One of the biggest mistakes new broker-owners make is trying to accommodate all agents.
Many new brokerages make the mistake of hiring too many different types of agents out of fear of competing with bigger franchises. However, this usually ends up causing problems because they can’t actually support all the agents they’ve recruited. A more strategic approach would be to focus on recruiting one specific type of agent, which would allow the brokerage to sustainably scale its business. The best compensation plans and services for this type of agent would also need to be taken into account.
Effective Recruiting Starts With Your “Why”
This is a common question among new broker owners, asking which types of agents they should recruit. However, the answer is that they should ask themselves which types of agents their brokerage is most likely to attract.
Before you start recruiting for your brokerage, you need to think about why you decided to create it in the first place. Your Mission, Vision, and Values will help you determine which agents will be attracted to your business. If you haven’t created your MVV yet, learn more about that in our blog, How to Start a Real Estate Brokerage (Without Going Broke).
Your brokerage’s Mission, Vision, and Values tell your customers, employees, and potential agents why your brokerage exists and how it is different from the competition. This message is made to attract agents who agree with your views and discourage agents who don’t from applying. You don’t want to spend your time with agents who don’t see eye-to-eye with the vision of your company, do you?
After determining which types of agents you want to attract, you need to ensure that the agents you do attract are compensated well and have access to the services they need to be successful.
How to Build a Brokerage With New, Newer & Low-producing Agents
Some people might think it is foolish to start a real estate brokerage consisting mostly of new, inexperienced agents. However, by recruiting and training brand-new real estate licensees and newer, low-producing agents who were struggling to get their careers started, your brokerage can grow rapidly.
Leveling Up
If you want to recruit more new or newer agents, you will need to consider what services you will need to provide each of them and the right compensation plan that will both appeal to them and support your brokerage.
You could earn a reputation in your real estate community for helping even the most challenging group of agents be successful quickly in a competitive market. This will gain you the trust of established and higher-producing agents. You can then reposition yourself to attract newer agents, then mid-level agents, and finally top producers and teams.
The 4 Services You Must Provide to Support New, Newer & Low-producing Agents
It is more difficult to get new, inexperienced agents to produce because they lack the skills and discipline required for success.
The goal is to help new agents close a deal within their first 90 days. To do this, they need to get into action quickly and learn the business while generating leads. There are four services that must be provided to support new agents.
- Structured training schedule: If new agents don’t have a solid understanding of what their job is and how their actions are helping customers, they won’t have the confidence to talk to people about buying or selling real estate. To get new, newer, and even low-producing agents producing commission income quickly, you must overcome these two challenges. First, you must quickly grow their real estate transactional knowledge. This includes each task related to working with buyers, sellers, and managing a pending transaction to close. The second is the chance for them to develop skills like showing homes, writing contracts, and giving presentations. You can provide this by creating a 12-week new agent training schedule that repeats each quarter. The benefits of a repeating schedule are that it allows agents to revisit classes as needed and new agents will feel comfortable knowing that your brokerage is willing to take the time to teach them how to be successful.
- Office or meeting space: More than any other type of agent, new, newer, and low-producers need personal interaction. This is done by having a comfortable place for them to come for the weekly training, monthly team meetings, and when they have a question or are facing a challenge. Despite all of this being available online in the COVID era, in-person education is better than virtual. Humans need human interaction, and newer agents will still prefer a physical office over a virtual office in the post-COVID future.
- Agent marketing plan: One of the greatest challenges for all agents is creating and managing an effective agent marketing plan. This is accentuated for agents who don’t have experience, listings, or a budget to market themselves to their sphere of influence (SOI). To solve this common challenge, your brokerage can handle their marketing for them. For instance, each month you can mail a postcard to their SOI marketing one of the brokerage’s new listings. This will provide more exposure for your listings and present the new agent as active in real estate to their friends and family.
- Leads, lead generation strategies, and accountability: Believe it or not, you can run a very profitable brokerage with only newer and low-producing agents. An example is a colleague who operates an independent split brokerage model, in which the brokerage receives up to 70% of the gross commission, and in 2019, his independent brokerage profited over a million dollars! With his unique business model, agents are happy to pay a higher split because in addition to standard brokerage services and agent training, they provide a steady flow of qualified leads so even a newer agent can produce one to two closings a month consistently. If you are not providing leads, then you must provide them with lead generation strategies so they can generate leads on their own.
Newer Agents Prefer a Low-risk Compensation Plan
New real estate agents are worried that the money they saved to start their career will run out before they get their first commission check. This is because there are many fees they must pay before they can start working, including the cost of real estate education, membership in the National Association of Realtors, and errors and omissions insurance. In the state of Colorado, the total cost of these can exceed $2,000.
