There is no doubt that the US housing market was red hot in 2021. The combination of high demand, low inventory, and historically low mortgage rates fueling high prices set up an unparalleled seller’s market.
So what did this mean for the average agent? To be brutally honest, more effort for less income. Consider competing for fewer listings, spending more time and money on lead generation, thousands of showing appointments, and writing multiple contracts that were most times rejected. Wouldn’t you be frustrated and discouraged?
Today, inflation is at a 40-year high, home prices are ballooning, and interest rates are increasing monthly. As a result, many analysts believe we could even see fewer homes sold in 2022. If that wasn’t enough, the National Association of REALTORS® grew its membership from 1.4 million to around 1.6 million last year — a 14% increase. That means more agents fighting over smaller pieces of pie.
While this may sound like a lot of doom and gloom, there is a solution for agents to net more income than they did in 2021. Let me explain.
There are only three ways for an agent to net more income. Increase your revenue by closing more sales, selling higher-priced properties, or decreasing expenses. What if you could do all three? What could that mean for your net income?
As an agent, your highest expense is the split you pay your brokerage. Splits can amount to anywhere from $15,000 to $30,000 per year. Historically, we thought these significant percentage splits covered the offices, training, technology, and support. But does it cost that much for your brokerage to cover these expenses?
I was once told that splits only matter in the absence of value. I couldn’t agree more, but what if all things were equal? What if an agent could get all of the technology, training, and support they are used to for a small flat fee per transaction? What if they could earn an extra $15,000 more each year— not by selling more homes, but by simply reducing expenses?
Let me go back to my initial statement and pose the question differently. Even if the number of homes remains steady for 2022, we still have 14% more agents. That means fewer sales opportunities for each agent. So, if an agent sells 14% fewer homes, how does that agent make up for the loss in sales commissions?
The solution is quite simple. Moving from a brokerage that charges a large percentage split of 20% or more to a brokerage that charges a flat fee of $500 per transaction could mean an additional $1,500 or more income on just one sale. Now, multiply that across multiple sales.
If all things are equal between your current brokerage and Fathom Realty, which charges a small flat fee, what could you do with that extra income? You could spend more on marketing to drive sales, save for retirement, pay down debt, or fund your child’s education. The sky’s the limit, and it simply takes a step of faith. Don’t wait until the market shifts to get ahead of the curve!
Josh Harley is a serial entrepreneur, Founder, and CEO of Fathom Holdings, tech geek, innovator, disruptor, marketer, teacher, artist, U.S. Marine, and an Alaska-raised sweet tea fiend. Josh believes deeply in the principles of servant-leadership and strives to be an example to his leadership team and his agents on serving others first. To learn more, visit FathomCareers.com.