Jun 17, 2024
Canmore, Alberta

“Well, we don’t show or feature property that isn’t listed through an agent.”

(Can’t read the full email – click here for the online version.)

By the time you receive this, we will have returned from a quick real estate tour of Panama City and Playa Caracol. Panama is on our short list of countries to spend more time in due to its business and financial strength, location between the Americas and the warmer climate.

I hope to provide you with some business lessons in future articles but for now, I’d like to recount one that happened at home.

For those of you who grew up with online banking, trading, messaging and all the modern technological marvels that make up our world in 2024, there was a time when none of these options were available.

Take investing, or trading in the stock market, for instance.

It doesn’t seem all that long ago when one had to phone a broker to get one’s trade’s done – paying large commissions to get them completed. Information for the retail investor was scant. We relied on end of day quotes in the next morning’s paper and maybe, from monthly newsletters. With the advent of the Fax machine – we could subscribe to daily or weekly Fax Alerts.

But we were still at the mercy of the brokerage houses and their large commissions when we wanted to make a trade. Day trading? Forget about that. All your profits, if you were any good at this, would have been wiped out with the commissions.

With the advent of the internet, came an innovator, Charles Schwab, I believe, with the world’s first, discount brokerage. You want to do your own trades? Don’t need the “advice and expertise” of a broker? No problem. We’ll make it easy and inexpensive for you.

And so began a complete overhaul of how investment accounts were run and priced. 

Today, even the banks offer their own, online trading accounts, where one can add, withdraw, sell or buy, investments of all types, at the push of a button.

Real estate, on the other hand, still feels like it operates in the dark ages.

Agents will quote you the old “7 and 3”; which refers to 7% on the first $100,000 and 3% on the rest, split between the buyer and seller agent. Only someone living under a rock would think that there is any piece of real estate selling around the $100,000 mark. Try 10 times that number.

In Canada, and I suspect in most parts of the western world, prices in real estate have far surpassed inflation. And so, possible real estate commissions, especially in coveted mountain resort towns, have gone to incredible heights. 

It’s a bit of a running joke for us old-timers to learn that a new arrival to our town is an agent. Sell 1 or 2 multi-million homes – you’re golden. The truth, of course, is that while some agents are doing extremely well, the majority may be lucky to be involved in more than 1 transaction of a property per year, worth considerably less.

The burden of paying this commission, has always fallen on the seller. Accept an offer of $2 million on your little house and then see upwards of $64,000 go from you, to the agent(s).

That's getting to be big money!

In this day and age, where the actual buyer and seller can readily access information on property of all types and sizes, online, one wonders, what exactly is the agent doing to earn so much money from a single transaction.

**(Full disclosure: I’ve worked with and helped many agents in this field, and yes, there are situations where their advice and experience are beneficial to all parties. For most simple properties, however, it's more difficult to discern.)

Given the parallels between these two industries, investment and real estate, it is not surprising that the old guard realtors are less than cordial to their online, discount brethren. I am sure the same was true with the original trading desks. 

It was not surprising, therefore, when we invited some of our real estate friends and acquaintances, to come by and view our house for sale, that most declined or rather, did not show up. We hadn’t listed our house the conventional way, you see.

Which is unfortunate for them, because I am sure many could use the commission which we will happily pay, when they bring a buyer. Especially, in our market, which currently has a dearth of homes for sale in the price point of ours.

(One smart agent is certainly pleased with the decision…)

What is the lesson for you?

All business owners would love to own a monopoly. I mean, it would be great to have no other competitors, assuming you had a product for which there was a market.

Additionally, most business owners would also love it, if they did not have to renovate and re-engineer their business. Once you’re up and going, wouldn’t it be great if you didn’t have to change how you functioned? Didn’t have to upgrade your office, means of production, method of delivering the service, etc.?

But the reality is that you do. If you want to stay in business.

One way to stay on top, is to understand and continually monitor, your business’ profit margins. 

This is one reason why I am including our Financial Training for Business Owners, $997 value, for free, when you join RealBusinessMastery.com. Use code RBM90 and get 90% off, available for a those who act quickly. 

Until next week, 

Stay healthy and focus on profit! 

 - Hugh 
The “Profit Accelerator” Expert

P.S. Looking for proven ways to take your business to the next level? Look no more! With a membership to Real Business Mastery, you will find over 280 hours of training with proven strategies to grow any business. Plus, you get access to my $50,000 Advertising Library with winning promotions and campaigns from over 120 industries.  Act right now and save 90%! Click here now and use code: RBM90.

★ BECOME A HIGHLY PAID BUSINESS COACH WITH #1 COACHING PLATFORM ★
I am looking for individuals to help handle the exploding global demand for business
coaching services. I’m willing to train [at my expense] the right individual with a
passion for wanting to help small business owners become successful.
NO travel - work from home. $225,000 first year income. If you or someone you
know is interested, click here and an 8 minute video will explain it all.