By MATT BEALL
I’ve never run a professional sports organization, but from all the media obsession and scrutiny about it, it sure seems a lot like running a real estate brokerage.
Free agents. Prima donnas. Coaching. Trades. Salary caps. Talent attractions. Farm systems. Draft picks. Culture. Maybe I should be the new GM of the Dallas Cowboys.
Agents are usually independent contractors. They’re free to sign on with another organization for any reason. They have to like the culture of their team. They have to feel like it’s a winning team. They have to see value in what being on the team provides for their career. And they have to like their contract.
As owners, we all live with the reality that any of our talent could walk out the door at any minute. We have to perform.
Sure, in professional sports, salary caps are dictated by the league. But real estate brokerages have salary caps, too. You can’t just overpay everybody. There has to be enough revenue for the company. Commission splits, sliding scales, per-transaction models. These all come into play.
Ever see an agent join a new company and then, immediately after that, agents of that company promptly leave because they didn’t like the new hire? It happens all the time.
Just like professional sports, real estate has trade deadlines. For whatever reason, right around the end of the year, agents start to consider making a move. Maybe its just end-of-the-year planning, but it’s definitely a known thing, so much so that every brokerage’s recruitment efforts double at this time of the year.
Good leadership is hard to find. Whether you attract talent from the outside, or cultivate from within, it’s among the most challenging aspects of running any organization.
Real estate professionals seem to have an inherent distrust of business managers or leaders who haven’t sold real estate before. But when was the last time you saw Erik Spoelstra dunk or Bill Belichick throw a touchdown pass? There’s a big difference between drawing up the plays and being on the field. Good coaching wins championships.
Owners are often stuck in the constant inquiry of weighing the costs vs. the benefits of keeping a prima donna on their staff. It’s great to light up the scoreboard, but not always at the expense of wrecking the locker room and driving away other talent.
Remember when LeBron James was vetting different teams? Remember “The Decision”? All the celebrities chiming in, trying to convince LeBron to come to their hometown. The red carpet.
Owners of real estate companies go to extreme lengths to attract talent. We’d all love to think that people work with us because of how great we are. But the truth is that we bust our asses to attract talented agents, and to keep them.
Culture matters. And your organization has one whether you know it or not.
The San Francisco Giants have a culture. Fear the Beard. The Freak. The Panda. It’s exciting. It’s unique and different. It’s intriguing.
The New York Yankees have culture. They’re legendary. Clean cut. Pinstripes. Winners.
Chris Smith and Katie Lance conducted a very revealing poll of top real estate agents last year for Inman News. The No. 1 reason why an agent leaves one firm for another? Culture.
What’s your culture?
Draft picks and farm systems
There are some real estate companies who run real estate licensing schools, and then recruit the new licensees to their firm. They’re basically draft picks.
I’ve hired several agents who sold time shares, or interval ownerships, for big companies like Starwood, Marriott and Wyndham. They’re trained sales professionals. They’ve worked out great. I think of Starwood and Wyndham as my own personal farm system.
We also have a “referral brokerage,” designed for licensees who, for whatever reason, aren’t going to practice real estate full time. The referral brokerage isn’t a member of NAR or the MLS, so the expenses of being licensed are much lower. The agents commit to simply referring the business to Hawaii Life, as opposed to practicing real estate. I relate to it like the minor leagues. Sometimes we send somebody down to the minors. Sometimes we bring them up to the majors.
Let’s face it, the real estate industry isn’t getting any less complicated. Short sales, REOs, financing challenges … these all add complexity to the industry. Teamwork matters. Communication and collaboration between the ownership and the salespeople are integral to success.
If you’re a player on the field, don’t call your own plays in the huddle.
If you’re the GM, share the big picture. Make sure everyone’s enrolled in the direction of the team.
The only “I” in TEAM is in the A-hole.
And don’t forget, the game isn’t for you, it’s for the fans.
Matt Beall is the principal broker and owner of Hawaii Life Real Estate Brokers.