Let’s begin by establishing clearly — this isn’t new info — just widely ignored. In fact, it’s more likely than not most agents readin’ this will roll their eyes for one of two reasons. One would be cuz it’s old news to them. Not that they’ve ever contemplated using it, just old news. The other is cynical disbelief when something from a couple generations ago is touted as being highly effective and profitable in today’s real estate brokerage climate. Give it a read and then make your call.
I will tell you in advance that from what I’ve seen personally, the huge majority of super high volume per agent operations are using it. They just don’t know it was snatched from the hippy dippy 60s. 🙂
And yes, there are one or two big time brokerages who’ve successfully gotten away from the model used by the industry the last 40 years.
I learned this model beginning in 1967. I’ve spoken of Dad’s brokerage countless times here, but what may not have been communicated clearly is how relatively few agents were needed to produce such off the chart sales. Let’s put the numbers on the table. How’d you like to have been one of the 25 to never more than 30 full time agents (Usually 8-12 part timers.) who divvied up more than 1,000 sides a year for five straight years? As their janitor/official printer-of-listings, I witnessed some pretty astounding things. ‘Course, back then I had no earthly clue I was seeing world class production, as I thought it was the way it was supposed to be.
Boy, did I ever learn different as a few birthdays came and went.
Our industry, beginning in the 1970s, decided it made more sense to go away from a highly profitable business model. Before operating expenses, the OldSchool model netted 40-50% of every commission dollar earned. From that income they paid all costs — the broker did. I cut my teeth on that model, and it worked like a charm.
In their infinite wisdom, they decided a superior strategy included increasing agent pay by over 100% Read more
