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Real Estate Agent - MLM Model

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AlessioLC

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Hi Fastlaners,

I was wondering what's your thought on the MLM based model for Real Estate, used by Keller Williams and many others.. ?

I mean, can we trust this type of businesses specially in this industry ?
Can we trust this business model in itself ?


I've met 2x Team leaders just in order to learn what they were doing because i have friends who want to join these network and all they were selling me was : Earn a lot of money (i'll passed on that because everyone can make a lot of money if his good enough), 600m² of office space (open space) and the ability to build my own team and earn income on them..growth sharing too.

The thing is, that in France there's so many of these MLM Real Estate businesses and they are all selling the same thing "We're n°1 and you'll do great here".

I'm a beginner in this industry, so there's my question :

> Build your own way as a solo R.E Agent or join a MLM R.E and learn as you go and then after this build your own.(Agency/MLM Network Marketing) ?

In these network, you earn about 70% of the commission on [5-7%] fees.

When you have a team, you earn 7% on the 30% left of the 70% (you earn the 7% on the % left for the network, so then you don't touch the commissions of the agents) that's for the first 10 peoples, then it's decreasing as the revenue are increasing.
 

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p0stscript

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Personally the MLM part would make it a big NO from me, ivI' been a guppie so 'cheers but no thanks from me'.
Ask yourself what is the value of learning the business doing it this way, could you do it another way and have control?
 
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AlessioLC

AlessioLC

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Personally the MLM part would make it a big NO from me, ivI' been a guppie so 'cheers but no thanks from me'.
Ask yourself what is the value of learning the business doing it this way, could you do it another way and have control?
I don't trust the MLM product based, because everybody can do it.

But in the R.E it's an other level, there's a lot of consequences and knowledge required to perform.
Also, the potential of these network is to build your own team in France, Spain or any other country and earn money on your downline, and be able to travel a bit while earning money from your downline.

You also don't have to pay them as a traditionnal agency as they are independant and they don't cost you anything excepted time to help them to learn the R.Estate activity.

That would be me i would go solo for the control, but in the MLM you lost control (you're not the dude who choose to modify the pay plan/commissions..) but you have the TIME, SCALE.. : once you got a team, you can work less and the business can run by itself, excepted some phone calls from your downline.
You can also SCALE where the MLM goes.
 

p0stscript

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I don't trust the MLM product based, because everybody can do it.

But in the R.E it's an other level, there's a lot of consequences and knowledge required to perform.
Also, the potential of these network is to build your own team in France, Spain or any other country and earn money on your downline, and be able to travel a bit while earning money from your downline.

You also don't have to pay them as a traditionnal agency as they are independant and they don't cost you anything excepted time to help them to learn the R.Estate activity.

That would be me i would go solo for the control, but in the MLM you lost control (you're not the dude who choose to modify the pay plan/commissions..) but you have the TIME, SCALE.. : once you got a team, you can work less and the business can run by itself, excepted some phone calls from your downline.
You can also SCALE where the MLM goes.
It's not a subject I know about, but from your response you seem to be answering my question, and your own. Have you already made up your mind or do you need confirmation about trusting the business and this model?
 
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AlessioLC

AlessioLC

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I didn't because it's not like an MLM Product based, the MLM with a product is for most of them a scam.

However, you are registered as a true professionnal of Real Estate and actually working as an Agent, it's not the same thing, you are just linked to a network, as Keller Williams does (KW is n°1 in the US and is up since 2000)
I would like to have more feedbacks.
Btw it's not for me but for a friends, that's why i'm asking, i actually have my projects
 

p0stscript

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would like to have more feedbacks.
Btw it's not for me but for a friends, that's why i'm asking, i actually have my projects
Not being in a position to help I'lI leave it to others, hopefully you not have to wait too long for a response.
 

Real Deal Denver

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I'm a real estate agent. Although I've never worked for Keller Williams or ReMax, I have considered it. The reason was for the superb training they have. And that's as far as it goes.

Come on - do the math. You earn 70% of your commission, and then earn 7% of the remaining 30% from your team? What is 7% of 30%?
I'll tell you. It's 2.1% of the 100% (total). You're giving away 30% and they are, generously, giving you an opportunity to earn 2% of it back again. What a great deal.

Pennies.

On the other hand, if you need the coaching, go for it. You're going to pay for it, but this is a career we're talking about. Everyone pays their dues one way or the other. For me, I've been in the business 18 years in different capacities, so I know a lot. I should. 18 years is a huge investment in time.

