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What drives your fear of flying solo?

airplane wing & fluffy white clouds on a beautiful blue dayIn my endless quest to dispel the many myths surrounding what it takes to thrive as an independent broker, I’ve compiled a list of the top ten ways agents deceive themselves into thinking that they can’t – or shouldn’t – set up shop on their own.

1. Creating a “sense of community”

Unless you’re actively recruiting, the last thing you probably need to be doing is hanging out at an office chit-chatting with other agents. Sure there’s endless entertainment and comic relief swapping horror stories and real estate tips and yes, you’re building rapport with other agents that could help a future deal go more smoothly than otherwise. But let’s face it, ultimately you’re just wasting time. If you need to create a sense of community, being active in your local community is a far better, more authentic, alternative. Volunteer for Habitat for Humanity or another cause you have a passion for. Create a true sense of belonging while building a meaningful network of contacts outside of – but related to – real estate. If you want contact with other agents use social networking sites like Twitter, Facebook, LinkedIn, and ActiveRain to interface with agents outside your market. You may even find you feel freer to share with those who aren’t your direct competition and with whom you may wind up being able to refer business to in the future.

2. Access to real estate expertise

Early in my career I did several transactions involving options to sell that only one broker in my company knew how to handle. Since there is an endless number of ways that transactions can evolve, there are many experienced, competent brokers who don’t know or who don’t have all the answers. That’s one of the most attractive things about real estate, in my opinion. Never a dull moment. Granted, I don’t advise anyone to go out on their own until they have a critical mass of transactions under their belt. For me personally I felt that number was about 100 transactions (five years) but your mileage may vary. I am always shocked when people with six months or a year of real estate experience think they’re prepared to go off on their own. Contrary to what you might tell yourself, however, you don’t need a broker to ensure access to expertise and advice should you run into a conundrum. Your local association dues should cover something known as the Legal Hotline.

Consult your association’s legal hotline or call another trusted broker for advice. The most important thing is to recognize when you don’t have the knowledge or expertise to handle something on your own. When you contact the Legal Hotline you’ll speak to an attorney (whoever’s on call) who will be very sharp, professional, and to the point. You’ll save time and energy dealing purely with the facts and wind up getting to the nitty gritty of the matter much more efficiently than waiting for a busy broker to call you back.

In my endless quest to dispel the many myths surrounding what it takes to thrive as an independent broker, I’ve compiled a list of the top ten ways agents deceive themselves into thinking that they can’t -or shouldn’t – set up shop on their own.

3. Access to quality training

There are endless quantities of training available. Frankly, much of it is overrated. Doing real estate is the best way to learn real estate. Talking to your clients and soliciting their feedback is the best way to identify areas for improvement. The more transactions you’re involved in the greater your knowledge, expertise and the breadth of your experience.

Incidentally, Keller Williams uses training as a recruiting tool. Go ahead and attend their training sessions. Honestly, they won’t mind! In fact they’ll love you for it because when the room is filled it makes them look good. You don’t have to join them and they won’t pressure you to do so (okay, admittedly you might have to do a little fessing up so they don’t waste their time trying to recruit you). There are also books, courses, tapes, streaming audio, podcasts, and more (some free, some not) that you can sign up for on an ad hoc basis. If you’re like me you’ll find that you can attend all the courses in the world but if you don’t bother implementing what you learned, it can be a colossal waste of time and money. If you do find the need to collect designations (like I did for awhile before I knew better), focus on implementing a few tried & true techniques, then add incrementally. Most people don’t use a fraction of what they learn in courses. Remember, the real estate training sector is a huge money-making industry. You’ll get a certain amount of valuable training just fulfilling the semi-annual requirements (which have recently increased) required to maintain your license.

4. Access to referrals

Is a steady stream of referrals keeping you from going out on your own? I doubt it! Whether your broker is giving you lots of referrals or not, practice generating all your own business for a few years. I did this for 4.5 of my first five years before I was finally able to admit to myself that the few referrals I was getting weren’t really worth taking when I could get plenty of business on my own. Don’t accept referrals unless you are absolutely desperate and have tried everything else first.  Ultimately if you can’t generate your own business and have to rely on your broker, you may not be cut out for real estate sales. Don’t rely on floor calls or walk-ins either because you won’t have them when you’re on your own working out of a very small office or your home. Learn to work independently and generate the bulk of your own business! You’ll net more and be better prepared to go off on your own.

