Oklahoma Real Estate Experts founder Ruthie Gallardo-Owens follows up on her blog discussing how to pick a brokerage in Oklahoma, this time looking at lessons learned from the LuLaRich Amazon documentary series.
Following up on my last video where I talked about how to pick a brokerage in Oklahoma, this time we're going to look at some red flags of some brokerages.
Parallels between LuLaRich and Real Estate Brokerages: MLM and Pyramid Schemes
I don't know if you're like me, but I spent the whole weekend binge-watching the LuLaRich documentary, and it started to remind me that there's red flags in everything. But it's always so important to take the time to do the research and make sure that whatever we're doing, whatever company we're signing up with, that it is definitely on the up and up.
What I noticed about a lot of the people on that documentary was that they were just so excited about the opportunity and about the promise of success that they didn't do their homework. And they really didn't have a way of knowing if LuLaRoe was just a multi-level marketing company or a pyramid scheme.
Multi-level Marketing vs Pyramid Schemes: What’s the difference?
I've learned something. In multi-level marketing, you get paid, or you should get paid, off of the product that is sold. So if you recruit someone, your bonuses should come from the product that they sell — just like us at Oklahoma Real Estate Experts.
If you are in a reputable brokerage, who's offering some sort of profit share, your profit share should come from the sales of that other person, rather than from the simple act of recruiting them.
The pyramid scheme is that you are selling product, but you're also recruiting, and your income comes mostly from recruiting, not selling product. So that was the big “Ah ha!” moment for me.
I've heard of a lot of people asking about some of the brokerages that do recruit all of the time. I personally am at a brokerage where you do not make any money for referring anyone. So I come in, even if my best friend said, "Hey, Ruthie, come join my brokerage, it's going to be great, it's a great opportunity." When I come in, they do not get any money for my being with that company.
However, there are several very large, very reputable brokerages that do have a large emphasis in recruiting — and that can be a flag. Again, a lot of them are very reputable. It's more of a profit share situation, so the more you sell and the more you recruit and the more your recruits sell, the more you make — which is great! However, I wouldn't know how to decipher if it's a legitimate one or not — like the LuLaRoe consultants didn't know how to decipher that.
Do Your Research and Ask Questions
So one thing to do is really sit down with those brokers and ask, “Okay, are you still going to make money off of me even if I don't sell anything?” Because the big problem with LuLaRoe was that people who were selling absolutely nothing were still profitable to the people who brought them onto the company.
So make sure that you fully understand how the profit sharing works or how the recruiting works. And if they say, "Well, there is a bonus structure," or that kind of thing, find out where your bonuses are coming from.
One of the biggest things that I did see there, as well, is how remorseful a lot of the women were who joined or who had teams, who built teams there, who brought more people in, because they didn't realize that a lot of times the success that is being sold is not replicable. So when you are looking at brokerages, remember, don't just look at their top sellers. A lot of top sellers are very... the way they run their businesses are unreal. They work 24/7, and it's not something that can be replicated just in a few months.
If you're interviewing brokerages, and remember the brokerage works for you, you don't work for them, make sure that you are going somewhere where it's very clear where the money's coming from and who will be profiting from you joining.
For any more tips and tricks on how to pick a brokerage, you know where to find me. Follow me on social media, or feel free to contact me, I'm Ruthie the Realtor. Have a wonderful day!
Those wanting to watch the video can click here (How to Choose a Brokerage for Oklahoma Realtors: Lessons from LuLaRich)and subscribe to receive new news or tips and tricks for home realtors as they appear. Those wanting to know more about Oklahoma Home Real Estate Experts can go to the website at https://oklahomarealestateexperts.com .
