In an ever-changing market and a very stressful profession like real estate, sometimes it’s easy to lose sight of the importance of reflection and experience. The wisdom of a true industry veteran can do a lot to put things in perspective.
We’ve reached out to Jim Reid, one of the top real estate consultants in the GTA, and one of the few deeply passionate real estate practitioners and teachers. His thoughtful answers offer clarity and far-reaching perspective on industry-wide shifts and possible pitfalls. This is the first of a series of interviews with Mr. Reid.
Tell us a few words about your background in the real estate industry and about your current position.
I am not alone in choosing real estate late in my working life; however, people seem to come to our industry at all points in their working lives. Mine followed over 30 years in the private sectors.
By the time I reached my new career in Real Estate I was 53 and had started my second family. But I had a pretty full tool kit and only wanted to earn enough to help pay the bills, get kids through university and hopefully accumulate some RRSP’s and property equity. Our new lifestyle required ten deals a year to keep our heads above water.
My prior work experience was certainly diversified after graduation from McMaster: new MBA’s at Ford of Canada, McMaster Marketing Teacher, Partner in new motorcycle dealership (Kawasaki, Ducati), U of T Finance Teacher, Woods Gordon Mktg. & Econ. Consultant, Crazy David T-Shirts turnaround, Kearney Management Consultants, Peoples Jewellers (300 stores), Computer Innovations (28 Stores), DeBeers, (Diamond Monopoly), J. Walter Thompson (Advertising Agency), RPMS- Reid Project Management Services, Silent Gliss turnaround, Morse Jewellers turnaround, Canhome turnaround, Consumers Distributing (300 outlets) turnaround, Seneca College: Marketing/ Public Relations/ Sales Promotion teacher, Mr. Mom, Royal LePage – Your Community Realty, Jim Reid Realty owner broker.
As a technology first adopter for thirty years, I was ready to deploy the latest technologies and marketing innovations: cell phones, real estate software, real estate website development, home staging, virtual tours, etc… Through my Excel databases and Internet skills, along with professional Market Research experience in many other industries, I was able to keep an eye on our industry. An early government subsidized consulting assignment led me to research and analyze over 20 Canadian industries and assess their future opportunities for development. Industry analysis is an intellectual addiction for me.
When my license arrived, September 1995, I had no idea that I was totally unequipped for my new career.
My transition into real estate wasn’t what I had planned. It took me until my second year to find the 40 hours+ that were needed to stay in the game. My 20 hour weeks were a miserable failure. I didn’t even do one deal my first year (especially a personal disappointment for someone who had trained thousands of retail salespeople). But I did learn that it was foolish to max my line-of-credit on mass marketing techniques.
Adjusting our family lifestyle around prospect lifestyles is essential. (They prefer to meet with us on evenings and weekends.) There would always be plenty of down-time between hectic deal makings to enjoy an active lifestyle around the kids’ sports and development needs. But, it took me a while to accept that 70% OF MY WORK FOR PEOPLE WOULD ALWAYS BE “NO CHARGE”. However, often a deal materialized later and the bills got paid by September.
Even with my wife bringing in a very good steady income, when annual commissions bounce around from $30k to $150k to $70k to $250k, it became an art to manage our household financial affairs. Real estate “cash flow” has been certainly an intimidating roller coaster for my independent one-man-show. New career-Realtors© will be prudent to create and maintain family financial statements and budgets as well as learn Quick Tax software inside out.
Our reality is that life ambushes us all, competent and incompetent. I wouldn’t have been able to stay in this industry if I was “THE ONLY BREADWINNER.” Never under-estimate the risks in this industry. It includes lots of solid body-checks, but as long as you get up quickly and get back in the game you will score lots of goals.
Nowadays, it would be rewarding for me if I could help Realtors© make themselves more successful and professional. Perhaps I can even earn some money for a few toys (dirt bike, canoes, travel) by consulting to people wanting to fish in our complex and financially shark infested industry.
During the past twenty years, training and mentoring Realtors© was a privilege that I enjoyed a great deal. This is why I feel honoured to be an initial contributor to this new EXPERT INTERVIEWS blog from Point2 Agent.
What is the main reason why you joined the industry?
You really want the “Main Reason”? “This is the only industry an old divorced guy with no capital and no job prospects can have a chance at having some very good paydays in his senior years!”
