The new rules of real estate team building: Part 1 - Throw the old schools of thought out the window5/18/2018 BY JAMES HUSSAINI May 18, 2015 In today’s climate, the real estate industry is moving toward more sales teams and fewer individual salespeople. Generally speaking, sales teams show more profitability and better reliability than the solo real estate broker provides. In the traditional brokerage business model, any registrant is recruited, but in a team model the recruitment is very selective based on the role the team member will fulfill. In the traditional brokerage model, a high head count of salespeople is the name of the game despite the fact that only a few top-producing sales professionals account for the majority of the transactions. The larger number of nonperforming salespeople consume most of the resources of the brokerage, but their overall sales contribution to the brokerage is much lower when compared to the top producers. So why not just focus on top-performing real estate professionals instead of recruiting “hasslers”? Why not build your team “one high performing member” at a time? Why not create your team slowly and soundly, instead of through random recruitment that has no clear long-term vision? There are many real estate team-building models available to use as your framework. The model I propose is one that focuses on a “core membership” centered on collaboration. Ideally the core member relationship should be structured upon a sense of ownership. You have to make your core members feel as though they are one of the owners — like they share the same destiny. A sense of ownership can become the primary motivator for your team members to take their performance to the next level. Initially, you will attract your core members and add new team members as your sales grow. Consider your core members as “department heads” for your team. In the beginning, each core member will be both in charge of their department and also responsible for handling the details and tasks of their department. Once the business grows, each department (core member) will recruit personnel accordingly. This structure will give core members the opportunity to advance their skills and talents by focusing on a particular aspect of your business. The online marketer is at the heart of your team In today’s age of hyper content consumption, online marketing is the bloodline for real estate sales. One of the main challenges in the real estate industry is that most real estate salespeople do not have formal sales and marketing training. Generally speaking, most real estate salespeople lack up-to-date marketing know-how. Some do not understand the real value of online and social marketing; they still live back in the MLS and newspaper age when marketing was about advertising in magazines and having a “business card”-style website. Others do not have the resources to stay up-to-date with current marketing trends or to implement sustainable marketing strategies and are at the mercy of internet search results. The real estate professionals who understand the value of true marketing and have the resources to work with a marketer face another challenge: their lack of confidence in online marketers. The crux of the problem is that some real estate salespeople see online marketers in the same way that some property owners see renovators. Similar to the renovation profession, anyone at any level of skill can claim to be an online marketer. In the same manner that most renovators overpromise and underdeliver, some online marketers do the same. Therefore, some real estate salespeople do not feel comfortable and confident working with online marketers. This opportunity can be a big loss for real estate salespeople, as online marketing plays a crucial role in their sales success. Stay tuned for Part 2 on Tuesday, which includes the five phases of growing your team. James Hussaini is the founder and president of Realty Point. Email James Hussaini. Read the article in INMAN
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BY JAMES HUSSAINI September 11, 2015Takeaways:
Recruiting Hiring new agents and brokers is the mainstay of any brokerage. But there are distinct differences between the traditional brokerage and the evolving brokerage models. Traditional brokerage model Strength is in numbers. The bigger the agent and broker headcount, the more efficient the brokerage is in building market share. New agents and brokers are brought on board as they seek a more recognized brand name to build consumer recognition of their real estate practice. New brokerage model Strength is in the specialization of the team members allowing for a more personalized client experience that drives referral customers and is the lifeblood of a profitable brokerage. Recruiting is not a priority in the growth of business in the new brokerage model. It is apparent that taking a greater interest in the development of the agent’s or broker’s professionalism and business practices leads to a better brokerage culture and increased business. Retention is of primary importance. Growth of teams is often from within as each member defines their specialty and improves the operation of the team through collaboration and cooperation. New recruits are often attracted through referrals as the success of teams draws the attention of agents or brokers. Recruits are often seeking a better foundation for their real estate practice and the benefits of building a specialty to grow their businesses become apparent. Challengers and competition As accepted technological systems become more prevalent, every real estate brokerage and businessperson is facing increased competition. New rivals enter the market with the intention of disrupting the established and new models alike. Traditional brokerage models Traditional brokerages are often slow to respond to change due to the costs of integrating new systems and practices into everyday use. The brokerage actions are more likely to be reactionary instead of innovative in the business practices. New brokerage models New brokerage models are more flexible and able to adapt to change due to the specialization of team members. They are also more likely to accept innovation and integrate useful tools into everyday business processes. Brokerage setup and operations Every business has defined structures and in real estate, as heavily regulated as it is. There are legal, compliance and regulatory mandates to be observed and followed. The basics define the structure of a real estate brokerage. But once we look beyond the regulations, there is some latitude on how a brokerage operates, and, of course, the culture of the business is available to be molded by the owners. Traditional brokerage model Rigid from the top down, most agents and brokers employed by the brokerage are self-employed and self-reliant to perform their portion