Gina Jacobs, owner of Gina Jacobs Real Estate & Property Management, Woodbury, Conn.
In the traditional real estate world, brokers work on a commission basis, usually receiving five or six percent of the home sale price. Yet over the years, real estate broker Gina Jacobs increasingly found this system problematic – especially during the recent rough stretch when the housing market was lethargic in her central Connecticut business territory.
“It was kind of hard to try to sell overpriced listings,” she complained. “You’d work and work and work, but you would not get paid because the houses would not sell.”
Although Jacobs worked as a broker for 15 years with Berkshire Hathaway and William Raveis under the commission-only model, she believed that this approach might benefit from tinkering: a new compensation model that omits the commission completely and charges sellers only for the time their broker works on their behalf. But since well-established brokerages were not eager to experiment with such a radically different approach to the business, Jacobs decided to take her first-ever entrepreneurial plunge and created Gina Jacobs Real Estate & Property Management in 2015, which became the first real estate brokerage in Connecticut to jettison the commission completely and bill the seller only for the hours worked on their behalf.
Concentrating her efforts on the five Connecticut markets where she was known for years – Woodbury, Middlebury, Southbury, Oxford and Naugatuck – Jacobs had the advantage of coming to the market with built-in name and face recognition. “People have seen my face in Berkshire Hathaway and William Reveis ads, and I’ve been around her a long time,” she acknowledged, adding that she is sometimes stopped in stores by people that recognize her but can’t quite place where they’ve seen her.
Yet Jacobs recognized that she while may have been a known entity, she was starting her business against well-entrenched operations with sturdy marketing operations.
“It is a challenge with any new business,” she continued. “It is hard to get the word out when you are working on a limited budget. I also don’t have a background in market, so people that went to school for that would probably be further along in the game.”
While going the traditional marketing route with paid advertising in local newspapers, she only followed a limited online strategy and instead embraced some seemingly lo-fi tactics, including the placement of advertising flyers in a local grocery store.
“It’s a simple little thing,” she said, with a laugh. “But I’ve gotten calls off of that. And when my supply is low, I just go over there and restock.”
But Jacobs got her biggest marketing boost via free advertising when she was featured in a daily newspaper in February 2014. The article detailed her efforts to launch her new business model, and it seemed to make an impact with many people.
“I still get sellers who saw the article two years and held on to it because they were waiting to contact me when it was the right time for them to sell,” she said.
Nonetheless, Jacobs’ approach to home selling requires a learning curve from prospective clients who only know about brokers charging commissions. And she is not shy about speaking her mind when she believes sellers are coming to market with unrealistic pricing expectations.
“Many people still want to try and pitch the higher prices for their homes,” she complained. “I feel that is a waste of valuable time if they are coming out of the gate that way. If a seller is not pricing properly, I’m probably not the right choice for them.”
To date, Jacobs is getting more business from referrals, which clearly suggest she is doing something right, but her business model has not been picked up by her local rivals. And while she has part-time assistance from a semi-retired broker, she realizes that her next challenge is to expand her company with other real estate professionals that will agree to work under her system.
“I was looking all winter to bring in someone for the summer,” she said, ruefully. “But some agents are still leery about having to leave the commission environment.”
Gina Jacobs is online at http://ginajacobs.net/.