A friend of mine graduated from bible school in the early 80’s and decided to move from Peoria Ill. where he and I worked at Caterpillar Tractor Company together, to Cape Canaveral Fl to start a church. He asked me to come help him get the effort off the ground. I had been laid off from Cat for a while at this time and things were tough around central Illinois for a young family of 5. I was working as an HVAC laborer installing systems by day, evenings I had a job at Sears and on the weekends I cut and delivered firewood for $35 a pickup load. So I was open to the idea of doing something different requiring relocating, but was obviously concerned about how does a guy with only a high school education make a living in a new state without many skills?
Wally, my friend’s father owned a Red Carpet real estate franchise in the neighboring town of Cocoa Beach. So when he called me to see if I would be interested in getting my real estate license, It didn’t take long for me to ask that ever important question, ”so, how much do you think I can make selling houses”? He immediately responded, I’ll bet you could make $30,000 a year! (it’s probably noteworthy here to share my only experience selling anything in my entire 31 years on the planet at that time was my evening job selling tires and batteries at Sears, but heck, real estate can’t be that much harder, right..? ) “$30,000 a year?? That’s double what I’m making now working 3 jobs!” I responded.
As crazy as it sounds now, within a few months of that conversation with Wally, I loaded up the family and moved to a new state where I basically knew no one, to take on a straight commission job, doing something I had no clue how to do, as the sole provider for my family. And it would be funny now, if it wasn’t true, but just prior to getting in our UHaul Truck to start the trip to Florida that day, I walked to the middle of my front yard and stuck a “For Sale By Owner” sign in the ground. I wasn’t about to pay some high priced Realator to sell my home!
I learned a lot that first year in business, and I did sell some things, but not a lot of real estate. I sold one of the cars, the TV and a bunch of stuff out of the garage. Things were not looking too hopeful. To compound the challenges of trying to get started in a strange land with a new occupation that depended on a solid economy, something really bad happened for the area. I’ll never forget heading into the office that fateful morning and hearing the Shuttle, ‘Challenger’ take off. It would shake the ground where we lived. I remember exactly where I pulled off the 520 causeway that morning and parked the car to watch the event. They were always an incredible sight. A few minutes into the launch I remember thinking to myself, I don’t recall the other shuttles I had seen splitting apart like that? I had no idea what had just happened, until I got to the office where I found everyone crying. Some of the folks in my office personally knew those that died that day.
The few friends and aquatances I had by this time all said that I might as well move back to where I came from since the entire area depended so heavily on the space program. That they would be rolling up the sidewalks soon like they had done in the 60’s when something negative happened to the space industry. The general consensus was no one would be buying or selling real estate any time soon. I let my naysayers know though that my 3, 5 and 7 year olds all still needed to eat so I was going to somehow figure out how to sell some real estate, sense I hadn’t found much of a demand for a laid off fork lift driver yet.
Within 6 months of the shuttle disaster most of what was left of our equity from the home in Ill., that finally sold, was just about gone. Things were not looking good. I was reading the want ads considering maybe getting into the car selling business, but honestly was not ready to give up on my new career. Not yet anyway.
Then one late night I was watching an infomercial about how to get rich selling real estate. According to the guru on TV all I had to do was find an investor to provide the down payment on a home and then find someone renting an apartment that would like to get into homeownership, put them both together and they could “co-own” a property. Sounded pretty easy to me! The investor would provide the down payment and the former tenant would live in the home and make the monthly payments. They would share the ownership and it would work out for both parties. So, inspired by the late night message, the next day I found a large piece of cardboard and with a felt marker wrote in big bold letters, “RENT to OWN” and I put it in front of the one listing that our office had.
Within a few weeks there were so many people calling on that homemade sign that my broker started putting similar signs all over the place. Thankfully we didn’t have to work with the co-ownership program very long and ended up hiring someone just to take all the “rent to own” calls that were coming in. Since Patrick Air Force Base was nearby, we found out fairly quickly that there were a lot of veterans in the area and many could buy a home on their own, but just didn’t know they could or how to do it. That’s where I came back into the picture. I helped many of those buyers calling on that cardboard sign buy a home. I’m so glad I did not give up on my new career. That was in 1986 and I had my first million dollar year in real estate that year. Not bad considering our average sale price was $64,000.
Soon I started winning awards with the local MLS. It was about half way into my third year in the business that I started realizing that my Broker wasn’t doing a lot for my bottom line anymore, that it was primarily my efforts bringing in my business. So one day I asked Wally for a higher commission split than the 50/50 that I was on. It seemed like the right thing to do. He said no one gets a higher than a 50/50 split. I said if you don’t give me at least a little better I’m going to open up my own company! He laughed and said I did not have the experience to run my own office. By the end of that year, though I loved and appreciated everyone in my office, since there were none around, I opened the first Re/max office in Brevard county Florida. I figured that there were probably other agents around that were getting frustrated and wanted to be able to capture more of their hard earned commissions as well. I was with that franchise for a total of 27 years. I will never forget the feeling I got when I received that carbon copied congratulations letter from headquarters that was sent bulk mail congratulating me for my 25 years with the company. I thought, wow, it seems like Mr. Liniger, the founder, could have at least sent something with an original signature on it.
