So many real estate agents are losing significant amounts of hard earned commissions. In fact for every $400,000 produced, most agents are giving away $200,000 to $280,000.
Could this be your retirement?
This article covers
+ How smart sales agents are making less sales and keeping more than branded agents
+ A good brand is like a club we like to belong to, but we all know that a brand doesn’t make us great.
+ Why fear is the great con.
+ How it’s just as easy to set up your own business as it is to continue working for someone else but with a lot more upside. (Ozway holds your hand all the way and removes the fear to make it easy).
+ A step by step plan for sales agents to create financial freedom in 5-7 years earning over $150,000+ pa in passive income (whether you get out of bed or not, this is true freedom)
+ Why looking for more listings isn’t working smarter until you have the right business model.
In my discussions with real estate sales agents i increasingly find that they are searching for new business models that can support their day to day listing needs while allowing them to keep a much higher percentage of their gross commissions.
Let’s get one thing straight, before you consider setting up your own licensed business you need to be ready. What I mean by this is that you need to be well trained and confident that you can generate listings consistently.
On the flip side if You are just starting your real estate career, your agency provides most of your listing leads while still teaching you the trade then stepping into you own business is not a good idea.
But….. if you have been in real estate for longer than 1-2 years and feel positive about generating listings then chances are you have more than repaid your current employer for their help.
If this is you then now is the time for you to do the right thing by yourself and your family and build a successful business or agency and with this build your long term wealth.
Working with Ozway when you set up your own business is as easy as working for someone else. We have worked out what it is that distracts agents from the important task of building their business.
You could describe Ozway as a backbone that you plug into. All that stuff which is potentially scary to some and probably very boring to most is done by our team at head office.
I’m talking about things like trust accounting, settlement and compliance processes, listing properties on realestate.com.au, taking pics and making commission payments and much much more. These are all necessary evils when running your own business, and we do all of this for you.
You might say – “well I have all those services already and I work for a great brand” – I would say to you “that is correct, but you are overpaying for these administrative services and it is costing you your retirement lifestyle.”
Most agents i have talked to who have fears about being in business for themselves find enormous comfort in the back bone Ozway provides.
We have a great team, we have invested hundreds of thousands of dollars in systems and most importantly we have been doing this for others successfully for years.
Re-branding yourself (your personal brand – Your name) and owning your own real estate business can be one of the smartest decisions you make. If this is you I urge you to look back over your past 6 to 12 months of your listings and trace the origination of your sales.
My guess is that you will quickly discover that most of those listings are a result of your personal efforts. Specifically:
+ Buyers from your open houses or property sales enquiry,
+ Your personal contact list,
+ Your farming (Cold Calling, Door knocking, letterbox drops, Suburb Sponsorship on re.com.au or domain.com.au etc.)
+ Your previous buyers who bought
+ Your referral network
+ Your own personal prospecting strategies etc.
Too many agents (and very good agents I might add) are being brainwashed into thinking the franchise brand is what makes them successful.
Don’t get me wrong, a good brand is like a club we like to belong to, but we all know that a brand doesn’t make us great.
It’s your skills and actions that make you good. Add a great support team and you will become outstanding. A brand can give you identity but we must ask ourselves, at what cost and to who’s cost?
Generally this cost is a very large expense to the sales agent and one which benefits the franchise brand enormously. Some would say disproportionally.
I don’t understand why we pay a whole heap of money for a quality brand and then promote that brand even more, why doesn’t the brand pay us? After all it’s our work and efforts that brings in the business.
Of course we want quality. Take Hugo Boss as an example. They make quality suites. I love a good suit, but i can tell you that while i may look and feel great in Hugo Boss it is me (not the suit) that makes an impression. The adage – form over substance or substance over form? – well form is important and makes a first impression but it is substance that makes a lasting impression. In some instances a client may have some comfort around your brand association but most agents have to ask themselves if that brand association is worth 50% to 70% of the gross commissions they are producing.
What does 50% to 70% even mean?
If you produce $400,000 in gross selling commissions (26 sales x $15,500 average selling fee) and you get to keep $120,000 to $200,000.
This means the value the brand association is worth at $280,000 to $200,000 per year. That means you need to have achieved 18 listings and sales (out of your 26) just because of the brand association.
Most agents we speak with place the brand value at around 20-30% if they had to place a figure on it.
If this average agent was operating in partnership with the Ozway business model they could make just 14 sales and keep $200,000.
That’s 14 sales with Ozway instead of 26 sales with the traditional real estate models for the same financial outcome.
