In this monthly column, Anthony Askowitz explores a hypothetical Miami real estate situation from both sides of the broker/agent dynamic.
This month’s situation: An experienced agent (who joined a new office this year) is used to the traditional annual review process and has concerns about a new approach.
Agent perspective
While I did leave my former office this year, one thing I did appreciate was the way they handled annual reviews. It was a very formal process that carefully analyzed my numbers and demonstrated my value and efficiency.
I know I work hard and smart, so this format worked for me.
My less-productive and less-experienced colleagues, however, always dreaded it — they felt like the broker used their review as an excuse to reduce their current commission split (because they did not attain a certain production level), forcing them to start the new year at a lower amount.
This did happen to me once early in my career, and although I didn’t like it, I could certainly understand the reasoning.
Here at my new office, they take a more progressive approach with reviews, focusing more on goals.
I’m curious about how this works, but I’m also suspicious…this feels a little “touchy-feely” for a veteran like me, and I actually do want my production data to be taken into account.
Will this modern process really show my value and help me improve next year?
Broker perspective
With so many dramatic changes to our industry in recent years, I am not a big fan of the traditional annual review.
In my opinion, it has become a necessary evil that both the agent and broker feel like they must endure — like going to the dentist.
How does that really help? Whom does that really serve?
Most real estate companies will rationalize the annual review process by pointing out that each agent is supposed to generate a certain amount of money to maintain the office. (So, in theory, the company’s cut of the split pays for the agent’s share of this maintenance.)
I agree with my agent’s former colleagues on this point: many firms do use reviews to justify cutting the agent’s split. (In some offices, the agents have automatic restarts every year.)
I find this antiquated process very sad and degrading; it puts the entire burden of an agent’s failure or success solely on them, and only they face the consequences.
What if the market has been horrendous? What if the broker has been doing a poor job?
Furthermore, agents already know when they have had a challenging year, and more often than not, they know very well the reasons why. The current format of reviews focuses much more on the past, without addressing the future. (A little like a doctor who only fixes the symptom, instead of the root cause.)
While I do think an annual meeting is useful (even necessary) for keeping everyone on the same page, I believe there is a better way to serve our mutual interest.
How to meet halfway
While the concept of annual reviews continues to make sense for effective real estate companies, the practice itself can use some tinkering.
One effective method is to make the meeting more of a “PREview” instead of a “REview,” focusing less on the agents’ production data and more on their goals, values, strengths and weaknesses.
For example, questions such as “what results do you want to achieve?”, “what keeps you on track?” and “list five of your time-wasters and excuses” are more likely to generate an open and honest discussion than specific questions about sales that did or did not go through seven months ago.
In addition, questions about goals for the next 12 months (and even the next five years) go a long way toward establishing mutual understanding, trust and belief in a long-term relationship between both parties.
Anthony is the broker-owner of RE/MAX Advance Realty in South Miami and Kendall, leading the activities of more than 165 agents. He is also a working Realtor who sells more than 150 homes a year.