of the business as they bring business to the brokerage. The owner, usually the broker of record, often will limit their interactions with their agents and brokers simply due to available time and resources. This model is commission-oriented and profit-motivated, necessitating the “captain at the helm” style of management that often leaves the agents and brokers on their own. New brokerage model Greater flexibility is seen in this emerging model of brokerage. A stronger reliance on the individual agents and brokers to work as a team, specialize and promote their contributions to the brokerage team fosters a stronger culture. Actively recruiting from the outside is not as necessary because the culture created and maintained in the team style of sales builds comradery and reliance on each person being effective in their role. The new brokerage model I am proposing is a working model that powers all Realty Point Inc. brokerage franchises. Real estate brokerages, depending on whom you speak with, are either slow to adapt or adventurous enough to engage with emerging technologies to power their business. However, the middle ground is where most brokerages exist: They are slow to adapt and throw money at technology that is underutilized. The truth of the matter is that brokerages are powered by people, the technology used as merely a tool that allows for greater flexibility of the sales representatives, brokers and owners to serve their clientsbetter — past and future. Teams have emerged as the answer to a prosperous real estate career. Brokerage, as a way to better serve clients and build future business, allows individual agents to specialize in positions and benefit from the team. Otherwise, one agent would have to handle all — often to the point of overwhelming the agent. The final question is: How does your brokerage position itself in this changing landscape? Please continue the conversation in the comments section below. Read “Is the traditional brokerage model obsolete? Part 1.” James Hussaini is the founder and president of Realty Point. Email James Hussaini. Please read the article in INMAN:BY JAMES HUSSAINI September 10, 2015 Takeaways:
I want to introduce you to my new model of brokerage, which includes co-working spaces with shared resources, administrative staff, and office equipment and furnishings. It’s a Realty Point brokerage. Realty Point provides the resources that allow a one-person brokerage or small team to operate as efficiently as a fully staffed brokerage. Beginners start with an operation that handles the brokerage registration paperwork required to open a brokerage and provides office space for the brokerage in five Greater Toronto, Canada, locations. It has the administrative staff to handle the phone calls, transaction paperwork and general office duties. I have made sure that Realty Point franchisees benefit with a low-cost entry point that virtually eliminates the added burden of administering a brokerage. And the benefits go far beyond even these expense and time-saving services. Real estate sales professionals in Toronto are showing a lot of interest in this new model of brokerage. With four franchisees and five office locations, Realty Point is growing fast since its founding last year. Discussing traditional vs. new brokerage models With my experience on the table, I spoke at Inman Connect San Francisco in August. I appeared on a discussion panel that questioned “Is the traditional brokerage model obsolete?” This discussion was moderated by Bernice Ross, and with me on the panel was Fafie Moore, broker and owner of Realty Executives of Nevada, and Penny Nathan, broker at Ascent Real Estate. See full biographies of the panel here. The panel’s discussion looked at the traditional brokerage model and the new brokerage model that is emerging. What follows is a summary of my thoughts on brokerage models. Maintaining profitability The question of whether the traditional brokerage model is obsolete hinges on how profitable the brokerage is and if there’s a better way to ensure profitability by staying with the existing model or applying a new one. The panel’s discussion looked at the traditional brokerage model and the new brokerage model that is emerging. What follows is a summary of my thoughts on brokerage models. Maintaining profitability The question of whether the traditional brokerage model is obsolete hinges on how profitable the brokerage is and if there’s a better way to ensure profitability by staying with the existing model or applying a new one. Traditional brokerage model The traditional brokerage, for the most part, relies on a large contingent of agents and brokers to bring in business. Each agent and broker works alone (for the most part) with little interaction with their brokerage. Communication comes in the forms of basic marketing materials, training (if offered), deal transaction help and transaction related activities that are required to be completed by the brokerage and broker of record. Within this model, each agent and broker handles his or her own marketing, networking, lead generation and sales. New brokerage model The new evolving model of brokerage relies on the team-based model of agents and brokers working within their team unit to achieve the desired results — sales. Within the team-based model, specialists are created to handle specific duties within the team to achieve optimum results. Each team member takes charge of their specialty to the benefit of the entire group. This model allows for a greater reach for marketing, networking, lead generation and sales. The argument that traditional brokerages are obsolete:
The argument against traditional brokerages being obsolete:
There are similarities in both traditional and new brokerage models, on the face of things. But the differences, which at first glance may seem slight, bring about a wholesale change that will affect the basics of real estate sales for years to come. Tomorrow, we will continue the discussion comparing the traditional versus new brokerage models with regards to recruiting, challengers and competition, and setup and operations, in “Is the traditional brokerage model obsolete? Part 2.” James Hussaini is the founder and president of Realty Point. Email James Hussaini. Read the article in INMANIs your real estate career giving you financial freedom? 3 tips for planning your long-term success7/7/2015 BY JAMES HUSSAINI July 07, 2015 The first few years after receiving a real estate license are tough. If you’re successful enough to build your listings and close some deals, you see your self-employed income attacked from all sides with marketing expenses, brokerage fees, income taxes and more. At this point, your retirement strategy is an after-thought, but with some foresight and planning, you are on your way to financial freedom. Here are three steps to ensuring longevity in your real estate career and your financial future. 