Understanding Agent Retention
These days I am occupied with building a new office for the company I work for. In our new neighbourhood, there is a bit of a buzz from local agents. We are building something unique. It hasn’t really been done before in the city. Over the last few weeks I have met with many agents who are interested in what we are doing. While they see the value of what we are creating, their main motivation in talking to me is less about being part of a new brokerage and more about getting away from the office they are working in now. This led me to consider the notion of agent retention and how to avoid losing good agents to the competition. There are many reasons agents leave. Some you can avoid, some you can’t. Here are some in no particular order.
- The agent has moved their principal residence and doesn’t want to commute. This is more likely to happen to the agent who comes into the office regularly.
- The agent has a conflict with another agent in the office. This is a big issue to tackle. As a manager/owner, it is your job to make sure that conflicts are dealt with fairly. Agents should always come away from a dispute knowing that, regardless of them winning or losing, you have looked at the facts accurately and explained your position clearly.
- Management issues. Believe it or not, some companies don’t get the fact that the agents are the clients, not the public. Our job is to provide agents with the tools to do their job well. Whether it is through training, front office support, advertising, etc, agents will abandon ship if you are not supporting them.
- Office aesthetic. The office should be current, clean and functionally laid out. Agents not only need a good work environment but they need a place to bring clients. Torn carpets, dirty bathrooms, and poor maintenance issues need to be addressed quickly. Agents will maintain a clean environment when they are proud of their surroundings.
- Commission structures. It is a reality of life that agents are looking for the best splits. Let’s face it, no one has yet to build a business model where the agent gets 100% of their commission and the office personnel does everything for them. The key is to simply be progressive and ahead of your competition. The difference in the take home commission of a mid range earning agent is negligible when you look at pay for service brokerages versus the full service models.
- The fun factor. Many companies, for whatever reason, lack office camaraderie. Managers and owners should make it part of their mantra to plan events and have fun as a group. Everyone should feel like they are being treated as a key part of the team. Our offices actively participate in golf tournaments, mini ski trips, social events and barbeques.
- Education and weekly office meetings. Management needs to be proactive in making sure agents are up to speed on current topics, policies and procedures. Presuming agents are doing it themselves will land your brokerage in a heap of trouble.
- Offices are too big or too small .I talked to a couple of agents who felt that they were simply lost in the shuffle. When they first started working at their brokerage there where fewer than 50 agents. Within 6 years, the company had grown to over 300 agents. Regularly there was a line of agents that formed outside the manager’s office. All of a sudden, asking a simple question became an hour long ordeal. I met with another agent who worked for a terrific little boutique company but there was no one even answering the phones. The few agents that worked there had to do everything from clean the offices to confirm appointments. There is no advertising budget and no one to update the website.
- Technical support. A strong brokerage needs a solid online presence. The web site needs to be constantly maintained, accurate and updates.
- Agents overstay their welcome or get fired. Surprisingly, many companies don’t check with the governing bodies to see if a potential new agent has complaints laid against them. There are agents out there with absolutely no respect for rules and regulations. You should avoid them at all cost as they are surely to be repeat offenders.
- Finally, there is something to be said for being part of something progressive and different. The day of the cookie cutter mentality is long gone. Agents today want to be a part of something unique.
It is a reality of life. Agents will move around but hopefully, if you are aware of the reasons why they leave, you can take steps now to eliminate or minimize the disruption to your office.
The views expressed in this blog may not represent the views of Bosley Real Estate, Brokerage, Ltd.
Building a Defendable Market Position
A lot of the topics I write about come out of ideas I get during our office meetings. Our agents love Monday morning meetings. It is a great way to start the week. It pumps everyone up. It is energizing. Agents talk about open house experiences while they are fresh in their minds.
This week we talked about the changing market. It has happened quickly. We are still positive, but the market has changed nevertheless. Two months ago the ratio of sales at or above asking to sales under asking was about 50/50. A month ago it was about 30/70. It is now 10/90. Simply put, we are not seeing the buying frenzy we saw a few months ago. The number of transactions is still very good, but agents are working harder to put the deals together.
This simple discussion about changing market conditions made me think about our position as a company in the market place. Our success as a brokerage is based on several core competencies; Solid management, great training, consistent advertising, strong online presence, and good client and agent support to name a few. As the market starts to balance out, these assets become so much more important.
