Good morning! Yesterday was 8.5 hours of continuing education inside a stuffy hotel conference room. Even though the information was good (NC has totally revamped their Offer toPurchase form), we felt pretty fried leaving the hotel.
We’ve done it – we’re on our own in real estate. This should make a really good topic for blogging for a while. Getting a new business venue off the ground and what it entails. Today, I’ll start with the “why”.
Even though we haven’t been particularly specific about the reasons we’ve changed offices so often, the reasons have been valid. The first company I was with really did give me a good background in the basics and for that I’m grateful. On the downside, they not only allowed “showing fees”, they encouraged them. For those who don’t know what a showing fee is, let me explain. A “listing” agent goes to a lot of effort to secure a listing, market a listing and so forth. At this first agency, if a “selling” agent from another firm calls into the office wanting to show the property – the call is NOT referred to the listing agent. Whoever answers the phone hijacks the business and if the showing results in a sale the listing agent must split their commission 50-50. When I was at this office, I saw many examples of this. Not only was the random call from another agency hijacked – there were many selling agents who would deliberately seek out someone other than the listing agent.
The next office offered a much better commission split and did not have “showing fees” but was severely under-capitalized and lived way beyond their means. That was sad because it was a well-intentioned and forward thinking company. We just couldn’t add to the stress of being an independent contractor of never knowing if the rent or electricity had been paid.
We loved the third office. The other agents had been with the company for a long time. The agency had a highly honored reputation. The Broker in Charge was always available, but not a micro-manager. Then the business was sold. The atmosphere turned into pure hell and the new owner managed to alienate most people in town, ruin the company’s reputation, unethically appropriate agents’ income & property and run the business into the ground within 6 months. To say that the work environment was toxic is just putting it too mildly.
Our departure from the toxic office was unexpected and we had to work (meaning our licenses had to be hung somewhere). We chose an office on Main St in Sylva because we liked the location and the people there were pleasant. We told them from the beginning that this would be our last move without moving into our own business. We expressed reservations from the start about the open room with all agents in one space and the lack of privacy. While there were certainly some policy changes that contributed to our decision to start our own office – the deciding factor was the nuts and bolts of money.
We coldly looked at our business with business eyes. In the 8 months we were with the last company, we brought in the most closings of the office. We handed over almost $10,000 from the commissions to the office. As we looked at the costs of running our own business, we realized that the $10,000 we handed over would not only cover the rent, phone, errors and omissions insurance and advertising but it would also cover most of the expenses we already cover out of “our” side of the commission. We pay for our own licenses, continuing ed costs, extra marketing, cell phones, and car expense. The company we paid almost $10,000 to were able to cover their costs AND make a small profit, while we financially struggled to keep house and home together.
Are we nervous? Sure. Are we confident? You bet. We are prepared to make our own decisions and be responsible for them.
Have a good day.