Real Estate Franchising

The trend in the last couple of years is giving bigger and bigger split to agents. I see the trend nationwide, and very closely here in Las Vegas. There are more and more 100% companies and the fees are getting lower every day. A year ago I thought that $100 per month in office fees and $300 transaction fee was pretty low. Today I see many companies offering $25 per month (also $10 per month, or even $1 per month) and $100 per transaction (including E&O).

Assuming low E&O insurance policy it can add $15-$40 in transaction cost. Then as a broker you have to check each transaction file. You have to assume min. 15 -40 minutes per file of your and support people time (discussing closing with agent, checking file, returning file to agent for missing paperwork, cashing check from title company and issuing check to agent plus all related accounting entries, etc.). There is not much left for broker/owner!

 Think about the scenario little bit more:
- Each office has operating expenses (copies, paper, printers, computers, telephones, secretary, front desk, cleaning service, power, etc.). There is not much left to pay those.
-  There is a big liability with each transaction. How many transaction a company has to do to cover just one lawsuit or paying deductible to insurance company. For example I worked for the company in the past which had $5,000 deductible for E&O. Later it was increased to $10,000. If a company charges $100 per transaction it will need 50 - 100 transactions just to cover that!

If you look at it you will realize that is not a business you want to be in. What if you are able to generate leads for your own agents? And take reasonable 25% referral fee or maybe 50% for new agents? In one transaction you can make possibly more money than tens of agents will bring to your competition. And that’s the strategy how MillionSaver real estate system works.

People ask me a lot this question. I would say it really depends how you do business. I know a lot of brokers who are in the business 10-25 years and don’t really make a lot of money. They work hard, but they don’t work smart.

 On the other hand I am in real estate just couple of years. Got my real estate license in December 2001 and broker license in 2004 (I think in March). But all my years were very profitable.

Why? I followed few simple rules:

1. Keep expenses low. I choose not to get beautiful and expensive office. I have started in small office with $400 per month rent. Once company grew I got more space and year ago bought my own 3,200 sq. feet office building. It is already paid off from the cash flow I have received. So starting small got me advantage and now I have free and clear office!

2. Do smart marketing. There are tons of products for agents and brokers. Most of them are too expensive and provide little value. I didn’t spend any money without seeing that REAL return will be high enough to justify the expense. So we are back to number one here:-)

3. INTERNET! INTERNET! INTERNET! It all goes to Internet. More and more users will use internet to search for homes. Using internet is very efficient way how to advertise or manage business. Therefore I developed Internet based Contact Management system for capturing leads, managing leads and managing agents. Therefore I have developed IDX system for showing and searching homes. I had a vision how to market real estate and manage agents better using tools and software. And therefore such tools are available as part of MillionSaver Real Estate Franchise.