- A team decides to make the move to become a brokerage for many reasons: life events, a series of small events or the desire to build a legacy.
- Teams who break off to form brokerages try to retain what they love about their team.
For others, a life event can be the trigger.
In the case of Washington, D.C., brokerage co-owner Hans Wydler, it was the Amtrak train derailment in Philadelphia in May 2015 — a traumatic event that left him badly concussed and physically affected for months after he experienced it.
“Steve and I had been talking about setting up own brokerage for years. This was the kick in the head that initiated serious conversations like: ‘What are we waiting for?’ Life is short,” said Hans.
12 months of Wydler Brothers
The Wydler brothers, Steve and Hans, started The Wydler Brothers brokerage on January 1 this year, bringing with them 20 agents and 10 specialists — almost the complete team they had at Long & Foster.
They had reason to be confident — in 2015, they did around $250 million production in the Maryland, Virginia and D.C. markets, and they expect this to be up by 25 to 30 percent by the end of 2016.
They now have 40 agents and counting at two main offices, and the plan is to get to between 75 and 100 agents in the next year or two — the emphasis on quality, not speed.
When they formed the brokerage, the brothers, known for their funny videos, tried to retain what they loved about their team.
“We wanted to form a brokerage that had aspects of a team, a collaborative environment, an open floor plan, no private offices. We have a lot of shared platforms, all the same CRM [customer relationship manager] — we really believe in tapping into shared intelligence of all the agents in our business,” said Steve.
In creating an independent brokerage, you get the chance to cherry-pick the elements of competitors you like. One of their competitors did profit-sharing, which the brothers do — though they think they do it better and more transparently. Some of the agents have invested in the business, too.
Training is a big priority in the new business. When a new agent joins, no matter how senior, they do an eight-week boot camp and are mentored through their first two transactions to make sure there is consistency.
In their own business, the Wydlers are encouraging teams, which they think is the future of real estate.
Said Steve: “We are happy for teams to form within the business — we have a lot of experience to help people do things intelligently; we will support our agents, challenge their assumptions, make sure they are sorting through all the different things to be successful.”
Ready to make the leap?
To those thinking of making the leap, the Wydler brothers advise team leaders to ask themselves why they think their team would work well as a brokerage.
Said Hans: “What are you trying to do? We wanted to build a beautiful company that treats people with passion and helps them through an important transition; it’s very clear for us. But if someone wants to sell, sell, sell and make a lot of money — don’t take on the burden.”
Added Steve: “Really think through what differentiates you from all the other brokers out there, why people would want to join you? If you can’t answer that, think again.
“It’s a lot of work and it can be very rewarding, but if you don’t know ‘the why’ then it can be waste of effort.”
The journey to lift-off for Path & Post Real Estate
While the Wydler brothers are almost a year down the track, Becky Babcock and Brad Nix from Path & Post Real Estate are just a week or two out from their departure from ERA Sunrise Realty in Atlanta.
They have set up shop around six miles away from their old office — their new independent brokerage serving the north Metro Atlanta communities of Cherokee, Cobb, North Fulton, Forsyth, Pickens and surrounding areas.
Like the Wydlers, they made the break very carefully, giving their brokerage plenty of notice — which is not necessarily the norm.
Path & Post was a distinct loss to ERA Real Estate. Last year it was the No. 1 sales associate team for ERA in the U.S., with 280 transactions, $66 million in volume and $1.86 million in gross commission income.
Babcock built the team over 13 years, and three years ago, Nix joined — they are business partners in the new venture: Babcock the CEO, Nix the COO.
They are confident in their team’s potential — its volume last year would have been in the top 25 percent of ERA brokerage offices anywhere in the country, so it stands to reason they can do well on their own.
When asked what triggered the move, Babcock said it wasn’t any one thing: “Like a snowball effect, we started realizing small things, such as the post-closing survey experience for our clients always came from Becky Babcock, not from the Path & Post Team. Then we’d notice confusion of our team brand and the franchise brand by customers in the market.”
They had ideas for enhancing client experiences and building their brand, and the move toward independence just began to make sense.
Bringing your team with you
The business-owners made sure that they broached the idea with the team before telling the brokerage in September, talking to them about the future they saw for good, local, independent brokerages.
The general response from the team was: “Why did you wait so long?”
When the news hit, the team members all used social media to get the word out.
“We empowered the whole team to participate — it was not just a brand, but people talking,” said Babcock. Team members had the ability to tag each other and mention each other in the news.
What are they looking forward to? Making their own decisions and having their own clear, vibrant marketing.
“We needed the freedom of an independent brokerage, without the inherent constraints of being co-branded with a corporate franchise,” said Babcock.
Doing things your own way
The two business partners have a way they like doing things and they can run their business exactly as they see fit, still collaborative and team-like, with support for agents when going on vacation, for instance.
Said Nix: “We have buyer specialists and seller specialists.”
These lines can get blurred in a brokerage, buyer agents having a few listings and listing agents having some buyers, which can cause confusion for clients, the pair argue.
Most importantly, they are looking forward to being a hyper-local brokerage with a personal touch.
“That first point of contact can now be customized,” said Nix. “From the beginning of the sign call to post-closing, it will be a very personalized approach that matches the team as well as the brokerage.”
Mark Spain on creating a saleable asset
Of course, one of the main reasons a team leader sets up their own business is because they want to build a saleable asset and create a legacy.
As former Keller Williams team leader, now chairman and CEO of Mark Spain Real Estate, Mark Spain confirms that this was his motivation when setting up on January 1 this year to serve the metro Atlanta and Athens areas.
When you are head of a team working for a large company, you are helping them build their brand — creating an asset for them, he argues.
“I loved my time at Keller Williams, but I was at a tipping point in my career. It was the next natural progression of success to be on my own, with my own brand, to create a business and a business model that was a saleable market asset,” he said.
The successful former agent, who grew up in an entrepreneurial family, said setting up his own brokerage has been easier than he thought it would be, possibly because of his background.
One of the things he emphasizes is dealing with issues as soon as they arise, and he has done this to good effect.
In 2016, the business has gone from 42 agents at the beginning of the year to 72, and while the Mark Spain Team did 1,275 transactions and $287 million last year at Keller Williams, this year, the company did 1,800 units and $360 million.
Having your own business you have to sell yourself
Describing himself as very much a “sales guy” at heart, rather than selling homes at his new business, Spain said he is “selling myself and my vision.
“It’s about creating something that is amazing, that has never done before — that’s what drives me,” he said.
At his brokerage he uses a team business model. His sales and marketing divisions are providing agents with not just leads, but also appointments, through radio, TV, billboards and yard signs, as well as word-of-mouth referral.
“They can do some of their own deals, but 95 percent is coming from my efforts,” said Spain, who has been in the market 21 years and is a second-generation real estate player.
Tips to team leaders ready to launch
Spain’s tip to team leaders thinking about making the move to independence is to ensure they have a good accounting system in place already, so they don’t have to worry about that when starting out.
The team-leader-turned-CEO should be able to understand finance, profit and loss, to track revenues and control expenses and have a structure in place to grow.
They would also do well to build up a good head of steam before launching out into the market, he added.
One of the strengths of a good brokerage owner is in recruiting the right people, he said. As Spain seeks to double in size in 2017 and expand out-of-state to Carolina and Florida, he is aiming for 3,500 transactions with 150 people.
He said: “Who succeeds are those who hire the best people — the people who are going to win are those who have the best people on the court.”
Spain is looking for people with customer service in their DNA — some might be people who have had some frustrations in their lives, and it has made them extremely determined.
“You can’t harness that sort of power; you’d better just get out of their way.”