Real estate need a Purple Cow!

Hello from up in the Great White North! Great post, and great food for thought. The industry is constantly cheapened by bad agents collecting premium commissions. People want options, and there are better ways to run a business and still turn a profit while working towards overall positive public perception (which obviously has not existed for some time now).

Great suggestions, let’s see what the innovators can spawn from them!

Forms of this type of brokerage are out there already, I see it in bits and pieces. Thanks for keeping the spotlight on it.

Consider this my plea for you to continue to put “pen to paper” on the Davison Realty model. You are tossing out some serious ideas for industry leaders to chew on.

-A fan

I have been pondering this thought for the last couple of years. I opened my brokerage about 8 months ago. I have yet to hire any agents because I do not believe in the traditional brokerage model.

I believe that to have a successful company we need to get away from the whole “agent is an independent contractor” mindset. Not only is it, IMHO, the cause of the general public looking down on our industry, it is impossible to run a successful BUSINESS when you have 100 people running around out to protecting their own interests, building their own brand, and believing that they are their own boss with no one to answer to.

I say put all the agents on the payroll so you can control their activities, assign territories, and make them have some accountability. AFAIK, the real estate business is the only industry that has the independent contractor exemption for salespeople and it was only put into place so that brokers wouldn’t have to pay payroll taxes and insurance on non-producing agents.

Pay them a flat fee for each closed transaction so the client doesn’t have to worry that they are being up-sold on something to pad the agent’s pocket. Give a bonus if they brought the client into the brokerage.

Mandatory training, required 1 year apprenticeship for new licensees, and require that all salespersons obtain their broker’s license within 3 years. I would cover the costs of the required coursework if they sign an employment contract agreeing to stay with the company for at least 3 years after obtaining their broker license.

I’m sure there’s more, but these are some thoughts that have been rolling around in my mind as I think about trying to grow the business or just stay a mom-and-pop shop.

No, I have not calculated any premium charges and feel there is really no reason to do so given my penchant to over deliver and under charge – a ethos of mine that has proven itself time and time again over the past 30 years, several very successful companies and a comfortable life.

Personally, I view the current percentage of 6-7% charged to the consumer as premium having been a consumer in dozens of real estate transactions. Some of the checks I’ve cut for real estate services have been considerable for a job that was far less than. So the problem as I see it is not the revenue it’s a) the services rendered that need to be increased b) the splits c) how a brokerage manages its earnings.

This post is about ideas. Insights. Expanding the boundaries of what a brokerage is and what it can evolve into if it so desired. It’s about making a difference. Building something special in the marketplace. A business that people respect. And want to hire for services by the masses.

There’s enough money being made from the current formula to make everyone happy and paid for a job well done if distributed with wisdom and fairness. The problems arrises when “greedy” is thread through the model by a shortsighted needle.