Idea woman image via Shutterstock.
Editor’s note: This is the third of a four-part series on a new model for real estate brokerages, in which brokers would invest in their agents. Read Part 1 and Part 2. Renwick Congdon will explore his vision at Real Estate Connect San Francisco, during a Thursday, July 11 panel discussion, “Broker as Investor: Tearing Down the Old Broker/Agent Relationship.” Also participating in the panel will be Kevin Lisota, CEO, findwell; Debbie Lewandowski, director, First Team Estates; and Brian Boero, partner, 1000watt (@1000wattbrian).
Twice a year, for the Imprev Thought Leader Survey, we poll top real estate executives about their most pressing business challenges. The results consistently show how deeply the industry’s fate is tied to recruiting.
This year was no exception as many brokers suggested that our industry is facing a talent crisis: Top brokers tell us they are just not seeing the depth of quality talent that is needed to maintain, much less grow, the industry.
The truth is real estate’s existing structure discourages entry by some of the brightest minds.
Take Jessica Bishop, for example. After owning and operating her own Seattle-area house painting business for a dozen years, she closed it last October. Since then she’s been considering a number of career options, including real estate. She has even been taking online classes to learn more.
“Real estate has been high on my list, and I’ve had a lot of people tell me that with my business background, I would be very good at it,” she said. “And I am good at selling.”
But will she actually go ahead with it? She harbors doubts, including her feeling that the barrier to entry for real estate is just too low.
“Without sounding like a snob, it’s sort of like, well, anyone can do this,” she said. She wants to tackle a field that would court her for her experience.
Then there’s the state law that would require her to work for two years under a broker before becoming one herself — “an apprentice thing,” as she put it.
Bishop, 35, believes she’s a little beyond that apprentice stage.
“One of the things I don’t like about the idea of being just a real estate agent is, I am capable of running a large organization,” she said. “(In her previous business) we would sometimes have over 300 employees.
“We were very sophisticated for a smaller business,” she said. “We were doing $2.5 million in net revenue during the last five or six years. We had a lot of workers to keep track of. I’m capable of building a team of people, handling payroll and a lot of other things.”
She relishes the idea of a business that would use her team-building skills, but the “lone wolf” structure that’s traditional among real estate agents seems to run counter to that, she said.
Bishop — an experienced, organized, business leader — is exactly the type of person who could build a substantial real estate business. She’s perfect for the LLC model in its purest form.
Real estate wouldn’t have a talent crisis if we offered a model that appealed to the young entrepreneurs like Bishop.
That’s not to say that the LLC model I’ve shared previously (Part 2) is the only way to attract the Bishops of the world.
We’ll know we’ve been successful when a future Imprev Thought Leader Survey shows the recruiting issue at the bottom of real estate’s “business challenges” list.
Friday, Part 4 will explore how one real estate firm is looking at the LLC model in another way to solve a different business problem.
Renwick Congdon is CEO of Seattle-area based Imprev Inc., a marketing technologies company he founded in 2000. A serial innovator and entrepreneur, Congdon serves on the board of directors of the Seattle chapter of Entrepreneurs Organization, a network of more than 8,000 business owners in 40 countries.