A 2017 Inman poll found 58% of Realtors plan to use property investments to fund their retirement. 51% have personal savings as part of their plan. SEP, IRA’s and Individual 401Ks are planned by 34%, simple IRA’s 22% and 17% intend to use their spouse’s retirement plan. A mere 16% said their retirement would be funded by their current real estate business! Only 16%!!!!
In a similar survey Inman asked, ‘Do you have a plan for your client base at retirement?’ 35% were going to remain active and join a referral program. 31% had no plan at all. 12% thought they would sell their book of business.
Very few agents successfully transition their business while they are still active in it. These few successful ones investigate their professional partners and find those whose expertise and business ethics aligns with theirs. Partners with proven longevity in the business, as turnover of newer agents in the first couple of years is quite high. And of course, partners they trust will not be lured away during the transition process and will stay loyal to their clientele.
What stops Realtors from transitioning their business profitably?
• Greed – The need to grab every commission dollar today without planning for the potential commission dollars of tomorrow.
• Ego – No one can do the job like I do. That’s probably true, no one can do it like you do, unless you train them.
• Waiting too long – We see it all the time, agents start handing off leads to new agents, who may or may not be in the business a year from now. Plus, they go on much needed vacations and haven’t arranged for support in their absence.
You get the picture! Eventually, when these agents want to sell their business, it has gone from being a Luxury Property to a serious Fix-Up with diminished market value.
Plan early, invest in yourself today thru a Professional Partnership to extend the life of your business well beyond your working years.
A percentage of something today into your retirement years is infinitely better than 100% of nothing tomorrow.
Lori Mares, Stepping Up! Team Lead