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25
May

Building A Real Estate Team? Part 1


In theory building and running a real estate team seems like a pretty good idea. You are getting more leads than you know what to do with so you bring on a junior agent as your buyer agent. You give them good quality leads and if they sell the client a home you take a percentage of their commission. The more junior agents you have working for you the more money you make. Sounds awesome.

The reality is that when you run a team you agree to take on a lot more responsibility. Not only are you a selling agent you are now a manager, a leader, a trainer, a mentor and an engaged human resources director. If you cannot lead effectively, or over-manage the team you will ,in effect, spend more time managing and less time doing what you do best…selling. But when you dive into the relationship even further a few dichotomies surface. As a sales representative you are working as an independent contractor for your broker, your team members also work for the brokerage but report to you. Hopefully you have the same values as your brokerage and are on the same page when it comes to business goals. With any luck your team members are well-trained and share your ethics too. But what happens when a team member does something wrong? Your brokerage is on the hook to clean up the mistakes even when, for example, the mistake was made because they were following the team leader’s direction. So the question remains, who is responsible for the team members? The team leader or the brokerage? With teams these two entities are fundimentally at odds with eachother. The brokerage provides services essential to the agent (The ABC test of who controls the services) vs the team leader who supplies the leads ( the economic reality test). The real estate brokerage is, in many ways a unique creature. It is statutorily required to provide certain duties, like oversee agents, provide accounting and practice risk reduction. 
Compensation based on commission.

Here is something else to consider. There are currently three separate cases before the courts in the United States that are challenging the very nature of the agent and team member relationship. The outcomes could very well force team leaders to re-evaluate how they build their teams. In each of the cases the team members are arguing that they were hired as buyer agents but were also required to perform tasks for the leader such as pick up and deliver cheques, meet appraisers, sit agent open houses, home inspections or even write blogs or post stories on social sites. The very nature of these tasks, it is argued, presumes an employee/employer relationship and if that is the case then wouldn’t the team member deserve the benefits that an employee would receive, such as employment insurance, medical and dental?

If teams are here for the long-term then, in my opinion, it is important for brokerages to develop a policy and procedure manual and some standards of service. Team contracts need to be more than just a handshake agreement or a quick email. The reality is that no two teams are the same so a blanket agreement is just not going to work. Have a lawyer draw up a binding agreement and make sure that it works within the laws of REBBA 2002.

Certainly brokerages need to understand that teams are developing at a fast and furious pace and there is yet another complication….the sub brokerage. I will talk more about that in part 2 and then later in part 3 I will talk about the finer points of developing your team.The reality is that as the team concept evolves, more questions and complications will develop. In the meantime the best you can do as a team leader is to have a written agreement which sets a tone and understanding of the relationship, achnowledge that compensation is based on commission, list tools and materials supplied for day to day efficiencies as well as who is responsible for their maintenance and upkeep, include clauses on sick leave, vacation time, desk duty (if required) and above all else have a system that will have solid arbitration mechanisms. 

mark mclean is the Broker/Manager at the Bosley Real Estate Queen St W office and President-Elect for the Toronto Real Estate Board. The opinions expressed here do not reflect the opinions of TREB or Bosley RE.

6
May

It’s Time To Play The Objection Game.

huddleSometimes you need to have a little fun with the meetings and to be honest, the more people who attend, the more fun it is. Yesterday’s meeting got everyone engaged and if you are ever stuck for a good meeting topic please do me a favour….steal this one. Especially if you have a group of over 20 agents in a room.

Every active agent will tell you that whether they are working with a buyer of a seller they always come across objections. I’ve done a past blog about objections which you can read here. How you deal with that objection will be the difference between success and failure. So in today’s meeting I asked the agents to tell me all the objections they have faced over the last year. Not surprisingly, I got a fairly substantial list. We then went through the list and ranked them in order. For the purposes of the meeting we determined that the top four were; commissions, fear of over-paying for a home, not wanting to get into a bidding war and the classic “my uncle is a Realtor”.