5. Access to a brick & mortar presence

Real estate offices are becoming increasingly mobile. Realtors often work from home or in the field and go to the office only when in need of meeting spaces. Admittedly, when I was considering going off on my own, the prospect of not having an office to invite clients to really kind of freaked me out. But I quickly realized that I could check with my local libraries, title companies, and banks about using their offices instead and it turned out they were all more than happy to let use their conference rooms anytime I wanted. One lender even complained the other day that I wasn’t using their office enough! Do realize that they’re hoping you’ll send some business their way at some point but that’s likely to happen anyway and to be expected. After all, what virtual business partner wouldn’t want that? The bottom line is you may think you need a brick and mortar presence but you really don’t. The business of real estate takes place at showings, listing appointments (homes), and closing tables. Maintaining an office drives up costs, results in duplicate files, extra trips to your “other office”, etc. Also, consider asking your clients (once you’ve got an established relationship) to drop by your house. You’ll keep your home and home office more organized while strengthening the bond with your clients. Your clients may even get decorating ideas! You’ll also save time and money running around. And best of all, no more earnest money getting lost in the mail!

6. Access to technology

I’m lucky that I have a technology background and acknowledge that I may be more the exception than the rule. It is doubly sad, therefore, that many brokers supply technology that doesn’t meet even the most basic requirements of technology-dependent agents. For example, the webpage you’re assigned when you work for a broker is typically nothing more than brochureware lacking any real functionality. You’d be surprised how easy it probably is to outrank your broker’s site with a simple, well-designed WordPress blog. Also, most applications are web-based now so you shouldn’t have to pay high monthly technology fees for outdated, poorly designed software. For office applications use Google’s suite of free web-based applications. For hardware support call the Geek Squad or buy an extended warranty. There’s built-in support for Paragon that comes with your MLS dues. All you should really need is a fast connection to the Internet and a good data plan on your cell phone. For a virtual receptionist try using a service like callruby.com. They’re savvy, professional, and cost-effective. And there are loads of licensed virtual assistants who can help process your transactions. Bottom line: duplicate office setups are costly and cause agents to be tethered to an office away from home that zaps productivity. That makes them less flexible and less able to service buyers and sellers who need things on short notice. Get organized and mobile so you can be  relied upon for a quick turnaround when clients have questions, want to list their home on short notice, or want to write an offer.

7. Ability to leverage a credible brand

Virtually any brand, so long as it’s unique and distinguishable from other brands, is differentiating and therefore able to capture the attention of the marketplace. Moreover, consumers are attracted more and more to idea of “buying local” and supporting local businesses (and therefore their local economies) rather than supporting large chains. I recently landed a listing because the client caught sight of my yard sign and noticed it was new, different, and locally-owned and operated. She didn’t want the sign in her yard to look like all the other signs in the area. She wanted her house to stand out and felt my sign would help her accomplish that. She interviewed two competing firms but felt that my pricing was more realistic, my staging advice more comprehensive, my branding more remarkable, and my roots in the local community more deep and committed than the competition. Operating under a big box “name brand” broker promotes that broker’s brand and does nothing to distinguish you or your services. Try asking your clients if they care which broker you work for. I guarantee the vast majority, if not all, do not care one bit. People hire a specific agent because of the rapport they build and how they convey they will do business with them, not because they hang their license with a certain broker.

8. Avoiding expensive start-up costs

You can start your own brokerage company for less than the commission you’d give your broker on one $100K sale. That’s right. For well under $1,500 you can have everything from business cards and a website to custom yard signs and office equipment. You can spend a lot more than that but in my opinion that is a choice, not a necessity. I do recommend that you have a few month’s living expenses saved, however, in case you have a dry period (this is true even if working under another broker). The last thing you want to do is make a client feel pressured to buy so you can get paid!

9. Avoiding expensive operating costs

My operating costs have gone way down since going solo. I no longer have to give my commissions away to my broker, I no longer have to pay desk fees, technology fees, or transaction fees, it’s cheaper to print color copies at home, it’s cheaper to order my own sign installations directly, business cards are less expensive (another “profit center” eliminated), and I no longer spend money on gas to commute. There are loads of other operating costs that have been eliminated too such as being hit up for money for birthday lunches, gifts, office treats, and more!

10. Fear of agents avoiding my listings

Buyers are attracted to yard signs, open houses, and full-featured websites with MLS search capabilities. They find listings online and ask agents to show them properties. If an agent makes excuses not to show certain listings, they run the risk of losing that buyer.  Cooperating agents cannot realistically get away with not showing competitors’ listings that their clients are asking to see. No one is dumb enough to screw themselves out of a commission in an attempt to somehow “punish” an agent who has gone solo. This is a preposterous supposition with no basis in reality. Since going solo I have more listings than I’ve ever had in my career and everyone under the sun, from every conceivable brokerage, has shown my listings and brought me offers. It’s just silly to think that an agent would discriminate against another agent because they work for a competing broker.

