100% Commission: What real estate agent wouldn't fall in love with this 100% commission real estate company?
My name is Kate Davis. Why do agents affiliate their real estate license with Real Estate Professionals in Baltimore, Maryland? Why would a top agent want to sign on with Real Estate Professionals, a company that most of their clients haven't even heard of?
Robert Kaetzel is a real estate broker and started a very unique real estate brokerage. The firm's 100 percent commission only compensation structure appeals to experienced agents that are making sales in this competitive real estate market. In this candid interview the self described "real estate maverick" gives his take on the real estate market and what it takes to be successful selling real estate.
KD: Many real estate companies are consolidating or closing offices to cut back on expenses. How are you able to do so well?
RK: Simple. We offer 100 percent commission to the agents affiliated with our company for a very reasonable monthly fee, less than $300.00. This makes our company attractive to agents that are doing business in this market and want to make maximum income. We have been lucky to have some really good agents transfer from other companies that are 100% commission companies because we can save them money and provide a more independent and professional environment to work in.
KD: How do you compete with the large companies like RE/MAX, Coldwell Banker and Long & Foster?
RK: That's a great question. The answer is pretty simple. We don't. We don't market to the real estate buyer or seller. The Real Estate Professionals agent is our client and we place all of our focus and attention on them. It's their job to market to and service clients. By offering agents the ability to maximize their income it allows each agent to spend their own money directly promoting and advertising their own business as they see fit. Some of our agents have been in business for a while and do little if any marketing and are doing business strictly on referrals from past clients. Other agents are marketing like crazy and are growing their business. If you ask me, most corporate advertising is a waste. Statistics show that most buyers will either do business with a friend or by a referral from a friend or they may simply meet an agent as they look for properties. The agents with the listings are attracting the buyers. Sellers tend to list with a friend or referral from a friend. It's very hard to run TV commercials, radio ads and the like and have people raise their hand and say I want to do business with you. Real estate isn't a bag of frozen vegetables and we don't have any Jolly Green Giants in real estate. There is no such thing as a dominant brand in real estate. A no name company can do more business than a well known franchise if they have the right agents.
KD: So the marketing these companies do doesn't get them business?
RK: Not enough to justify the cost. Why would agents want to give advertising money to their brokerage from their commissions so that the brokerage can do general "image" advertising? You could get real business from a good craigslist ad or even buying a past client dinner and save alot of money. The real estate business has shifted and many of the things that worked in the past don't work today.
KD: So like politics, all real estate is local?
RK: Absolutely. Who wants to do business with a large faceless company when you can do business with the friendly guy or lady from church? The other trend that I see right now is specialization, even micro-specialization. Who wants to do business with the general practitioner real estate agent who specializes in "residential real estate". There is a hot and open market for agents that differentiate themselves. We have a guy in our office who specializes in waterfront property in Baltimore County. He was a former RE/MAX agent. He had his own logo designed and he designed his own for sale sign which we authorized him to do. He advertises in Homes magazine and I can tell you he has been very successful with that marketing strategy. Waterfront sellers have been seeking him out as the specialist, the expert. That doesn't typically happen in real estate. Agents usually chase clients. His example is how smart agents do business. Don't chase the clients. Let them seek you out. I know his marketing works because I sat in at a settlement for him and he made $18,750.00 on one transaction.
KD: That's alot of money.
RK: Sure it is. He got the client and he made the commission because of who he is and how he marketed himself, not who his company is. Do you think he might have a few extra dollars to market with now? I could give you more examples of specialization and the earning potential but I don't want to give out too much information. I still have to make a living.
KD: What is micro-specialization?
RK: To me micro-specialization is getting your focus down to a very limited target audience. Micro-specialization is being the proverbial big fish in the small pond. Marketing to a very precise group of people or slice of the market so that your marketing message resonates with them. Agents can even have more than one micro-specialty at a time where the agent is the expert to each target market. It goes against traditional marketing ideas and the fallacy that you should try to make yourself "global" and appeal to everybody which seems to be the conventional wisdom. I have met many agents that think their key to success is being licensed in 3 states when they can't make money in the state they live in. As the wise man says, jack of all trades, master of none!
KD: Do many agents specialize in one aspect of the business?
RK: Absolutely not. I would say it's definitely less than 1% of real estate agents. It's a very small group. Most agents are afraid to specialize. They feel they are giving something up. The agents that are willing to do it can reap a big reward. It does take some time. It's not an immediate thing, but it is a very cost effective way to market your services. We have an agent with our office that specializes in working with current and former marines and their families. He is a former marine. He can obviously identify with that market and speak the language. That's one thing that our company does different. We try to help the agents with our company market themselves intelligently. To get the maximum return from everything they do. Anybody can throw money around and generate business but you need to be profitable. My favorite saying recently is "I don't want to spend $4,500.00 to make $5,000.00". Many agents are perfectly content doing this. They care about their ego, their stats such as gross commission income and the number of transactions they have worked on but none of that means anything if the net income isn't good.
