Last week I opened up a discussion with you about the best possible model for running our real estate business. I began with trying to describe the large TEAM approach and some of it pros and cons. Re-reading it, I am sure there is much I could have added and or even written more succinctly. That said, I am questioning many of those ideas as we consider moving to a different office, albeit within the same firm. Stay tuned.
So I’ll address that briefly. Inside the local real estate marketplace here in HR, there are only a few models working well. The most common is the Traditional. A locally owned, un-franchised brokerage where each agent is an independent contractor and it is an “eat only what you kill” system with greater shares of the pie (commission) as you sell more and/or gain tenure. The other is still a traditional firm, only attached to a nationally branded company (franchise) and pays a fee to the parent firm over and above the commission split. There are a few Mega Team enterprises that employ sales people and pay them a salary+ commission after providing them most of their leads.
What’s best? Good question. My view from the inside over many years and many markets has revealed a few things. Many teams are formed as a partnership to afford each partner to have their cake and eat it too. They give up some business in order to have a life. To spend time with the kids, husband, only work with buyers, etc. Certainly beneficial to the agent, but unless it is run as a business and one individual is given the operating officer role, it is not a model that grows and someone is likely to become discontent. Often a team is created for growth and often it is ego driven. The more agents using the rainmaker’s name, the better it sounds and the more potential leads the more potential sales. It allows X number of people to generate a large volume of sales and therefore claim a higher ranking. The successful models are run as a solid business and generally act as a company within a company (similar to a franchise).
The best model I’ve see is one or two, fulltime, equally committed sales people and one, rockstar administrator. Let’s face it; the goal here is to run a profitable business. We have all seen big fat firms of all kinds have to cut way back when there is a down turn in whatever industry they are in. That’s because the overhead became greater than the profit. This model is generally earning the same commission split as the mega teams and has little or no administrative overhead. No employee headaches and as a result, I have seen that their individual clients become like family and would walk through walls for them. I imagine the ego is sufficiently stroked as they review their portfolio numbers.
‘Nuff said on that. Stay tuned as to Gabrielle and I and G.R.E.A.T. are going to work together to best serve you and your needs.
As our business grows here in Virginia Beach and Chesapeake, I have been looking closely at our business model and what is the best way to A) grow our business and B) best serve our customers with the same personal touch and professionalism they have come to expect.
There are a few different approaches and I thought I would give a brief overview and perhaps you’ll share with me your thoughts on what works for you as a customer. Maybe you are not a real estate customer per se. And I don’t mean ours, but in general. WE are all customers, of some kind, every day. How do you like you to be served? Do you like lots of info, lots of personal interaction? Or are you a “just gimme the facts and tell me where to sign: kinda customer?
There are a few different models in the RE biz these days. Some new and techy, some old and very hands on. Both work.
One new emerging model since I’ve come back to the business is the mega team version. There is a rainmaker who really puts it out there with their name on everything and solicits business through every channel possible. Radio, TV, Internet, newspaper (is that still a thing?) and so on. They hire inside sales associates (ISA) whose only job is to take ad calls and convert them to an appointment and capture a lead and pass it on to an agent. These groups often have several agents working on their team in order to chase down all this and often have a full service office including property management. If they are not a proper brokerage firm proper, they are often a company within a company. While I was managing a large office several years ago, we had the beginnings of teams like this and they are generally self sufficient since the team leader is given much latitude and is capable of running the team themselves regarding the coaching and accountability and need to be good at putting out their own fires. I want to be sure to not suggest that any of this is bad. As a buyer or especially a seller you want activity and phone calls and someone following up on these leads the instant they come in. We know that our society has become so ADD that if we don’t hear back right away, we move on to the next thing.
From the perspective of what the GREAT team does in the future, we need to look at what the commitment to building a team is, what are the implications and does it bring us closer to our goals/customers or further away?
In order to keep this brief (I know, too late), I am going to address the other models in the next post.
Until then, please don’t hesitate to reach out and offer your thoughts and especially to ask questions.
If you need real estate assistance, we are here to help. If you just want to catch up and go have a cup of coffee or meet up for a bike ride, LETS GO!