One mistake that new broker owners make is trying to be everything to all agents.
New brokerages should focus their recruiting efforts on one specific type of agent instead of casting a wide net out of fear. The best compensation plans and services are needed to keep them.
Effective Recruiting Starts With Your “Why”
Questions about which types of agents to recruit are common among new broker owners, to which the author always responds with advice to reframe the question. Instead of wondering which types of agents to recruit, the author suggests new broker owners ask themselves which types of agents their brokerage is most likely to attract.
The key to finding agents who will be interested in joining your brokerage is understanding your own brokerage’s mission, vision, and values. If you have not established these yet, you should do so before attempting to recruit anyone.
The Mission, Vision, and Values of your brokerage communicate to customers, employees, and potential agents why your brokerage exists and how it is different from the competition. This message is specifically designed to attract the agents who are aligned with your views and repel the agents who aren’t. You don’t want to waste your time with agents who don’t align with the vision of your company.
If you want to recruit agents that will stay with you, you need to know what services and compensation models they need to be successful.
How to Build a Brokerage With New, Newer & Low-producing Agents
I knew that the agents who were the most successful and had the most experience would be the most difficult to persuade to join my brokerage. You might be wondering who would be crazy enough to build a real estate brokerage with mostly inexperienced and low-producing agents. The answer is me. When I opened my real estate brokerage in Boulder, Colorado, I knew it would be challenging for an outsider like me to gain the trust of the producing agents in such a tight-knit community.
I didn’t have a large budget to pay producing agents, like Compass did. Instead, I had six years of experience coaching agents as Team Leader and BOLD Coach for Maps Coaching and Keller Williams.
My solution was to go out and recruit brand-new real estate licensees, and newer and low-producing agents who were struggling to get their career started. By doing this, I was able to grow my startup brokerage to over 40 agents in the first six months!
I proved to the Boulder real estate community that I could quickly guide even the most challenging group of agents to success in a hyper-competitive market like Boulder. This won me the trust of the established, higher-producing agents.Soon, we were attracting mid-level agents, then top producers and teams.
If your brokerage wants 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.
The 4 Services You Must Provide to Support New, Newer & Low-producing Agents
Newer and low-producing agents are more difficult to keep in production since they often lack the skills and discipline needed to be successful.
The goal of a brokerage should be to help new agents close a deal within their first 90 days. To do this, the brokerage must get the new agent into action quickly. The new agent needs to learn the business and generate leads at the same time. There are four services a brokerage must provide 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. I am fully aware that all of this can be online, but if COVID has taught us anything, it is that in-person education is better than virtual. Humans need human interaction, and I believe that 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, my brokerage handled their marketing for them. Each month, we mailed a postcard to their SOI. It was a simple postcard marketing one of the brokerage’s new listings. This provided more exposure for our listings and presented 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. I have 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. The method I used was to teach them about the different real estate lead generation strategies and guide them to pick one based on their Myers-Briggs personality type. This turned into the basis for my book, “16 Strategies for Sales.” Once they selected their lead generation strategy, I helped hold them accountable with weekly one-on-one accountability meetings. Even though this was a time-intensive approach, it is the most effective way that I’ve found to get new agents into production quickly.
Newer Agents Prefer a Low-risk Compensation Plan
(The original text can be found here: http://www.inman.com/2015/02/27/should-i-pay-to-be-a-realtor/ ) New real estate agents are concerned that the money they saved to start their careers will run out before they receive their first commission check. This is because there are many fees they must pay before they can start working. In the state of Colorado, where I live, the cost to get started in the real estate business, including education, membership in the National Association of Realtors, and errors and omissions insurance, can be more than $2,000.
If you want new agents to join your brokerage, you must reduce their fears by offering to pay for their licensing course. For example, I did this by offering to pay for the course after the new agent had closed two to four deals with the brokerage.
Many newer and less productive 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. A benefit of having newer licensees is that they are less likely to dismiss your brokerage simply because of a larger broker split.
If you’re looking to build a brokerage that charges transaction fees, I would recommend going after mid-level and higher agents. It’s not worth it to target new or low-producing agents, because it’s too costly and time-consuming to train them effectively.
Why You Should Recruit Mid-level Agents to Your Brokerage
Many recruiters and broker owners try to get top-producing agents, but the more reliable income for a brokerage comes from mid-level agents who do 10 to 20 transactions a year.
Compared to newer agents, mid-level agents require less time for one-on-one interactions and tend to be more consistent in their production. They are also less likely to leave your brokerage for another one than top producers are, since they aren’t as likely to be headhunted by other brokerages. Any brokerage that wants to be successful must have a plan to recruit and support mid-level agents.
The Services That Mid-level Agents Desire
Mid-level agents who sell 10-20 properties a year are doing well, but they usually don’t produce enough income to hire an assistant to handle their business marketing, listing marketing, and transaction management. So brokerages that offer these services can be appealing to mid-level agents. Providing the following services can help attract and support mid-level agents:
Developing a strategy
It is tempting to try to include too many different messages in marketing, rather than serving to inform clients. This can detract from the message the agent is trying to deliver.
Patla stresses the importance of agents appearing approachable in all aspects of their marketing. They should be knowledgeable about their market, but should not overwhelm potential customers with too much information.
Patla emphasizes the importance of relationships in real estate, noting that agents should be understanding and supportive given the high levels of stress associated with buying and selling homes. She asserts that advertising should reflect these same qualities.
Both @properties and Compass have a design team that agents can use to develop archetypes representing their ideal clientele. Marketing content that targets those archetypal personas is then developed, particularly through digital media.
The aesthetic touch
An agent’s personal brand should be able to quickly capture the attention of their target clientele. Potential clients may quickly judge whether an agent is right for them based on the look of their ads. The photos, color schemes and amount of text on an ad can all come together as part of a successful campaign.
Patla wants agents to think carefully about their branding, including what they stand for and who their target audience is.
“It’s important for agents to be aware of other brands, even down to the smallest details like font and color,” she says. “There are emotional reactions that can come from those choices. When you’re just starting out, it’s important to take the time to plan your marketing, so you can be prepared when the market changes. Your company probably has resources like templates and market information that you can use to create content.”
According to McKenna, agents who want to establish a personal brand should create mood boards that include images, colors, and fonts that reflect their individual style.
When You’re Ready to Recruit Top Producers & Teams
When recruiting top-producing agents and teams, you must be aware that their businesses already rely on their own processes, systems, and employees. This is unlike recruitment for mid-level or new agents, where you can be more flexible in what you offer.
Since they already have a good customer relationship management system, it may not be worth it for them to switch to a different brokerage that has a “top-of-the-line” CRM system.