Recently I met with two great agents. As a well thought out team, they have achieved remarkable success in less than 6 years. Their current company had grown by over 400% since they started. As much as they loved their company they were getting lost in the shuffle. They needed a change. Surprisingly, their biggest concern was not commission splits but moving to a company that had management that could advise them through the new economic environment. You only need to visit our website to see the depth of knowledge our management team has.
I have also hired a couple of new agents. They are committed to making a solid career in real estate abut chose us because of our exceptional training. Our in-house program provides agents with the same level of experience as someone who has been in the business for two years.
Finally, I talked to an agent who works for a very small boutique company downtown. She is one of their more successful agents but simply cannot grow her business anymore. Her current company hasn’t the resources to increase their presence in the marketplace. There is no support from the “back office”, there is virtually no marketing or advertising, no on-line presence and no training. The decision to move is compelling when you look at what we offer in a similar, but larger, boutique environment.
I have been blogging about brokerage best practises for awhile now, but many of the key elements to brokerage success will be of little use if you don’t have a defendable market position. Change in market conditions happens quickly. If you are paying close attention to your office generated statistics, you will probably notice things changing in as little as two months. Surprisingly, a few companies aren’t aware of the cyclical nature of the real estate business. Many agents and some companies have never worked in a balanced market let alone one that favours buyers. The way you conduct your business changes significantly. All of a sudden, selling a home is no longer a slam dunk.
At the end of the day, your brokerage will succeed if you stay on your toes, invest wisely in your business, recruit carefully, pay attention to slight changes in the market, and continue to build your brand on the fundamentals of honesty, integrity and knowledge.
Embracing Brokerage Statistics
Weekly meetings at our company are entertaining, enlightening and insightful. This week we tried to get through all the housekeeping rather quickly so that we could talk specifically about the changing market conditions. Talking to a roomful of 40 or 50 agents naturally leads to many different opinions, but for the most part, they were all saying the same thing; Things are balancing out. Surprisingly, all our agents are feeling positive. For many of their clients the changing market means that buyers can spend more than 10 minutes in a house before deciding to pay tens of thousands of dollars over asking. We all agree there is some element of buyer fatigue out there.
Obviously interest rates play a big part in the changing housing market. Rates change because the brains at the central bank collect and disseminate information each quarter on everything from inflation to job creation or loss. The Euro Zone fragility and slow growth in the US economy play huge roles as well. For the most part, a move on rate hikes or decreases come after a pattern is established which means that things have already changed significantly when the decisions are made.
In our real estate office we have, at our finger tips, tons of information on buying habits and the health of the real estate market. Seasonality notwithstanding, the increase in listings, or standing inventory, tells an obvious tale, and of course, tracking the number of sales month over month and year over year is very important. We like to also track how many sales are over asking price, at asking or under asking. More than the standard tracking of sales to listing ratios, we look at as many as ten other factors all of which give us a clear picture of the overall health of the real estate market in Toronto. This information is reviewed week to week.
A big part of real estate is statistics and numbers. The information we collect not only helps us, as managers, to plan for the future, it also helps our agents adapt their marketing strategies. We are happy to share our information if it means our agents have a leg up on the competition. Starbucks utilizes similar statistical research to determine exact, hour by hour, staffing requirements. Ultimately the more you know about your market the better. There is truly no depth to how much information you can learn about the market and your clientele. The information we mine is not typically available to the guy who decides to sell a house himself or the discount broker looking to make a quick buck, so essentially they are lacking a proper and accurate view of market conditions.
With the flip of a few switches, Lone Wolf, the standard in real estate software programs, can provide a great deal of data, but your brokerage office must be prepared to dig deeper. Think about what you could do with other information such as the demographic of your clientele. How much power would you have if you knew with reasonable accuracy that a first time condo buyer is statistically likely to move in year 4 or 5? Obviously it is up to your sales force to stay connected to their clients to take advantage of repeat business and agent software, like Top Producer, can help agents do that, but think about how useful this information can be to brokerages in forecasting simple things like strategic marketing campaigns. Privacy issues come into play so it is important to know when or if you are crossing the line but tracking and forecasting on a micro level must be a high priority. Ultimately, statistics define where you go and how to adapt your strategy to get there ahead of the competition.
This blog does not necessarily represent the views of Bosley Real Estate.