Can you think of any other excuses – or outright lies – that you keep telling yourself to drive your fear of flying solo? Comment here or direct message me at @jolenta on Twitter. I’d love to hear what you think!

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  • 22 comments

    22 Comments so far

    1. Benjamin Ficker July 11th, 2009 11:03 am

      Great article. You point out many reasons why a “traditional” big brokerage can actually cost you money instead of help you make more money.

      But a few points:
      – You pointed out how great KW training was and how anyone can go.
      – They have a cap on their commission splits and the only fees are $40 a month if you work from home.
      – They are VERY agent focused, they want you to build YOUR brand, with only the legal advertising requirements for their logos, etc.
      – They have a reviewing broker so you can focus on getting more listings and selling more homes

      With all that said, what is the draw of that type of model?

    2. Benjamin Ficker July 11th, 2009 11:07 am

      ~ With all that said, what is the draw of that type of model?
      - Sorry I meant draw back of that type of model

    3. I been doing this for over 30 years, solo, major and a major franchise( which was once not so major)REMAX. Solo if fine if you are good and are in a limited geographic market. Else the brand recognition and support is very good to have.

    4. Benjamin Ficker July 11th, 2009 3:22 pm

      I think going solo in a large market works too, you want to build your own brand awareness though. There are large brokerages that allow this, so why not have the best of both worlds?

    5. Tim Shepard July 11th, 2009 9:37 pm

      I think a lot of people stick with the “traditional” firms out of habit and fear because the top agents in the past were typically associated with those companies.

      The companies on “main” street or in the best locations received the most walk-in traffic and business. Things have changed now and the internet is now “main” street.

      I made the decision to go independent and have never looked back. At first, I was concerned about whether or not I could get buyers and sellers to work with me without the brand recognition. Fortunately, I realized quickly that people never hired the brand to start with…they hired me!

      Like most major decisions that I’ve made, the process is always more stressful than the outcome.

    6. Barry Bevis July 12th, 2009 5:21 am

      Love the post!
      Whats wrong with the KW model? They have duped you into believing you are building an independent business. You are still working for someone else- you are still under a GIANT corporate structure and you are still paying for them to promote their brand.
      In our market the lead brokers “team” still gets the most benefit from their marketing. Looking at the volume reports prove that.

      I went out on my own this year and have loved it!
      My business is my own and I can make my own decisions.
      Ive had my best year ever in what everyone else is saying is a “down market”

      Oh yea- and the commission split is great!

    7. David Losh July 12th, 2009 9:07 am

      This is a great article.

      Here in Seattle I say Windermere is a monopoly. People say Wndermere when you ask who their agent is. There again the Brokerage was started by a Real Estate Investor who wanted to raise the level of professionalism that agents have.

      Small Real Estate companies have come and gone. Most of the agents who started brokerages are back to working for some company or the other. One independent I was talking with Friday afternoon is having to sue a client for a commission. That is one case where a larger company can have more resources.

      Another part of dealing with a larger market share brokerage is having the over sight of the agents. When there’s a dispute with an independent there is very little recourse other than going to the Multiple Listing Service or the State.

      Ultimately, if there is a choice, I think most agents prefer to do business with a brokerage that shows long term stability and involvement in the Real Estate community. Consumers may have a personal preference that can keep a smaller company in business, but I have come to the conclusion that consumers need more from a company.

      You’re brining up this idea at a time of change in the Real Estate Industry. Smaller companies may be a solution to the mess we have today. Certainly larger brokerages have shown they need much more over sight.

    8. Benjamin Ficker July 12th, 2009 9:53 am

      @Barry
      In our market the lead brokers “team” still gets the most benefit from their marketing. Looking at the volume reports prove that.
      To be clear, from the brokerages marketing or the teams marketing?
      It may be different for other companies, but the KW I was at in Portland, and the one I’m at now, don’t do any marketing for clients. They recruit for agents, but all teams and single agents get their business from their own hard work.
      I definitely believe their is a place for small brokerages. But I think the KW model offers the best of both worlds. Keep your overhead low (comparatively), keep the level of training for yourself and your team high, AND focus on getting more leads, listings, and leverage.

    9. Tim Golden July 12th, 2009 10:49 am

      Great post …Our family is considering a solo move at the beginning of next year and this post was timely.

      The comments regarding the unique local flavor of a small boutique-like shop are very appealing to us.

