Realtors: An EPIC Opportunity!
EPIC?!? Pretty strong language, don’t you think? But for Realtors, maybe not.
How so, you ask? How about a little background for some perspective.
Exhibit “A” – A Wall Street Journal article on the state of the real estate market published in March 2021 stated the following: “There are more real-estate agents than homes for sale in the U.S.”
Exhibit “B” – According to the National Association of Realtors (NAR), the Association of Real Estate License Law Officials (ARELLO) estimates that there are over 3 million active real estate licensees in the United States. THREE MILLION!
Exhibit “C” – Forbes magazine published an article in January 2019 that stated that according to the website salary.com, “…the average annual earnings for real estate sales agents was $41,289” as of January of that year.
Exhibit “D” – The website Investopedia.com, in a May 2021 article, reported that “…the median annual pay for real estate agents was $48,930 in 2019, according to the most recent data available from the U.S Bureau of Labor Statistics.” That article went on to state that, “Of course, real estate agents and brokers can make much more than that. The highest 10% of agents earned more than $111,800 in 2019.” (I wonder what the bottom 90% made!)
If you take out the top 10%, according to these sources, the average Realtor makes about $40,000 a year.
Not bad, but hardly enough, in my opinion, to compensate for all the hours – nights and weekends – that Realtors have to work. Hardly enough to compensate for the kids’ soccer games and pool parties that are missed. Hardly enough to compensate for being “on call” pretty much 24/7. Hardly enough to provide the kind of lifestyle most people who work that hard deserve and strive for.
The EPIC Opportunity
As I write this in July 2021, the real estate market is in a frenzy. With interest rates so low, Realtors, mortgage companies and title agents are having a killer year.
But those of us that have lived through the tech crash of 2000 and housing crisis of 2008 – 2010 know that the real estate market can’t continue at its current frenetic pace much longer. Inflation is heading up and central bankers are threatening to raise interest rates sooner than they had planned.
So, what happens when the market gets back to normal? If 2019 was normal, the average real estate agent will be making something in the neighborhood of $45,000 or $50,000.
But there is an economic shift that’s just beginning that will have massive financial consequences and – Realtors are uniquely positioned to take advantage of it.
Our course, “Learn How to Value and SUCCESSFULLY Sell Businesses“, teaches you how to value and sell businesses.
Become a Professional Business Broker…
The Baby Boomer generation is starting to hit retirement age at a rate of 10,000 people a day in the United States alone.
According to the U.S. Small Business Administration, more than 50% of small businesses – nearly 15 million – are owned by people over 50 years old.
UBS, the Swiss investment bank, issued a report that included the results of a survey of business owners. It’s conclusion? More than 40% of business owners plan to exit their business in the next decade.
Tens of thousands of businesses around the world will be coming to market over the next 10-15 years. The owners of each will need the help of someone who knows how to value, market and sell businesses. And each sale will generate a very handsome commission.
The professionals that broker businesses enjoy two substantial financial advantages that real estate professionals miss out on. The first should be fairly obvious. The second, possibly less so.
First, businesses, as a rule, sell for more – often times MUCH more – than do houses.
We work with businesses that range in value between $250,000 and $25 million – the range in which the majority of private businesses fall.
Second, commissions paid for handling the sale of businesses range between 8% and 12% with the average generally being 10% – DOUBLE, or nearly so, what Realtors earn selling houses.
And if you’re selling houses outside the U.S., you know that commission rates wherever you are are probably even lower than the 5% or 6% that U.S. agents enjoy
So, do the math. Selling one $1 million business means a very handsome commission – one that is more than twice what the average Realtor will make in a typical year. That’s just ONE DEAL!
We’ve launched a coaching program specifically tailored to Realtors that want to sell businesses, business owners and to anyone that wants to become a business broker.
If you’d like to learn more, email me at joe@WorldwideBusinessBlog.com
Granted, though valuing, marketing and selling businesses is conceptually similar to valuing, marketing and selling real estate, it is significantly different in practice.
But real estate agents and brokers already understand the concept of preparing a property for sale, marketing those properties, helping to negotiate a purchase agreement and shepherding the deal to closing.
Those skills give Realtors a leg up when they decide to learn how to value and sell businesses.
And get this… In many areas, anyone who engages in the brokering of businesses for compensation needs to be licensed. But believe it or not, the required license is a real estate license! Something every active Realtor already has!
Every business that does not fail will eventually be sold. Every one.
Every business Realtors pass as they drive around town showing houses every day.
Car dealers, building supply companies, marinas, boat dealers, convenience stores, hotels, child-care businesses, grocery stores, cabinet suppliers, healthcare providers and thousands more!
Every business in every office park, strip mall, shopping center, industrial park and every one on Main Street.
And every owner will need the help of someone who knows how to value and successfully sell businesses.
Since founding Worldwide Business Brokers 20 years ago, we’ve seen countless real estate agents list and try to sell businesses. We’ve been contacted repeatedly by real estate agents who, after trying – unsuccessfully – to find a buyer for a year or more to ask for our help. But by that point, two of the three cardinal rules for selling businesses have been broken, making the likelihood of us being able to help in the short term minimal.
If the real estate agents involved knew how to value and properly market the businesses they listed, it is highly likely that those businesses would have sold.
But here’s a hint: no one, in the history of the world, has EVER gone to the MLS looking for a business to buy. No one.
The Bottom Line
Brokering the sale of businesses isn’t for everybody. Doing multi-million dollar deals can frighten those among us that are less-driven.
But for those real estate agents who want to supercharge their commission income without the hassles of a 24/7 career, there is, right now, an EPIC opportunity to do so by helping millions of business owners turn their years of efforts into the capital they need for retirement – while at the same time taking most weekends and evenings off to spend time with family and friends.
If you’re one of those agents, let me know.
If you have any questions or comments on this topic – or any topic related to business – I’d like to hear from you. Put them in the comments box below. Start the conversation and I’ll get back to you with answers or my own comments. If I get enough on one topic, I’ll address them in a future post or podcast.
I’ll be back with you again next Monday. In the meantime, I hope you have a safe and profitable week.