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CONTACT WALTER

559 S. Washington Ave., Kankakee,IL 60901

P.815.929.9258 P.815.929.9200

walter@waltersanford.com

"Just wanted to say thank you for doing such a splendid job of delivering the “Meat and Potatoes” instead of a bunch of fluff. The feedback from everyone was assume. Everyone said they picked up an idea or two…which is exactly what we wanted. Thanks again." Shamiram Mazejy, Coldwell Banker – Clifton

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Are You Thinking about Opening Your Own Place? December 9th, 2013 | Posted in General Real Estate, Real Estate

Recently, I was asked to answer some questions regarding an agent opening their own brokerage.  Below are the questions with my responses, which have been taken from my personal experience and my experience with my clients.

 

Question One:

What are the telltale signs that a REALTOR® should break out on his/her own and start a brokerage? What are the typical tipping points in these situations?

Answer One:

Square footage!  When there is need to add to the team or add infrastructure/technology but there is no place to put it, it’s time to move out on your own.  A team that is separated loses synergy.  If the broker cannot or will not add square footage, the agent may be forced to get his own.

Another area is lead generation.  Some of the teams that I coach are so effective in generating leads that occasionally there is spill-over to other agents in the office and leads are lost.  A destination without in-house competition is sometimes the answer.

Compensation is another area to consider.  Sometimes top agents already supply the services for themselves.  When that top agent crunches the numbers and adds up the total costs of splits, fees, and franchise costs – many times they find that that amount of money can pay the monthly mortgage payment on a building.

Sometimes a broker’s vision and goals differ so much from the top agent’s that there is dissention within the office. 

You need a change of business plan.  Working the pure commission life is hard!  Sometimes agents want a different business model that allows income from splits and fees so that they can get away from the daily business of one-on-one sellers/buyers.

Finally, sometimes a different management style necessitates a move.  Maybe an agent wants to provide a heavier training regimen or hold agents accountable, and he or she might find that easier to implement in a different environment. 

 

Question Two:

What are the first few steps that a REALTOR® should take when the points discussed in #1 above actually happen?

Answer Two:

A.      Find a location

B.       Prepare a budget — looking at all costs and applying the knowledge of previous abilities to bring in income.

C.      Make a list of all the marketing materials, phones, internet, and image changes.

D.      Decide whether this is going to be a secret move vs. a well-advertised move.  This usually depends on the relationship between the broker/owner and the vacating agent.  It also heavily depends on whether the broker has a reputation of allowing a vacating agent to keep his or her listings. 

 

Question Three:

Where do REALTORS® generally go wrong in these situations? What challenges do they encounter and how can they work through these issues?

Answer Three:

Bad mouthing by either party is not the way to go!  The management of the previous brokerage bad-mouthing the leaving agent and the leaving agent bad-mouthing their previous affiliation will not help anyone.  There is no reason to do either.  It only hurts the image of either or both parties.  The brokerage should be proud that they could provide the foundation for an agent to open their own business.  The leaving agent should be thankful the experience gained at the old brokerage. 

If the broker supports your moving on, then full disclosure of the move is the best way to go.  Another item of contention is that the vacating agent should initially look to recruit new agents from other companies, rather than the one they are leaving. 

 

Question Four:

Do you find that REALTORS® tend to jump the gun in these situations and perhaps not think through what it really takes to run their own brokerage?

Answer Four:

No, since most of the great agents want to stretch their wings.  They were successful agents because their planning and coaching allowed them to move to the new endeavor.  If there was a problem, it would be underestimating the costs of having your own brokerage.

 

Question Five:

What other advice would you give a reader who is thinking about this right now?

Answer Five:

The concept of the broker trying to keep listings or charge higher splits during a transition time will cause innumerable problems.  Letting great people do their own thing is the gracious thing to do. 

I hope this helps you make the important decisions involving opening your own brokerage.  Doing so means you are opening a new type of business.  You will be taking much time away from personal production and the other challenges while trying to live off of other agents in your new office.  We have coached many top producers and their teams through this year long process.  Good luck in your planning!

 

Walter Sanford has been designing and implementing real estate systems for 30 years.  One of the most successful REALTORS® and now wealthy from his systems, Sanford teaches his systems and strategies through his products, seminars, and personal coaching producing the best results in the industry.  Do what works, do what is proven.  Hire Walter Sanford.  Call our office at 800.792.5837, email walter@waltersanford.com, or chat with us online at www.waltersanford.com.

How Do You Handle Office Misunderstandings? July 1st, 2009 | Posted in General Real Estate

Getting along in an office can be frustrating. You have so many considerations. Even though you may be right, you must consider the damage to the relationship you have with the other agent in the office, with your broker, and the other agents in the office. Don’t forget your client who might hear any negative news, too.

You need the people in your office to handle those incoming inquiries about your listings, send your buyers to you without any side trips, and tell your sellers that all is being handled efficiently. These other agents are ambassadors to your business while they have no stake in your business so you have to get along with each other!

Recently, one of my coaching clients had an amazing “discussion” with an agent in her office. The names have been changed to protect the guilty and innocent, but the circumstances are amazing.

How would you have handled this nightmare?

Suzie: “I cannot tell you how floored I was to see the commission split at closing. It certainly does not create good will from your fellow agents here at the office. You are quite right that you marked special conditions, but since no one else within the office had ever done this to me, I did not ask any questions. I would hope that you will reconsider this as I had no idea and feel that you should have made me aware, rather than surprise me.

It absolutely is my fault but I had no reason to think it would be anything but a 50/50 split. I turned the closing in and asked the secretaries if ANYONE else within our company did this, and they didn’t know of anyone else doing that. We should all strive to sell our company listings and getting a 50/50 split is the best part. I respect your professionalism and think you do a great job. I try to do a good job as well and it would be nice to be compensated equally.”

Mary: “I am sorry that you were surprised at the commission split. You did do a great job on this transaction, and I enjoyed working with you. When we came to this new company, this policy was explained to us in depth. We also have received Emails from the broker outlining the special conditions and how it works. My partner and I do use the special conditions in most of our listings. While we always try to offer a 2.4% commission, we do not always offer a 50/50 split. We do spend a great deal of money on advertising, assistants, and other services for our sellers. I did speak with our office manager, and she tells me that several agents do enter special conditions on their properties.

Again, I am sorry for the confusion. It was never my intent to be anything but upfront and honest by checking special conditions and making in house agents aware of the commission offered on this property.”

Suzie: “In explanation, I always hate to put personal info into it, but my son is very ill. He has cancer. He is going to a trial procedure in Utah where they remove all his bone marrow and stem cells, and basically kill him and hopefully bring him back to life. That is where the money was going from this transaction. He will be in ICU for 2-3 weeks and possible good results or death. It is a tough place to be as a parent. That is why this was so important to me. Just wanted you to know I wasn’t being greedy.

In case you don’t believe me, ask anybody that knows me. In this particular incidence, you did not have to spend any advertising dollars, brochures, etc. I again ask for your consideration this one time. Insurance does not participate in this trial.”

My suggested response from Mary: “So, where does this leave me? Bad business practitioner or a monster? Neither is acceptable or true. If you would graciously accept my effort to start an office fund for your son, I will put in the first $500 and distribute a pledge form to all the agents and management in this office for his help. If you would be so kind to outline more information about him, like his name, hobbies and accomplishments — I will draw up a cover letter and make a pledge form to submit it through the office this week, showing that I was stepping up with $500. Maybe we can exceed your expectations. Please let me know.”

I will let you all know how this ordeal ends. Being adept at handling office conflict can really make the environment a better place for all.



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