The Best Real Estate Investment
Your own ethical real estate office
You made a comment in your latest email newsletter saying, “If you’d like to know more about having your own ethical real estate agency one day.” I am intrigued to hear what you have to say. I am interested in real estate, but have always been turned off it due to the shocking reputation the industry has. It would be satisfying to be able to operate ethically and profitably in the industry. Tell me more!
Perhaps it is best to start by telling you why we put that message in our newsletter. In other words, our motives.
For more than ten years we have been teaching agents and their staff. It all began because the results at our own real estate office attracted many agents to us. They wanted to know what we were doing. It got to the point where showing other agents around our office was taking up too much time. So, instead of showing them around, one at time, we decided to book a local hall and speak with them in a group. About 150 showed up. And that’s how we got into teaching agents.
In the mid nineties, it was suggested to us (by a wise woman) that we should state what we were really doing, namely “promoting ethics in real estate”. After much thought, that became our theme. And then came all the controversy. Many agents started to say, “How dare you call us unethical?” We tried to say that it was mostly the systems that were unethical and that it was impossible for the most honest or well-meaning person to do an honest job if the systems were flawed.
In 1997, we released an entire agency management system based on ethics. It was well accepted and we had plenty of agents ‘join us’ – i.e. subscribe to our training courses, use our licensed material and agree to follow what, by then, had become known as The Jenman System.
Within a couple of years, more than 300 real estate offices were our clients. We supplied them with constant updates as well as on-going training and support.
We had lots of challenges, most of which we handled well. In fact, we thrive on solving problems. Our biggest problem, however, was getting the agents to do the “hard parts” of our system. Of course, by “hard parts” I mean the parts where they had to make a decision between ethics and sales. So often, ethical conduct is not immediately profitable. As I write in my book, if an agent is faced with the choice of telling a lie to make a sale or telling the truth which means losing the sale, many agents will lie. They feel they have no choice. In fairness to the many good people in real estate, it can be very tough when you are competing with agents who revel in the deceit of the common systems and win so much business as a consequence. Tough yes, but not impossible.
As more agents became known as “Jenman agents” we faced our biggest challenge – what to do about those agents who were not following our system (or who were following only the parts that suited them and avoiding the hard parts). It was tearing us apart to be saying one thing publicly and then having an agent who claimed to be associated with us doing the opposite of what we were saying. We were terrified of being seen as hypocrites.
The solution was to introduce an accreditation system called Jenman APPROVED. Only after we had checked the agents and made sure they were following our system would we allow them to use our name. We also wrote a Code of Ethics and Client Care which our APPROVED agents are required to follow.
We are so confident about these agents that we are prepared to publicly offer our own GUARANTEE to consumers who use them.
It is a wonderful concept and is working very well.
Except for one point. We do not have enough great agents.
In 2000 we had 311 agents as clients. When we introduced our accreditation in 2001, we selected about 50 to become APPROVED. Today we have 70 and about another 80 who may soon be good enough to get our accreditation.
What about the other 150 or so? Well, many have left us. Not allowing them to use our name caused some to leave. Insisting that they stick with our codes of ethics causes others to leave. And then there are the real shockers, those who think that because they pay us they can use our name and continue to use unethical systems.
The other factor is that during a boom it is easy for almost any agent using any method to earn large profits. This creates laziness and lethargy. They don’t need someone to show them how to make more profits if it is going to require more effort. Even if, in the long term, they will be better off, most agents have a short-term mentality.
A short-term mentality leads to long term problems. That’s one of the reasons the real estate industry is so poorly regarded today. The focus is not on ethics and client care, it’s on profit; and profit now, not tomorrow.
Our major aim is to change the real estate world, to make the process of selling and buying real estate one that is safe and pleasant. In short, to win the loyalty and trust of all real estate consumers. It’s incredible, but the more consumers who support us, the more the typical agents reject us.
A study of our successes and our failings has made us focus on something that has always been known to us and that is, the people we have no problems with are the consumers and the new sales recruits. We have always had great success with hiring salespeople by focusing on those who have no experience. This means no ingrained bad habits. It has worked wonders.
So, consumers are very supportive and so are the new recruits. The one group that has caused us the most problems for many years has been the leaders of the offices – the agents themselves. Even those who are our best examples today have sometimes taken years of nurturing, training, coaxing – or as one newspaper said recently “demanding”. It can be so draining to change years of bad habits. The promises followed by the disappointments are heartbreaking. One day I’ll write a book about it.
But perhaps we, too, have been taking a short-cut. We know that our best and most lasting and sincere support comes from consumers and fresh salespeople, so why have we not gone looking for fresh owners? Perhaps because it will take too long to show them how to open an office and get a business going? Maybe. But it can’t take as long as having to undo all the bad habits in existing agents. When we study the success of our best agents, we find that those who are growing the fastest are those who are brand new to real estate. They are eager, hungry to learn, they work hard and they follow advice. They are a delight to work with.
When I opened my real estate office, I had no experience. I started at the top, so to speak, as the owner of the office. Sure, I worked hard, especially for the first two or three years. But it was the best investment of my life.
I cannot begin to tell you how simple it is to succeed in your own real estate business. It is so simple that I almost have trouble saying it because I fear no one will believe me.
Consider this: Sellers and buyers despise the typical agent. There is a huge demand for agents who care about consumers. The average commission for selling just one home is about $10,000. If you are genuine about ethics and helping people with their most important financial asset, then your sincerity will show (you can’t fake it). This attracts people to you, it really does. Sell 10 properties and the income is $100,000. In my real estate office we averaged 25 sales a month. Sure, in those days the commissions were much lower. But today the number of sales is about the same.
It is simple for a good real estate business to earn a profit of $500,000 a year.
The other night I was queuing for the movies with some friends, one of whom has a real estate business under our system. Someone tapped me on the shoulder and told me that he used to be an agent. Today, he is selling building materials because having a real estate office was too hard. I introduced him to my friend whose profit was $600,000 last year.
But here’s the best part. My friend does not work in his business. He plays lots of golf. The ex-agent said that he should have used our system all those years ago, but all his other agent mates told him to stay away from me. My friend worked really hard for about five years. Today he reaps the rewards with low hours, high profits and a business that is loved by sellers and buyers.
Although we are a training and education company not a franchise, I once read that McDonald’s in their early years had similar challenges. Their worst owners were those who had experience with running restaurants! Their best were those who had no experience but were eager to learn and were prepared to adhere to a proven and profitable system.
And so this is why we are now going to seek people with no real estate experience who want to have a wonderful business earning great profits and helping people to sell or buy real estate ethically and with complete safety. It is great to have a business that makes a profit and makes a difference.
In Australia, I think there are more than 50,000 new businesses opening every year. All of them want to make high profits. Many of them are hardworking, decent and highly ethical people. These are the ones we want to meet.
We will look for people with high ethical standards and a high level of business acumen. In a couple of months we will start looking in earnest.
In the meantime, if you are interested, my advice is to learn as much as you can about real estate and how it works. Do some research, ask around and you’ll soon start to realise that it’s quite simple. If so many agents are doing so well with such poor standards imagine how well you could do. This is the very thinking that led me into the industry. I used to meet agents and think that I could easily do a better job. I didn’t realise how true that was.
Neil Jenman, July 2003
welcome. Neil tries to read every e-mail and respond personally. We have posted some of the common questions
together with those we feel may help you. Thank you for your interest.