I found myself aged 53 and ready to start a new career with zero net worth. In the past, there could be 500 applicants and I always obtained an interview and assumed greater responsibilities and rewards as a corporate wage slave. But at 53, the corporate and government doors closed as “Ageism” locked the doors shut.
The thinking went something like: following the most challenging and rewarding 5 year career of being Mr. Mom for two babies/ infants/ toddlers through pre-school, plus being the “House Mom” for my hardworking wife Terry, plus being Mr. Mom to about 15 local kids while their Moms went shopping and to the beauty parlor or gym, I’d better build a personal business working with the public.
The least resistance came from this industry. I decided to open my own doors in real estate. It cost six months and $5,000 to be in my own business as a private contractor for the brightest and best looking broker, oops brokerage, in Richmond Hill, consisting of about 60 realtors.
I stayed for 20 years, my longest career without being fired, until they had eight offices and over 800 Sales Representatives/ Associate Brokers. That proves I was right that as long as we have a pulse and a license a broker will take us on. I didn’t realize at the time, that being fired quite a few times was actually good experience for this industry where an active realtor gets rejected almost every day of their whole career.
That was my situation then, but my personal reasons for choosing this industry had more to do with lifestyle than money earning prospects. I wanted to share the business know-how and expertise I had acquired through my 25 years in truly exciting enterprises from cars and motorcycles to t-shirts and diamonds in the infancy of the technological age.
I knew that my business knowledge and skills mix would be valuable to my future clients in real estate. Mass merchandising techniques, in a mono-marketing industry, took some adjustments, but they did me well in selling properties.
Once I finally chose my real estate farming niche it took about 24 months to become the top producing person in my target market. I enjoyed giving farming workshops to new sales representatives (and a few senior realtor competitors).
Within eight years, we accumulated enough equity on our bungalow to do a major rebuild. Real Estate was the right choice for me and my family.
What are the most important factors realtors should consider when building their strategy?
One could write a book on this subject, but perhaps I can share the key character attributes that transport us towards our lifestyle goal to become Successful Professional Realtors©?
Be humble servants with integrity, honesty and truthfulness.
Use self-discipline to ensure we are always fit and qualified.
Be permanent students of this industry.
Create a Five Year Business Plan.
Only consider our personal benefits after we maximize those of our clients
Seek to understand the difference between truth and honesty.
Under-promise and over-deliver.
Be certain we and our clients respect family priorities.
Give some of our time back to the industry.
Knock on another door.
We will certainly succeed as Professional Realtors© if we consistently pursue these strategies.
Are small family businesses suited for the real estate sector or is the industry run by major companies and corporations?
In my centrist-free-enterprise-democratic-socialist opinion:
“This SMALL BUSINESS question has enormous strategic significance to Canada’s Premier Economic Industry.”
My perspectives and values place the creation of independent family enterprise far above the nefarious trend towards creating wage slave jobs for everyone. Corporatization economically enslaves humanity and it is a patronizing tool of the rich and powerful that stifles our creativity, positive motivations and family lifestyles.
The Real Estate Industry’s industrial heritage is “Independent Small Family Businesses.” This is a crucial Canadian industry that needs to fight hard to defend and continue this heritage. Allowing our industry to become the depersonalized, computerized, robotic, corporate oligopoly model would be an absolute denigration of our Canadian culture and lifestyle options. The consequences for our nation and its economic independence would be tragic. In my opinion, other countries already suck too much revenue out of our Canadian property markets and too much internal cash and capital flow is making the rich richer. We are one of the few remaining foundation industries for middle class growth and development.
Please don’t misunderstand me. I have been a significant contributor to corporate growth and development and these organizations have achieved great things for our societies and cultures. But, if we wipe out the family enterprises that are the seeds of corporate evolution, we open the iron gates of corporate dominion over all.
However, that being said, our Residential and Recreational markets tend to be driven by subjective significant personal feelings and emotions within our clients. There are many possible highly sensitive reasons for buying and selling property. It is important for real estate professionals to draw alongside our clients and become friends they can trust implicitly. Small business is the only entity that can deliver these kinds of intimate services our clients often need.
Commercial, Industrial and Investment real estate tend to subdue feelings and emotions and are often guided by profit, legal and other unsavory motives. Thus, corporate processes and their lawyers dominate much of these markets, although many individuals specialize in the large array of their sub-markets. This area of our industry is already accelerating into the realm of technological corporatization.
