Brace yourselves. Winter is coming. Tis the season for: “Can we sit down for a cup of coffee and talk about your business?”
It’s head-hunting season in the real estate brokerage world. Agents are agonizing over the being inundated with broker recruiting calls, but we brokers know: it’s the only time of year that they actually listen to us.
Let’s talk about some industry hits and misses we’ve seen this recruiting season.
When pigs fly
When it comes to recruiting talk, nobody puts Robert Reffkin in a corner. The Compass CEO’s 2020 pledge: 20 percent market share, in the 20 biggest U.S. cities, by 2020. Similarly, Uber is pledging by 2020 to have driverless flying vehicles in action. A cranky old broker (like myself) might frame both as “When pigs fly.”
You have to love the confidence of the risk-takers at Compass, even if you don’t buy the pitch. Clearly the investors who continue to pour cash into the brokerage’s volume-at-any-cost business model do.
For Compass to make it rain in the 2020 club, it will need to become a dominant player in every major market, half of which the company doesn’t even have an office in yet, within two years. Cue a strange version of the real estate industry’s “tyranny of politeness,” where we smile and nod instead of saying what we’re all thinking.
Maybe it’s the gray, drizzly weather up here in my remote corner of the world fogging up my brain, but I was always under the impression that brokerage margins were slim, and this wasn’t a good business to pay huge premiums to acquire.
It will be fascinating to watch this spending spree unfold. The IPO can’t come fast enough.
Russ Cofano had a great breakdown last week on Realogy’s commitment to being an agent-centric franchisor. That’s a difficult task being so many steps removed from the agent, but the goal has to be creating a flexible framework within which brokers can focus on agents’ needs first and foremost.
A key takeaway from Cofano: “From my experience as a brokerage company executive with both a more traditional firm and one that is less so, the agent-experience with a firm starts with economics.”
Will the franchisor’s economic relationship with franchisees shift to accommodate this agent-centric push with financial flexibility?
No growing pains
One of the biggest recruiting hurdles is getting over “switching pain.” Changing tools, software systems, etc., can cause agent paralysis.
California Regional MLS is taking a page out of the agent recruiting playbook by removing some of those hurdles (full disclosure, I currently serve on its board).
It’s creating a system-of-choice where agents can choose to use CoreLogic’s Matrix, Black Knight’s Paragon (the two most widely-used MLS software platforms) and now W&R Studios’ Cloud MLX front end to access the MLS database as member benefits.
Three choices for interfacing with MLS data, fewer agent onboarding software woes, less broker angst, greater cooperation across geographies — who says MLS isn’t innovating?
Some of Bamboo Realty’s people are still looking for jobs. Their lawsuits allege the owners left them a few paychecks short. There were some good people working at Bamboo in management and sales.
I’m reminded of a mortgage bank I worked for in San Diego. A coworker called one morning to tell me our office was shuttered in the middle of the night. The owner locked the doors, drove his Ferrari to his beach home in Del Mar, and we’ve never heard a word from him to this day.
Managers and salespeople had to own up to our families that we should have seen it coming when last month’s paychecks were delayed. We trusted ownership’s word that it was a temporary situation.
You don’t forget that lesson. Do business with good people. Trust, but verify.
Teresa Boardman attracted quite a crowd with her latest jab at NAR about health insurance.
I understand the pain. My rates go through the roof every year, and my plan gets canceled every other year. NAR has tried to deliver a plan for members in the past, only to be shut down by insurance regulations regarding crossing state lines.
Health insurance costs are a huge issue for all Americans, yet so are tuition rates, traffic, fuel prices, etc.
These are not issues for a real estate trade organization to pit against its primary focus when we’re faced with direct, time-sensitive threats to real estate affordability.
We can oppose this version of tax reform and still support the concept. Our tax code incentivizes spending on education, retirement, health insurance and homeownership because they are a net benefit for society.
Not all spending is equal, and we have to preserve incentives for buying and owning real estate.
At the same time we can — and should — continue to work toward a solution for health insurance for members. It’s just not NAR’s primary objective.
What happened to iBuyer outrage?
With Inman Connect New York coming up, I’m surprised at how unremarkable the iBuyer conversation has been lately. I just talked to the head of an iBuying platform that’s looking to partner with a plain old traditional brokerage like mine.
It was an “I’ll take this to ownership, and we’ll talk about it,” conversation that just a couple of years ago would’ve been, “Get off my lawn!”
Maybe Brad Inman’s triple-threat listing offer scenario isn’t so crazy after all.