This April, one of Inman’s most popular recurring theme months returns: Back to Basics. All month, real estate professionals from across the country share what’s working for them, how they’ve evolved their systems and tools, and where they’re investing personally and professionally to drive growth in 2022. It’s always smart to go Back to Basics with Inman.
Some business professionals say, “You have to spend money to make money,” but that’s not always the case.
In real estate, the market can turn on a dime, which is why agents need to be smart about saving money where they can in their business.
Agents recently told Inman that saving money can be as simple as tapping into your brokerage’s in-house services or tracking your expenses more closely. However, it can also be as elaborate as partnering with a local university to develop a real estate marketing internship program.
From not spending money at all to investing some strategically, here’s how industry experts say agents can save their pennies.
Grow your knowledge base first
Instead of turning to products or technology to fix a problem in one’s business, Lindsay Reishman of Pareto in Washington, D.C., says that agents should first consider working on their knowledge base in their field. Having a deeper understanding of the market is typically what helps set an agent apart, Reishman argued.
“It’s about being able to answer the question of ‘how can you uniquely provide the services that any specific type of buyer or seller needs?'” Reishman said. “Usually when I think about that question, I don’t solve for it with money — I solve for it with time and effort. So I’ll say, Okay, I really want to work on condominiums in downtown D.C. — what do I need? To know about X or, if I’m buying a property in the condo, what’s relevant right now?”
With condos, for instance, Reishman knows that older condo buildings aren’t currently being approved as easily by Fannie or Freddie, so he knows to guide his buyers in other financing directions.
Invest deliberately and make a plan
After doing everything they can to address pain points in their business without spending money, only then can agents likely gain a better understanding of what they need specifically, and be more deliberate about their spending, Reishman said.
“My general belief is that we would all benefit by being increasingly deliberate,” he said. “What I see is that sometimes agents are looking at the newest shiny object and thinking, ‘Oh, I should grow my business,’ and then somebody approaches you and says, ‘Well maybe you should invest in Zillow leads or send postcards to your farm area’ … it’s not deliberate. So I find that oftentimes agents are trying these various things without a plan. So I think the best practice is to really develop a strategy and a plan, like, ‘What do I want my business to be?’ and ‘How do I get from where I am to where I want to be?'”
Reishman added that once agents are ready to invest in something in particular, they should do the research into the specific product or tool, and reference reviews from reputable sources like Inman News or T3 Sixty about the product.
Scrutinize P&L statements
There are so many subscription services today that it’s possible some agents are subscribing to services that may have been relevant to them years ago but are no longer — without even realizing it. To weed out the unnecessary ones, Reishman said agents should regularly review their P&L statements (profit and loss statements) for services they’re no longer using. Even small recurring expenses can add up over time — a monthly fee of $20 could save an agent $240 over the course of a year if eliminated.
Take advantage of your brokerage’s services
Krystal Acosta of Compass in Denver, Colorado, said she saves money by taking advantage of her brokerage’s in-house services, which she essentially pays anyways through her commission split. “They have a really amazing marketing system and CRM,” she said. “I’ve been with other brokers who have to pay other people to do marketing.”
Minette Schwartz of The Schwartz Team at Compass in Miami, Florida, agreed.
“See what your brokerage can provide you,” she said. “Your brokerage is there as a stopgap to help you with any issues for contracts or IT support. What can they help you with, either on the marketing side or on the transaction coordination side? Maybe there’s a redundancy you didn’t realize.”
Resist shiny objects/online traps
Being in an industry with so much innovation can be exciting for agents, but it can also be confusing to sift through the noise to get to the good stuff. John Cunningham with eXp Realty in Phoenix, Arizona, said that in order to save money, agents need to be able to see beyond all the glitter.
“[Don’t] buy every shiny object that comes across the internet that promises to help [you] sell,” he said, “because we get hit up by that stuff all the time. All the time. It’s very tempting, but I don’t do that anymore.”
Work with a mentor
Particularly for new agents who are trying to save money while they get their business established, Elena Licari of Coldwell Banker in Los Gatos, California, recommends finding a mentor who can help guide you through decisions. There’s no need to “reinvent the wheel,” she said, when there are agents who have been through the same thing before and are willing to share their knowledge.
“Just jump right in and put yourself out there,” Licari said. “Don’t be afraid of rejection.”
Shift your mindset
Maintaining a flexible mindset is another strategy that Licari’s employed in order to save money in her business, a strategy that proved instrumental during the uncertainty of the pandemic.
“A lot of it is mindset,” she said. “The most important thing in that whole thing is going to be mindset and the mindset is going to be what’s going to allow you to survive or not. That’s what allowed me to thrive in COVID. Personally, my business expanded more than I ever imagined during COVID because I was able to pivot and shift and I think that’s an extremely important quality for an agent, not to get stuck in one way, to constantly reevaluate your systems and pivot …”
Dennis Bowers of The Bowers Group at Compass in Naples, Florida, said that the adage “You have to spend money to make money” is one that actually can hold true when it comes to adding members to your team. A few years ago he hired an assistant to help take care of the tasks in his business that slowed him down, and hasn’t looked back since.
“I wish I would have done it five years prior because since I’ve done that, [I] just have more time to do the things [I’m] good at and delegating the things that [I’m] not or that [I] don’t like.”
After growing with an assistant for some time, agents should consider creating a team with more agents in order to grow their business even further, Bowers said.
