February 12, 2007 Ezine

February 12, 2007





































Read by More Than 30,000 Agents

How to Buy Properties When
You're a Full-Time Commercial Broker
(Scroll Down for Details)

In this Issue:

One Big Difference Between Residential
and Commercial Real Estate Brokerage

Having been a commercial real estate trainer and coach now for nine years, after having been a commercial real estate agent for 20 years before this, I've observed some differences between residential and commercial brokerage that I never noticed while practicing as a commercial agent. This is because being a coach and trainer gives me a better perspective when looking at both industries now, and while there are some similarities between the two of them, there are also some big differences, too.

The biggest difference I've observed is in the level of professionalism within these two industries. And let me first make it clear that I have the highest regard for full-time top-producing residential agents. They are true professionals, and they often utilize technology and systems in ways that I really wish commercial brokers would embrace themselves.

But what perplexes me about the residential brokerage industry is the number of agents who are allowed to continue working for their companies while producing zero or minimal results. The industry seems to be a haven for people who want to feel like they have a career, when in reality they really don't. Because success in real estate brokerage involves more than carrying around business cards and telling people you're an agent.

In commercial real estate brokerage these people would just be fired. But it seems to be normal practice in many residential offices to allow agents to keep their licenses there whether or not they're closing any transactions.

I can't imagine what it would have been like throughout my career in commercial brokerage if I'd had tens of agents constantly working for my office who rarely closed any transactions. Allowing this to happen adds a feeling of dead weight to an office just by having these people around. And I'm trying to figure out why the managers of residential offices allow this to happen in the first place. Is it laziness? Do they feel sorry for these people and feel it's OK to indulge them in the fantasy that they actually have a real estate career? Does this make it easier for the manager to not go out and recruit solid agents who will bring in good business for the company, as long as the company already has a lot of agents working for it? Or maybe the manager is just thinking, "Hey, if some of these people do close a transaction during the year that will at least bring some additional revenue into the office."

And my feeling regarding that last possibility mentioned is if you clean out the dead weight and recruit three new agents who will really produce some solid revenue for the office, everyone else who's productive in the office will be much better off by just having only productive people around them.

And in terms of agent productivity on the residential side of the business, in the Spring of 2005 I read an article in the Los Angeles Times where the head of one of the L.A. area residential real estate boards was interviewed. Now keep in mind this was almost two years ago when the residential real estate market in Los Angeles was on fire and people were buying and selling homes at record levels. So even while business was proceeding at this record pace, here's what the head of that local residential real estate board had to say about the agents who were its members:

"Seventy-five per cent of our members close between zero and one transaction a year."

And this was in a market where transactions were closing at an unprecedented rate!

Now let me segue into a true story about an experience I had in 2006 while leading a live commercial agent training seminar. I was speaking at one of the state real estate conventions, and what happened to me was so shocking and stunning that I decided I needed to write an article about it. And that article is the one you're reading right now.

And in mentioning this story to you, speaking at state real estate conventions is different than speaking for commercial real estate brokerage companies. When speaking for commercial real estate brokerage companies, the audience is 100% commercial agents. But when speaking at state real estate conventions, despite the fact that my seminars are designed for commercial agents, 40-70% of the audience are people who are residential agents wanting to learn more about commercial brokerage. This is because at the state conventions more than 90% of the people attending them are residential agents, and it's very easy for them to walk into my commercial training because they're already at the convention. In addition, many of these residential agents have become curious about what we do in commercial real estate, and they want to learn more about it.

But what happened to me while leading a seminar at this one convention left me stunned and with great concern about how some of these agents may be treating their clients and prospects...

I was leading a three-hour presentation to more than 350 agents. And at the end of my presentation I made a special offer for a commercial real estate training product to all the agents in the room. And in addition I told everyone that if they bought the product from me on that day, I'd immediately hand them one of my one-hour commercial agent audio training CDs for free. (The main product they were ordering from me was going to be shipped to them in the future.)

Well at the end of my presentation there was a rush to get a hold of the order forms, fill out the information, and hand the completed forms back to me. And as I received the forms back from the people I then handed them their free audio CD. But it was after I returned home with the order forms that the unexpected then hit me...

Forty per cent of the residential agents who turned in their completed forms gave me fraudulent or incomplete credit card information, in an attempt to walk away with the free CD and never, ever have to pay for anything. And when following-up with these people by phone they weren't taking our calls and they weren't returning our messages about this either. But when we finally began leaving messages with the term "credit card fraud" mentioned in them, our phone calls were then returned and in many cases the legitimate credit card numbers were then given to us. But some of the agents both refused to give us their real credit card numbers, and refused to return the bonus CD they had walked away with from the event.

