By Barry Lebow

I have a friend. She is a good Realtor, she cares about her clients, she has been at it for many years and if you ask anyone who has ever dealt with her, they would only sing her praises.

There is a problem though. She has spent years building a network at the lowest rung of the real estate market in her area. She has to sell a lot of houses to make a decent living. Based on volume, her sales propel her into the ranks of the top five per cent of salespeople but based solely on commissions earned, she never tops $100,000 per year.



I sat with her and I pushed her to broaden her marketing to the next level of pricing in her area. She resisted. “But these people I serve, they love me, I love them.”

And I told her, she is confusing real estate sales with social work. She spends a lot of time helping her clients, who are low-income Canadians. She even drives old dears to doctors or dentist appointments and I applaud her for that but she has forgotten about serving her own needs first.

One day she called me as if a light went on. She got a listing of a better real estate product, an actual detached single-family and it sold. She made over double what she was used to making and she was excited.

I told her to push hard. Go back to basics, knock doors, let everyone know that you listed and sold that property. Push and push hard.

It is now about two years later and she is selling less in volume and more per commission. She still sells the lower price point she used to service, but solely on referral and those small sales add to her volume and obviously add to her income.

For the first time in her career she earned just shy of $150,000. She cannot believe it as that achievement was beyond her grasp. She just had to get past her own fears and her own insecurities. What she had failed to do, despite her years in the business and with decent training, was take pen to paper to scribble out how to achieve her desired annual income. She never had a business plan.

I realize that my column goes across Canada and each community has its own price points.

Some of you do not have the opportunity to move up in the market because that market may not exist but there are opportunities in most markets for move-up if one seeks them out. Review this chart to see why volume should not be the main goal of a top Realtor.

Assumptions:

  • you are on a high split with your brokerage
  • you still have some brokerages costs, a per deal fee and annual fees. I allowed a 15-per-cent expense. This will vary as no one plan is universal
  • Bonus! You do volume and you will double-end some of your deals.

Raise your price point, find the right neighbourhoods to work in and you will reduce the volume needed, your income will rise and you can have a better balance of work and life. If you are in a market that has a very low price point and if you are serious about your career, either move (not easy) or start to study the highest price point in a market. For someone in a village you may want to starting looking at selling farms or smaller commercial.

Find a strong Realtor who can guide and mentor you. Shadow them if you can or at least meet to discuss your direction. Create a business plan, know your costs, what an hour of your time is worth and how to achieve it. Do you know what a typical listing costs you and how many hours you spend from the first contact until the deal closes?

I also suggest reading Selling Luxury Homes by Jack Cotton. Yes, the book is written for an upscale market but his techniques are exceptionally good and are to be applied to all listing and selling scenarios.

If you heed my advice, drop me a line in a year from now and tell me how things turned out for you. I love success stories.

Barry Lebow, FRI, Master-ASA, ABR, SRES, is one of Canada’s most recognized real estate authorities. Now in his 51st year of professional real estate, Barry has been honoured by many real estate associations for his work in the profession. He has testified in more than 500 trials across North America. He is the founder of the Accredited Senior Agent designation program. A teacher, trainer and educator, he is a broker at Re/Max Ultimate Realty in Toronto. Contact Barry by email.

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6 COMMENTS

  1. As Barry well knows a Housing Correction wipes out myths about the market whether it is condo prices going up forever or Quality over Quantity of Clients.

    Last month less than 1 home sold for every 3 Ontario REALTORs in Barry’s home province in the “busiest” month of the year.

    These articles are so 1980s you cannot believe. Bad advice then and worst advice today!

  2. Good comment by Brian Martindale. All clients are of equal importance. If we started counting the satisfaction of these clients instead of the dollars they generate in commissions, the income we make looks after itself through referrals based on solid, caring service. Having worked for a broker with the mindset of money first, I eventually learned the lesson – service first. It’s like playing hockey in the NHL (or any other sport at the top level), you play for the love of the game (in this case, the joy of helping people fulfill their dreams) and the income happens. Clients are to be treasured for the length of ones career. The most cherished clients I have had are the ones who have become friends – including the buyers at the start of the market and those whom have bought at the high end of the market (in our area). Indeed, we generate a poor image when we think money first.

