The $100,000 a Year Agent – How That Can Be You

My company’s checks have a typo on them. I’ve left it uncorrected for years, in order to remind me of my lean beginnings. The company name is on the first line, followed by what should be Jeff Brown — Broker on the second line. Instead, it says, Jeff Brown — Broke. No, really, it does. Hardly anyone notices. In fact, we’re in the year’s last quarter and nobody has said anything this year. I think a couple people told me about it last year.

Every time I write a check it’s the first thing I notice. Much like muscle memory, the first picture that pops up is me, grabbin’ a commission check, (with much blonde hair blowin’ in the wind) and runnin’ down to deposit it in the bank. Back in those days, if it wasn’t for the backbone of the real estate industry, the working wife, I wouldn’t be where I am today.

Real estate is, as I was told before California informed me I’d passed my first license test, the highest paid hard work, and the lowest paid easy work around. I’ve found that to be true, but not all-inclusive. As I’ve said a few times recently, .150 hitters can work as hard as they want, but if it’s not at the right things, nothing changes.

Here’s a thought to ponder. In real estate there are no minor leagues. In baseball kids learn their craft there. In real estate? Gimme a break.

There was a seven year period in which I worked for one of the biggest real estate firms in all of CA. The office sported 150 agents. They had a mentor program that graduated newbies as experts in protecting the company’s ass. Their career life expectancy was almost measurable. The office manager aspired to have that program bat .150 someday. The worst kept secret ever was the real reason that program was not axed. The newbies weren’t allowed in the ‘main office population’ ’till they closed three transactions — and their split was 50%.

24 trainees X 3 deals a year, at $500,000 median price, X 3% X 50% = (Insert drum roll here) over Half a Million Bucks to the office. Ta da!!

Now you know why they trumpet their so-called mentoring programs so often and so loudly. Newbies are nice enough to pay the company’s bills, then politely and quieting fade away, so the next group can take the bit and plow the fields.

So, how can you make $100,000 a year in a $200,000 a home market? So happy you asked.

If you’re new, pay attention to what they tell ya about paperwork. Sure, cuz it’s the right thing to do, but mostly cuz if ya don’t get it right in a deal, they’ll hold back your commission ’till it’s the way they want it. Give courtesy nods to their tips on generating business. If they’re in management, it’s almost always due to their inability to do exactly what they’re urging you to. There are exceptions of course, including the office manager mentioned above. But she merely proved the rule. In fact, it was directly due to her previous experience as the partner in a successful real estate firm that made that office so successful.

Bottom line? Most office managers are like college business professors, in that they teach cuz they could never do it in real life — or worse, were afraid to even try. Don’t get me wrong, good office managers are worth tons. But only for their management skills, not their ability to teach agents how to be successful.

If you’re one of the exceptions to this rule, God bless ya, and I apologize for paintin’ you with this broad brush. But you of all people know I’m dead right on this point.

So, you’re doin’ about $30-40,000 a year, and would love to get that up to six figures. Here are a few suggestions toward that end.

1. Unless you’re Dale Carnegie, your ‘sphere of influence’ will only get ya so far. But then you’ve found that out by now, right? Keep tappin’ and expanding it, but stop drinkin’ the Sphere of Influence Kool-Aid. It’s what office managers tell their newbies. They sell/list a few houses to Aunt Mary, the song leader at church, and an old high school chum, then they’re gone. Meanwhile, the office made 50% per deal.

2. Bite the bullet and stop avoiding the trenches. The longer you insist on doing open houses on others’ listings, etc., the longer you’ll be doing a deal a quarter. If you don’t like the process of generating something outa nothing, find a team and become a buyer’s agent. They’ll allow you to pony up to the lead generating buffet without you having to lift a finger.

3. Pick a slice or two out of the market, and go after them with a vengeance. Since you’re not tryin’ to do 18 deals monthly, this will work just fine. Your menu of options? Expired listings — FSBOs — smallish farms — maybe a modest website with your own IDX — and always your trusty sphere of influence, regardless of what two slices you choose.

4. To make $100,000 in a 100% office, you only need to close 18 transactions. This assumes an average home value of about $200,000 at 3%. That allows for some expenses. That’s 20 if your expenses are a bit higher.

5. Quietly research your office’s top agents. Approach one you like, and who will give you the time of day. You already know how they’re getting business. Ask them for some mentoring, with the promise you’ll not become a huge time suck. If you’re smart, you’ll be able to apply some of what they pass on. Pay attention.

Let’s say you decide having a very doable smallish farm, and will diligently prospect expired listings in areas in which you have knowledge. As always, you’re also gonna be faithfully mining your sphere of Influence.

We’ll assume you’re actually working 40 hours weekly, and that those hours aren’t AgentHours. 🙂 They’re the hours Grandpa worked every week. By your consistent and conscientious plowing of those fields, here’s what will happen — I promise.

You’ll do about a transaction a quarter with your sphere. Some will do more or less, but that’s about what should happen.

By working expired listings, you’ll list about a property a quarter, probably more. But count on the one.

Those listings will generate about one buyer-side transaction a quarter, probably more. It’ll also give you the chance to hold an open house on your own listing, allowing you to lose your virginity with dignity. 🙂 You should do that at least once, if only for how it’ll make you feel.

Your farm, no larger than 500 homes, will generate, in one form or another, one transaction a quarter. (See a trend developing here, do ya?)

So far, that’s 16 transactions for the year — probably more. That leaves ya two short of making six figures. Here’s where they’ll come from — referrals. If you can’t do 2-4 transactions a year from referrals, get out — cuz you must really suck. 🙂

Note: You’ve likely noticed I didn’t say to get a website with an IDX. If you can afford it, try it out. But understand, most agents aren’t making a lotta money that way. It’s pretty much a boom or bust approach, depending upon the quality of effective GeekWisdom behind it.

Look, everyone doesn’t hafta do 100 deals a year, and frankly, most don’t want to. But if you pay attention, focus on just a couple three slices of the market pie, and work eight hours a day — you’ll make $100,000 a year fallin’ off a log. Well, maybe not quite that easily, but you get my point.

With huge and obvious exceptions, (1994 is an example. A couple years ago too, probably.) the potential for the average agent to earn six figures has been very real, at least in this century, depending upon price points in different markets.

You don’t need huge, or even moderate marketing money. You can be a card carrying TechTard. (Say hi if ya see me at a meeting.) There’s no need for anything special or expensive.

The fact is, you can make $100,000 from Halloween this year to Halloween next year. To those who take the bit and make it happen, I have this quote for ya.

Not sure, but I think it was John D. Rockefeller who was once asked, how much money was enough for the average person. His answer?

“Just a little bit more.”

I had my first six figure year in the 80’s. It shocked, elated, and scared me to death. I didn’t know it ’till the CPA called, sayin’ my return was ready. I picked it up, brought it home, and opened it for signing. And there it was on the top line — $108,232.

You can do it. Once you do? You’ll begin to wonder what it might take to make that much in a quarter, or even a month. Then it’ll hit you like a ton of bricks.

You wouldn’t be thinking like that if you didn’t know it was an option on your menu. It’s a life changing epiphany. It doesn’t happen for most — only those who take their game to what I call BigBoy level. Use your own measurement. Mine was a six figure year.

Even when I had my first six figure quarter, then later, my first six figure month, nothing has equalled the thrill of seeing those numbers on that tax return for the first time. Not even close.

Go for it — I promise you, that feeling is worth far more than the hundred grand.