Weigh what the benefits are. Where will you be a year from now? If you can be successful a year from now - on your own - I'd say that's a pretty good bargain. If you are chasing after the pennies on the ground, then forget it. Read the two books KW founders put out - the millionaire real estate agent, and the millionaire real estate investor. I have them on my shelf in front of me. I'm looking right at them. Keller is the author, published by McGraw Hill. They are considered to be holy grail of real estate, although by today's standards they are somewhat dated. Nevertheless, they are still a valuable resource if you are just starting out.

Seriously, if you (and/or your friend) need this kind of advice, you better take a few steps back and read a LOT of books about real estate. You are not ready for prime time. Darryl Davis is my hands down favorite author. No nonsense. Get everything you can by him. He is also published by McGraw Hill. I'm wearing his books out.

These books, I read every few months. That's exactly how good they are.
 
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AlessioLC

AlessioLC

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AlessioLC

AlessioLC

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I'm a real estate agent. Although I've never worked for Keller Williams or ReMax, I have considered it. The reason was for the superb training they have. And that's as far as it goes.

Come on - do the math. You earn 70% of your commission, and then earn 7% of the remaining 30% from your team? What is 7% of 30%?
I'll tell you. It's 2.1% of the 100% (total). You're giving away 30% and they are, generously, giving you an opportunity to earn 2% of it back again. What a great deal.

Pennies.

On the other hand, if you need the coaching, go for it. You're going to pay for it, but this is a career we're talking about. Everyone pays their dues one way or the other. For me, I've been in the business 18 years in different capacities, so I know a lot. I should. 18 years is a huge investment in time.

Weigh what the benefits are. Where will you be a year from now? If you can be successful a year from now - on your own - I'd say that's a pretty good bargain. If you are chasing after the pennies on the ground, then forget it. Read the two books KW founders put out - the millionaire real estate agent, and the millionaire real estate investor. I have them on my shelf in front of me. I'm looking right at them. Keller is the author, published by McGraw Hill. They are considered to be holy grail of real estate, although by today's standards they are somewhat dated. Nevertheless, they are still a valuable resource if you are just starting out.

Seriously, if you (and/or your friend) need this kind of advice, you better take a few steps back and read a LOT of books about real estate. You are not ready for prime time. Darryl Davis is my hands down favorite author. No nonsense. Get everything you can by him. He is also published by McGraw Hill. I'm wearing his books out.

These books, I read every few months. That's exactly how good they are.
Keller Williams offer the opportunity to join R.Estate without the license of official R.E Agent here in France (the license is about 2y of work without a salary, in most of case), that's why he want to join this network.

Obviously 70% is not 100% and 7% of 30% is not that great but if you have a team of 20/30 peoples this can be interesting, i guess.
I would go solo and build my own brand, but MLM is the opportunity to build a big team that could potentially add a revenue..
(also an opportunity to bring crowd to an already crowded space which lead to a saturation of the market..)

I'll take a look at these books ! thanks
I don't think there's something wrong by wanting to join this network.
You are a commercial like in Sotheby's Realty / REMAX or any other else, you just work differently.. but i'm not from this industry nowhere near and that's why i seek feedbacks from you guys.
 

Real Deal Denver

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Keller Williams offer the opportunity to join R.Estate without the license of official R.E Agent here in France (the license is about 2y of work without a salary, in most of case), that's why he want to join this network.

Obviously 70% is not 100% and 7% of 30% is not that great but if you have a team of 20/30 peoples this can be interesting, i guess.
I would go solo and build my own brand, but MLM is the opportunity to build a big team that could potentially add a revenue..
(also an opportunity to bring crowd to an already crowded space which lead to a saturation of the market..)

I'll take a look at these books ! thanks
I don't think there's something wrong by wanting to join this network.
You are a commercial like in Sotheby's Realty / REMAX or any other else, you just work differently.. but i'm not from this industry nowhere near and that's why i seek feedbacks from you guys.
I don't know how things are in France, but it sounds somewhat similar to what is here, in the USA.

Yes, you need two years of experience IF you want to be an independent broker on your own. Until then, you are an ASSOCIATE broker working under the supervision of an independent broker. But you sure don't work for free. I am an associate broker, even though I have much more experience than two years. The reason for that is my supervising broker offers me a lot of benefits and support. I could go on my own, but choose not to. The vast majority of associate brokers stay that way, even though they don't have to. If the office runs their operations well they will offer many benefits, and a lot of support. I pay a fee for that, and I think it's totally worth it. I have a very strong support team there for me all the time in case I need them. I don't, usually, but I like knowing they're there. It's kind of like Doctors. You often see an office with a group of doctors, instead of just one. There are many benefits to having skilled associates to work with. A team can accomplish much more than a single person can alone. Don't be greedy - be smart.

