My daughter had a monumental crisis on her hands this week. It seems that a certain feline we call Fluffy (and who, for the record, isn’t) had chewed through her iPod earphones again.

"Get me new ones!" my daughter wailed.

And in that moment, she’s like a real estate agent working in the ’90s.

Back in the ’90s, her broker would have immediately shoved aside everything he was doing at that moment, like gazing smugly at the production board or interviewing a new daughter, and dutifully rushed to give her what she needed.

Her broker today (that would be me) plays a new role.

"Here is the car, here are the keys, and Best Buy is that way," I said.

You see, if I am able to look beyond today, I know I can’t orchestrate her happiness or success, at least not in the long run. And I certainly can’t be her Girl Friday at the ready every time the music stops.

Ultimately, the best I can do is give her the tools that will allow her to accomplish her goals should she have the willingness and the desire. How, or even if, she chooses to use those tools is entirely up to her.

Ask not what your broker can do for you.

When I walked into my first brokerage in 1997, the broker was the textbook doting mother raising a very big bevy of codependent agents. I was met in the shiny lobby and shown to my dedicated cubicle. I was given my own land line connected to the very expensive phone system and my own intranet e-mail address connected to the very expensive company Web site.

My broker paid for pretty business cards embossed with the trusted logo that would guarantee my instant credibility, even though I wasn’t quite sure at this point what, exactly, "escrow" was.

I needed other stuff to ensure my success, of course. Computers? Check. Fax machines, copiers and a back room brimming with stationary and high-gloss promotional materials? Roger that. All that was missing was the work — oh, and a little matter of how to do the work. …CONTINUED

My husband and I refer to the agents of the ’90s as the little birdies, and they are still with us in great numbers today. Huddled in the cozy nest with mouths agape, they wait to be fed, when what they really need is a quick lesson on how to fly and a shove.

The problem is that we are now in the Information Age. And while our rules of connectivity, communication and commerce have changed, the traditional brokerages still defend the territory of their bigger trees. Instead of telling the agents to spread their wings, they keep trying to feed them.

When I was a little birdie, I jumped out of the nest before I had completed my "Two Weeks to Untold Riches" indoctrinating boot camp. I wasn’t so much enlightened as I was hungry. Regardless, I closed my first transaction before I had successfully located the lunch room. One of my first commission checks after splits was $600, and I was grateful. I didn’t know anything else.

Running a traditional brokerage costs money — a lot of it. In my office back then, the new agent gave a sizable chunk of her first three paychecks to the office "mentor," the person who ran the weekly meetings on role-playing and the fine points of bulk-mailing.

Half of the balance went to the brokerage, and brokers were having a field day. Most of us, they figured, had at least three transactions in us before it would become clear that we were better suited for the circus.

And, being new, our commission splits were the least generous. We were the French fries, those high-profit-margin extras, so new agent recruitment was synonymous with an awesome bottom line.

Somewhere along the way, agent commissions and brokerage costs reached a point of disconnect. The agents who survived their early years and learned to feed themselves started demanding higher splits, and I was one of them.

Our leverage was the threat of flying south to another tree. We became debt centers, but the brokerages liked having us around, considering us effective billboards in wooing the next new, high-margin flock into the nest.

Today, the traditional brokerage has become a little shop of horrors. A lot of agents who have grown accustomed to both the generous commission splits and all of the goodies are still yelling, "Feed me, Seymour." But the model is broken — at least if you define broken as unprofitable. So what’s a broker to do?

From my spot in the cheap seats, it looks like a lot of the old-guard brokerages are trying to "fix" it. Unfortunately, that is like me trying to fix my eight-track tape player. Modern times have rendered both functionally obsolete.

Our industry has been irreversibly changed by the Internet. It is no longer enough to fix the old machine; we need to retool the entire shop.

Downsizing, right-sizing or cutting back by any other name is a start, but it’s not enough. Reducing agents’ splits while pretending to honor the sacred cow by instituting a resource fee, administration fee or corporate marketing fee is not enough. …CONTINUED

It’s time to stop feeding the little birdies and teach them how to feed themselves. Some will starve. For those, starvation would have been the outcome in any case.

The key is in outsourcing. Most of the broker’s traditional roles have effectively been outsourced anyway, so embrace it. Instead of showing your new hires to a computer bank, tell them they will need their own.

Rather than trying to be a trainer, coach, technology provider, marketing department, and office supply warehouse, provide them in exchange for their license a thumb drive with links to all of the resources they could ever need to start and grow a business.

It will cost you about five bucks, and you can imprint your familiar logo on the side.

My agents know that they can choose from two dozen classes a month offered by our member association on everything from contracts to computers to marketing. There are enough seminars, webinars, coaches and "bar camps" to go around.

I don’t provide the agents with glossy brochures; I provide the file and tell them where they can order. I don’t teach them how to use social media or build a blog or manage their database; I outsource.

For every agent need, there are hundreds of people who specialize in that and only that. Each one would be delighted to help for a fee. Other information is free, and the agents just need to know where to find it, so I am their compass.

I can’t offer our agents a prescription for success any more than I can tell them what their favorite color should be, because they each bring different skill sets, personalities and talents to the table. And I won’t underwrite their business nor write their business plans in exchange for a bigger take because I respect them and their independence too much.

My job is to run the business side of the business, to manage risks, to ensure standards for conduct and competency, and to define and defend our culture. This approach won’t appeal to the agents who can’t or won’t feed themselves, but those are not the agents with whom we want to partner. Broker as day care provider is the old model, and it’s broken.

I don’t think the problems with the large brokerage models are fixable. It’s like we were all barreling down this road when we missed the directional detour sign. So now we have overshot. Continuing down this path, even with a few adjustments, may seem less painful, but it’s still taking us in the wrong direction.

Agents will keep asking what their brokers can do for them as long as the brokers allow. The irony is that by the brokers providing less, agents are forced to think, reason, innovate and ultimately feed themselves.

By providing less, everyone gets more.

Kris Berg is broker-owner of San Diego Castles Realty. She also writes a consumer-focused real estate blog, The San Diego Home Blog.


What’s your opinion? Leave your comments below or send a letter to the editor. To contact the writer, click the byline at the top of the story.

Show Comments Hide Comments


Sign up for Inman’s Morning Headlines
What you need to know to start your day with all the latest industry developments
Thank you for subscribing to Morning Headlines.
Back to top
Real estate news and analysis that gives you the inside track. Subscribe to Inman Select for 50% off.SUBSCRIBE NOW×
Log in
If you created your account with Google or Facebook
Don't have an account?
Forgot your password?
No Problem

Simply enter the email address you used to create your account and click "Reset Password". You will receive additional instructions via email.

Forgot your username? If so please contact customer support at (510) 658-9252

Password Reset Confirmation

Password Reset Instructions have been sent to

Subscribe to The Weekender
Get the week's leading headlines delivered straight to your inbox.
Top headlines from around the real estate industry. Breaking news as it happens.
15 stories covering tech, special reports, video and opinion.
Unique features from hacker profiles to portal watch and video interviews.
Unique features from hacker profiles to portal watch and video interviews.
It looks like you’re already a Select Member!
To subscribe to exclusive newsletters, visit your email preferences in the account settings.
Up-to-the-minute news and interviews in your inbox, ticket discounts for Inman events and more
1-Step CheckoutPay with a credit card
By continuing, you agree to Inman’s Terms of Use and Privacy Policy.

You will be charged . Your subscription will automatically renew for on . For more details on our payment terms and how to cancel, click here.

Interested in a group subscription?
Finish setting up your subscription