With each email alert I send to subscribers, it now includes a reminder that I have stopped brokering foreclosed properties. It’s a personal decision that has made our lives better, and this post will try to explain the reasons why.
Actually, so many of our friends and colleagues have been wondering why I stopped brokering foreclosed properties, and I often have to give a lengthy explanation, just so they’ll understand.
Well, I am tired of explaining, so I’ll just explain everything in this post.
Anyway, this is long overdue, so here goes…
My top 15 reasons why I have stopped brokering foreclosed properties
1.Change of priorities – I simply have to take better care of myself, my health, and family matters. This means I have to be physically present (and also physically fit) and give undivided attention (no multi-tasking, no phone calls, no trippings). Not that I didn’t take care of these things before, it’s just that it now takes more of my time.
As mentioned in my post on how I was able to stop diabetes, I also need enough exercise and enough sleep, so no telephone calls late at night and the wee hours of the morning. I believe this has also helped me manage my hypertension very well.
If you think about it, we strive to achieve the freedom to do what truly matters, and for me, I am setting aside brokerage for this purpose.
2.Brokerage must be done full-time – I believe that in order to attain a worthwhile level of success with brokerage, it deserves focus and dedication. In other words, it has to be done full-time. In order for me to do justice to brokerage, it deserves my 100%, but because of my change in priorities, I simply can’t.
3. It feels awkward – As someone who advocates smarter real estate investing, some people see my honest advice (In summary: not all foreclosed properties are good deals) as discouraging them from buying. Of course, I can just shut-up and let people buy those properties so I can earn a commission, but that would be totally wrong.
Which is why I end up saying my honest opinion, and at times I get a question like “Are you really trying to sell properties… It’s like you are discouraging me?”. Awkward!
4. Highest and best use – I would rather focus on doing the things I am passionate with, things I love to do, and would have a bigger impact to humanity (Ayos ba?!). But when it comes to brokerage, I have to admit that there are some aspects that I really hate doing, and I end up asking myself “Why the heck am I doing this?!”. The solution is to build a team so that people who are passionate about the things I don’t like to do, can do those things.
5. Brokerage needs focus in terms of location, and/or the banks you want to focus on. This requires building a team that can do the legwork.
6. Building a team takes time and effort, and I can’t do this right now because of my priorities. By the way, we actually tried to partner with a number of people, but sadly, those did not turn out so well due to issues, so we had to end those partnerships. One turned out so bad, refer to #10 to have an idea.
7. It’s hard to focus on your own deals when other people are asking you to find good deals for them. If you are an investor who is also a broker, you will understand what I mean. Guess what, after quitting brokerage, we suddenly have a deal that came out of nowhere!
8. A higher purpose. As Tim Ferris said in this blogpost, we should focus on doing our true calling, the reason why God put us here on earth. Tim said:
In other words, if something can be done by others and you can be easily replaced, then maybe that is not your true calling. This was exactly what I felt when it comes to brokerage. Not that I am downplaying real estate brokerage and other real estate brokers, or anything like that. I just feel it’s better to let someone else do it.
In the same article, Tim also said:
It was like a wake-up call. I would rather focus on using my unique God given talents to serve His purpose.
9. We don’t want to be a bottleneck – Getting property information is crucial to deciding to buy a foreclosed property or not. But getting complete details for a foreclosed property is hard, it takes a lot of time and effort. As a broker, it will likely be your responsibility to get that info.
Unless you have a team, you will realize you can’t do everything yourself, and you will just become a bottleneck. But as mentioned earlier, building a team for brokerage is not my priority right now. Frankly speaking, I would rather build a team for something else, something bigger (It’s a secret for now… hehe!).
10. Challenges working with other brokers – It’s so frustrating to deal with unprofessional and unethical real estate professionals, and also colorums, even with the RESA Law! I just wish it had more teeth and good implementation so that those who are violating the RESA Law will not go unpunished.
It’s disheartening to see a few bad eggs tarnishing the real estate industry, and I’m just sick and tired of it. I still have high hopes that there will be better enforcement/implementation. Without it, legitimate brokers will get bypassed and scammed by other unethical brokers. Which is why I would rather own properties than just broker them, and now we focus on our own deals.
11. There are so many grey areas when it comes to brokerage right now. For example, how do you handle taxation between brokers and salespersons? For us we stick to conservative practices and it means a lot of taxes to pay, which affects minimum percentages to make it all worth the effort. most of the time, it’s simply not worth it.
12. It’s a logistical nightmare because of the horrible traffic out there, coupled with the inefficiencies in real estate transactions. If you have been into real estate you know there will always be legwork and other things that would require your physical presence. Yeah, you can outsource, but only up to a certain extent. One perfect example: if you become a broker, you can say goodbye to your weekends. 🙂
13. It’s too stressful -I quit the corporate world to get rid of stress, it’s bad for my health. But when I tried brokerage, it’s like the stress got even worse. I remember the time when I took a break from everything to give my back-injury time to heal, and I suddenly enjoyed the feeling of not being a broker, and my feeling was, I should have quit as a broker a lot sooner.
14. No need to hide bank details. This is probably the best thing about not being a broker, because brokers usually have to hide the bank details, either to prevent prospects from going straight to the bank, or prevent other brokers from stealing clients (listings from banks are non-exclusive and offer little protection to the original brokers). This can get complicated when almost all listings have bank details embedded.
Since I do not broker foreclosed properties anymore, I don’t have to worry about these things, and I can share listings as they are, quickly! Anyway, this was actually how I did it from the start.
By the way, I believe that the fastest way to get foreclosed property details is to go directly to the banks/sellers, and now everyone can do so because their contact details are there, for everyone to see! Again, no more bottlenecks (refer to #9).
15. Brokering is best done with a team, and I’m talking about a real team with several people. A one-man team simply can’t cut it, it will lead to stress and burn-out.
Actually, there are so much more reasons, but I’ll just add them here when I have time.
Update: More reasons…
16. Our baby project was a success! I truly believe avoiding stress by quitting brokerage (both me and my wife) was a big factor. Thanks be to God!
17. People don’t realize how hard it is to be a real estate broker. We solve problems, we find solutions, we actually make deals happen, and we go for win-win. And yet, majority of the time, it’s a thankless job… it can get so frustrating.
But I guess I’m lucky because I was blessed with a lot of clients and friends (both buyers and sellers) who know the value of real estate brokers (Thank you guys… you know who you are!), which is probably why I stayed as a broker for a long time.
I just want to remind everyone that I started this blog to share what we learned in our real estate investing journey, along with the listings that we found. And then we tried to broker foreclosed properties. It was very rewarding, we learned a lot from it, and it was good while it lasted, but things change.
Make no mistake, becoming a licensed real estate broker is still a good stepping stone to investing in real estate. But when it’s time to move-on, you just have to move-on.
Nope, I’m not entirely shutting my doors to real estate brokerage, it’s just that I have to approach it in a different way, and all of the above should give you an idea of the things I want to solve when the time comes.
Don’t worry, there are a lot of honest and trustworthy real estate brokers out there. I would recommend going to the various real estate associations like REBAP, PAREB, etc. You can also go to our friends like Eden and Bryan Dayrit, DJ and his team from Driven Marketing group, our mentors from REBAP LMP and REBAP Marikina, to name a few.
Anyway, for now, I have come full circle, and I’m back to doing what I love doing, which is building a blog/platform that empowers real estate investors in the Philippines.