One of those urban myths out there is that real estate is a simple business
and anyone that wants to do it, can.
The truth is that it is anything but a simple business.
It is not the place to make big money with little or no real work (no risk ).
And listings do not always sell themselves, just by putting it on MLS.
Yes there are challenges we face every day and every transaction is unique.
After studying and writing the challenging examinations we must go through just
to get licensed to be able to practice the art of real estate sales and marketing.
With the continuous education requirements and insurance coverage for errors and omissions,
and the stress of dealing with potential complaints to the Real Estate Council of Ontario and
compliance requirements with FINTRAC and the necessary disclosures and representation
agreements that need to be signed and filed.
This is all the easy part of the business, the next stage is actually finding clients,
dealing with other realtors and closing deals.
And as we said earlier every deal is unique and every client is special.
Most of us overlook or take for granted the critically important role of marketing –“
something that must be invested ( time & money ) in by all companies including
individual Realtors.”
With nearly 30,000 realtors competing for listings in
Toronto and only one realtor / team of realtors getting the listing and the
privilege to represent and market the property at a negotiated commission.
It’s half a victory to get this listing
opportunity in the first place, at a competitive price, than again compete with
other listed properties to achieve a marketed sale. Only then does the average
realtor earn his/her pay-day.
For which, if the market is tight and the property is over leveraged or
burdened with obligations – the closing of these properties will be delayed
until there is agreement as to who may accept a squeeze of the monies owed
them, bank – the mortgage(s)/lines of credit, tax department, liens and other
encumbrances, etc – the realtors and their commissions (may get cut, or an
interest free second mortgage with no payments due for 3 years; for example ),
never it seems the lawyers involved.
Marketing costs ! And there is no assurance of return of
these expenses to the realtor(s).
Who spent their money advertising the property for sale, placed signs, kept a
database of qualified prospects and networked over years. Some realtors just
make it look easy – but they have been hard-working farmers tending to their
fields of expertise and farm areas.
Yes some realtors are also lucky, right time right place, being in the right
market with the economic winds at their backs.
An associate of mine, educated me recently about the “amount
of time, talent and $$$ invested by Ad agencies in a half day ‘pitch’ is phenomenal.
He reviewed several agency’s presentations. However one of these agencies –
decided to close their Toronto office for the day, bussed their employees to
his company’s HQ and had them standing in the parking lot, to demonstrate the
ageny’s commitment to his company’s business.
They won the account, by the way.
But what of the four other agencies, that did not win his company’s account ?
They had to eat the cost of their presentation(s) and everything that went along with it.
The analogy applies to Realtors also – you have to invest in Marketing,
including listing or buyer rep presentations. And you can’t sit back and say
“well, if I don’t get the listing I’ll have them sign a consulting
contract”. The entire contract goes to one of your 30,000 competitors, who
may not be equally skilled – yet they are equally licensed, insured and have
access to MLS ( if that is important to the client ).
There’s an estimate from experience, that of the opportunities we uncover,
we actually gets paid about 3% of the time.
In 97% of the cases, we either do not get the assignment, or the deal falls through.
This may be a huge revelation and mental ‘shift’ for some
of us, since as a career employee of a corporation or government, we may have
one client (our Employer) and we get paid 100% of the time for all our efforts and all of
our expenses are covered.”
There are no guarantees in real estate.
This may be one of the contributing factors to the
large numbers of turnover among sales representatives.
Real Estate sales is easy to get in, however tough to stay in.
Real Estate is a competitively tough business which most clients and new realtors seem to
overlook or take for granted.
Go in prepared and with both eyes open!
Twitter : EnvoyCapRealty
Envoy Capitol Realty Inc.,brokerage Toronto / Canada
Buy,Sell,Lease,Consult,Develop,Manage,Syndicate — Investments
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