KD: Where did you learn about marketing?
RK: Several different places. Its one of my favorite subjects. I listen to alot of audio books in the car. I try different things and I like to experiment and see what works. Thats the true test of effective marketing. Its not what I think will work, its what works. To me marketing is salesmanship and it is a results based activity. Its a way to multiply your results and effectiveness, if you do it right. In real estate you typically get paid when you perform so if I can do something faster than you or more effectively I will make more money. There is no extra pay for doing things the longer and harder way. Thats marketing. Using ideas and techniques to do your prospecting for you.
KD: Why would an agent want to pay a monthly fee for 100% commission?
RK: Many agents don't. They would prefer to lose ten times that amount of money by having it conveniently deducted from their commission checks. When you earn 100% commission you are in business for yourself. It's a no brainer for agents already on a 100% commission plan and for productive "commission split" agents that are actually selling instead of sitting on their hands and whining about how hard it is to generate business. We can offer agents the ability to practically have every benefit of owning their own brokerage office without the high cost. For experienced agents its the only way to go and they can make alot more money that way. I totally understand that this concept is not for everybody. Its for agents that sell. Agents that are active in the marketplace. I was introduced to 100% commission and I thought it was the best thing that ever happened to me in the real estate business. Don't get me wrong an agent can be successful with any arrangement, but in my opinion 100% comission systems are the best and make it easy to be successful.
KD: How many agents work at Real Estate Professionals?
RK: We have about 45 agents right now. Thats not a really huge number. We want good agents that are independent and know the business. Its not a numbers game for us. Its a cliché but quality over quantity. In this market many real estate companies are so desperate they will sign on any agent. We have a different approach. We are the only company that I know of that doesn't take on brand new salespeople. We have some very productive agents and we are really proud to be in business with them. They make us look good not the other way around.
KD: How's business?
RK: It's pretty good actually. Our small group of agents closes around 500-600 transactions every year. Since we have a totally different concept and business model from most real estate companies we tend to attract people that do well no matter what the market is like, the top producers. Agents have to adapt to whatever the market brings. Nothing stays the same. We want our agents to market themselves, not the company. The real estate business is a personal service business and buyers and sellers do business with agents they like and trust. The company is a very minimal part of that equation if any. We encourage agents to market themselves first and foremost. If they do that they will be successful. Look at attorneys and doctors. They don't get together under a franchise name. They each have their own practices. I don't understand why the real estate industry has become franchise oriented. I see agents work at companies and the name changes every few years. Many agents want to promote a company brand and it's the exact opposite of what they should be doing. Agents that market themselves intelligently will do more business and those that don't are destined to find something else to do.
KD: What trends do you see in the real estate industry?
RK: Right now there are about 40,000 licensees in the State of Maryland. That's a very high number and people continue to give the real estate business a shot because of the low barrier to entry. The market is competitive in that there are many highly focused agents spending lots of money to generate business so it is forcing many of the less serious agents to put their license on inactive status or with a referral only company or join an agent's team. The other trend I see is that a smaller group of agents, I'll say 5-10% are doing more business than ever before. The agents that are doing well have a good lead generating website and they are spending money and time marketing themselves and they are adapting to the changes in the real estate market. Most if not all buyer leads are coming through the internet. We get alot fewer sign calls than ever before but more internet and email inquiries. Agents without a good web presence and computer skills may be extinct soon.
KD: What is your biggest challenge?
RK: I guess that its probably finding really good and caring real estate agents. There are thousands of real estate agents in the marketplace but many of them, well for lack of a better way of putting it "just plain suck". I am very passionate about the real estate business and I put my heart and soul into Real Estate Professionals, Inc. and I enjoy helping agents with our company. However, it can be disheartening when you try hard to help someone and they either don't listen to your advice or they don't have the discipline to follow through on things. Some people just don't want to put forth the effort to be good at what they do and sometimes I feel like I am wasting my time when trying to help these people. I feel sometimes that I want success for them more than they do. I can't do it for them. I have a quote displayed in the office that I created. It reads "A successful businessperson takes responsibility for how well they are doing or how poorly". I really believe that and I guess the real estate business is not for everybody. More now than ever before you have to be well rounded and have skills in many different areas. You need computer skills, communication skills, marketing skills, sales skills, self discipline. You need to be able to be sociable and friendly and be able to establish rapport with people. It can be very tough to bring all of these skills together. The closest thing to being a good real estate agent would be a good politician. Alot of the skills are very similar. An effective real estate agent could be a good politician and vice versa.
KD: How do you sign on agents? Do you advertise?
RK: Not really. I really don't care if we sign anybody on. Wait a second. That sounds bad. Let me rephrase. We want to sign on good agents that act responsibly and treat their clients and customers well. Agents that are serious about the business and want to make money. Many of our agents found out about Real Estate Professionals because they knew someone from our office that they may have been involved with in a transaction. Our agents refer people to us. We don't advertise like many companies do because its not a numbers game for us. We dont have to sign on any more agents to pay our bills so we are selective. In all honesty, we do advertise under the radar. I have a list of people who I think are good real estate agents and I do try to promote the company to these people. I try to reach out to people we are interested in rather than wait to have them discover us. Its not the traditional way real estate companies try to recruit agents but it works for us.