1. Build a team to protect your sales One truth you’ve learned is that holidays and time off are a luxury. Any time you stop working, your income dries up quickly. Relying on others to help you continue your solo business while you’re away eats into your earnings and can cause unavoidable conflicts. Should you avoid “salesperson burn-out,” you will realize that to protect your business and income, you need to build a team. By being the “team leader,” you can bring on other salespeople that support your activities with their expertise. You’ll ensure that the business culture and work ethic you exemplify are the guiding principles of your team’s performance. As you grow, you will work toward expanding your team. You’ll start to specialize your team’s roles. Eventually, you will likely hire a digital marketer, sales specialists, listing specialists and a stable of professionals to handle photography, video and other tasks on an as-needed basis. Strengthening your team is the first step toward securing your income as you proceed with your goals in the real estate industry and your eventual retirement. 2. Build a clientele base to protect your sales As your sales team grows their listings and sales numbers, you’ll realize that referral business is either driving your sales or holding you back. If your team has focused primarily on attracting new clients while ignoring past clients, your referral business will not perform at its potential. You built your team with the best specialists, and to protect your business future, you must create a culture of customer service excellence that lasts long after the transaction close. Plan the after-sale customer contact so that your clients don’t forget about your service as you offer your experience and help throughout their home ownership life. Remembering that homeowners will purchase five or more homes throughout their lifetime. Because they will bring new clients to you only if they remember you, formulate a plan that involves maintaining a gracious and fruitful two-way relationship with your customers. The three pillars of building your clientele base and referral business are:
3. The final piece of the puzzle to cement your success Throughout your real estate career so far, you’ve transformed from a solo real estate agent to a team leader who has built a successful business and clientele base that brings your team a steady flow of returning and new clients. However, you’ve been working for someone else’s brokerage, and they have been reaping the larger rewards that you’ve passed on to them, such as your marketing experience, your leadership by example and the financial obligations of the brokerage dues you pay every month and every close. Opening your own brokerage is something you might have wanted to do — and you now realize that you need to take this step to protect your future. Eventually, you will retire from the real estate business, and the equity you’ve built so far doesn’t belong to you; it belongs to the brokerage on your business card. Your decision to open your brokerage becomes a foregone conclusion to protect your interests, to provide for your family and to achieve a comfortable retirement through your hard work and success. The equity you have built with your sales team, with your clientele base and your years of hard work will provide for you long after you hang the last “for sale” sign. You also have options to protect your team by offering them shares in your brokerage that will keep them with you and encourage them to continue the culture of excellence you began in the early years of your career. Your comfortable retirement can translate into protecting your team for the long-term and will allow your business to continue long after you have handed the reins to the next generation. James Hussaini is the founder and president of Realty Point. Email James Hussaini. Read the article in INMANBY JAMES HUSSAINI June 30, 2015You should know any property you show to a potential buyer as well as if you were buying it for yourself. Forget about your commission and keep your buyer’s interests front and center. Step 1: Preview prior to the showing You need to preview the properties before taking your client to see them. You will learn more about what you are showing and hopefully not be surprised by anything that pops up or questions the buyers ask. This preview will reaffirm your buyer’s faith in your knowledge because you will be able to find the property quickly, and you’ll know where to park, find the lockbox, enter and walk them through without getting lost inside. Step 2: Buyer showing and reactions As you walk your buyer through the property, they will look, open and measure with their eyes. You need to gauge their reactions to develop a better sense of their ideal property, what gets them excited and what turns them off about any features of the particular property. This feedback will help you through all future showings and negotiations — if the situation calls for it. Step 3: The buyer negotiations Once your buyer has selected a property to their liking and is ready to have you present an offer, you should conduct meetings with the seller and their representative face to face. You will find that the negotiation process will come to a quicker conclusion in a meeting with them rather than if you negotiated through email throughout this part of the process. You should always know what stage the deal is in, and be prepared to update your client regularly on things that aren’t necessarily your responsibility. These update topics might include mortgage brokers, home inspections, lawyers, moving companies and other professional services that happen with transaction completion. Exceeding your buyer’s expectations It’s easy to do the bare minimum and still bring a deal to the closing table. A lot of real estate agents do just that. But you want your buyer to remember the great customer service you provided; you want them to be able to share their experience with their circle of influence; and you want them to refer future business your way — the bare minimum will not suffice. You have to show them your professionalism, knowledge and dedication to their interests as a central part of the process every step of the way. Only when a buyer has a positive experience that is above and beyond their expectations can you expect them to refer business to you happily. James Hussaini is the founder and president of Realty Point. Email James Hussaini. Read the article in INMANBY JAMES HUSSAINI June 23, 2015 Hello, agent: Your mission, should you choose to accept it, is to create a superior buying experience for your client that will inspire that client to refer business to you forever. Are you willing to accept this mission? Which of the following scenarios is most likely to generate referrals from your clients?
