By far one of the most misunderstood aspects of a real estate business is scaleability. There are only so many hours in the day, and there are only so many days in the week.
For years I’ve watched agents struggle with the management of their time, and their teams time. This usually leads to the hiring of ISA’s and Buyers agents. These are the 2 moves that ultimately tank the team’s or the single agent’s net profitability. Coaches have been preaching to hire a buyers agent as one of the first hires when an agent starts a team. However, this usually leads to the agent sacrificing 50% of their income per sale while they focus on trying to get more sellers and list more properties.
This is the beginning of what I call the NPP. Net Profitability Plunge.
It starts off with the agent thinking they have so much more free time to work on finding sellers, listing properties, and generating more business. When in reality, that agent (or team) has just lost 50% of the net proceeds coming into the business. This is the top of the hockey stick.
Within about a month or two, the agent realizes that they’re not making the kind of money they thought they would by having a buyers agent. Some blame it on the buyers agent, some blame it on the follow up, some blame it on the leads themselves. Now the agent starts looking for a way to stop the hemorrhaging. They hire an ISA to follow up with the leads, they increase their lead spend, and they try to find lead providers that promise “ready” leads (which usually come with a referral fee to be paid out at closing.) The net proceeds have declined again and we’re now in the free fall stage of the hockey stick.
The expenditures have now increased to an unattainable rate. The ISA isn’t converting as well as the original agent did, the lead providers aren’t providing “quality” leads, the buyers agent is still doing the same amount of business, but is now getting overwhelmed by the quality of the appointments set, and the team turns into utter chaos.
We now come to the bottom of the hockey stick when the buyers agent leaves or is fired. The agent realizes that the ISA isn’t doing a great job and fires them. The leads are still coming in, but the agent is now working all of them, trying to juggle clients, giving up free time to handle clients, and getting burned out because the money isn’t what it use to be, leading that agent to now hire the coach or continue coaching with the coach that told them to hire the buyers agent in the first place…. And the coach lines their pockets helping the agent “fix the problem.” It is a vicious cycle, but it’s done every day. I know, because I have been there, and have been that agent. I had a net profitability of 12% in the beginning of my real estate career because I did the exact model stated above. That agent was me.
I had sold 37 homes in 4 months, and I had $6000 in my bank account.
So I fired my coach and went about things an untraditional way, a way that I knew I could increase net profitability and free up a lot of my time.
I sat down and figured out where I was spending the most time, and where the best use of my times was in my day to day operations.
I was really good at following up with leads and writing contracts. When I did those things, I made money, but more importantly, I could do them anywhere.
The things that took up the majority of my time were showing houses and attending inspections.
These were 2 things that I could outsource that would save me time and money. So I developed a showing agent model. Using other agents to show houses for me, while I focused on setting appointments, teeing up clients, and then writing contracts.
I started small, sending one or two clients with a showing agent to see how the transition worked and how I could transfer the trust the client had with me to my showing agent, and then back to me again. It was a rough beginning until I started to learn the mindset and the methodology of handing off my clients to a showing agent for their showings, then it clicked, and the process got much easier.
The reason this was so powerful was because I built the relationship with the lead, they learned to trust me, they liked that they got to speak with me instead of an ISA who didn’t know the area. My conversion rate started steadily climbing. Soon, I was swamping my showing agent, so I found another one, and another one.
On most evenings my showing agents were out showing multiple homes to multiple families, on the weekends they were usually busy from 9am to 6pm, with 2-3 families each.
I had effectively multiplied myself.
My day was spent following up with leads for a couple hours, then checking in with clients that were seeing homes that week, following up with clients that had been out seeing homes the day before, and then writing contracts. I started work at 9am and I was usually done around 5pm. I worked from home most days.
Over the next 4 months, my net profitability went from 12% to 63%. I then started my team, by hiring a transaction coordinator, an admin, and bringing those showing agents on payroll. My business took off, my net profitability sustained above 76%, and I started having a whole lot of fun in my business.
Growing your business, be it as a single agent or a team, doesn’t have to be a burden. It doesn’t have to wipe you out. It doesn’t have to infringe on family time.
For some of you the buyers agent model might work, but for most, it mathematically doesn’t make sense.
I’m launching a 3 call live course on how to start and grow a showing agent model. It’s the first time I’ve ever talked about how I grew my business from a single agent to a team that I sold for the mid 7 figures. It’s 3 calls talking about the showing agent model specifically and how you can implement one TODAY. It doesn’t matter if you’re a single agent or a team. I’m covering it from both angles.
The calls kick off on Feb 1. For those in the program, you’ll have access to the recordings.
In the 3 calls we’re going to cover:
How to setup a showing agent model
Where to find showing agents
How to pay showing agents
How to transfer the trust of the buyer
The showing agent contract (how to protect your deal)
How to leverage and scale this
The cost to get you in to all 3 calls, and the recordings is $499. We are limiting the seat count and I won’t be doing this live again.
The link below is how you sign up.