Why I Bought a WPI Franchise

WPI (World Properties International) Franchise Guy
Having owned two different real estate franchises and worked for 4, plus one independent real estate company over the years in various capacities, gives me some insight I believe into the realm of real estate marketing. I certainly don't know everything about all of them and things changed somewhat with the reincarnation of the Cendant-NRT-Realology naming trilogy, but not much from what I can tell.

Originally it was said that Cendant believed there was more "value" in the sum of the parts than the whole. The Realogy "buyout" indicated something less than that I'm told.

Rest of the WorldThe Realogy brands: Coldwell Banker, ERA, Century 21 and Sotheby's are well known, and offer varying degrees of vertical market services. You can order your real estate services with a mortgage to go with it with most of them, and even add insurance and title services to the mix. They are great added profit centers for the parent company. The agent however is usually left in the back room content that h/she was able to provide great service for his/her customer and client, but only got paid for the real estate services. They did however get lots of "praise" no doubt from buyer, seller and broker for their good will efforts.

Unfortunately, they likely didn't get PAID anything on the allied services they referred. It's because of RESPA they are told. They could opt out of the real estate business and become a mortgage broker of course, but for most companies the "twain shall never meet." That is not to say however that an unknown marketing company with one real estate agent in the entire "national" company can't tag the agent for 35% of their transaction commission as a referral fee.
Seems a little unfair doesn't it?

WPI WorldWPI provides a vehicle where the agent can provide real estate services AND mortgage services through a combination of appropriate oversight and effort so that an agent can actually get paid for doing the jobs they do. They also get a healthy "spiff" from the Home Warranty they sold.

Actually, I can't imagine a home being sold in this day and age without a warranty. It means up to 3% more for the home according to industry data, selling up to 50% faster, 80% of buyers prefer a home with one, AND it reduces E & O premiums and helps minimize seller and broker liability from lawsuits. Why didn't the seller want one again, since it's FREE for the seller during the listing period?

Want to take away the commission argument? Sell a warranty! "Tell you what I'll do. I'll GIVE you a Home Warranty that can get you up to 3% more for your house according to Business Week Journal. Subtract that from my commission, and that's probably what you'd pay to a cooperating broker if they brought a buyer and you were selling as a FSBO." Let's see, 1% of $300,000 is $3,000; 2% is $6,000 and 3% is $9,000. Hmmmm. OK. I'll throw it in.

Oh yeah, then there's insurance services and title services. Oh you're not an insurance agent? Don't have a law license? Well, you COULD study real hard and get one of each, OR, you could form a partnership with an insurance company, and an attorney and get into the game. Yes, if you're a partner in the venture you can get paid on your investment.

WPI has shown us the way, and they're doing it. That's one of the reasons I bought in. they're leveling the playing field for EVERYONE. Trying to do this on your own is EXPENSIVE, and you have to learn all the ropes through trial and error. With WPI you don't have to. They did all the heavy lifting.

Home Enterprise System
I think WPI has made the big boys a little nervous. Most agents today work out of their homes a great deal, anyway - unless you really like coffee and donuts at the office - which you'll likely pay for out-of-pocket.

With instant web access, online MLS,' email, chat services, inexpensive desktop publishing systems and cheap printers, an individual can compete VERY WELL with the big brands. The only things the Home Enterprise office doesn't have are: huge office overhead, and "protected territory."

Let's take huge office overhead. What do you think is the FIRST bill paid by a broker each month AFTER the manager's salary? You guessed it - it's probably the expensive lease or mortgage on the "bricks and mortar." Look what Amazon and eBay was able to do in the books and products world. They are giant category killers. WPI offers that same kind of opportunity in the real estate and allied financial services world. Believe me, the other guys are noticing.
Protection? Essentially, there is none. Today it's pretty hard to "protect" any territory in commerce. If you buy a "protected" territory, but if I work for the same brand and just happen to live in your territory, you can't stop me from doing business here. You can stop me from opening a store-front, but who cares? I'll just surround your territory with my agents.
You may want a store-front instead of working out of your house, but it's certainly not for walk-in traffic in most locales. Walk-in traffic used to be important in the age of pre-MLS, but today, except for very select markets it's almost useless; unless you don;t mind paying for a humongously expensive marquee or billboard, which is what many real estate offices have become.

