Have You Thought About Creating A Real Estate Succession Plan?-with Jessica and Justin Ball- EP 164

On this episode of the Lab Coat Agents Podcast, Jeff is talking  with Jessica and Justin Ball. They are  discussing the aspects and the components of their book - Succession Planning for Real Estate Agents. They share about how a retiree can help an agent who is new to the industry by teaching them their ways of working and letting them take over the business. The core of their book is about how an agent who is thinking about retirement begins to identify a successor, or if you are a younger growing agent, how you sit down and have a respectful conversation with an agent who is near retirement. Tune in now.   Episode highlights: Jessica had a 10-year career in law enforcement and was a federal law enforcement officer. She made the jump into real estate when she decided to start a family.  Jessica has formally done several succession plans with other agents, and just as they were going through those, they realized there was a lack of information out there. They were taking notes, doing interviews and compiling it all together, and then decided to share it with everyone else because money was being left on the table for the retiring agents.  Justin is an academic by trade and by nature. He got his real estate license, and now he is a commercial agent. They are working through a succession plan with the number one Re/Max commercial broker in the St. Louis region and one of the top commercial agents in the United States. Justin was an unlicensed professional for five years, and as a licensed professional, it's been several months at this point. The Jessica Ball team with Re/Max Traders Unlimited. Jessica has two other residential agents and an unlicensed administrator assistant office manager who are doing amazing work. There are 65,000 active realtors today who do not plan to be selling real estate in less than two years from now. In their home state of Illinois, there are more than 7000 Realtors over the age of 60, probably closer to 70. In a lot of the cases, they have almost 2500 realtors who will not be selling real estate in Illinois in the next 24 months, says Justin. There are agents who want to let go of the business, and they are going to give it to someone who they can trust to take care of their sphere and their clients that they have been working with for years and years and years. There are also new agents in the industry, they are buying Zip Codes and trying all the fancy stuff, spending all this money to try to get leads- there is huge opportunity if they can really work out a deal with a seasoned agent who is wanting to exit the industry and literally that agent is going to put a stamp of approval on you. The majority of the time people experience agents who are generally flattered and that opens the door for a great conversation. Through their book, Jessica and Justin teach about 3 kinds of structures and contracts for building the succession plan. They typically tend to find that the best time frame is to have a few years to make that trust transition and to expose your sphere of influence to your successor. They have found what works best is not only paying those referral fees on clients but including a one-and two-year incentive bonus. Given the average home price in our market, $5000 is a big incentive. “We are at a market where the average home sale price is roughly $150,000”, says Justin. Jessica is doing her own advertising and marketing. She says that is why a CRM is important, a database where she knows these people here.  At the end of those three years, the successor takes ownership of that database at that point in that sphere of influence. The part of the motivation to really keep in touch with the retirees, a sphere of influence, is knowing that you have the potential to build lifetime clients and referrals of referrals. Jessica went through those succession plans. Justin and Jessica started to write components of the book about what assets a real estate agent has. There are advertising contracts and magazines and billboards and right down the line of assets that people don't really take the time to think about their value and how necessary they are to support your business.  One of these other kinds of intangible assets is a seat in some networking groups. Some agents have been in these groups for 10-15 years and so having the successor step into that role takes time to really gain the trust of that referral network in that group.  With a commercial agency it is not necessarily the book of business like it is with traditional residential. They explain the difference. 3 Key Points: Justin dug deep into the National Association of Realtors profile of real estate agents and there are 300,000 Realtors in the United States over the age of 60 and while there are 10s of thousands of new Realtors joining each year. The average age of agents is going up, and it's just over 56 years old, and they ask this fascinating question on the realtor profile: Do you plan to be selling real estate in the next 24 months and all of the groups? About 20% said they did not. Jessica and Justin discuss if the younger agents are paying the retiree on all their deals, or is it only specifically referred deals? As per Jessica, an agent probably can't come out of nowhere. They need to be present and involved in their brokerage. They either need to show that they are there, and they care about the industry and that they are involved in the longevity of it because that is going to be important for the person who is retiring.   Resources Mentioned:  Lab Coat Agents | Website | Facebook | Facebook Group | Twitter | Instagram  Jeff Pfitzer   | Instagram | LinkedIn | Twitter PowerISA (Sponsor) RedX (Sponsor) Jessica & Justin Ball:  https://resuccession.com/ https://jessicaballhomes.com/ https://www.facebook.com/JessicaBallHomes/