If you want to attract new agents to your brokerage, you will need to address their fears. One way to do this is by offering to pay for their licensing course, or compensating them for their first two to four closings with the brokerage.
Many newer and lower-producing agents are attracted to split compensation models. This is because these models are less risky for the agent. They only have to pay fees when they have commission income from a closing. New licensees are less likely to dismiss your new brokerage simply because of a larger broker split.
If you’re looking to make money from transaction fees, you’re better off targeting experienced agents who produce a lot, rather than trying to train newer agents. It’s just too time-consuming and expensive to train new agents effectively.
How to Grow A Real Estate Brokerage: 5 Recommendations
Invest In The Right Tools and Resources
The days of a simple pen-and-paper list of prospects are gone. You should help agents to achieve their goals by giving them email marketing tips and the right technology tools.
Although it may be tempting to choose technology tools randomly, it is important to select software that will make lead generation and follow-up simpler. It is also important to know when to invest in people instead of investing in new things. Here are the best areas to concentrate your efforts:
Platform-Building Tools
Platform building means creating your own audience through marketing activities or tools. For example, you can build a platform by creating an email list or a list of SMS subscribers. Once users have joined your email list, you don’t need to rely on other platforms or strategies to reach your target audience.
At least one platform-building tool is necessary when attempting to grow a real estate brokerage as it allows you to communicate valuable information to subscribers when it would be most useful.
Using email and text messages to communicate with your supporters is more effective than paid marketing. Your competitors may be spending thousands of dollars on social media ads, but you can generate supporters who are more loyal.
If you want to increase your brokerage’s impact and reach, one way to do it is to start building an email list. Not only will this be beneficial for you, but it will also help out your agents. You can use a lead magnet to attract new email subscribers – this is a free resource that they can access once they give you their email address.
As you gain more subscribers, you can split them into groups based on shared characteristics. For example, you could have a segment for first-time homebuyers and another for people who have already bought a home. By sending relevant emails to each group, you can foster stronger relationships with both.
Superior Visuals and Graphics
It is essential for your brokerage to have top-tier visuals. Your brand graphics need to communicate that if you want your agents to reach modern-day consumers. It is important to consider how your current logo and graphics are perceived. If they appear to be traditional or old-fashioned, you may not be able to reach your desired target market.
It’s important to have an understanding of your business’s brand story and to be able to accurately convey it. This is especially true for visuals.
Some phrases and concepts that you may want your ideal customers to associate with your company are: quality, dependable, friendly, and informative. These are just a few examples, but share your ideas with your graphic designer to get their creative juices flowing and to come up with a design that truly represents your company.
Although it may not seem important, 74% of consumers say that a brand’s visuals play a role in whether or not they will make a purchase. This applies to real estate brands as well as other types of businesses.
Making Your Brokerage Mobile Accessible
The world is increasingly mobile and this trend is not going to reverse. Around half of all people who use the Internet do so through a mobile device, and this number is increasing every year.
Other brokerages are using mobile devices to create a customer experience focused on speed and convenience. You need to do the same in order to compete. This means streamlining the agent onboarding process and making it easier for homebuyers to find properties.
As of 2021, Millennials are the largest home-buying demographic in the United States, representing 37-38% of all buyers. This group is also one of the first to experience on-demand products and services through the Internet, and this will drive their buying preferences for years to come.
As many as 45% of homebuyers have purchased their new place without seeing it during the COVID-19 pandemic, which is a major shift from just a few years ago. This new trend presents opportunities for real estate leaders.
Work with your team members or hire a skilled developer to create a user-friendly website and mobile app for your agents. Home buyers and sellers should be able to easily find and contact your staff. The top-level navigation should be simple and easy to understand.
You should make it easy for potential clients to get in touch with one of your agents. If it takes too many steps to fill out a contact form or share information, you should change the process. The less time potential clients have to spend before they meet with an agent, the more your business will grow.
Hire Agents to Guide, Rather Than Manage
Internet access has allowed people to shop in new ways. Rather than going to physical stores, people can browse online. This shift has happened in nearly every industry. If your brokerage wants to stay relevant, it will need to adapt.
This means that your agents should take a consultative role rather than a top-down role. In other words, home buyers and sellers want to be guided through the process, rather than having someone manage the process for them.
How can you change your approach to selling? By teaching your team relationship-selling techniques. Questions that are open-ended, building trust with customers, and asking about what new customers want to achieve are all signs of a successful company.
This is the mindset that more and more homebuyers are in when they research the best time to sell or buy a house. They don’t want somebody who just tells them what to do – they want a professional with helpful insights.
As your agents gain more experience, they will learn how to better engage with new clients. The conversations between your agents and clients will become more natural as your agents learn how to direct clients to the listings that best fit their needs.