Would you rather everyone think you are successful and wealthy or would you rather be successful and wealthy?
This is a very good and telling question and if most agents are honest with themselves they would rather be wealthy and have real choices in their lives from financial freedom.
Fear is the great con.
Too many agents allow fear to stop them from changing their environment and it’s this fear that is causing agents all around the country from building their personal assets and a passive income stream.
Most agents that step into the right business model will tell you they wish they had made that decision years ago, and it was the fear that held them back.
Let’s look an example of a sales agent I spoke with recently and I asked him what he really wanted to achieve in the next 5 to 7 years in his career in real estate.
He said he wanted to be financially independent.
I asked him how it was looking so far, in the 15 years you have been in real estate sales, how many investment properties or assets have you accumulated?
He said 2 investment properties and no other real assets.
My next questions was how much do you need to be earning passively (without getting out of bed, not working) to have the freedom you really want, he said around $150,000 per year. This means you need to create passive income of around $195,000 per year to allow for taxes etc to end up with $150,000 ($3,000 per week) to live on.
In order to create around $200,000 gross passive income you need an asset base of around $3,000,000 averaging a 7% return to produce $210,000 passive income or asset growth per year).
In the past 10 years this agent had not acquired more investments and was literally giving away far too much of his hard earned commissions to the owner of the agency and the franchise he was promoting.
If you haven’t been able to acquire an asset base in the past 10 years, what is going to change in the next 5-7 years?
The light bulb went on and he understood the importance of finding the right business model where he could continue to receive the support he was used to in his current environment but a model that empowered him to keep his fair share.
Based on his gross commission earned figures, this agent was averaging just $400,000 per year in selling fees into the office, yet only getting around $120,000 for himself to live on and invest. only problem was there was no money left to invest after the cost of living.
Ozway provides everything a successful agent needs to offer a premium service to buyers and sellers. From day one, everything you need to list and sell is provided to you and for a very modest monthly fee.
Under other similar models, agents have to pay for all their subscriptions and manage those subscriptions on top of the monthly BRAND/Franchise membership fees.
At Ozway we show that we care about our agents and their success. In fact we even help finance agents into their own business to make the transition easier on their lives and living commitments.
Powered by Ozway this agent will be keeping around $355,000 each and every year and there is a much better chance he will list and sell more now that he knows the incentives are so much better for him and his family. In fact it’s proven that even his friends and network will get behind him in support because everyone loves to help those having a go in business (everyone except your old boss who was pocketing so much of your spoils :-).
Get ready for your boss to show you a side you may not have ever seen before, I know from first hand experience because when I told my boss I was leaving the agency after all the years of building goodwill of the company and helping them grow their business assets, I got kicked out of the office, abused and I was made to feel like a criminal, not to mention I was not paid my owed commissions. While i lost some commissions in the transition i was well ahead within a short period.
But I digress…. lets get back to the story of how agents can really benefit…
Let’s say this agent kept his standard of living constant, living on the $120,000 per year he had been earning, he now has an additional $235,000 per year to invest. Sure he has to pay tax on this money, so let’s say he has a smart accountant who finds a way for him to be structured to pay 30% tax ($70,500) he will have $164,000 to invest in assets each year.
If we look at the South East Queensland property market right now, you can purchase investment houses for around $400,000 to $500,000 and rent them out for around 5% return ($400-$500pw).
To purchase a $450,000 property you will generally need a deposit around 10-20% depending on your situation and then $20,000 for stamp duty and other expenses. So for every $65,000 to $110,000 you can acquire another positively geared property on “Set and forget” to accumulate for your financial future.
Over 5 to 7 years we have just showed you how the average agent producing just $400,000 per year in gross selling fees can build a positively geared asset portfolio of 7 to 10 properties. This is how you will really build financial freedom for yourself.
Branding is valuable but branding will not make you financially independent, especially when it costs you $280,000 per annum.
Surely you must agree with what I am saying. It makes perfect sense. Brand helps but most of your listings come from your hard work.
At Ozway we recognise that it’s all about you and your personal brand. We exist to help you reach your dreams and support you to promote your own personal brand.
Find out more today and take the first step towards a better and brighter real estate future for yourself.
You will be so glad you made that step. We will help you make that first step an easy one.
Step up and join us for the real revolution in real estate….it’s finally time to feel empowered and reach your dreams
HOW CAN OZWAY HELP YOU?
*DISCLAIMER: This post is not intended to be taken as financial advice of any kind. Please consult a licensed financial advisor or accountant for advice.