Not a great week. I had to do something no manager likes to do. I had to fire an agent. Where do I begin? Well, first off there should be some information about my brokerage. We’ve been around for a while and consider ourselves a full service brokerage. I believe we have a sterling reputation in the city as an ethical, knowledgeable, and respected firm that has smart and successful agents. I hope I’m not pumping up my firm too much. A few years ago this agent approached us to enquire about joining our firm. At the time we had some reservations about her commitment so we were unable to offer her a role with our company. A year later she returned and pleaded her case to join our firm. Her current brokerage was not providing the support she required. Well, I thought, we are all about support. Perhaps all this agent needed was a guiding hand and a base from which to learn. I welcomed her with open arms under the condition that she attend our six-week training classes (known as Bosley U), committed to participating in our weekly office meetings and make an effort to come out once in a while to a Mastermind session.
For the first few months everything seemed okay. She came out to meeting, although often late, and was in and out of my office to talk about farming, websites, etc. I happily discussed her direction and offered suggestions and scheduled follow-up meetings. The wheels fell off the bus shortly there after. At Bosley U she seemed lackluster at best and wasn’t able to complete the basic homework. She didn’t spend much time at her desk or out touring homes and she seemed relatively oblivious to our emailed meeting minutes. As it turns out she wasn’t getting company emails because she hadn’t bothered to set up her (required) email address. As they say, you can lead a horse to water…..
I could go on, but what’s the point? It was clear that she was not interested in working in real estate. She just wanted a place to hang her license. The experience got me thinking about the brokerage business and the various business models out there and I wondered if one was better than the other. While some companies do everything to support your business; supply leads, provide training and skills development and give added value to the agent in exchange for a larger piece of the commission pie, others are content to take nothing and offer nothing. Then there is every variation in between. The truth is, whether we like it or not, every model has a place in our Real Estate World. I just wonder if agents are making the choices for the right reasons.
So in the end, my reasoning was simple. I would rather have an office with 40 hard-working professional agents who care about their careers. There is another, more self-serving reason too, if an agent isn’t coming to meetings they aren’t keeping up to date on current affairs, and that scares me. I smell liability.
A small part of me believes that I failed in keeping her engaged and motivated but the other part of me thinks I did the right thing for my office. While I can’t speak for other brokerages, our model presumes that you are in the business to work full-time.
It’s a popular term that you have probably heard before. If there is a way to beat the system, someone will find it. Not surprisingly, it applies to the business of real estate too. At first I was enthusiastic about those third-party sites like Craigslist and Kijiji. Hey, if I have a listing I will promote it on as many sites as I can to get the most exposure. That’s my job. But more and more I see some agents trying to game the system. It’s as if those agents said, ” I can use this un-policed site to make money”. Can you blame a guy (or gal) for trying? Over the last few months, the number of real estate scams I’ve seen on the web makes me shudder. Not to single out one site or another, but I wonder if third-party sites, not under some type of control, are turning our business back into the wild wild west. I can’t imagine the founders of these sites ever intended their sites to be used these ways.
We’ve heard this story a fair bit, but I finally heard it first hand from someone who had been scammed. This person was looking for a rental apartment. She saw an amazing place in her price range and the “owner” said it she could have it. She put down a deposit and went home. A week later she thought it might be a good idea to go check it out again. She phoned and emailed the “owner” but was unable to reach him. Finally she went to the apartment only to find that the current tenants weren’t planning on moving out. As it turns out, they were away the weekend the apartment was shown. Burned!
Equally, if not more distressing is the behavior of Realtors like this one; This agent logged into TREB found a couple of nice condos, used the pictures and descriptions to create a few ads and then post them as their own listings. Potential renters are calling and arranging showings presuming they are working directly with the owner or listing agents. So you might say, big deal. At the end of the day the apartment gets rented. Isn’t that the goal? I suppose you could make that argument but why should someone take advantage of the work I did to get the listing in the first place? I didn’t give that agent permission to advertise my listing. In this case, the scammer agent was working at a resort in Mexico when I contacted her about a rental. She offered to have someone in her office attend the showing. Poaching listings is rampant in our business and this example barely scratches the surface of the type of shenanigans that agents figure out. The DDF or Data Distribution Facility may take care of some of these problems, like the accuracy of the information, but…as one door closes another one is sure to open.
