AWARE - A Business in a Book. Lucille Orr
the normal office expenses if you choose to open your own office one day, but I’m going to encourage you to work from your own home office, with no staff if you prefer, to ensure your overheads are very low. To make money in any business you need cash-flow and very low overheads, so this is where AWARE Properties can help you.
Property Listings
One of the first things you need to learn if you are going to sell or manage real estate is how to secure property listings. This means securing properties that are FOR SALE or RENT. I had a graduate in my office for about a month giving him work experience following a six week concentrated Real Estate Sales Certificate course he had completed at the Real Estate Institute of South Australia. In all that time he was unable to list a property, even though I gave him information on appraisals I’d completed. I told him to follow them up and list them himself.
The one thing he found very difficult to do was to pick up the telephone. He wasn’t prepared to knock on doors either, but he did call a few people who’d listed their own properties for private sale in the newspaper. This is a hard way to gain a listing but he tried. He soon gave up and got himself a job with a steady salary that didn’t depend on commission.
One major lesson you will need to learn is, it’s hard to get started. I was very lucky because my first property listing came from a friend from my church. A member of the congregation told me he was about to put his house up FOR SALE and was talking to real estate agents. I asked him if I could appraise his home. I must admit at the time, high house prices in Sydney probably influenced me to put a high price on his home.
I did all the right things, everything I was taught at the REI sales course. I printed out the comparable sales in the beachside suburb of Hove for the previous six months. I had details from the computer on the home I was selling and I drove around and compared my vendor’s home with those that had sold in the same suburb. But his home was the first two-storey home of its type to be built in this location, looking at the sea. It was lovely, had wonderful sea views and there was no other property to compare it with so I invited my boss along to the appraisal to gain his opinion of its value. My boss agreed with my appraised price, so I was happy.
The vendor accepted my marketing plan and I got the job to sell his home. The only problem was that he wanted to pay me 1% commission including GST of the gross sale price of the home. I couldn’t believe it, why so low? Evidently other agents in his local area were prepared to sell his home for only 1%. I managed to talk him into giving me 1.1% including GST and 10% commission including GST of any additional money I managed to get above the expected sales price I had quoted. My share of the commission was only 30% of the 1.1%. I had spent the first month full time at REI studying the law subjects and I wouldn’t receive any of the commission as I was already in debt with my boss and had to repay my retainers and car allowances that I received while at REI.
My boss suggested I take the opportunity to gain the experience, as it was more important than to earn a good income in the early days. While he was right about getting started, he was certainly not right about the low income. At his real estate agency they charged such small commissions on sales that in the nine months I was employed with the company my commissions were so low I ended up still in debt to the firm.
My boss made plenty of money though, 70% of all my commissions and the Government paid a very healthy bonus to his firm for employing a trainee, and an extra bonus because I was a woman.
I left this job because he had promised to pay me 50% of my commission once I was selling well, but when I reminded him it was time to increase my share to 50% he refused. So, I had no alternative but to leave.
Working for a Boss
My next boss made me sign two agreements, one for the Government that said I had a retainer of $500 and a car allowance, plus 53% of my sales commissions. The second agreement was between him and me that only offered me 53% of the commissions on my sales. The retainer and car allowance had to be paid out of this commission, so if the commissions were too low, some weeks I wouldn’t earn any income during these periods.
I was willing to accept this as I knew I would always have enough sales and at least I was earning more than 50% of my commissions and didn’t have to pay back to my boss retainers and car allowances paid in advance of commissions.
It wasn’t right to have two agreements just for him to be seen as doing the right thing for the Government.
Getting frustrated with working for a boss I conducted a private survey at that time and found 10% of the women I spoke to who were working in the industry in either sales or property management had a full real estate agent’s license and could have been operating their own businesses. When I asked them why they didn’t work for themselves they responded, “I wouldn’t want to take on all that responsibility. I might get sued if something went wrong.”
The women I’ve met who are operating their own agencies are doing very well. Some are now employing their husbands to look after the administrative side of the business for them. Women entrepreneurs are usually very creative and original in their approach to small business and careful to do everything correctly and thoroughly so there are no problems.
The women employing their partners are extremely lucky to have men in their lives supporting them and working in their business. Men are generally better than women at making sure the business is profitable and are good at investing the money earned.
Women Care
Women are extraordinarily good at servicing clients, they’re often more tolerant. One of my women’s network members in real estate said, “Lucille, why did you choose to go into real estate? It’s the most frustrating business of all.” She was absolutely right, it is frustrating, long hours and you need a lot of patience.
However, the longer I work in the industry the more I love it. It’s a people business and you meet some wonderful people. The good ones certainly make up for the small-minded individuals who give you a hard time and don’t realize how many hours behind the scenes you work for them each day. Unfortunately, in this industry people only see what you do at open inspections or at auctions. They aren’t with you at 6 am when you get a call on your mobile phone, or at 10.30 pm when you are in a restaurant on Saturday night trying to relax with a friend and receive a call from a buyer about a home you are selling.
I’m certainly not going to paint a pretty picture for you about the real estate industry. It’s one of the hardest fields I’ve ever worked in, but at the same time one of the most rewarding. Throughout this book I’ll give you some examples of why I love it more every day. I so like to help people and when you touch their lives and make a huge difference to the way they live you’ll know what I mean. I feel God led me in this direction for a reason and the longer I work in real estate the more I understand why.
I’m not a regular church goer but I believe following my intuition is the way God communicates with me. While I was struggling with the studies and 24/7 work-load I started a prayer book. Late at night I would write down my thoughts and one night being very tired I asked the question. “Why real estate?” The response I received was, “There is enough land for everyone to have a small piece.”
I thought about this and realized that what was happening was that the rich were getting richer by investing and the hard workers (like me) were too busy working and not aware of the opportunities real estate offered them.
“Perhaps my Higher Purpose is to help those who haven’t invested yet. My book may encourage people to take a chance and invest if they have never invested in property before.” I decided to help women become aware!
Profitable Investments Improve your Lifestyle
After 14 months I had a meeting with a young lawyer who purchased his first investment property from me. I was surprised when he reminded me he only paid $65,000 for his two-bedroom unit because in just over a year, I told him it had increased in value and was probably worth $120,000.
“Do you think so? If it is I’d like to sell it and buy a newer, courtyard home for myself rather than stay in my parents’ home,” he said.