the modern real estate brokerage model. Many brokerages compete solely on their ability to be cheap. If a brokerage isn’t cheap, it must provide extraordinary value. If it is cheap, it needs a huge volume of agents and transactions. Either way, every broker is competing in a landscape with endless cheap models in a seeming race to the bottom.
Regarding your end goal, consider that the landscape of mergers and acquisitions with real estate companies has completely changed in the past decade.
Large brokerages are less often purchasing their competitors and more likely to acquire just their competitor’s top agents with sign-on bonuses and bribes. Brokerages don’t necessarily purchase their competitors anymore; they try to gut them instead.
It hasn’t been close to happening yet in real estate, but if we have a disruption to the equivalent of Amazon or Netflix, the traditional industry could be devastated in a short period of time.
If you’re looking for a powerful exit strategy by selling your brokerage in the future, you might now be nervous about the untold number of years it can take to grow and how quickly it could possibly collapse, either by innovation or ruthless competitors.
Finding success
Of course, there are success stories of opening a brokerage, but most are not. Most are stories of dysfunctional small businesses where the owner thinks everything is fine, but everyone else disagrees or is oblivious to how much better it could be.
I have seen single-agent brokerages be successful, but they invest time into things they shouldn’t and aren’t fully equipped in an increasingly competitive industry. I’ve also seen teams open brokerages with success, but building an infrastructure for a multiperson organization overnight is impossible, and it will be painful.
Team-style brokerages require even more support and systems than a traditional brokerage, including dedicated staff, more robust lead processes, hands-on meetings and more.
What’s my definition of success? Simplicity. Being in command of your work-life balance while creating the income you want is the highest level of success, in my opinion. Opening a brokerage is a long and windy path to get to this version of success.
Consider all of the other ways you could find success. Maybe it’s through scaling and simplifying a powerful real estate sales business. It could be by investing in real estate and creating a portfolio that generates passive income for you in the future. It could be chasing your other passions that bring you more fulfillment than showing homes on the weekend.
A realistic conclusion
Despite my pessimism, which I call realism, I want it to be known that I have no regrets either. My office has some of the best agents in the region, which helps make it fulfilling.
More importantly, we have developed our own technology and have a powerful intellectual property portfolio. If it weren’t for our tech, which allows me to be creative, I probably would have shifted gears a long time ago and transitioned into something else. Like most real estate agents have a hard time absolutely loving what they do, you would feel almost the same about being a broker. So why do it?
The wisest thing you can do is learn from the mistakes of others, especially when it comes to long-term career decisions that are hard to reverse. You might expect me to end with a hopeful note, suggesting that you could be the one to successfully open a brokerage. Statistically speaking, that’s unlikely.
But perhaps you are the exception — the one with the talent and drive. Maybe you’re the one with the resilience to outsmart the competition, create a profitable brokerage and maintain a great work-life balance.
Maybe.
But before you dive in, ask yourself if you’re being just a little bit naive.
Sean Frank is the founder and CEO of Mainframe Real Estate in Florida. Connect with him on Instagram and LinkedIn.
by Devon Broderick | Aug 2, 2024 | Industry, News Feed
Inman Connect is moving from Las Vegas to San Diego in 2025 and it’ll be bigger, better, and bolder than ever before. Join us for Inman Connect San Diego on July 30-Aug. 1, 2025 with the brightest minds in real estate to shape the future of the industry. Reserve your spot today for an exclusive discount.
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