Of course, the answer is “all of the above” — but it’s N0. 5 that should stand out for you. Providing the best possible customer service will give your clients something to brag about with their circle of influence. When someone asks them about an agent to recommend, their experience with you will keep your name on the tip of their tongue. And what is the foundation of their generosity for spreading the good news about you? You established a relationship with them that brought your skills and their requirements together. A buyer needs to like you as a person, feel that you have interests in common and that you are a person who can be relied upon to be knowledgeable and experienced. At the same time, buyers need you to be patient enough to make sure that they understand the sales process and to keep them informed every step of the way. You need to provide a high level of customer service with each interaction, or you will lose their confidence and even a successful close will not repair the damage that you have done to your relationship with them. Here are the three steps to creating that level of confidence: Step 1: Prequalify the buyer This step is the most important step to complete, even if the buyer is a close friend or family member. Not having this information will lead to endless phone calls, emails and running around with no real goal in mind. Be sure to get the answers for:
Step 2: Meet in person Yes, we live in an online world full of instant messages, texts and email. This does not mitigate the fact that the buyer needs to work with you in person. With your goal of providing the highest level of customer service, meeting your buyer client in person isn’t that much of a leap to make. You will understand your client better and minimize the number of miscommunicated or entirely missed messages that could destroy your efforts in a heartbeat. Step 3: Research for their needs, not yours When the buyer has expressed their property requirements, it’s your job to ask the important questions and complete the due diligence. Then you can show them, as well as explain, the properties that meet or exceed what they want. A buyer’s confidence in their broker can be destroyed in a moment of inattention to detail if you show them properties that do not meet their criteria without stating a good reason why you are showing them the property. The research can be time-consuming, but by ignoring your preparation prior to the showing you will surely lose them. James Hussaini is the founder and president of Realty Point. Email James Hussaini. Read article in INMANBY JAMES HUSSAINI June 17, 2015To successfully get your next listing, and every listing after that, you need to have two primary steps as part of your strategy: listing preparation and listing presentation. Many brokers don’t prepare enough or take the time with the potential seller to fully pave the way to ensure they get the listing. If you are not ready, your close rate of getting the listing will not be impressive. By qualifying your knowledge and displaying your capabilities, the choice will be much easier for the seller, and they will agree that you’re the right person for the job. 1. Listing preparation You’ve received a call and someone is interested in having you list their property. While some brokers will rush out to sign the deal as fast as possible, a better plan is to prepare yourself properly with the information about the area. By creating the right information package, you will set a higher standard than others and better position yourself to sign the deal. There are three phases to your listing presentation. Phase 1: Deliver your information package Your information kit introduces yourself to the client, as well as details your qualifications. This introduction is important because should you make it to the listing presentation you won’t have to sell your experience and suitability again. Included in this package, besides your qualifications, should be your recent sold listings, your local real estate board’s housing report, feature sheets and your marketing plan. There are other items that you might want to include such as testimonials and other personal brand information that sets you apart. Ideally you will deliver this information package to the client’s home or workplace, so the client has it available to read through at their leisure and before your first meeting. I highly recommended that after you drop off the package you visit the property and tour the immediate area. Visiting the area is helpful so you have a visual of neighboring properties when you prepare your comparative market analysis (CMA) for your presentation. You should also include a personal note stating what time you will call them to go over the package and answer any immediate questions they have. Phase 2: Prequalify the client At the predetermined time (as your note stated in the information package), call the client and ask the questions that will help you to better understand the property, why they are selling, and other details that will make up part of your listing presentation. Additional questions you should ask are:
The most important question, which you need to ask and get a positive response for, is: “When we get together and what we discuss makes sense to you, will you be ready to sign the listing agreement?” Now you will set the time for the listing presentation appointment. Be certain to request that the seller has these documents on hand for the meeting: property survey, mortgage statement, tax bill and floor plan (if they have one). Phase 2: Prequalify the client At the predetermined time (as your note stated in the information package), call the client and ask the questions that will help you to better understand the property, why they are selling, and other details that will make up part of your listing presentation. Additional questions you should ask are:
