Attention Agents: 5 Tips on how to Stop being BROKE

If you are a Licensed Residential Real Estate Agent I am probably going to deeply offend you by the time you are done reading this post. Please know that I am by no means trying to offend you but no doubt it will offend most if not all licensed Realtors.

Here are you 5 tips on how to STOP being BROKE. This came to me today after receiving an email from an agent friend of mine that sent me a specific section of the Real Estate Training Guide. He wanted to show me why agents are NOT aware of "Subject To" transactions. 

Here is the exact paragraph that covers "Subject To" transactions:

When a loan is taken "Subject to" the new buyer is not personally liable to the lender for the payment. In case of default, the seller (original borrower) remains solely liable for the debt, while the buyer (vendee) loses the property and any equity in the property up to that point. The buyer has no personal liability to the lender. 

Now, keep this in mind. This is an extremely versatile strategy from an investors point of view and an extremely valuable option for the Realtor and homeowner. Now this Agent said that the trainer mentions "Subject To" as quick as you can read this paragraph and then moves on. For some reason I completely believe him when he tells me that. 

Instead of going into the benefits of utilizing "Subject To" as a Realtor to help your homeowners/sellers, I already wrote about that in this BLOG POST. If you haven't read it, you need to do yourself a favor and do so immediately and forward it to every licensed professional you know that isn't making as much money as they could or should be. 

Now lets get into these 5 tips. Remember, I am probably going to offend you. If I do, that is your problem, not mine. You are more than welcome to challenge me publicly like Realtors have before, just know, you will lose as the previous challengers have but I welcome the challenge. 

Tip 1. 

Tell your broker to pound sand! 

That's right, if you haven't noticed yet, you are an over glorified employee. Your broker is your boss. You may not have to clock into work everyday, show up at an office or even get 'da man' coffee but you are no doubt an employee. 

When you are an employee, you make someone else rich. You either believe in free enterprise or work for someone that does. Don't fool yourself and say you are self-employed or you work for yourself blah blah blah. When you have to get clearance or an OK from your broker then you work for the man and the man doesn't want you to succeed by yourself, they want you to succeed for them. You are holding yourself back by not realizing what you are missing. Become a true Investor/Agent.

Tip 2. 

Educate yourself! Don't leave it up to some stiff with fancy acronyms like GRI or ABC BBD WTF or even WWJD LOL!!!

You decided to become an agent for one of very few reasons that probably include, to make more money and work for yourself(we've just covered why that isn't possible) to sincerely help others buy their dream home(that's sweet! but it's not about them, it's about you and your family NOT being BROKE) or you had some mis-guided notion that the way into REI was to become some stiff who thinks buying properties with emotion or at FMV is the only ethical or legal way to invest in RE. Ask those that were making those mistakes during the easy money years and see where they are now. I've shorted so many Agents houses it isn't even funny! They get all their butts handed to them while at the same time they swore they were 'experienced' investors and RE would always go up. They weren't 'experienced' they were suckers!

Tip 3. 

Be an investor first, Realtor second. 

Most Realtors spend their days doing the exact same thing over and over again. Showing houses to people that aren't going to buy. Dealing with sellers aggravations because you haven't sold their house yet etc.....

Instead of trying to get top dollar for their house(I know, I know, you were brainwashed to believing that listing a sellers house for full FMV is ethical) educate your client on the TRUE costs of selling their house. Explain to them the costs that are involved including your commissions, a buyers agents commissions, closing fees and more importantly 'holding costs'.

What are these? you should know! if you don't LEARN them! Educate them on how long you truly believe it's going to take to sell their house having it listed at FMV. Tell them how long the average days on market houses are at right now. Help them calculate their 'holding costs'. These include the mortgage payments that still need to be made, the utilities, repair costs to bring it back to or up to 'retail ready'. If you are not doing these things then you are being unethical by my terms! To me this means you are more concerned with your commission than selling a clients property for top dollar.

What does top dollar mean? well it certainly doesn't mean letting it stay on the market for more time than necessary while waiting for that full asking price offer while your client is still paying the mortgage! how about this, you pay the sellers mortgage while it's being listed and see how long you want to hold out for a full asking price offer! All of sudden what I'm saying makes sense when you're the one paying for it! Your services are expensive to a homeowner and if you don't tell them that then you are the greedy one, NOT me! 