KD: You opened a new office in Catonsville, right?
RK: Yes. We have always wanted to have a physical presence on the west side of Baltimore County. We have many agents that live on that side of town. The office is in a great location and we have the possibility of reaching into areas like Ellicott City and Columbia that we have never really tried to target. I partnered with a super experienced associate real estate broker named Troy Williams who is managing the office. We are very excited about it. Troy is a class act with a lot of experience in the business and I know he is going to make the office a tremendous success. He is an intelligent guy who knows how to generate business, so I think he is a great fit to help our agents be more successful.
KD: Troy, What is your exerience in real estate? Why Real Estate Professionals?
have been in real estate sales for over 12 years. After passing the real
estate exam, I did what many new agents do and signed up with a brokerage
with the biggest name I could think of under the impression I would sell
more homes with that brand behind me. I did sell 24 homes my first full
year in the business, but despite generating over $120,000 in commissions,
I only grossed $56,000 in income thanks to a 50% commission split and
paying other fees like E&O insurance and marketing premiums. I would
go to my manager to ask for a higher split and after 2 years there the
highest I could get was 58%. It was then I knew I had to leave. I found
a broker with a different philosophy on commissions, one that says that
if an agent finds their own clients, they should keep ALL of their commission...100%.
A small monthly fee to the brokerage was my only cost. I was able to work
no harder than I was but make much more money simply because I was able
to keep 100% commission!
KD: How can an agent get more information about joining Real Estate Professionals?
RK: Before contacting us they should first make sure they are serious about the real estate business and understand it. I do take phone calls. My direct number is 410-916-8200 and of course agents can always inquire through our website reprofessionals.com. We will never sign on an agent without meeting in person to make sure its the right fit for both of us. One thing that makes me different from alot of other brokers is that I will take the time to talk with and meet agents and give them impartial advice and lots of information. I don't pull out a flip chart and start trying to convince them that we are the greatest. That sales pitch makes me sick. I take the time to find out what each person wants to do and I learn alot about them. I listen to their ideas and offer mine. I am not afraid to give my honest opinion on other companies, which ones are good and which ones to stay away from. I think thats one of the reasons that we are successful bringing agents on at our office is the way that I treat potential agents, with respect. I will give them honest recommendations even telling them that there are better options than our company if I feel it is warranted. The best method of selling is telling the truth.
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REAL ESTATE BROKER IDENTITY THEFT - A BIG PROBLEM
Don't let your identity be stolen by your real estate broker. Many real estate companies want to steal your identity. They see agents as a way to brand and market the company and to save money on their advertising costs. They see you as their sales force and love it when you spend your money and time gaining exposure for the brand.
What are the 3 top danger signs of broker
DANGER SIGN #1
Does the company require you or want you
to use a company provided email address? i.e. firstname.lastname@example.org
DANGER SIGN #2
Does the company require or encourage you
to use the company logo or company colors in all of your marketing materials?
DANGER SIGN #3
Does the company provide a company web page for your potential clients to search homes/get information, etc.? Not good! Identity theft brokers don't want you to create these things on your own. If you did you might realize that you don't need the broker. By giving you these items to use they benefit and when you leave the company these things get turned off immediately grinding your business to a screeching halt.
At Real Estate Professionals we want every agent to create their own identity in the market and we will help you to do that.
All agents affiliated with Real Estate Professionals, Inc. are REALTORS®. You may elect to be a member of any of the following local associations in Maryland: Greater Baltimore Board of REALTORS®, Harford County Association of REALTORS®, Carroll County Association of REALTORS®, Greater Capital Area Association of REALTORS®, Anne Arundel County Association of REALTORS®, Howard County Association of REALTORS®. You are responsible for the payment of yearly dues.
TRANSFERRING YOUR REAL ESTATE LICENSE
We never will allow an agent to affiliate with our company without a face to face meeting and the submission of a written questionnaire. After meeting, and if we are both in agreement to you affiliating with Real Estate Professionals, Inc. we will take care of everything involved with your transfer, including the cost of the license transfer with the Maryland Real Estate Commission. We will make it easy for you to be set up to do business the same day.
Thank you for taking the time to read this.
To your success,
P.S. I wish that I would have found a company like Real Estate Professionals, Inc. a long time ago. We can be business partners and make each other successful. Dont procrastinate. Make a decision today to investigate the possibilities. Fill out the quick response contact form below while this is fresh in your mind and you are excited about the possibilities.
"Never leave that till tomorrow which you can do today." - Benjamin Franklin
"You miss 100% of the shots you don't take." - Wayne Gretzky
Not knowing when the dawn will come I open every door. Emily Dickinson
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