      Having lived in Seattle for 7 years in the 90′s …I very much remember the Windermere …Miss Seattle greatly and this brought back memories.

    10. Elizabeth Cooper-Golden July 12th, 2009 10:58 am

      This is a very timely post for me. My husband has been trying to convince me to go out on my own, as an independent. I’m currently with a big box company (ya know, with a red and blue balloon). I’m at 100% now, but still have a $12,000 cap or pay monthly, PLUS almost $500 in monthly miscellaneous fees. I have not seen the benefit, honestly.
      I have had two sales directly related to my big box broker in the past year. That’s it! I get my business from my web site.
      For the cost I incur, the benefits aren’t there. Our computer screens in the workrooms are the size of a postage stamp, etc.

      My biggest fear was not having a place to take my clients, or to meet them. I’m really not comfortable bringing them to my home before meeting them. After reading your post, I never realized there were so many options.

      Guess who will be flying solo soon? Thanks for the great info. I truly appreciate it!

    11. Barry Bevis July 12th, 2009 5:58 pm

      Ben, The KW here is synonymous with the owners team… there are other teams but most folks in our market know who owns the company. They also advertise more than any smaller team.

      Yes the other agents and teams work for their business- but are marketing for the brokerage = Branding for the Main Team.

      I know some people want to work for a franchise or have the oversight but I’m convinced I can make my dollars work better for me to build my business that I really own! No one has to cut me a check- the one at closing is made out to me.

    12. [...] Bookmarked a link on Delicious. BloodhoundBlog.com | What drives your fear of flying solo? [...]

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    14. Jay Thompson July 13th, 2009 7:38 am

      Elizabeth wrote: “I’m at 100% now, but still have a $12,000 cap or pay monthly, PLUS almost $500 in monthly miscellaneous fees.”

      Maybe my math is rusty, but that doesn’t sound like 100% to me…

      LOVE being an independent broker. And my agents seem to love it too.

    15. Shane July 13th, 2009 11:20 am

      Great post Jolenta. The list of fears for going solo is endless, but this is good start. When I was shopping around for a place to hang my license, the big box companies just started to blend together. Once you get over the initial fear of going solo, there truly is no turning back.

      In response to Benjamin Ficker’s question about what the drawback is, I would say one drawback is the IDX freedom. Locally our MLS provider restricts agents to using their Broker in Charge’s MLS feed. That means the only way I can create a truly custom IDX feed and display the MLS data the way I want to is by going independent.

    16. Steve Trang July 13th, 2009 6:39 pm

      I’ve had thoughts about going out on my own. This really helps with the arguments for it.

    17. Elizabeth Cooper-Golden July 13th, 2009 7:11 pm

      To Jay Thompson’s comment: ROTFL. You are right! Wow, am I brain washed? :)

    18. [...] 12 JUL 09 BloodhoundBlog.com | What drives your fear of flying solo? [...]

    19. Jolenta Averill July 15th, 2009 10:35 am

      @Benjamin Ficker: According to one ex-KW agent I spoke to in my market, the cap is $25K which is pretty substantial for most Realtors in our market. In addition, agents (even if working from home) are required to pay a “desk fee” (e.g. $110/month for a shared office with no window) as well as a technology fee, a showing line fee, sign installation fee and a couple of other small fees. Moreover, under the “Wise Agent” plan a “reviewing broker” charges agents an extra 20% per transaction as a “training fee” for the first eight months. Not really appropriate in my view when it is the broker’s job to review all agents’ transactions. So to answer both your questions, the drawback is the high cap (in this case $25K) and lots of other expenses, many unnecessary and/or “padded”, that make working for a broker very, very expensive. And, as another KW agent recently told me, she doesn’t feel it’s her broker’s job to give her referrals. So my question to agents is simply, is what you’re paying out to your broker worth what you get back from your broker? Your mileage may vary but when you’re getting no referrals from your broker, the training your firm offers is free to outside agents, AND you work from home to boot – where, pray tell, is the value?

      @Richard Stabile: Thanks for your comments. I agree brand recognition is good to have but let’s be clear: working solo does not preclude you from building a strong brand! ☺

      @Tim Shepard: You make two very important points, that people often stick with traditional firms because they associate the success of top agents with those companies and that the Internet is leveling the playing field and making the brick & mortar “Main St” presence less essential to success in the real estate industry. Congratulations for having the courage to go solo, despite the stress of the process, and for recognizing that it was you that was attracting the business, not the brand you were previously working under. Continued good success to you as a fellow Indy broker!