They say, “Until the pain of remaining the same becomes greater than the pain of change, we tend to stay the same.” Because of the differences I began seeing in the Re/max organization when they went public a few years ago, I eventually decided to leave the organization. We had the #1 team at the largest Re/max office in the region. Our 6 agents and I were selling 300 homes or about $100,000,000 a year, those last 2 years there. So it was a big decision to leave, but March of 2016 my wonderful wife, Connie and I decided to purchase an Exit franchise.
I loved the conviction of the founder of Exit and found the culture an upgrade to what I had grown accustomed to. It seemed like people there actually liked one another there. Unfortunately it took less than 18 months to realize the model was broken and recruiting experienced agents, in a super competitive market like Franklin and Brentwood Tennessee, to a 70% split, even with the hopes of a 10% residual income (and then keeping them), was pretty much impossible, regardless of culture, core values, training, support, etc. That is when I realized that the ‘pain of staying the same’ had become far greater than what we could afford to continue to endure. I think the loss of nearly $200,000 those 18 months had something to do with that pain. That plus having to walk around the ‘Big White Elephant’ in the corner of the office every day called a ‘70/30 split’. I could not continue to look my agents, or prospective agents in the eye and tell them that giving up 30% of their income (30% of their first $100,000 each year, forever) was a good thing. I knew I was worth it, I mean after all, I was determined to be a great leader, available to them 24/7, and we had top tier systems and training and office, etc., but at the end of the day, an experienced agent is running a business. And running a successful real estate business eventually requires you to know that you are receiving all you can possibly receive for each and every transaction. Especially as challenging as the environment has become.
Our industry has become more competitive than ever before. Not just because of the crowded field with the many new agents joining the chase daily, but more so because of the heavily funded tech companies we’ve never had to compete with in the past that are consuming a greater and growing portion of the pie than ever before. This new environment is forcing an increasing awareness that the net value of every opportunity to list and or sell a home has become more precious than ever before. Pushing the nagging question in the minds of all agents, “am I honestly getting my monies worth for what I am leaving on the table?” This question is going to have to be addressed, because in too many cases it doesn’t feel like it is any longer.
So after looking at our numbers monthly and not seeing any hope of improvement, I told Connie, “We’ve got to get out of this franchise, it’s eating us alive and we cannot continue down this path. Repeatedly, we watched experienced agents migrating to companies that offered far less in bells and whistles but more in commission split. Even some of our agents that we had helped achieve a high level of success and confidence, that loved us and we loved them, were considering leaving rather than ‘resetting’ there split as the custom the New Year.
I quickly became inspired to begin looking at every real estate model I could find information on. Especially those that were thinking out of the box. Our industry is changing rapidly and will probably never be the same. With the ready availability of knowledge, systems, training, lead gen processes, and the homogenization of brand loyalty, I began to recognize that the ability of many of the old established brands (no matter how respected) were soon going to go the way of the dodo bird. To me it’s become obvious, for these established, top heavy brands to keep their producers convinced that they are worth what they are being charged was going to eventually become impossible.
But to be clear, my research into the newer and existing real estate companies was not because I intended on buying another franchise. I was simply gathering research data that I intended on bringing to what I thought was going to be our new simple independent boutique office. So when I reached out to Realty ONE Group that fateful day it was only to get ideas, nothing more.
I invested days, then weeks researching Realty ONE Group and speaking to various Broker Owners after being introduced to the system by Mr. Eddie Sturgeon. Eddie is one of those guys that represents what he believes in with all of his heart and soul regardless of what might be going on in his personal life. You’ve gotta love that level of conviction. I know I do. And then when he informed me that a man that I had respected for years with my former company, Mr. Vinnie Tracy, was the new leader of ROG, I felt I had no choice, I had to pay attention. There is no question that this man is a true icon in the industry. He has seen it all. From small beginnings to becoming one of the greats. If I were climbing a mountain, I’d want someone guiding me who has been there before. Vinnie has been there, done that and is in the process of doing it again. And though it may be a taller mountain, he knows exactly how he is going to get to the top again.
That week I continued to discuss with other ROG Broker/Owners, that all openly shared, and not only did it make incredible since to those of us that are paying attention to the changes taking place in the industry, but I thought if the company is attracting this level of conviction and leadership, why go out and try to reinvent the wheel or why get on a ship that’s time has already sailed, were the only thoughts that came to mind. This company, quite simply, seems to have it all.