  3. On top of all that was said above, buyers have to start somewhere. And a substantial number sell and buy up. She has all of those clients for their lifetime of real estate. The move up home, the trophy home, possibly the cottage, the downsize home and likely all their children’s business as well. Especially with clients that come from big families or are socially connected. And going the extra mile and doing things that aren’t part of the job, feeds her soul, which will help to avoid burn out. Those little deals will build her entire career.

  4. Brian,

    Here’s a perfect example from down memory lane. I had sold a half-million dollar property.

    John M, who sadly disappeared from posting on REM several years ago remembered when I referred to something George Cormack, RLP (d), had always preached (in particular in regard to gift giving – but it applies elsewhere in the industry); treat all clients and would-be clients the same, regardless of purchasing power or in regard to what they are selling. You never know who knows whom, where, or is somehow related by a different surname.

    Unbeknownst to me, the sellers were part of a large family of sisters, each married to a man by a different surname.

    My phone rang and I was asked to “come list my house.” A small rather ordinary looking place, no excess stuff and such visible. A tiny greenbelt pocket with only a half dozen houses, and the greenbelt was well-used by local hangers-on of several age groups. The house was immediate adjacent the walkway. The house had been bought from the builder and was several years old with still builders’ sparse paint and not upgraded, builders’ carpet.

    And no landscape. NADA. The perfect definition of ordinary. And of course it had the greenbelt walkway as one of its plot demarcation lines. The compilation of these descriptors eliminated many buyers right from the get go.

    But I love the expression I first heard here on REM: “There’s a lid for every pot.” List price: 130k plus. Maybe 1200 sf. Single garage, and space for a small car on the driveway.

    I always asked clients where they got my name. (I tracked all my sources of incoming business.) Mrs. Owner spoke. Mr. Owner said nothing. (Ever, as it turned out.) She was a mega bully. As it turned out, it was her sister’s house I had recently sold, who was pleased and had told the sister in the small house she “had” to list with me, I had no idea who any of the group was.

    But to speak to the topic at hand, I treated all price ranges equally. Didn’t matter to me the price range. I always carried George Cormack’s words in my head. And I already knew his words were true.

    I write really good ads if I do say so, and good, efficient MLS copy, but never overstating what lookers would see when they got to an appointment the way I had often discovered – unmatched descriptions at appointments.

    But this was truly a head-scratching property how to describe. But it sold swiftly thanks to a co-op, for close to asking price, first offer within a short time, maybe a week or two.

    She made it clear that she wasn’t saying where they were moving to. And the night of the offer, she didn’t want me to read the offer to them but got her lawyer on the phone at 10 pm. She had notified him an offer had been registered. So I read the offer to him on the phone with her on an extension. The husband barely acknowledged my presence and of course said nothing. This was a professional couple in their thirties.

    Really there was nothing to change in the offer, but the lawyer, a really old fellow felt he wouldn’t be doing his job if he didn’t change “something,” especially on a first offer. WHAT???

    I had to educate him that to make any singular change would negate the offer, giving the buyer an opportunity to walk away. We were in a wobbly market, and I really had to take her lawyer to task. I was pleasant but firm. The sold sign I had brought with me, (I always brought a SOLD rider to an offer table presentation) went up. Good subliminal advertising. Of course little did I know he was the lawyer for the whole extended family. Word spread unbeknownst to me for years that I had “taken-on” the lawyer (although respectfully).

    Turned out the sellers had bought from a builder and all the important dates and such had even lined up.

    Next the senior father called me. I had no idea he was part of the “family.” A retired businessman, I never ever did know in what arena. Very polite but firm low key man of means it turned out.

    To make a very long story short, he told me what he wanted to buy, and I showed him one house. A son in law accompanied. The sale was done before the showing was complete. A most unusual place. Location was important. I never learned why.

    They put about maybe 20-30k into it in a only few months and decided they didn’t want it. Sell it for us. The market had turned and their improvements although not grand were practical. (They took off all the solid wood doors and installed them in their office I later learned.)