In addition, when everyone was filling out their order forms for the product at the event, one woman approached me and said, "I purchased this product on your Web site last week. Had I known you were going to be giving away the bonus CD for free I would have waited and purchased the product today instead. Will you still give me the bonus CD today since I purchased the product from you last week?"

And I responded by saying, "Yes, I'll give you the bonus CD," and I handed it to her right then and there. But when I returned home I discovered that she had never, ever purchased any products from me before.

As you can imagine, I never expected anything like this to happen with residential agents in such big numbers. And let's just say it's convinced me to never make an offer like this available again to residential agents whenever they're attending one of my commercial agent seminars.

I don't think anything like this would have ever happened with full-time, successful residential agents. But with markets transitioning all over the country right now, there's a huge number of residential agents wanting to learn more about selling and leasing commercial properties. It's become a national real estate phenomenon, and residential real estate organizations are now looking for ways to meet the demand for this commercial training.

My own feeling is that a lot of these agents who are interested in commercial brokerage are probably not, for the most part, making much money in residential brokerage. Why would someone who's making great money selling homes decide to throw it all out the window and begin all over again selling and leasing commercial real estate? I think many of these residential agents who are thinking they want to get into commercial real estate are having a tough time in their own residential business, and they're thinking the grass may be greener on the commercial side.

But in my opinion nobody, whether they're a commercial real estate agent or a residential one, has any business doing a transaction in the other specialty without working together with an agent who's an expert in that arena. Especially if the agent crossing over into the unfamiliar specialty has never closed a transaction in that arena before.

And as commercial agents, most of us would never, ever take a listing on a single family home. We recognize this is not an area we have expertise in, and we know our clients would be better served working with an expert who specializes in selling homes. And at the same time as commercial agents we sometimes get calls from residential agents inquiring about our listings. And they're trying to represent their clients and prospects in an arena that they have no background, training, or expertise in. But if our job as real estate agents is to protect our clients' interests at all times, no agent, be they a residential or commercial one, should be crossing over into the other arena for the first time without another agent who's an expert in that arena working along with them.

And with respect to those 40% of the residential agents who gave me fraudulent and incomplete credit card information just to walk away with the bonus CD...I'm really concerned that agents like these are out there trying to represent people in real estate transactions. If they'd do what they did to me just to get that CD, imagine what they'll do to receive thousands to tens of thousands of dollars or more in commissions on their real estate transactions.

I'm guessing that the agents who gave me the inaccurate credit card information are people who are struggling in residential real estate sales. And if these same people were working for a commercial real estate brokerage company, they probably would have been fired a long time ago. Keeping a lot of unproductive agents around in any brokerage office saps energy from everyone else, and this will affect people's productivity.

You'd never see a professional basketball team have 40-50 horrendous players practicing with them and suiting-up on the sidelines for all of their home games, even if these players would do it for free. But I'm guessing, similar to the residential agents who rarely close any transactions, that if pro basketball teams allowed this, many of these same 40-50 players would walk around telling everyone that they're professional basketball players.

In professional basketball as in professional real estate brokerage, the best interests of everyone including the profession itself are served when the people who can't or won't perform their job are fired and told to move on with their lives. In both situations it's important for everyone to learn that there's more to having a bona fide career than just wearing a uniform or walking around with a business card.

Click here for downloadable E-books and live audio interviews with top-producing commercial real estate agents. These interviews are with industry experts who show you exactly what they do to continually make $500,000.00 to over a million of dollars a year.


How to Buy Properties
When You're a Full-Time Commercial Broker

This Tuesday night, February 13th, at 8:00 p.m. Eastern Time, I'll be leading a 90-minute telephone conference for my Inner Circle where I'll interview Alex Rhoten, one of the top commercial brokers in the business, who's done an outstanding job of investing in and developing commercial real estate throughout his career. During this interview Alex and I will tell you all the ways you can invest in and develop commercial properties while working full-time as a commercial agent, instead of letting the years go by without building your own solid real estate portfolio. The title of our teleconference is, "Building Wealth Through Investing in and Developing Real Estate," and it's specifically targeted towards you as a full-time commercial agent.

If this subject interests you, and if you'd like to join me on the teleconference call for FREE, click here:

Click Here for More Information

I look forward to having you join me on the call!


Click here if you'd like more information on my one-on-one coaching program to take your real estate productivity to the next level. One-on-one coaching is available for both commercial real estate agents and company management.

"In just weeks Jim has showed me new approaches that have already generated millions of dollars in new business activity for me."

Hugh Damon
RE/MAX Commercial

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