NEW YORK — “It’s the race to zero margins,” said Brad Inman while moderating a brokerage panel at CEO Connect.
The room chuckled; after a year chock-ablock with brokerage mergers and acquisitions, the leaders present were well aware that there is change afoot.
Pick a direction
However, the reasons for those deals should be examined, pointed out Dottie Herman, the CEO at Douglas Elliman Real Estate. Technology can only go so far, she noted — and it won’t help an agent who can’t sell.
“Someone who’s on top of the market — I don’t think that it’s one thing,” she added. “You can have a great culture and they love you, but you also need to have technology and help people see.
Pick a direction and change it when you have to, she added.
Know who you are
Pam Liebman, CEO of Corcoran Real Estate, believes that it’s really important to know who you are.
“Define yourself,” she tells agents who want to level up their game.
“As companies, we need to decide who are we? You can’t just see the shiny penny that comes along and go, ‘Oh, I’m going to be them, I’m going to be them.'”
The culture at Corcoran is what makes it successful, she said. “The entitlement is crazy, and millennials need to be dealt with differently.
“Who are we at Corcoran? What do we want to offer our agents? We’re not going to pay you the most, but we’ll give you the most, and you’ll have the most opportunity to reach your highest production.”
Diane Ramirez, CEO at Halstead Property, agreed that culture is extremely important. “As you grow, it becomes exceedingly difficult.”
And she doesn’t think flat organizations work. “The agents want to know there’s a leader at the helm, and they also want to have a connection with the leader.” She cautioned that too much separation could be damaging.
Every office sees Ramirez at sales meetings, she said — at least quarterly — and she makes an effort to know all her agents’ names. She sends over goodie bags and meets with the new agents, shooting them personal emails during their first days at the company, so that they feel “known” by their leader.
“You must show up,” she said, “but along with that, they’re looking for the technology.”
The TV factor
Herman talked about letting one of her agents go on Million Dollar Listing when it first broke out. “I can’t tell you how many emails I get” about the show, she said.
“In certain ways, all of the glamour and hype of these Million Dollar Listings has kind of given the industry a different feel,” she argued. “It attracts the most talented people, and it is one of the few places that if you really want to put into it and grow, you can make a ton of money and be in your own business.”
Losing agents to teams
Edward Berenbaum discussed the culture at Century 21 Redwood Realty (where he’s president). “There isn’t any company platform out there that will get even a 70-30 out of a top producer,” he noted. “To get the right talent, we’re going to have to lose that battle as far as the individual agent splits for top producers,” noting that C21 Redwood uses a cap system.
“What’s really hot right now is teams,” he added. “We’ll try to recruit some good, younger talent, and we’ll lose them to a team because they like the structure they get from the team.”
The solution? Berenbaum said he tries to give agents the ability to compete with a team.
What’s happening to margins?
“Margins are definitely shrinking and the correlation is agent power,” said Ramirez. “I think it has to do with recruiting and the new models coming in. They’re being sought-after.”
Margins aren’t necessarily shrinking — Herman disagreed slightly — “but you have to do more deals,” Herman said. And 2017 will be a challenge, she added.
“What we’ve created is what we’ve created,” said Liebman. “It’s been created by the people in this room.
“Each person has to make their own decision; you have to look at your agents and decide,” she added.
“Expenses have gone up, and I think for almost everybody splits have gone up.
“I’m not a fan of the TV shows, as you know,” she concluded. “What it created was this broker-as-a-celebrity culture, and we have to explain to them that they are not the story. The property and the clients are the story.”