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.