The most important question, which you need to ask and get a positive response for, is: “When we get together and what we discuss makes sense to you, will you be ready to sign the listing agreement?” Now you will set the time for the listing presentation appointment. Be certain to request that the seller has these documents on hand for the meeting: property survey, mortgage statement, tax bill and floor plan (if they have one). Phase 3: Prepare yourself “To be prepared is half the victory,” Miguel de Cervantes said. You need to be ready, in a variety of ways, to win the confidence and the listing that the seller is offering. Be sure to have your toolkit that contains: clipboard for note-taking, calculator, tape measure, seller’s net sheet, prefilled-out listing agreement and your CMA. Also I’d recommend having a tip sheet for preparing the home for showings, a step-by-step guide on the process of property sales and a small gift to leave with them (notepad, pen, fridge magnet, calendar, etc.). About the CMA The most important item contained in the CMA is the period you use for comparative pricing. Too old and the data is unreliable; too new and market fluctuations are not accounted for properly. Be prudent on the side of cautious optimism with the pricing so the seller will be comfortable with your pricing suggestions. Also, take into account neighboring properties, give latitude to the seller’s particulars without skipping on the most important value-based points such as: condition, size, location, amenities, supply and financial options. By investing your time into a professionally prepared CMA, you will gain the client’s confidence in your abilities and their willingness to sign you as their broker. Remember to dress and act professionally. You want to impress the client not only with your qualifications, but your personal presentation, too. Dress appropriately, carry a briefcase and be prepared as if this were a high-paying job interview — because it is. Stay tuned tomorrow for “The right way to get the property listing: Part 2,” which will cover listing preparation, making your exit and beyond the listing. James Hussaini is the founder and president of Realty Point. Email James Hussaini. Read the article in INMANThe new rules of real estate team building: Part 2 - Throw the old schools of thought out the window5/19/2015 BY JAMES HUSSAINI May 19, 2015 Read “The new rules of real estate team building: Part 1.“ There are many real estate team-building models available to use as your framework. The model I propose is one that focuses on a “core membership” centered on collaboration. Ideally, the core member relationship should be structured upon a sense of ownership. You have to make your core members feel as though they are one of the owners — like they share the same destiny. A sense of ownership can become the primary motivator for your team members to take their performance to the next level. Initially, you will attract your core members and add new team members as your sales grow. Consider your core members as “department heads” for your team. In the beginning, each core member will be both in charge of their department and also responsible for handling the details and tasks of their department. Once the business grows, each department (core member) will recruit personnel accordingly. This structure will give core members the opportunity to advance their skills and talents by focusing on a particular aspect of your business. Growing your team, one member at a time In today’s age of absolute relevance for content marketing, the online marketer should be your first core member right at the inception of your brokerage. You can add additional core members as your business grows. Obviously, before adding any member to your team, you should have your office protocols and processes in place. Below is an explanation of growing your team in five phases: Phase I: The two core members you will need at the launch of your sales team are a real estate sales professional and an online marketer. In the beginning, in addition to sales, the real estate professional will handle general administrative tasks such as typing offers, listing agreements and so on. In addition to online marketing duties, the online marketer will handle customer service and retention responsibilities, as well as community content writing, as shown in the chart below: All marketing efforts should focus on community content writing and neighborhood promotion. You have to select an area to focus on and then prepare material and content to become the brokerage of the community eventually in the long term. After selecting a particular “farming area,” which can be a neighborhood or a group of people, you will research and write about community developments, events, sales, etc. There are a broad range of methods to establish your team in your targeted community. At the time of writing this article, search engine optimization and social media community engagement are the two most effective ways of establishing your brand and business reputation online. Phase II: Once your sales grow, one of the next members you want to add to your team is a “buyer specialist” because serving buyers occupies most of your time in phase one. This individual should enjoy dealing with people, in addition to excellent sales and communication skills. The key qualification for this position is having the patience for handling buyers’ inquiries and demands that can be overwhelming at times. If you are planning to grow the rest of your future “buyer specialists” under the command of this individual, in addition to the above skills, he or she should have leadership qualities. Phase III: At this stage, your sales are keeping you entirely occupied, and you would prefer to hand over paperwork details to an administrator. Your time is more valuable than what you will be paying an administrator. This individual should be detail-oriented and trustworthy because they will be handling your paperwork and general office administration. In addition to the paperwork, your administrator will take over the responsibilities of “customer service” and “customer connection” from the list of duties of the online marketer, as he/she might also be overwhelmed by this point. Keep in mind that “customer service” is offering a high quality of personalized service to your clients during the transaction, and “customer connection” is staying connected with clients after the transaction. There are ample opportunities for this customer service and customer connection person to serve your clients between the time the relationship starts and a deal closes. But more importantly this individual will focus on keeping in touch with clients long after closing through online and offline efforts to help build your client list and referral network. Phase IV: Perhaps, at this point in your business, the broker of record might want to divide his or her attention in attracting talent to the team. Therefore, you need