    Well, another odd experience. I double-ended it under subagency to another business professional family, and when all was said and finished the sellers had an extra 60k net in their pocket well-covering over and above their expenses, in just a few months. The buyer had done his own research and knew the background info. 700k range was big money back in the 80s. The buyer had chosen the house that was perfect for the family needs. And listed their house with me.

    They still live there. Again, location was important to the buyer.

    But the first family in the group needed a place to move to. A tall order with important specifics required. Not an easy task. A property became available 400k higher than their sale. We have to discuss with dad. No problem. Dad appeared, THE DAD! who had just made 60k. Another sold sign went up on an MLS listing as my buyers who had been sellers were delighted. A couple of years passed. In between, another family arm made an offer on another million dollar property.

    Then my phone rang again. Come and list our house. The original small house sale who had bought from a builder got a for sale sign. She had discovered I had a new listing close by the dad’s house. And they wanted it. Done.

    But an almost comical end to that circle over a few years. They were all using that old lawyer. Closing day… Tractor trailers on street packing and buyer ready to unload. The lawyer I had talked to on the phone at the initial transaction but never again, had failed to register a long gone paid off mortgage. It was Friday night of a long weekend and the buyers who bought the once builder’s house were from another city. Being clients of an out of town agent, of course I never got to meet any of those people.

    All the lawyers involved agreed the transaction would close on Tuesday I was told, it had been agreed among all involved, closing would be after the holiday weekend. Of co use this affected my double end sale; the whole string of transactions. The out of town buyers had children and pets.

    Quite a circus for all involved, caused by that old lawyer who had wanted to make a non-essential change to the offer on the 130k house years before. I expect they all had him pick up the tab for the long weekend expenses involved.

    But the point of telling this long story is to say without my having processed the sale on the 130k house and sold as a result several million dollar homes, none of it would have happened if I had turned my nose up at the possible 130k listing. It’s not rocket science to add up all my related ends.

    When in competition, often sellers would be told by other agents: you don’t want to list your small-priced property with her; she only sells million dollar properties. They listed with me anyhow. And told me about such conversations.

    There really is a lid for every pot, and not just in my cookbook and REM gourmet cooking columns. And I made sure my lid fit all sizes. As best as could be. Netting me often five ends out of a possible six. In retrospect I maybe double-ended more transactions than anyone in the country. In today’s climate not advisable of course. But in fairness the public should be educated that when they list with an agent not to expect the listing agent to sell it. In fact in some trading areas, forbidden. But who tells their sellers this part of the selling routine?

    Carolyne L 🍁

  5. It sounds to me like Barry’s friend is a really good person, one who values people over dollars. Her high volume of transactions has made her a very experienced Realtor, ‘experienced’ at getting it right, over and over again, vs getting rich on just a few deals. Which leads me to my pointed criticism of Barry’s philosophy…

    Question: Which kind of Realtor does one think the public would choose to deal with: A) A Realtor who completes only a few (maybe only three even) transactions per year, or, B) A Realtor who transacts many deals (as Barry’s friend previously transacted) per year? To put it another way, would the public want to deal with a class ‘A’ Realtor, or a class ‘B’ Realtor? Never kick your bread-and-butter clientele—those folks upon whose trust in you helped you to build up your reputation and cadre of expertise–to the curb in favour of leveraging dollars for donuts.

    Does the public want to deal with experienced-at-successfully-transacting-deals Realtors, or, experienced-at-milking-the-system money-grubbing Realtors?

    Barry: You come across as being all about the money. This kind of thinking is precisely what gets into the heads of future wannabes who think that by getting a real estate sales license, riches immediately await them via doing only a deal or two per year…starting with the first year in the saddle. These wet-behind-the-ears amateurs want to jump the que to the big time…right from the get-go. Your philosophy fosters that unrealistic realm of expectations.

    Build up your bank account and reputation on the backs of the poorer amongst us, and then dump them for uppity elitist business on a deal-or-three basis per year? No wonder the public has a poor perception of real estate sales people.

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