What kind of agent are you?
There are millions of real estate agents.
What kind of agent are you?
What is your identity, your character, your business religion, your guiding principles, your reputation?
What is the reputation of your brokerage? Does it match?
To paraphrase Seth Godin, if your real estate business stopped tomorrow, would people miss it?
It’s an important question to ask ourselves.
Why is that important?
Think about it. There are close to 2 million Realtors.
We are tripping over each other at every turn.
More and more people flood real estate schools every day.
It’s well known that 80% of the active agents out there do between 1 and 5 transactions a year, but what is not often talked about is that still accounts for well over 50% of the total home sales in a marketplace.
This fact has become a giant problem because the biggest trend in our industry over the last 10 years is agents shifting to the lowest cost brokerages that do little to train, guide, and mentor the sea of new agents coming in. And brokerages that used to provide mentorship now do so only at a steep cost to the agent, as the brokerages have shifted to making training and mentorship a new profit center for the company. Many newer agents can’t afford this type of training.
It’s a problem. It’s the biggest threat to our industry and the Realtor organization knows it, as articulated in their commissioned publication “Danger Report.”
And agents know it too.
A longtime successful agent in the Boise area just left her large brokerage to join our firm, and her number one reason for coming over was that she was beyond frustrated that the majority of her transactions were with agents within the same brokerage. This should be a positive circumstance, but because of the lack of training, ethics, and positive mentorship, she said it was a nightmare every time.
So she chose to move her real estate business to a brokerage that matched her principles, business ethics and provided guidance and mentorship to all the agents in the firm so that if she did have a transaction with an agent in the firm, it would be a positive experience. She doesn’t want to worry about the reputation of the brokerage negatively impacting the reputation of her real estate business.
We’ve all heard of the “client first” principle, which is the opposite of putting profits ahead of anything else.
Any good agent knows that we must do our best to protect our clients from making mistakes, to help them have the best outcome possible, rather than just focusing on the best outcome for us.
So why have so many brokerages lost sight of this?
They are so focused on getting MORE agents and having MORE profit centers, so they make more off of each agent, rather than first ensuring that they have agents representing the firm in a positive light to the community.
For brokerages, their agents are their clients. How can they expect their agents to put their clients first, if they themselves are focused on profits first?
Keep in mind this isn’t just a form of greed, much of this stems from so many brokerages going into a survival mode mentality.
With so many agents flocking to the lowest cost brokerages in town, it’s caused nearly all brokerages to improve the brokerage splits with their agents. This, in turn, has put a squeeze on broker margins and caused them to cut back on training, support, and guidance. The focus becomes on volume. With brokerages making smaller margins per agent, should we be surprised?
That might explain why this issue has gotten so bad, but it certainly isn’t an excuse.
The responsibility to solve this problem in our industry is not with the REALTOR® organization.
It’s the brokerage owners that need to take ownership of this problem.
If they don’t, we may see this industry implode.
In a world of rapidly changing technologies, the one thing that cannot be replaced is how we protect clients and guide them to the best possible outcomes.
But if that is not happening over 50% of the time, eventually consumers are going to turn to other solutions.
So as a broker and as an agent concerned by what I see in our industry, I have felt compelled to take some ownership of this problem, rather just complain about it.
It’s a major reason why I wrote Agent Entrepreneurs, why I started a real estate school, and why we provide 100% free CE training, unlimited 1-on-1 mentorship, and speedy broker support to the agents in our brokerage.
- I am so proud of our brokerage and every agent in our firm. I’m not perfect, our agents aren’t perfect, our firm is not perfect, but I’m so proud of what we stand for, how we put our clients first, and how we aim to be the change we want to see in our industry and our community.
We stand for something. If an agent’s business ethics and principles don’t match ours, then we don’t want them, no matter how much business they do.
- How you do business is way more important than how much you do.
- Reputation is way more important than next quarter’s profits.
- Leading by example is way more important than maintaining the status quo.
At least, that’s the way I see it.
Mike Turner – Designated Broker
Front Street Brokers