to recruit a “seller specialist” to handle the listings. This individual is perhaps the most important person on your team, as his or her name will be used and branded on your brokerage listings. Therefore, it might be better to consider to make him or her part of the ownership within your business structure. Should you decide to add to your team a seller specialist to lead your “listing sales team,” additional skills are to be considered for this position. The most important responsibility of the “seller specialist leader” is to generate sales initiatives, systems, methodologies and sales training. Only by improving your seller specialist sales skills you can add to your bottom line. Maximizing your team’s potential through training and coaching is a priority throughout this phase. Phase V: You have to remember that in the long run attracting top-producing talent is the best way to grow your business. One of the primary stakeholders in your team has to focus entirely on salesperson recruiting and community relationship building. Your business has to participate, and even sponsor, at the community level to nurture and build your brokerage reputation and brand. This individual can be the broker of record, one of the stakeholders, or you might recruit a new team member depending on following talents and skills: 1. Talent recruiter (human resources) The most crucial issue for the success of your team is to attract sales talent. The talent recruiter will focus on attracting the best talent in the industry to your team. This person should enjoy social networking and meetings. Of course, your marketing person or department will assist in the process of recruitment by connecting with individuals through online communities and platforms. 2. Community connection liaison As mentioned earlier, your team should focus on a particular neighborhood. The main mandate of this position is to build your team’s image in the community through community engagement and involvement. The liaison focuses on keeping up-to-date with the latest developments and amenities. Your team will try to bond with the community and participate in events as much as possible. The most important aspect of this responsibility is to write consistently about the community and promote this information online through your blog, social media groups, etc. Boutique brokerage team model As you can see throughout this process, we now have multiple stakeholders, and everyone involved works as a team with one goal. Therefore, you might choose to promote your primary stakeholders to partner in your brokerage. There are different structures that you can select for your partnership but you, as the owner of the brokerage, should remain the decision-maker. Remember that this team building model is not about an individual’s image or brand but rather your brokerage’s brand and reputation. Therefore, instead of promoting an individual as the brokerage representative, your brokerage name becomes established within a community. This is a new way to bring corporate-style branding to your real estate brokerage, which adds to your credibility. You have to remember that this is also the best way to transfer your business to the next generation and have a legacy to leave behind as it is challenging to transfer an individual’s image to another. Depending on the management and leadership of individuals that built the business, the image and brand of a brokerage can be alive forever. Whichever method you use to attract your team members, you have to have an accountability system” in place, otherwise, your brokerage will not perform to its highest potential. Eventually your brokerage structure might look as below: The progression from being the only salesperson in your boutique brokerage to having a full sales team in place, as shown in the five phases above, can confidently begin with the position of “marketer” being your first hire. As your sales grow, you will be hiring for the additional positions and specialized talent needed for your sales team. Over time, by hiring the best people you can, your brokerage will grow and create the business you envisioned from the start. Read “The new rules of real estate team building: Part 1.“ James Hussaini is the founder and president of Realty Point. Email James Hussaini. Read the article in INMANBY JAMES HUSSAINI April 27, 2015 In this article, I will lay the foundation of the “new brokerage model,” which takes away many of the fears, enumerated later, that traditionally go along with starting your own brokerage thanks to technology, outsourcing and shared space. I would like to disclose outright that even though you can outsource most details of operating a brokerage, all of the final responsibility belongs to the “Broker of Record.” Top performing real estate brokers have been dreaming of having the business benefits of both worlds. On one hand, they want to “own” their own business and on the other hand they do not want to “own” the operational headache of a real estate brokerage. Now it’s possible to have your cake and eat it, too. The “new brokerage model” makes it possible for top producers to transform from a “salesperson” to a “business person.” This opportunity is made possible by the latest advancements in technology and behavioral changes both in consumers and real estate professionals. We are all marching toward conserving what we have by sharing our resources. The trend is that the business owner doesn’t have to do everything himself or herself. One can outsource different aspects of a business. A real estate brokerage is no exception to this trend. This new business model will give the owner of the brokerage a greater opportunity to focus on the sales side of the business. As an example some businesses outsource their marketing efforts while others outsource their administrative responsibilities. In the real estate industry the administration side of the brokerage is the most time-consuming and tedious work that every broker/owner prefers to hand over to someone else. Administrative tasks prevent the brokerage owner from generating revenue. Instead of focusing on sales, recruiting and training, the broker is caught up with administrative hassles. As per the Real Estate and Business Brokers Act (REBBA 2002), the Broker of Record is the signing authority and responsible for all aspects of conducting the business of the real estate brokerage in Ontario. Having said that, the