This past week we celebrated our first year as Realty ONE Group Music City. I could not be more proud of what we are blessed to be part of. Yes, being the only ROG office open in the entire state of Tennessee has had its challenges, but would I do it all over again? “Where do I sign?” would be the answer to that question.
In less than 12 months our family has grown to just under 80 awesome professionals with a combined sales volume over the past year, according to Broker Metrics, of over $169,000,000 in residential business.
As we know, there are companies out there that talk about being “agent centric”. This company walks it out. And there are many things I love about this organization; the experienced leadership, the technology, the incredible world class training and systems, the commitment to stay on the cutting edge in all things real estate, the branding that spanks all branding, etc. etc. But truly, what I probably love the absolute most about being a part of Realty ONE Group is this ONE simple thing. Being able to look any experienced agent (or unexperienced) in the eye and share from my heart of hearts, “I sincerely do not know of another real estate company or model that is better and or offers more to their agents than this ONE does. And if you can find one that is better, then by all means join that company because it must really be something very special!”
One of the reasons that I believe ROG is such a great choice from the broker and owner’s standpoint is that though the margins are initially tight, this only insures us that our future is extremely bright. What I mean by that is this company is positioned to flex and or pivot with any and all changes coming in the future. And by giving our agents the best of all worlds, (Everything they need to be their best, PLUS 100% of their hard earned commissions) we empower them to do what they need to do to remain competitive in an ever changing market place, which insures our companies future value and relevancy.
Let’s think for a minute about some of the present and coming changes.
How is it going to feel to be an agent that is already on a 70/30 or even an 80/20 split, to have to give up another big chunk of their earnings ($4,500+-) just because their long time clients now shop at Amazon? Better get ready, it’s about to happen.
What is the agent saying to the home owner that they just drove an hour to sit down with, only to find out they are considering Redfin’s offer to list their home for 1%, knowing their office doesn’t allow them to negotiate their fees? Oh, I know, “you get what you pay for Mr. and Mrs. Seller..”? Really, is that all you’ve got to defend yourself and your companies required rate? How’s that working for you as you drive away with your sign still in the trunk? That response is losing steam and conviction to a consumer that is dialed into that one and most popular station of all, WiiFM, “What’s In It for ME?” Especially if we see the predicted drop in property values happen, which only forces the seller to pay even closer attention to the other options they now have. Here’s a thought: As an industry, we are going to have to be ok not hitting a ‘home run’ every at bat. Last I checked, “part of something” is always better than “all of nothing”..
And remember, each of these “tech” companies that are gaining traction in the marketplace are speaking to a “pain point”. Whether it’s the pain point of, “ease of process” or “bottom line net results”, it’s all about a pain point that needs to be addressed to increase the likelihood of being able to capture a higher percentage of future opportunities. And if you’re getting 100% of your commission along with everything else a ‘Top Tier’ real estate office can provide, the likelihood of being able to solve or speak to those ‘pain points’ is dramatically increased.
There has never been greater downward pressure on the agent’s commission than there is in today’s market. And that fact is not changing any time soon. How much better is the agent’s life and future in the business going to look like if they are getting all of their commission to work with, and not just say, ¾’s of it? Oh, I know, many get 100% once they cap, right? But does that cap last for a month, two? For the majority of agents in that scenario, not much longer.
I would challenge all experienced agents that are still on a split, “what would your business look like next year if you simply invested what you are currently leaving on your Broker’s table, directly into your marketing and branding budget?” In other words, what if you kept yourself on the split you are on now, and invested the difference that you can earn in a 100% environment into your future? Your family’s future? I bet it wouldn’t take long to make a big difference.
We are grateful beyond words to be a part of the ROG family of Broker/Owners and agents. We consider it a wonderful privilege to be with a company that I believe is helping secure the future of our industry by focusing on what that future truly hinges on, and that is, the health, wellbeing and professionalism of the local real estate agent. Those individuals that steadfastly remain committed to representing in word and deed every opportunity given, the true importance of our role to the local home buyer and seller, which ultimately even influences the economy of this great nation. An algorithm will never replace us, but only IF, we insist on demonstrating by our actions and expertise this critical message at every opportunity; that we are a much needed and worthy advocate to insure the smooth process and completion when buying and or selling a home. Not as the tech companies are trying to paint us as being: an unnecessary additional expense.
Thank you Kuba and all of the leaders of this incredible organization. In 35+ years in the business, I’ve never been more excited about my future, about our future. We are building something very significant. We are building a legacy that will be around for many generations to come.
Connie and I are humbled here at home base in middle Tennessee by the number of professionals that have and are joining our growing family and are embracing the mission with us that “Together, we are an unstoppable force destined to grow into the most productively successful and passionately referred real estate company in Tennessee!”
Thank you,
Monte and Connie Mohr
Realty ONE Group Music City