With our top four objections in hand we broke the group up into four smaller groups and gave each one of them an objection. Each group picked a team leader and over the next 10 minutes they had to come up with as many arguments as they could to kill their objection. The group discussions were pretty lively and after the 10 minutes was over each leader read out their list. What I loved about this game was that even after every counter argument was pointed out there was always others in the crowd who had more points to add. In my books anytime you get a discussion going in an office meeting you’ve had a great day.

I won’t go through the agent’s arguments today because your office might have completely different objections. It’s just fair to say that this meeting got everyone involved. For new agents it’s an opportunity to develop new talking points with clients and I have to say that a few, more experienced, agents even learned a few tricks along the way. This was a great meeting, a great discussion, awesome team building and helps solidify our office culture.

mark mclean is the Broker/Manager at the Bosley Real Estate Queen St W office and President-Elect for the Toronto Real Estate Board. The opinions expressed here do not reflect the opinions of TREB or Bosley RE.

5
May

WTH!?! Your Client Walked Away Over That?!?!

broken microvaveI’m trying to be polite here. The “WTH” stands for ‘What the heck”. A few weeks ago at our Mastermind session we talked about how an agent lost a deal over a relatively small item. In this case it was a $500 Ikea cabinet. As soon as that story came out others piped in about some of their lost deals too. It was surprising to see what buyers and sellers would walk away from. I put it out to my Facebook friends and got some wild responses.

One person lost a deal over a pool table when the seller was moving out of province anyhow. Another lost over a broken snow blower. Apparently the seller promised it to a nephew and buyer walked without it. Other inconsequential items included a fridge, a $100 microwave, a bookshelf, drapes and a flowering shrub in the garden. Of course it isn’t always about possessions. Sometimes it’s a technicality. I heard from one friend who had a deal fall apart because the age of the home was reported as 14 years old when it was actually 18 years old, while another deal died over a 6 month discrepancy in the age of the furnace. Another fell apart when the seller signed back an offer to close on the same date that was the anniversary of a death of a family member and was taken as a sign that this “wasn’t meant to be”.

Often the argument is just an ego thing where the buyer and seller just don’t like each other and dig their heels in but other times it is the telltale sign of something larger. Our job is diffuse the anger and turn it into a positive. Here is my example; Once I went on a listing presentation on a condo. The exact same unit on the floor directly below sold for $365k. I suggested to the seller that if we listed at $369k we might do a little better (being one floor up). The owner was insistent on listing at $379k so I thought, sure why not. It’s not wildly off base. After a few weeks we got an offer for $375k so being already $10k ahead I pressed my seller to accept. She wouldn’t. Insisted on the full $379k. We couldn’t make the deal work and the seller walked. So clearly my seller lost on a great opportunity….or did she? About a month later the seller listed with someone else at $379k and the condo sold way over in multiple offers. In effect, it turns out the original buyer lost. There is a lesson in here somewhere.

Clearly buying or selling a home is an emotional experience. Both sellers and buyers think they hold all the cards. Getting them together is the real trick. If you hit this critical impasse the first thing to do is isolate it. Is this a buyer getting cold feet or a seller who’s just not ready to let go? Knowing the true motivation will help resolve the issues. Sometimes however, people are just stubborn jerks. Other times you step up and buy them a new microwave. In the end, the buyer and the seller just want to know that someone cares. Finally, I heard from one friend who tells it like it is. His client was his wife. Many years ago she dug her heels in when there was only a $200 difference between her and the seller. The agent husband managed to get the deal together and it has been their matrimonial house for 20 years. He loves to tell the story about how she almost let the deal die over $200. Hilarious.

mark mclean is the Broker/Manager at the Bosley Real Estate Queen St W office and President-Elect for the Toronto Real Estate Board. The opinions expressed here do not reflect the opinions of TREB or Bosley RE.

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