      @Barry Bevis: Love your analysis of the KW “dupe” and the way you are making a success of this down market, also known by many non-Indies as “the worst market ever” (at least according to one agent whose been in the business for 30 years). Rock on!

      @David Losh: Thank you for your kind words and for sharing your views! I do think that consumers need more from their brokerages than they are getting but I think that big box brokers are proving time and time again that they are unwilling to step up to the plate. In my market the big boys are not investing in the right technology and are spending money promoting their brands instead of supporting their agents with the right training opportunities and other marketing materials. Moreover, in my market there is a huge push by consumers to support locally owned and operated businesses as part of a larger effort to keep our local economy strong and to exchange business with each other. So the larger brokers are at a distinct disadvantage because they they’re viewed as anonymous chains who list property en masse and then disappear from view. Personalized, customized service and a strong value proposition is where it’s at and that’s not something I’ve witnessed as being provided by the big brokers here.

      @Tim Golden: Glad this post was timely for your upcoming decision. Good luck with it and don’t hesitate to be in touch if I can help answer any other questions or help you work through the issues you’re facing in the Seattle market.

      @Elizabeth Cooper-Golden: So glad this post was timely and helpful to you! And to answer your question, no you are absolutely not brain-washed (at least not anymore!). ☺ Good luck flying solo and please stay in touch. Because of the traffic my website gets I do a fair amount of out of state referrals – so let me know where to contact you in the future so I can send you business.

      @Barry Bevis: I’m starting to regret having brought up KW as that was not really meant to be the focus of my post at all! Anyway, thanks for your comments. Great to hear from another Indy broker who is surviving – if not thriving – in this market!

      @ Joe Spake: Thanks for the Delicious link!

      @Jay Thompson: My math isn’t great either but even I could figure out that paying out $200K over five years for five referrals worth between $10-$15K was a poor return on my investment. The reason I say “between” $10K-$15K is that one of the so-called referrals wasn’t even a true referral. The broker had an agreement with the corporate the buyer was transferring with so they turned it into a referral even though I’d been working with the guy and his wife for 8 months!

      @Shane: Great point about the IDX feed. You’d think they’d be smart enough to figure out that if you’re willing to spend the bucks on a site that brings in more business they would make more business too. But I guess not. They probably know that a custom IDX is probably going to make their site look bad and raise eyebrows as to why they don’t invest in better tools for their agents’ clients.

      @Steve Trang: Great that you are thinking about it. I was so scared to be a business owner that when I was in business school getting my MBA, I avoided all but one course on entrepreneurship because I was convinced I would never, ever go into business for myself. I thought it was too risky to put my own capital on the line. What I finally realized after becoming an agent was that I was doing just that, but without any of the benefits of being in business for myself. Like others have said, I love that the checks are made out to me now. I also save 3-4 hours a month not waiting around at the office for the broker in charge to give the check to accounting to pare it down and give it back to me with little more than a pat on the back for my hard work.

    20. Mark Jacobs July 16th, 2009 5:53 pm

      Keller Williams Realty – Is the best, each office has their own fees, all are not the same. Our CAP is 18K and a 80 a month office fee. The education the best around.

    21. Madison real estate July 17th, 2009 12:32 pm

      @Mark Jacobs: With all due respect, I think you may have missed the point of my article. You can start and run your own real estate brokerage for a whole helluva lot less than $19K! If you’ve read Shift (How Top Real Estate Agents Tackle Tough Times) you’d know that Keller himself advocates that agents cut their expenses down to the nib in times of uncertainty like these. And as you know, training is free at KW so unless you’re getting a whole lotta something else from your local KW shop, by my math your cap adds up to nearly $19K of completely unnecessary expenditures. I don’t know about you but that constitutes quite a few sales in my market!

    22. Greg Dallaire July 24th, 2009 5:00 am

      Jolenta,

      What an insightful top ten reason’s why to consider going independent.

      I’ve implemented a tablet pc into my real estate business with a verizon aircard. Since I have purchased my tablet PC I have not printed more than 5 pieces of paper and i’m capable of doing everything start to finish in my clients home and or where ever it’s convenient for them. It’s about service and results bottom line. If you provide great service and get your clients results you will become a referral monster.

      Real Estate is about Customer Service and just because you have some big name behind you doesn’t mean you’ll get great service.

      You insightfully share the truths of owning your real estate company there are many challenges that come with owning a business but the possible rewards blow working for any company out of the water.

      Keep up the great work I’m glad to see your website climbing fast in the Google Rankings! You’re doing a great job next time in Madison lets have lunch i’ll buy!