Who doesn’t like a bonus?
In the competitive market of Oahu in Hawaii, Coldwell Banker Pacific Properties has been offering selected competing agents generous incentives to jump ship.
For one agent at Hawaii Life, it was too much to resist. After some recent to-ing and fro-ing, he decided to take the money and move brokerages.
Jumping ship
Matt Beall
Hawaii Life’s principal owner/broker, Matt Beall, said that the principal broker at the Coldwell Banker Pacific Properties office in Kapolei, Oahu — which is corporate-owned — had made multiple offers to his agents recently, and the agent tempted away was given an incentive believed to be around $45,000.
“He said he declined them twice and the check kept getting bigger,” said Beall.
Beall said the agent, who has now signed off from Hawaii Life, had a sales volume of around $6 million — slightly above average, although close to one third of the leads for these deals were provided by the company. He had been with Hawaii Life for around a year.
He added: “It would be one thing if it were Compass trying to establish market share, but Coldwell Banker is the largest in the state by agent count, so it’s a curious decision.”
Coldwell Banker Pacific Properties has 450 agents across Hawaii’s main markets and is the largest in the state, the company confirmed.
Mike James, the president of Coldwell Banker Pacific Properties, who is also in charge of San Francisco Bay Area and Sacramento/Tahoe for Coldwell Banker, said in a statement to Inman: “In the real estate industry, it is a common practice for companies to encourage top-producing real estate professionals to affiliate with them by offering resources to help them gain prominence. Any discussion that takes place between an independent contractor and our company is a private matter.”
Russ Cofano, president and general counsel at eXp World Holdings, agreed that a signing bonus is common for top producers who move brokerages, though it’s less common for more moderate producers to be offered that type of compensation.
Every market is different, however, and the Hawaii property market is an expensive one, he added.
“But $45,000 for a mid-level producer is a pretty decent sum of money,” he said.
It is thought that Coldwell Banker Pacific Properties has had some attrition on Oahu, with agents being poached by other big brands in the last couple of years.
Hawaii is a hyper-local market, and to have a leader who isn’t based in Hawaii might have had an impact, said Beall.
Realogy flagged its aggressive recruiting at Q3 results
In its Q3 results announced in November, Realogy partly blamed lower-than-expected results on poaching by others in the industry, especially in NRT, which owns the Coldwell Banker Pacific Properties among other brokerages, when explaining a 1 percent earning decrease.
“While our third quarter results reflect continued pressure on NRT as expected, we have moved aggressively to improve the business and enhance NRT’s competitiveness with an infusion of talent and new growth initiatives,” Realogy chairman Richard A. Smith, said at the time.
The company would tolerate the near-term pressure in margins with the prospect of increased revenue in the long term, he said.
“Companies don’t do this so they can lose money, they do it with the expectation of profit,” added Cofano.
Beall’s understanding is his former agent has committed to being with Coldwell Banker for three years.
How does a brokerage respond to poaching of its people
Beall’s reaction to the recent aggressive recruiting campaign by its competition has been: “I’m going to compete on product, put my head down and build great stuff. It’s a different mindset; we are more than the sum of a bunch of people,” he said.
Hawaii Life had a $1.1 billion sales volume with 200 agents in 2016.
You handle other brokerages approaching your agents with attractive offers by doubling down, said Beall.
“We are about to launch a whole new website; we have a new merger, new leases; we are building a better product. For me, if my product is not good and I don’t do right by my agents, then they should leave,” he said.
“If he believes he is getting a benefit and it works for him, more power to him. There is no ill will,” he said.
He added: “Oahu is a very robust market, there’s plenty to go around.”