Broker of Record should always read and review before adding their signature to brokerage paperwork even if the services are completed in-house by brokerage staff. The responsibility doesn’t go away when done in-house by someone other than the Broker of Record. The final authority is one and the same. It goes without saying that whoever takes the responsibility of handling your administrative paperwork should be qualified for the task. A wide range of brokerage services can be outsourced, but the ones that occupy most of the resources and are the most tedious tasks are: 1. Deal with administration In order to bring a deal to the closing table, there is a lot of coordination and paperwork that goes on behind the scene. A ton of details and paperwork are exchanged between the brokerage and interested parties such as lawyers, lenders, insurance brokers, etc. Your time, as a top performing real estate professional, is worth way more than handling these tedious tasks. And if you hire someone to do it for you, you will still need to supervise that individual. But more importantly, it might not be financially feasible to hire an individual to coordinate and close your deals in a boutique brokerage. The ideal option for you might be to outsource this service and let someone else take care of this headache for you. 2. Accounts management In order to protect the interest of all parties involved in a real estate transaction, REBBA 2002, for very right reasons, is the legislation that has strict parameters for brokerages to conduct their business and is overseen by The Real Estate Council of Ontario (RECO). The main mandate of RECO is the protection of the consumer through a fair, safe and informed marketplace, and all brokerages are obligated to adhere to the requirements legislated by REBBA 2002. Naturally, these rules and regulations generate a vast amount of checks and balances which leads to a copious amount of detailed record keeping. There are compliance regulations about how funds are disbursed and how documents are filed and managed. Each and every detail has to be adhered to as per RECO regulations. These details can be extremely time-consuming, require a lot of attention and plenty of patience to fulfill the requirements. For example, every brokerage is required to reconcile all accounts (trust, commission, general) each and every month. This duty is a tedious process. Even if you utilize some of the latest software available, it still needs an individual to reconcile each item of the transaction. There are many other operating tasks that are going to fully occupy your precious time. You are better off to hand-over this responsibility to someone else who is capable. 3. Receptionist services It is part of the real estate brokerage business norm to be open for long hours during the weekdays and weekends. One of the tasks that is required to be taken care of is handling calls and arranging showings. Like any other task in a real estate brokerage, there are many details behind the scene such as showing instructions, appointment confirmations, broker paging and handling all sorts of client and broker inquiries coming to the brokerage. In addition, any communication such as fax, email, mail, etc., needs to be handled accordingly and promptly. Technology has made it possible to be mobile, and you might be able to handle your reception services from anywhere, but not having a receptionist in a reception area might reflect poorly on your image. Not having a receptionist in place could negatively impact your brokerage reputation. Although hiring a receptionist should be a must for a brokerage, it might not be a financially feasible option for everyone. This is where the new brokerage model comes in, and you can have access to the services of a receptionist. It is much more cost-effective and headache free. More importantly let someone else be responsible for hiring, firing and monitoring the staff. 4. Shared office space One of the main obstacles of opening a real estate brokerage is the cost of office space and interior furnishings required for a real estate business. The initial setup cost could easily get into the tens of thousands of dollars which is a sizeable risk even for top producers. More importantly, the commitment of paying office rent each month is an obligation in which most top producers prefer not to partake. Therefore, some brokers choose to work out of their home, which can tarnish their image and others do not dare to establish their own real estate brokerage for this very reason. The new brokerage model proposes to open your brokerage in a shared office environment where it is a move-in ready space. All furniture, interior design, printing equipment, internet, phone systems, etc., is in place for you. All a broker has to do is just move-in. The risk on the brokerage owner is much lower as there is no significant upfront cost, and further because it is a shared resource, the cost of monthly rent is very low compared to independent office space with a long-term leasing commitment. Predictability and stability for you All the above four points of the new brokerage model create stability for your business. The biggest challenge for a business owner is unpredictability. On one hand, the expenses such as phone bills, internet bill, utility bills, office supplies, etc., can fluctuate greatly and unexpectedly. On the other hand, handling staff schedules can be unpredictable and aggravating. Sometimes there is no staff showing up while other times they might quit without notice. As the owner of the business, you have to fill in the position which could be very daunting and costly for you. It can take you away from prior important commitments. The unpredictability of business is one of the other main reasons that brokers do not dare to step out, take action and open their own brokerage. By opening your brokerage with a shared resource model, not only does it fix your monthly operating expenses at a very low amount but also gives you confidence that someone else is taking care of making sure that everything is functioning properly. Develop your business? By taking charge of administrative hassles, you are getting yourself dirty with day-to-day operations of the business. You are not opening your own brokerage to take you away from your business. The least is that you don’t want your business to decrease. By getting involved with the daily operation of brokerage