The first few days in the office were pretty exciting. I met some great people and learned the office procedures. I learned how to use the copier, the fax machine, the wireless network. I had training classes on our paperless system – online document and transaction management software. All in all, it was pretty cool. I got my 90 training program under way so I could hit the ground running. I received a couple of leads and began prospecting to find my own clients. Well, I was in the office doing some work when I got an “up call” – meaning I was next in the rotation to receive a lead from the company switchboard. I spoke with the person who was frustrated with the realtor they had been trying to get information from. They were relocating from California and needed someone on the ground in my state to deliver the information they needed so when they came to town, we could look only at those properties they knew met their needs. I provided some information, then followed up later to make sure he got the info and discuss any other properties. It must have worked because I became busy very quickly with this person. When they came into town, I picked them and we drove to 6 homes. We negotiated an offer on their favorite and BAM! I was a Realtor.
What became clear quickly was the training in our office neglected to go through what to do to negotiate a contract. Rarely, does it happen this way, but we were in the finished basement of the home my clients wanted while the sellers and their agent were upstairs. We agents were running up and down the stairs negotiating the deal while our clients relaxed in the home. We had an agreement and I didn’t know what to do next. I discreetly wet upstairs and pulled the other agent aside and asked her how to finalize the deal. She was very supportive understanding it was my first deal. She walked me through the earnest money situation and finalizing the deal. Turns out she is the managing broker at her firm and was very eager to help out new agents. Was I lucky! It could very well have gone badly and I could have been exposed as a potential risk to my clients.
At the time, I didn’t realize it, but my training at the firm did prepare me for prostecting my client’s interests. For that, I am grateful. I have heard horror stories from other agents about training under fire and screwing up deals.
So, now I have a deal in process. I am sitting in the office and an up call comes in for one of my coworkers. He was frustrated in trying to understand this person and I could tell. Finally, they told the receptioninst they were sending the call back to the front desk as the agent couldn’t work with them and didn’t think they had any money anyway.
Well, the front desk asked me to try, so I was happy to give it a shot. I got on the phone and this wonderful asian woman was asking about a home very close to our office. I hopped in the car and met her there to walk through it. She seemed interested, but very non-commital. I didn’t know what to make of it. Was this a cultural thing, was it a negotiating tactic, was she really just wasting my time? We parted ways saying I would dig up some more information on the property. In the meantime, the agent who listed that particular property was asking for someone to sit the open house on the weekend. I volunteered. The weekend came and I was sitting at the home. Here comes that same asian lady and her husband. They walk through the home and I just happened to finish compiling the information for them. I presented it to her there at the home and she must have been impressed because we wrote up an offer right there on the home.
Whoa! Two deals going within two weeks and I had only been with the firm for a month. I was on a roll and I was unstoppable. I loved it. I hadn’t even begun my prospecting yet. People in the office were a little miffed at my success out of the gates, but I really don’t pay much attention to that stuff.
Very early on, it became clear who the complainers were in the office and I avoided them like the plague. Negativity wasn’t going to creep into my mindset from others – I was determined to keep it that way.
So, the first of the two deals closed. I carried the title company check to my office and presented it to them. I couldn’t wait to get my check. Payday! I got my check and my jaw dropped. What the…?!? I went to my managing broker to discuss why the company took so much of my check. Turns out there are a whole list of fees they get for the pleasure of me doing business through them. Franchise fees, insurance fees, transaction fees, lead generation fees, company splits, etc. The list was endless. Basically, I ended up getting roughly 27% of the total company split.
To put that into perspective, lets say the home was $400,000 and the commission was 5%. The firms split that – each getting 2.5% or $10,000. I brought home a little more than 27% or $2,700.
How the hell am I going to make a living bringing home such small checks? I would have to do two transaction a month for the whole year. I ratcheted up my goals – began prospecting – and began showing homes.
Well, the business didn’t get much better. I total, I closed 7 transactions in my first full year. I brought home a little bit and it helped the household, but didn’t get us to the point where I was making a solid living. To add insult to injury, I was working with a lot of buyers as my prospecting for sellers was inconsistent. There is an old adage about buyers – “Buyers are Liars”. I can’t tell you how many people I spent time with who either weren’t ready to commit or couldn’t come up with a downpayment to get the ball rolling. In some cases, people were just killing time or “tire kicking”. I remember working with a couple to show a series of 8 homes one day. The found one they liked. Then asked me to set up a showing in a another neighborhood for 6 more homes. I did as they asked and showed them. They found another one they liked. I spent two full days with them showing homes. When they decided on a home, they called up a buddy of theirs who is a realtor to actually handle the deal. I was totaly screwed on that. I could have fought for my share of the commission for showing them the home they ultimately bought, but I didn’t have confidence in my business yet to know whether I would win. If it were today, I would have filed a complaint with the state board and would have received a judgement in my favor.
Anyhow, I was rapily becoming bored showing properties with people who weren’t going to buy anything. I got a call one day from that very nice asian lady who I sold my second property to. She wanted to buy another one. I didn’t realize it at the time, but she was an investor who buys rental properties. I jumped at the chance to show her another one. In fact, once I realized she was an investor, I did my best to show her a spreadsheet I created with income projections from this property. She wasn’t impressed. She just wanted the property. Well, she already had a maximum price in mind. We began negotiating and came within $2000 of each other before both sides decided that was enough. My client wouldn’t come up any more and the sellers wouldn’t go down any more. I couldn’t believe we lost a deal with only $2000 difference.
I returned to my office to sit and think about this. I also realized I got a charge out of this type of deal. It was very logical and she taught me to stick to the numbers. If the numbers work, then do the deal. If the numbers don’t; walk away. Holy crap. I really liked this.
I did try to get the deal moving again with no luck. I did however change my prospecting from buyers and sellers to focus now on investors. I was now working with 2 investors pretty regularly and the business was challenging but growing. I liked the logical approach. I liked the numbers and learning what things the investors look for. I was having fun again and I was working with people who could get the deals done. I also didn’t have any more opportunities fall apart because the color of the carpet was wrong.
Next time: Real Estate investors are cool!
