Over time we tend to adjust our thinking and perspectives of how we want to conduct our business. I’m referring specifically to the real estate industry and directly to the real estate agents and broker/owners.
The industry is very attractive based upon the ability to operate as an independent contractor. No set hours and you are rewarded based upon your own ability to produce results in servicing either buyers or sellers of real estate. In the last 40 years many Real Estate Franchise companies have been started and then promoted. From there the brand was used to attract new franchisees and agents to work within those franchises.
The end result is that the franchise industry has captured over 60% of the real estate market in the United States. The franchisors did very well and far better than the franchisee’s that believed in a specific brand.
Just because someone buys a franchise does not mean they will be successful. The franchisor, as they are known, does not warrant or guarantee success. That is entirely up to the franchisee.
Who buys a franchise and why do they buy a franchise?
Most are purchased by either an independent real estate brokerage company, or an agent within that company who feels they want to grow a successful business using the business model of a specific franchise. Some franchise companies are easy to deal with others having no clue as to how to listen to their customers. Those that cannot hear soon find that the franchise has switched either to another brand or decided to private brand itself.
The reality is that many people who purchase a franchise really should not have done so.
The reason is they possibly were not qualified to manage a business or did not have the personality to lead. Leadership is paramount.
Many franchise sales people never sold real estate. The next time a salesman attempts to sell one of these great brands ask the salesman, if it is that great why don’t you own one?
Over the last 30 plus years I have seen many so called franchisee’s fail. I have seen great sales people over extend themselves to build a successful real estate office and let their ego over rule the primary objective for being in the business.
The objective should be to earn a great living and have total control over your own destiny. What they really should have done was to say, OK I am going to be very successful in the business and will align myself with a quality company in my market.
I will go to work and build my personal book of business. The better I serve my customers the more referrals I will receive and the more money I will earn without having to make any major investment in office buildings, support staff, insurances, and reporting to a franchisor.
At this juncture I feel STRONGLY that there is no need for any more real estate franchise companies. An agent can name his/her own ticket and have a super career with no headaches of running a company. Many existing brokers wish they had done just what I suggested years ago. They know it was not worth the pain of being a baby sitter to everyone in the company.
All an agent has in life is 24 hours a day to make a living, raise a family, take a vacation now and then, and build a retirement account by purchasing an investment house every year. That is exactly what I taught my agents when I founded RE/MAX in PA in 1978.
At this point many of those agents became millionaires following that suggestion.
In closing, if a young real estate agent wants to truly be successful I recommend stay an agent or associate broker with a quality firm. Don’t make the mistake that so many others have made of buying some franchise and then wasting your time, money, and maybe even your family by working too much and taking too many risks trying to help other agents who don’t have the same work ethic as you.
However if you’re like so many others who insist on buying a franchise do your research. Not just ask but get the real stats on how many franchises of a given brand have failed in the last 10 years. You will be shocked. If you find there are more than a thousand, two thousand, or even more you must know something is Rotten in Denmark.
Wishing everyone the best of luck with a great career in real estate sales.
Michael J. Stefonick, CEO
Optimix Marketing, Ltd.
506 Colonial Drive
Hilton Head Island, SC 29926
Executive Coaching & Management Strategies for Real Estate Professionals
RE/INVENTING Real Estate Brokerage To Improve Your Bottom Liine.
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