By now, many of our real estate colleagues have seen the previous letter I wrote this month about our culture here at KW Luxury. Thank you for all of the kind emails, letters, and phone calls. We are excited that some of you will be joining our team. As we said in the first letter, we are convinced that we have something special going on here and we want you to be a part of it.
Today, we want to address the two biggest challenges that every real estate agent faces which are probably the greatest threats to their long-term well being. Here is what we learned in the last few years:
1) Every agent’s biggest challenge in their business is how they will replace themselves so they don’t have to work seven days a week, 16 hours a day, for the rest of their lives.
2) The second biggest challenge for every agent to figure out is his or her exit strategy: What will happen on the day that you sell your last house? Will there be no more income? Did you leave a system, a team, or a revenue source in place that will pay you in retirement?
It’s critical for every broker who calls Real Estate as his or her full-time profession to figure out how to plan for these major obstacles.
To address problem number one, we believe that it’s essential in today’s market for agents to consider building a team. If a single agent is running ragged with more business than he or she can handle, then the first hire to be made is an administrative assistant. The second hire that an agent should make is a buyer’s agent or at the very least, a showing assistant. These can be done with little or no money out of the agent’s pocket. The third hire should be a marketing specialist. This process of replacing yourself keeps going until you get to the seventh level of the business model. This is the top where your team runs, sells, and earns you income without you doing very much at all.
The second problem of your exit strategy is partially solved by the team concept we have outlined above. When it’s time for you to walk away, you have a team and a machine in place that sends you dividend income in your retirement. You may also have taken advantage of a company-wide profit sharing plan such as ours, which brings in a second source of income. A third source of income is the opportunity to invest in market-center ownership. Add all three revenue sources up and you will be earning a nice income without touching your retirement accounts.
In conclusion, there are a lot of great real estate agents working their tails off in this market place. Unfortunately, even the best have not addressed yet how they planned to replace themselves, or what their exit strategy will be so they will have something to enjoy in retirement. If you want to talk with us on how we can help you solve these roadblocks, we’d enjoy visiting with you.
Dan Polimino and Gary Lohrman.