Nobody works for two years in real estate for no income. Nobody. I have trained several people in different aspects of real estate, and they all are paid. They are not paid their full earnings - there is a split to compensate their supervisor/coach for their time and expertise. That's how everyone does it.

In this day and age of google, you and your friend desperately need to read about ten or twenty books on how to be a successful real estate agent. There is no reason whatsoever for ignorance in any line of work anymore. The resources are there and they are so abundant.
 

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grobez

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Hey there
Went to a introductory presentation for Efficity in France, and my personal feeling is that it's almost a scam. I know it can work, but the figures they present are not achievable by the vast majority of people, and they tend to hide some important truths like how long it can be to sign your first clients, the delay (legal 3 months+ Efficity is paid first and then pay you way later) before getting paid and things like that while at the same time everyone in their network has to pay monthly fee for various services (and they try to sell more and more services like accountabiliy...).

I would say it can work for a few people and actually pay decent, but if your able to achieve that for a MLM estate company I think you can achieve way better on your own.

There is one thing no to underestimate though, they have good online acquisition tools and provide a lot of leads, which is harder to achieve on your own when you start.
 
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AlessioLC

AlessioLC

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Hey there
Went to a introductory presentation for Efficity in France, and my personal feeling is that it's almost a scam. I know it can work, but the figures they present are not achievable by the vast majority of people, and they tend to hide some important truths like how long it can be to sign your first clients, the delay (legal 3 months+ Efficity is paid first and then pay you way later) before getting paid and things like that while at the same time everyone in their network has to pay monthly fee for various services (and they try to sell more and more services like accountabiliy...).

I would say it can work for a few people and actually pay decent, but if your able to achieve that for a MLM estate company I think you can achieve way better on your own.

There is one thing no to underestimate though, they have good online acquisition tools and provide a lot of leads, which is harder to achieve on your own when you start.
That's the thing, they're all selling their stuff and that's i can understand because they need salesman.
However, he was looking at iAD Immobilier - Mandataire, as it's the official N°1 here in France.
But, i don't know there's something too bright to be good in these networks.

I now someone who earn at least 90K/y in this network, it's a friend but he is an old R.Estate Agent with 20y of experience and a lot of people behind.
 

jlwilliams

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The "MLM structure" didn't originate with MLM. The commission structure comes from the insurance industry. The whole concept of building a down line (or team) and getting paid from the spread is way older than the MLM as we know it today. I'm not a real estate agent and I'm not familiar with the Keller Williams business structure, but it sounds like the same sort of set up.

The scammy nature of the MLM that pitches over priced products are well known. Real estate and insurance are not really the same. You have real goods and services, you are selling to real customers not just other people "in the network" and in most places you need a license so there is at least some oversight of the business.

It's a good way to go if you need and want the group dynamic. In insurance, lots of agents go with the IMO (independent marketing organizations) because of training and support. You can make more money and learn more than you would as a captive agent. The down side is the IMO takes some of the commission, which sounds like what you are facing there at KW.

My advice is try it if you are new to the industry and want to get in. You get some training but more importantly your "up line" is there to give you advice that may save you from blowing deals. Stuff like government compliance, errors and omissions and so on can bleed a new independent guy to death so having the support is worth it. If it doesn't pan out in a couple years, take the experience and move on.
 
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AlessioLC

AlessioLC

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My advice is try it if you are new to the industry and want to get in. You get some training but more importantly your "up line" is there to give you advice that may save you from blowing deals. Stuff like government compliance, errors and omissions and so on can bleed a new independent guy to death so having the support is worth it. If it doesn't pan out in a couple years, take the experience and move on.
I agree ! And yes it's about the fact that you lose 30% of the 100%..
 

p0stscript

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I agree ! And yes it's about the fact that you lose 30% of the 100%..
It comes back to value, is it worth losing the 30% for all the training and experience you get?
Ask yourself what is the value of learning the business doing it this way, could you do it another way.....?
If this seems the best way, then go for it, as jlwilliams advises try it if you're new and if it doesn't work out take the experience and move on.
 

Real Deal Denver

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It comes back to value, is it worth losing the 30% for all the training and experience you get?

If this seems the best way, then go for it, as jlwilliams advises try it if you're new and if it doesn't work out take the experience and move on.
Well said. These are the answers me, and everyone else, are looking for.
 
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AlessioLC

AlessioLC

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Thanks guys!
 

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