How about the agent who had a listing on MLS at one price and also advertised it on Craigslist at a different price with the proviso the buyer use him to purchase the house? The Craigslist ad also didn’t contain any of the required information that is required under our guidelines. Designation, brokerage, contact information. Do you care? The internet is a big place. I have to believe there are a lot of agents using third-party sites to rightfully promote their listings. That’s great. But what about the scammers and cheats who are playing the system? They know full well that RECO can’t patrol the internet, and most agents aren’t checking to see if people are poaching their listings. And if they do, are those agents going to launch a complaint knowing that it will take 8 months to get to a hearing? Years ago, organized real estate was established to protect the public. Rules and regulations were written to make sure real estate transactions were done fairly. Is that protection gone out the window?
Is the sharing of data, through IDX leveling the playing field or making the system easy to beat? If you are part of IDX your listings are shared on every other agent’s website. Honestly, I’m okay with that BUT I want the public to know that if they are on Joe Smith’s Website the listing they are looking at is actually mine not Joe Smith’s. I want my name at the top, not buried somewhere in the bottom. Oh and while I’m on the subject, why can’t I brand my video tours? Argh, it makes me crazy!
Have you been scammed on a third-party site? Do you have an interesting story about an agent finding a creative way to beat the system? What can we do about it?
“Statistics are like bikinis. What they reveal is suggestive, but what they conceal is vital” American Professor Aaron Levenstien.
Months ago, at one of my Monday morning meetings, I wanted to drive home a point about the top 1% of agents (by ends) currently in The Toronto Real Estate Board. I took out my trusty tape measure that used to accompany me on every appointment and told everyone to imagine that each centimetre represented 10 agents in TREB. I fixed one end to the edge of our front desk and asked the agents to shout stop when they figured I had reached the number of centimetres that represented the top 1%. Off I walked. I got about 3 metres before I heard the first ‘stop’. Guess what? That 3 metre distance, representing over 3000 agents, was ten times higher than the actual number. Strange but true. The top 1% of TREB, in terms of number of ends, is represented by fewer than 360 agents. Wow! This was fascinating to me so I worked with our General Manager, Ann Bosley, to break down the numbers even further. What came to light was a very interesting story. Check out this first graph;
This first graph is very interesting. In a very unscientific manner, I determined that agents become full-time when they sell over 6 properties in a year. It is fascinating to see that this graph represents a full 71.2% of the nearly 34,000 agents who fit into the category of “Part-timers”. Even more amazing was that a whopping 6136 agents, a full 18.6% of the Toronto Real Estate Board did not sell a property last year. Note how the percentage of agents in each category diminishes as the number of deals an agent does increases. TREB membership has grown by over 1/3 in the last ten years and it seems clear to me that this segment of the membership will be particularly vulnerable to a downturn in our economy and if we were faced with as deep a recession as we saw in 1989, we could lose a significant number of agents.
This next graph deals with full-time agents. What’s particularly interesting about this graph is the number of deals the top 1% do per year. At the very top of TREB are the group I have categorized as the “Super Ultra Agents”. This elite group consisting of only 7 agents represent a mere .02% of TREB. They almost exclusively work as team leaders and they sell over 200 units per year. The next group, the “Ultra Agents”, consists of just 39 agents or .12% of the total TREB membership. They also work as team leaders and sell between 100 and 200 properties a year. The next category is reserved for the “Super Agents” who sell between 50 and 100 properties per year. While there are nearly 150 agents in this category they represent only .45% of the membership. Finally, rounding up the top 1% are the 164 agents that are selling between 40 and 50 deals a year.
The middle group, particularly the agents that are selling 7 to 12 units per year represent the most significant category. They are the biggest group of full-time agents, nearly 5300 agents or 16% of TREB membership. They are working hard enough to get nearly a sale a month, but with an average sale of $500k, this group is making a yearly income of between $87,000 and $150,000 before office split and expenses.
Several months ago I produced an interesting Infographic on the Canadian Realtor, check it out here;http://bit.ly/w9UfpV . The research clearly illustrated that not only is the Toronto Real Estate Board the biggest board in Canada, it is over three times the size of the next biggest board, Vancouver. So why did we spend so much time doing the math? Simple, having an insight into the demographics of our board helps us to be better managers. These graphs are an amazing visual explanation on agent performance. I can see what the agents in our company are doing compared to the industry as a whole and I can work with agents to help them jump to the next category. What is clear is that at the very least, agents should be striving to hit the 7-12 transaction target as quickly as possible and as a dedicated manager it is my job to get them there.
A few notes on the information gathered here. The statistics on agent performance are collected by a third-party, independently audited company called IMS Incorporated. When you see an agent claiming to be in the top 1%, it is almost always supported by IMS numbers. For the purposes of this post, the numbers provided only deal with units sold, not dollar volume, over the last calendar year. There is a small margin of error in some of my math. Don’t forget that there are a number of new agents that are working full-time but have yet to record a transaction. Also, the numbers do not report new construction sales.