administration it is more than likely that your revenue will suffer badly. Even if a portion of your focus is shifted toward administration, the details of paperwork takes you down with it. Once your focus is shifted, even if there is time left in your day, you cannot bring your focus back on business development. You are worth way more than handling administrative hassles when compared to income potential. Once you decide to hand the administrative hassles to someone else, you now have to choose one of the two paths you want to follow: either to focus on your sales or develop your own team and focus on managing your team. Of course, you can do both at the same time, but it might not produce optimal outcomes for you. Just imagine a world where you don’t have to worry about the paperwork, and you can simply walk into your office and either prospect for new deals or work with your team members to expand your business. Step forward and be an owner Top producing real estate professionals have always preferred to establish something of their own for many different reasons. Some might want to leave a legacy behind while for others it makes perfect business sense. In the past, there were obstacles for an individual to open their own brokerage ranging from initial hefty setup cost to high monthly payment commitments. The broker is responsible for monthly payments whether their brokerage makes money or not. It is a risk that a lot of people are not willing to take, especially if they feel comfortable in their current employment. The new brokerage model takes away all these worries. There is minimal initial upfront cost as there is no office leasing involved. More importantly, there is no significant monthly operating expenses as almost all aspects of running a brokerage business is shared. Further, even staffing is handled by a third-party, which leaves a lot of room for the brokerage owner to focus on the developing their business. The beauty of operating out of a shared resource brokerage centre is that a brokerage can expand at any time it wants. Therefore, this new brokerage model offers the best of both worlds; making you an “owner” with no hassles and commitments and providing exceptional room for business growth and expansion. So go ahead, leverage your resources and take advantage of this new brokerage model. James Hussaini is the founder and president of Realty Point. Email James Hussaini. Read the article in INMANBY JAMES HUSSAINI April 16, 2015The debate between the value of working under the umbrella of a big-name brokerage and opening your own brokerage under a “boutique” name goes back as far as when the first broker negotiated a plot of land for two sheep and a goat. The broker then took home wool and goat milk as the commission. Your brokerage’s name versus your success On one hand, the brand recognition value of a large real estate franchise cannot be understated. You have immediate recognition as a real estate professional when you use the name of the franchise brokerage, whereas the boutique brokerage name might not have that type of distinctiveness about it. Of course, individual effort and accountability factors are often overshadowed when tied to the name brand. The advantage of professionalism and success is more on the side of the boutique brokerage owner and entrepreneur and the reputation he or she has built. In Ontario and many other locales, a real estate salesperson starts a career at a brokerage. They must be employed for a minimum of two years prior to being eligible to take the “real estate broker course.” Upon successful completion, they become a registered broker and can open their own brokerage to become the “Broker of Record.” In real estate, your expertise is learned under the wing of someone that has walked the same path. Yet, they have achieved what many real estate professionals do not aspire to, which is owning their brokerage. Earned, not given Remember, an individual’s success is earned — not handed to them. Client leads through the brokerage office are not arriving on your desk fast and furiously. You must network, meet and greet, market and push your individual identity to become a reputable broker. Every contact is a potential client, if not today or tomorrow, then maybe years down the road. Referrals are based on your initiative and connectedness, not by virtue of someone else’s name. Often real estate salespeople shift from one brokerage to another because of lack of sales training, nonexistent support through challenging times and unfulfilled promises of leads being provided while monthly brokerage fees increase. Changing brokerages and maintaining your sales volume is a good indication that it’s your sales ability and work ethic that provide the foundation for your success, not your brokerage’s name. You understand what works for you and try to find the right employment to ensure that what you need to continue your success is available to you. Brokerage alternatives As you seek out alternatives to your current brokerage, you might ask yourself:
Shifting from brokerage to brokerage seeking long-term sales success might not be in your best interest. At some point in their career, every real estate professional must answer the question (if not to others, then certainly to themselves), “Do I have what it takes to own a real estate brokerage?” It’s easy to find the answer, just look at your past income statements. If you’re paying too much tax compared to other professions with comparable incomes (your accountant can help you with that answer), then yes — your sales are established and your income needs protecting from the tax man. Franchise or boutique? The next answer you need is whether to open a franchise brokerage or a boutique brokerage. The benefits of each are varied but almost always start with two questions:
With these answers the undertaking of moving to a different brokerage, and maybe even opening your own brokerage, will become crystal clear. You are now starting the journey to becoming a true entrepreneur by adding business owner to your list of real estate achievements. James Hussaini is the founder and president of Realty Point. Email James Hussaini. Read the article in INMAN |
AuthorBelieving education is power and has the ability to generate wealth – Jamshid has made a commitment to sharing his knowledge and expertise in the real estate. Categories
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