Internally, major foreign-owned franchises dominate the branding credibility of independent realtors, but they don’t fully control the small real estate family business practitioners’ finances yet. However, they do heavily influence the formation of high volume sales teams via biased recognition and award policies that distort the public’s opinion of who are truly the best realtors. In my personal experience, this certainly tips the balance in the “Listings” markets in favour of teams. Our infra-structure is less than conducive to the independent small family business model.
Externally, the business practice of Affiliation Programs between corporations in other industries and the payments of referral fees to non-realtor organizations has begun to drain revenues out of our industry. Some extra-industry businesses, with access to huge metadata information, are planning major incursions into real estate. Their owner-targeting processes will transform prospecting. Some realtors have already consigned over 50% of their commissions to be identified with mass media radio and TV shows flooding our industry.
Also, technology has created opportunities for all sorts of new services for realtors and clients within our industry. Online shopping is also rapidly penetrating our industry. We are in a CHANGE CYCLE where most of us will be morphing into “techno-realtors”.
The industry itself is rationalizing at a rapid rate as real estate boards fumble over mergers or unifications of databases. In our product market of extreme diversity, real estate Boards and Associations’ centralizations and standardizations lead to automation and homogenization of our services. They aren’t sure anymore if our industry would better prosper serving fewer practitioners and making the CANADIAN REAL ESTATE INDUSTRY a purely Corporate and Government Domain.
Government agencies seem to feel that because we are such an important industry to Canada, we must be regulated and controlled. The traditional common sense motto of “Buyer Beware” has now been reversed into harsh legal threats of “Seller and Realtor© Beware.” Government regulations always favour corporatization of businesses and thus stuffs our crammed law schools, binds up our free-enterprise and reduces competition. It also breeds corruption within an industry.
All of these trends rapidly add over-heads to the small family businesses and are gradually shifting the markets to the larger players. Our Canadian Spirit has always encouraged free trade, healthy competition and freedom to develop a business. None of these attributes exist anymore in the real estate industry, never mind too many others.
With hundreds of thousands of pages of regulations and laws binding our industry, it is pretty obvious where we need to start. Otherwise, the oligopolies now dominating most industries in Canada, and many other nations, will soon wipe out any opportunity to work somewhat independently in our industry.
Until independent contractors find ways to use technology to defend themselves against these forces, we will certainly have to face the real possibility of our extinction. I guess we are pretty special, now that we are on the “endangered species” list.
What’s the most important piece of advice for beginners in the industry?
There are many equally profitable pieces of advice. I want every private worker in this industry to succeed in creating a wonderful lifestyle for themselves and their family. Our industry works in harmony with members from all 1000 Canadian sub-cultures. At the core of our industry is cross-cultural social interaction. We have pledged to eliminate our racism and both peacefully and happily serve the public with the expert real estate services they require. If you can live by these standards, then you serve well your family, your industry, your community, your culture and your country with nobility. (Oops… too much cheerleading.)
I guess, “Knock on doors!” should echo in every heartbeat for the rest of your life. There are many friends waiting to meet you.
You should soon realize that the courses you took might keep you out of trouble from lawyers and government agencies, but other than being somewhat familiar with the paperwork, you weren’t given any training on how to do your job.
Thus, your TIME MANAGEMENT will be crucial to your survival and prosperity within this dynamic new lifestyle.
Redesign your hourly activities for the next week, every week, and cut out the hours you have been wasting on TV or the Internet. Research, Study and Train yourself like you would to run a marathon. Consistent designated hard work makes making money much easier.
The other integral ingredient is your Self-Confidence. Get your spiritual persona in order and never forget that you only need 10 deals to survive. If the market drops 20%, you still have 80% of the market to harvest, and your 10-deal market share is miniscule.
For those who stepped into real estate to pick up a few extra dollars for the family, I would say to them, “Choose to make this your full time career.” Otherwise, you will live in disappointment, do your clients a disservice, reduce the market for your real estate neighbours, and do the industry an insult to the profession. A half committed Realtor© is a person living half a life.
If you have a full tool kit of business knowledge and skills when you get your license, you may try to go it alone, but I usually recommend newbies to join a team. Hopefully you will find a coach instead of just a team leader with a megalomaniacal ego.
Lastly, turn your Sell, Sell, Sell mindset into: Serve, Serve, Serve!
Looking for more expert insights? Learn how to be invaluable to home buyers, according to one of Winnipeg’s top agents.