Best Business Practices for Brokers, from leading Brokers

by THE WAV GROUP on July 30, 2008

The market is off.  How far off varies by market and niche.  Nevertheless, everyone is challenged – agents, brokers, franchisers, franchisees, and MLSs.  Here is a list of tangible ideas that may help you in your business today.  To sum up the recommendations – focus on enhancing agent quality rather then building the largest army.

According to some at the RIS CEO Exchange, we have gone from a volume of 7 Million transactions in 2005 to 5 Million transactions forecasted for 2008.  How should brokers respond to manage their companies effectively in this market?  Manage with urgency!

William Keleher, Broker/Owner of Prudential New Jersey Properties offered this list of key ideas for brokers in this time of market adjustment.
1.    Evaluate Under performing offices – either close them or merge them with other offices.  Gone are the days of one office per town.  Regional market centers are more effective.  If that is not an option, consider buying or merging with a competitor.
2.    Perform a line-by-line review of your P&L.  Ask yourself “If we had not done it, would we do it today?”
3.    Revise legacy compensation plans.
4.    Hold sales professionals accountable – specifically on number of appointments each week. (Per Brian Allen, Broker/Owner of Windermere Cronin & Caplan Realty Group – measure activities, not results).
5.    Drive capture rates in mortgage & title.
6.    Cut print advertising and increase online advertising.
7.    Before you make changes, do intensive research, have a formal plan, communicate the plan effectively and personally to everyone in your business, manage the timeliness and measure the impact.  Tell everyone every step of the way – for better or for worse.
8.    Don’t fire unproductive agents – change their access to service levels and bring compensation in line.  However, realize that the old grey mare may never win the Kentucky Derby.
9.    Manage top producing teams as separate business units and meet regularly to perform a P&L review.
Darren Kittleson of Keller Williams Realty added…
1.    Carefully consider what to do with agents who are unproductive and refuse coaching
2.    Focus on training to drive professionalism.  Darren quoted Gary Keller by saying “If things were tough at home, would you cut out education and accountability?
3.    Hire a productivity coach for agents doing fewer than four transactions per year and require them to attend sessions.
4.    Start a book club for top producers (top 20%) and get together to review the book quarterly – aka “The Starbucks Experience.”

Ken Baris, President of Jordan Baris, Inc.
1.    Innovate! – They support agents with a technology hotline, unlimited virtual tours, showcase listings at realtor.com, agent dashboard for leads, and company networking.
Dan Foresman, President & CEO Prudential Georgia
1.    Change Marketing with a sense of urgency from seller driven to buyer directed.

Conclusion:
Brokers exercising these ideas in their markets are seeing great results.  Profits are up 18%, numbers of agents are down 10% and markets have receded 28%.

 

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