I'm actually going to take pictures of my competitors' offices and use them in my presentation. "Look Mr. and Mrs. Seller what has to be paid for before the first marketing dollar is spent each month. How much do you think is left over for marketing after paying out the office overhead in this office? That's money NOT being spent on YOUR house. Getting top dollar means spending real money on marketing, not bricks and mortar, right?"

Unless you stay small, you'll want a store-front someday, but it will likely be based on delivering value-add services and as a multi-use productivity plant. The majority offices today are pricey marquees and "coffee klatches" for floor duty, and the very occasional buyer visitor.

About the 37,000,000
For about the past two decades the REALTOR organization has claimed approximately 1,000,000 members. It got as high as 1,200,000, but the numbers are dropping as fast as the market in most areas of the country. It's typical in a real estate down cycle. The easy money is gone!

There are about another 1,000,000 real estate licensees, according to pundits, that ar enot members of the REALTOR organization. That number will fluctuate of course too.
These are who you hear about in the real estate world. Add to that about 500,000 mortgage officers, and about that for insurance agents; and in those combined fields there are about 3,000,000 or so practicing professionals.

Get this: there will soon be approximately 37,000,000 people now working from their homes. Imagine tapping into THAT source as potential REALTORS, real estate agents, insurance agents and mortgage officers.

The Future Beckons
WPI even offers a residual income "matrix" system for recruiting agents and franchisees. It's a great add-on for what a good agent and "believer" does anyway - recruit fellow agents. With WPI you just get paid for it. Yes, there are several levels down the channel and you can make a fortune if you recruit a lot of people, but that's not what will happen with most agents. Where offer shines is that most agents won't get rich doing this, but they'll earn a few hundred more a month here, an extra thousand or two there, and added to their real estate commissions and mortgage income, pretty soon it comes out to real money.

If you do 12 transactions a year and only write 50% of the mortgages, you can increase your income by 33% to 50% without doing much extra work. What if you sold 50% pf them an insurance policy through your insurance partner and 50% of them closed with your title company?

What if you approached a FSBO or Expired listing and LEGITIMATELY didn't care about listing their house because the seller agreed to send YOU all the buyers for pre-qualification, and insurance and title services? And, you gave them FREE online storage for all important transaction documents, a FREE website and their own FREE online classified? Think you could add some value for THOSE types of sellers? Yes you could, AND you haven't asked for the listing yet.

Now after doing all this FREE work, they didn't sell, just like the other 86% of FSBOs. Who do you think they're going to call when it's time to list? Frankly, they won't have to call you right? Because you've been calling them about buyer prospects for mortgages at LEAST once a week.
A case could be made, in fact, that it might be better NOT to try and list FSBOs too quickly. Most FSBOs are over-priced initially anyway, and the FSBO effort gives sellers the "training wheels" they need to get realistic. In the meantime you're demonstrating REAL VALUE for the services you provide, and they're getting a much needed education while you're getting buyer leads, mortgage leads, insurance leads, potential title insurance leads, and a Home Warranty (which you've already pre-sold to the FSBO of course), on the FSBOs marketing effort. Now THAT'S a biggie! Imagine that - getting the FSBO to expend THEIR marketing efforts and dollars for YOUR benefit.

It's not so bad getting FSBOs trained to the realities of the market on THEIR dime, and you've STILL got an 86% chance of getting the listing. Hmmmm. Does that sound like a win/win to you? You bet it does.

Call me if you want to know MORE!

Chris Michaud
chris@acceptancegroup.com
www.acceptancegroup.com