Tip 4. 

Earn more commissions. 

Now what I mean by that is not go out and get more listings and hope one will close that you are brainwashed to do by your brokers. It really irks me to know that Agents are taught this way and don't try to tell me otherwise, your fellow Realtors already spilled the secrets and I think it's horrible you subscribe to that while at the same time cry ethics and standards blah blah blah. If this is you, you really should be ashamed of yourself and stop wondering why you're broke with a 100 listings in your name! You spend more time getting listings than you do selling properties, what else did you expect? You didn't believe the trainer/broker when he/she told you that is the secret to selling more houses did you? Of course not! Somehow I get the feeling you're calling me an A-hole right now, not because I am an A-hole but because I'm right and you're too foolish to admit it. 

What I mean by that tip is this, instead of taking your commission and living off of it like a paycheck(what 99% of realtors do) take your commission as a note on the property payable by the buyer at a slightly higher than prime rate on a short term basis, say 2, 3 or even 5 years. This way you create passive income so to speak. Think about it, you make 3% minus what 'da man' takes from you and you're still living off of noodles in a cup and driving a beater-mobile. Listen to my tip 3 and be an investor first, agent second! Do you have any idea how much MORE money you will make from that rather than just taking a commission? Of course you don't because you haven't yet figured out that your broker doesn't have YOUR best interest at heart, only his/hers. I'm not saying take each and every single commission as a note, but take one out of every three to start, build up some passive income, then increase it more and more, soon you'll see that you can easily live off of your 'passive' income comfortably and you can use your 'commissions' for 'actual investments' 

Tip 5. 

Become a broker.

I know I told you earlier to tell your broker to pound sand but think about it. Who is making all the money? They are! Why in the world would you want to make someone else rich? Don't give me some lame excuse how money isn't everything blah blah blah. Do you think wars happen over anything else other than money? do you think the world turns from love? do you know we're not in the 60's anymore? WAKE UP AND SMELL THE CHEDDAR! If your broker is not filthy rich then leave his run down shack of an office and 'Move on up to the east side' and become a broker. Now I don't know the first thing about becoming a broker but I do know they are making more money than you so why wouldn't you become a broker? Remember, You either believe in free enterprise or work for someone that does. 

Open up your own brokerage and recruit top notch agents! real go getters who will make you A LOT of MONEY!!!  Educate them on the beauty of legal and ethical transactions outside of your normal everyday nightmare. 

Fly a guy like me in to speak with your agents. I'm cheap! I'll fly on Southwest, stay at a Motel6 for the night! I'll come in and blow their minds and show them how they can make more money and more importantly, how to make YOU more money! Now of course I'm not a charity worker so I'm sure you're wondering how much that would cost you, the answer is, whatever the cost of a plane ticket and a room at the closest Motel6 costs. What? no money? what's the catch you say? Here's the catch, it doesn't have to be me, it can be a local investor if you want, the point is when you bring a BUYER who WILL BUY and stick him in front of a room small or large with a bunch of Agents sitting there looking at him/her, everyone gets excited and deals start happening. Bring me into your office and I'll show your agents how to be better agents! All I ask is that we do some deals together! It works out for everyone!!!

Your agents will learn how to be better agents without all the mumbo jumbo stiff and traditional dream selling that happens now. I will show them things that will excite them! that will open their eyes to things that were in front of them all along! The coolest part about it is it doesn't even have to be ME, get someone local if you want, I don't care! Just do it! 

 

Now, I've given you 5 great tips on how to STOP being BROKE. You can take from this what you want but understand this, if you are a broke Realtor, then it's your own fault! My offer stands to any Broker that is willing to fly me in and put me up for a night and take me out and buy me a .99 cent cheeseburger that I will come in and spend at least 2 hours, more if I have to, I will  show your agents how to significantly increase sales in your area. I'm not claiming to be a guru or some marketing genius, but what I will teach your agents will benefit you 100xs over what it costs for a simple airplane ticket, a Motel6 room and a .99 cent cheeseburger! All I ask is that I get to add my name to YOUR buyers list!  

I also ask that if you were offended by this blog post then by all means share your anger and send the link to someone else, whether it be on twitter or facebook or just an email. Call me an A-hole or whatever you want, just tell them I offended you and let them decide if I'm right or wrong.