“You’re offsetting some of the profits you could make,” by adding people to the team who need to be paid, he said. “But if you’re able to cover more ground and give team members opportunities to sell and you’re making percentages off of that, then you’re saving money and making more money, but also expanding your reach and your gross.”
Become a visible presence in your sphere
Bowers said that working one’s sphere typically helps agents bring in more money at the end of the day than buying leads. Instead of turning to Zillow or other sources for leads, Bowers said, focus on your sphere.
“You’re gonna get more bang for your buck if you focus on those people over a buyers lead generation system. So I think that’s one thing that you could do that definitely saves money and does not fall into the trap of, ‘Oh, I can generate 300 leads for you this month. You’re gonna pay me X amount of thousands of dollars.’ With that number, you might get one or two actual buyers or leads out of it, and then you have to convert those. So that’s a big trap that people fall into.”
The goal of any agent, Stan Ponte of Sotheby’s International Realty in New York City said, should be to brand oneself as a real estate agent to everyone in their sphere and then participate in their community. The best way for agents to do this is by leaning into things they already enjoy so as to connect with people who have similar interests that they might naturally work well with.
“Real estate is an emotional business,” Ponte explained, “and people tend to hire people that they are aligned with in some other aspect of life as well. So for me, it was acting and LGBTQ rights. And I immediately began making sure that my spare time was spent volunteering, supporting nonprofit organizations and being part of the community of people who had similar interests or similar drive, similar passions.”
Ponte began by volunteering at New York’s Drama League events early in his career and ultimately reached the point where he could afford to sponsor and even co-chair the gala, at which point (over the course of a robust career) his sphere had grown immensely and he gained clout in the community. “Theater and Broadway are a big part of not just the fabric, but the economics of New York City,” Ponte said. “A huge amount of tourist money is driven through Broadway, so it was a way for me to say I don’t just live here and work here, but I want New York City to thrive.”
In order to perform at one’s best and optimize earnings over the life of a career, Ponte argued that agents should prioritize self-care. Plan out vacations in order to rejuvenate, he said, and you may even gain some business in the process.
“Hopefully, wherever you go on vacation, you’re doing some business where you are and meeting the brokers in that local market and creating referral networks … all over the world,” Ponte said. “A vacation is an opportunity and a chance to unwind and stay healthy. I think a healthy real estate business has to survive, not only in preparation for ups or downs, but over the long term…”
Lean into digital and virtual
Marketing online through social media and other outlets is much more affordable than print marketing, and arguably more effective for today’s audiences of homebuyers and sellers, Frances Katzen of The Katzen Team at Douglas Elliman in New York City told Inman.
“Print ad and magazine [marketing] is not nearly as effective to the instant gratification culture that we’re in,” Katzen said. “What we’re seeing is the Instagram/Twitter/Facebook era has become a very efficient, fast way to grow a viewership, a business, without too much cost. The more techno side of social media has become a huge effective, cheaper forum for most people to earn and grow viewership and a placement in the market.”
Likewise, she said agents who need an assistant for support should consider hiring a virtual one, which can typically be hired at a fraction of the cost because people are sometimes willing to take a pay cut for the option to work remotely. Brokers who are still paying rent for office space might also want to consider giving up their lease, now that platforms that make virtual work possible are accessible and cheap, and sometimes free.
Make the switch to an EV
All car owners are feeling the pinch from surging gas prices today. Liz Hogan with Compass in Miami, Florida, bought a Range Rover last year and is now having serious regrets that she didn’t go electric instead.
“It used to cost me somewhere in the $50 price point to fill it up,” she said. “Today, it’s easily over $100 — literally, every time I go to the pump, it’s higher.”
For agents who have to drive around town to appointments all day and fill up their cars two or more times per week, making the switch to electric is likely going to be much more cost-effective in the long run.
“I cannot tell you how many conversations I’ve had with Realtors about this topic because it’s something that’s obviously very pertinent to our lives,” Hogan said. “Most active Realtors are filling up their car once or twice a week, at least, and we see the pricing go upward every single week… I can’t tell you how many say, ‘I wish I bought a Tesla’ or ‘When my lease is up, I’m going to buy a Tesla.'”
Get an intern
Agents and brokers who live in or near college towns should look into opportunities to hire interns for a semester through local universities. Through Compass’ partnership with Florida International University (FIU), Hogan has been able to hire interns during the summer to help her out with marketing and social media. Hogan doesn’t need to pay them since the students get course credits through their university, and she just needs to complete a fairly basic evaluation at the end of the summer.
“They would run my social media, they would go to the photo shoots, they helped me revive my listing presentations, shadowed me, helped me put together booklets for clients, helped me do ads in the paper or media,” Hogan explained. “So I think as an unpaid intern, if it’s just for marketing or for other things within the business, I think it’s a great opportunity that people can take advantage of.”
Talk to your accountant
Since most Realtors work for their brokerages as independent contractors, many have the ability to write off a number of expenses when it comes time to file their taxes. Therefore, in order to make the most of tax season, agents should stay up-to-date on the current tax code and speak with an accountant about their options.
“We have, as independent contractors, the ability to write off a lot of things like entertainment and lunches and certain things we do for our customers as gifts,” Hogan said. “So I think looking at what the tax code allows you to do would definitely be top of my list to tell people to look out for in a conversation with their own accountant.”