Have real estate license. Is this a good plan for doing real estate referrals?

No sense starting another thread on this subject, when the details have been covered in depth
here:

http://www.warriorforum.com/offline-...u-getting.html

Good luck!

1. Suggest that you check your state's real estate laws. In many states it is illegal to sell real estate leads. She could become a lisying agent only, but in most states you still need to work through a licensed broker. Varies from state to state.

2. Home buyers instinctively contact a local realtor when looking for a house to purchase. How will she compete with the major players in your market? How will anyone find your site?

3. So now you hope to split the commission between your wife, the agent, possibly the other person's agent and one or two brokers, depending on the deal. Many companies have reduced their commission to 4%. You had best be selling very expensive homes as your share could be peanuts.

4. One of my clients and best friends is licensed in NJ and PA. We have discussed this scenario over the years on more than one occasion. We have always arrived at the same conclusion. Not a great business model.

That's not saying it can't be done, but to go into it without speaking to agents and brokers in your area for feedback, looking into the legal aspects as well as the cost projections versus a guestimate of potential income, you could be in for a rude awakening. I believe that you will not be welcomed with open arms as you will just be perceived as nothing but competition, looking for a slice of their already shrinking pie.

Do your research.

Cheers. - Frank

Thanks Frank for your thoughts. I appreciate it as some of these topics you brought up are issues I need to address before jumping into this. I'll be speaking to several agents this afternoon, to get their thoughts on it. I'm realizing this can be a tough business to break into but it also seems if I work hard & stick with it, it can also be very rewarding.

Here's a few responses to some of your comments:

I don't think this should be an issue in our state (PA). My wife is already working with a broker in our state. She's attended their personal training classes & has spoken to them about working in referrals. They said it was fine.

This is true that local realtors acquire a large number of leads, however one thing most experienced agents know is, if you're relying on your brokerage for lead generation, you're doing it wrong. An agent may get some of their leads from their brokerage, but they really need to do their own marketing & acquire their own, if they want to succeed. Most agents spend a portion of each day cold calling, spending money on marketing themselves, etc. Just like any other business. We'll simply be doing that work for them, so they can focus on showing houses. In regards to how...I haven't fully fleshed this out yet (this topic was kind of the main reason I posted this question) but it'll be a mix of online & offline marketing, using methods similar to what's already being used in the marketing world to generate leads.

I haven't taken into account the total marketing costs just yet, but after looking into my wife's commission rate & adding on a modest marketing cost, my early ballpark numbers still come out pretty decent. But obviously, this will need to be looked into more thoroughly though before starting.

Thanks again for your thoughts. Greatly appreciated!

Regards,
-Ryan

About 10 years ago I was working on a home computer for the top real estate agent in my area.

I asked him how he managed to hit number one in the region several years in a row, and did it his second year in the business.

His answer surprised me. I expected him to talk about various types of marketing, or being a great closer, etc....

He said it came down to one simple thing. He parked his car at the end of a block, rang every doorbell, and introduced himself, leaving his business card with them.

If he didn't have an appointment scheduled, he was ringing doorbells.

I asked him if any of the other agents in his office did that. He just grinned.

He didn't wait for "marketing" to work. He worked to become the one agent everyone in town knew by name.

I'm not sure how your city views ringing doorbells just to introduce yourself, but it was highly effective for him.

My point...every broker in your city will be advertising the conventional ways, how are you going to differentiate yourself?

The ability to create self perpetuating lead generation/sales machines in any industry always goes back to the numbers. When all things are equal whoever owns the machine that makes the highest conversions and profits is able to dominate/out spend etc.... Straight off you are in a situation where your machine has to split the profits because you will not take it through to close yourself. Not a great situation. To put that in perspective I know many that got into lead gen for real estate and then decided the only way it made sense to stay in the game was to become realtors themselves. You are headed in the opposite direction.

On the flip side, in the realm of just being into the lead gen for a percentage of the final commission you are really no farther ahead of anyone doing this type of lead gen that has no license at all.

A few guys that I know are knocking it out of the park at the moment simply generate home valuation leads so no license needed. To get and stay profitable that actual part of the business of generating leads is only about 25% of what is really important to their survival because to be honest if you have any skill and a budget generating the leads is not hard. Selling them, getting paid and keeping the buyers of those leads is where it all falls apart. They suck at closing, they don't work the system etc... so you will actually find it much harder to manage that side of the business than the lead gen, thus the reason the folks I know got pissed and said screw it we will be the agents and take it through to completion.

Also the level of competition for being a lead seller is brutal. The best are not just selling leads and they will be or have already knocked on the door of your target market. They are offering complete back end solutions, regular ongoing coaching and masterminds and their level of skill at doing all this is rather amazing so the perceived value compared to an outfit just starting out makes hugely difficult for anyone to compete with them or keep them very long.

I thought I would chime in here. Yes it is definitely possible to get a % of the deal. There are lots of agents who need business and are willing to share.

I will not go into too many details here - but if you think and work hard and talk to a lot of people about what they need you can come up with innovative approaches to solve the major problems that agents experience.

I currently have a system worked out that allows me to keep around 65% of each deal I create - and I don't have to be involved in the transaction in any way. You can see my post about it in the other thread.

You must know that this industry is brutally competitive and you MUST come from the mentality of a giver. That is true to really succeed in any business but especially in this one. Forget about what you want and need, find real problems that exist in this industry and do everything you can give people a solution to their problems.

Forget about basic/simple websites and tricks. Homeowners are marketed to constantly and are becoming more and more sophisticated.

As always - to make money, you must find things people hate to do, and learn to do them exceedingly well. I question why your wife doesn't want to be an agent anymore and why you believe you can build a business around her license. What you are proposing will be much, much, much more difficult than being an agent. As an agent, she could be pulling in $70-90K without working TOO hard. That is a relative statement because as with any business - hustle is the most important factor.

Especially if you believe you can create quality leads - you should seriously consider doing this as a service for your wife first before expending a bunch of time and capital. I don't know what your business/marketing experience is but if you can do it well for your wife, she can make $120K in the next 12 months - then you can easily sell this to other agents.

Starting to advertise is really a good plan, this is after all high-ticket sale for you, A guy I know on FB once sold the home in a week with $80 or so adspend with one simple ad, so the potential is limitless