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% commission only compensation structure appeals
to experienced agents that are making sales in this tough 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. How are you able to survive in the current economy?
RK: Simple. We offer 100% 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 a pay increase. 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 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.
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 100% commission and for productive "commission split" agents that are actually selling instead of sitting on their hands and whining about the real estate market. We can offer agents the ability to practically have every benefit of owning their own brokerage 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.
KD: How many agents work at Real Estate Professionals?
RK: We have about 50 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. 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. 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 we are still seeing the real estate industry lose agents pretty rapidly. Right now there are about 38,000 licensees in the State of Maryland. Compare that with about 45,000 from two years ago. Most agents that I talk to think that this is a great statistic. This market is forcing many agents to put their license on inactive status or with a referral only company. 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: 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 myrealestateprofessionals.com. We will never sign on an agent without meeting in person to make sure its the right fit for both of us.
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