Tired of endlessly riding in cars with buyers? Don’t think you can endure another frustrated seller calling? No problem. Start your very own relocation company. It’s so easy I’ll bet that after you read this you’ll wonder why you never thought of it.
First, let’s think about what a relocation company is at its very core. It is a company that attracts people who are relocating, and helps them find real estate professionals taking the stress out of moving. The largest relocation company is Cartus Mobility (originally part of what is now Realogy, the parent company of Century 21, ERA, Coldwell Banker, Sotheby’s International, and Better Homes & Garden real estate brands), and the company in your market who handles their relocation is probably the busiest company in your market.
The agents who work those relocation clients are accustomed to paying as much as 40% of the gross commission for each side of a transaction, and since it is a relocation, there are typically two agents — one on each end of the transaction. The client has the advantage of relaxing and knowing that a relocation company will be overseeing the brokerage services on each end, allowing them to focus on the other details of the move.
Now, imagine if you could identify relocation clients early in the buying cycle, engage them, and then refer those clients, with an assignable agency contract, to an agent you pre-screened on the client’s behalf. You could make 40% of the gross commission on each end as a referral, and you could run the entire operation from the comfort of your home.
All you would need is a system to attract relocation clients, and then client management that allowed you to oversee the progress your referral agents were making on your relocation business. Easy enough. Check out our technology. And it is also simple to advertise only to out-of-town buyers when you are doing online advertising. Let’s think about the possibilities.
You advertise and attract a new relocation client online. The client has a $200,000 home to sell where they currently reside, and they need to buy a similar but more expensive home in your market, let’s say $250,000. One of the best parts of this strategy is that nearly every transaction is double-ended.
Now, because you’ve read and understand my Ultimate Listing Presentation, you pre-sell the listing at 8% splitting the commission with the buyer side and keeping 4% for the listing side. That means 40% of an $8,000 gross commission, or $3,200 for the listing side. And believe me, the listing agent is thrilled to get the 4% commission.
And on the buyer side, let’s say we are talking about 3% of the new purchase price of $250,000 (assuming no bonuses or higher commission offers by builders or agents). That is another 40% of $7,500 gross commission, or $3,000 for the buyer side. Not bad.
Now think about it: You’ve not burned a dime of gas. You’ve not wasted a week of your life riding around town showing houses. You’ve not wasted your weekends holding open houses or showing houses. You’ve not had to place advertising, yard signs, lock boxes, or any of the other hassles of doing traditional real estate business.
And for your valuable service of identifying, connecting with, and referring your client, you’ve made $6,200 in referral fees. You have no legally required record keeping, because you are not the agent, but rather collecting a referral fee. And you have very few expenses.
In a typical real estate practice, you would have the cost of producing 24 leads for each transaction, but because your business is double-ended, you will only have to produce 12 leads. If you have an average cost of $4 per lead, then your advertising cost is under $50 per deal, or less than one percent of your revenue! Wow!
I know what you’re thinking. That can’t possibly work. Otherwise, lots of people would be doing it. Oh yes it will. One of our agents lives in the Dallas market, and this is the only strategy he uses. He makes more money than he has ever made before, while sitting at home by his pool, in his shorts. Of course his laptop and phone are close by. Not only can it work, it does work.
If you started using this idea, you’d probably be the only person specializing in relocation services to your market. What a great unique selling proposition. The agents you refer to will love it. You will make a lot of money, and most importantly, you will provide a very valuable service to your clients, while keeping your costs to an absolute minimum. That’s Max-Bang!