C21AGVoices

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“What are the three most important things in valuing real estate? Location, location, location!”

During the past 20 years, like any other real estate professional I have often asked what increases the the value of my real estate practice . And after a lot of thought, I am clear that the answer to that is also location, location, location.

But what makes a good location for a real estate license is different then what makes a good location for real estate. The components are really very simple but agents are sometimes distracted by the way the components are assembled.

Generally, agents look at a commission structure or “split” thinking that determines where their license will make the most money. But the real measure of a good location for a license is dollars in the agents’ pockets, which is determined by more then percentages.

It’s the same story we tell our seller’s. “Sure you can list with someone that will offer a lower commission rate, but if your house never sells, what good will that do you?”.

Here are the components I looked for as an agent.

1. What type of of management support will I receive?
2. What is the experience of the management and support staff?
3. What support staff and departments are there in the company?
4. Does the company generate leads that will be distributed to me?
5. Does the company charge me for those leads?
6. Are there any other fees that I have to pay?
7. How are expenses allocated between the company and me?
8. Where is the office located?

It is nice to think you are valued because you played the percentage game, but where’s the benefit if your deals don’t settle? Or if you don’t have new buyers and sellers to work with? Too often, monthly desk fees, referral fees and costs billed back to the agent create so many deductions that the “high” commission split results in less money at the end of the year.

Don’t be fooled by smoke and mirrors and promises that don’t get realized. Make sure your license is truly in the best location by asking the questions and doing the math on your own.