Updated: Jul 7, 2021
I’m gonna state an unpopular opinion: Brokers need to be paying attention, because things can change at any time.
My preacher man used to say, “Everybody focuses on the here and now, when what you need to worry about is the then and when.” And while he was talking about the afterlife, the same concept applies for brokerages and their revenue streams.
There is extreme downward pressure on commissions out there, whether we want to admit it or not. Block chain technology is the way of the future for quicker transactions. This became evident in the mortgage industry last year, when International Currency Exchange (ICE) bought Sallie Mae for $11 billion. They are now able to complete a mortgage transaction quicker and cheaper than ever. The average transaction takes about 4 to 6 weeks, and costs $8,000; they can close a transaction in 2 weeks for $2000- $2500. All of the sudden, speed to market and reduction of friction saves up to 50% of the costs and time.
You can try to deny this, but it is real. People have been trying to figure out how to do that same thing in the real estate industry. It will happen. It is happening. In a SWOT analysis, this external force would be classified as a Threat. You can’t stop it. So, how do you adjust for it?
When a real estate transaction happens, roughly $85,000 of salaries and commissions are generated.
Think about that for a minute.
Consider all of the various components of a real estate transaction, and all the major players. For mortgage, you have a loan officer, loan officer assistant, processor, underwriter, and a host of others. For title, you have a title rep, closer, abstractor, and an attorney. Your real estate arm will include agents, brokers, and various other support staff. Other people involved in the process are inspectors, and appraisers.
There are many things that have to happen by humans, and humans cost money. But if it is a debit here, then it is a credit there. So how do we capitalize on it, as a broker?
Grab a bowl and get your piece of that $85,000 soup!
At first glance that seems like a great idea. But then you research what is required to build up another business- the compliances, licenses, time, and the expenses- and you drop it like a hot potato.
Here is the Simple Magic: create Joint Ventures (JV) with the others in that $85k soup. There are turnkey solutions out there, where all the heavy lifting is done by others. You simply feed the beast, and generate revenue from it.
For example, imagine you are a broker or team that sells 20 houses. If you had a JV with a transaction management company, you would charge the agents a fee for this service, files would be in compliance, no more chasing, and the agent would become more productive. You would receive a percentage of that fee, let’s say 20%, which equates to $19,200 per year.
Let’s say you have a JV with the title company, and the number you receive is $100 per closing. This equates to another $24,000 per year.
Now we’re talking, right? Now, what if you close 50? 100? What if you opened this service to others in the area? Do you see the potential?
The machine needs to be fed and will be fed. You might as well own a piece of that machine.
Disclaimer, because this is the world we live in: make sure you have an attorney and CPA set this up and review all documents.
Explore My Town would like to take the guesswork out of this process. We will be rolling out MyTownConnects in September 2021!
This service will revolutionize the way B to B networking is done. Following the Explore My Town Local Video Program, you will be able to start a MyTown Connects chapter, or a whole area with several chapters, and build the most powerful networking, social media, and video ecosystem possible. Not only will you have an elite B to B referral group, you will also create a revenue stream. Each chapter will generate $19,123 per year.
Think about that now, $19,213 per year for doing what you are supposed to be doing and/or are paying to do NOW.
Open 3 more in the neighboring towns, that’s $76,493 per year. Maybe you have expansion teams around the country, or are in several locations.
Do I have your attention yet? Good!
If you read this far, be proud of yourself. You have the mind of an entrepreneurial champion.
If you would like to learn more about how to build a multi-point revenue business, or to learn more about Explore My Town and MyTown Connects, send an email to PartnerSuccess@ExploreMyTown.com
To learn more about Explore My Town go to https://www.Partnerwithmytown.com
Follow the Broker Talk Crew and get real coaching advice in the group dedicated to revolutionizing the real estate industry https://www.facebook.com/groups/brokertalk
Listen to the podcast version on YouTube of the Broker Talk Podcast
Till next time,
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