This winter, Inman is obsessing over leadership in real estate. We’re publishing profiles, Q&As, strategy guides, and an in-depth 5-part report on what the industry wants from its leaders. Then, on March 26-28, we’re going to gather those leaders in the California desert to digest all of these inputs and figure out where to go from here.
This is a collaborative process. Please engage with our posts, and send us feedback to firstname.lastname@example.org. And if you are a leader who wants to join us in the desert in March, or if you want to recommend a colleague, send a note to email@example.com.
Problems arise in real estate all the time. Just the other day, I found myself in the middle of a complex and convoluted transaction. Like any smart real estate agent, I sought the opinion of my brokers.
As I sat across the desk from their wealth of knowledge, I quickly remembered the importance of great leadership. After 10 minutes under their sound counsel, I had a fresh perspective and solution to my problem.
This desk-side encounter got me thinking about the importance of leadership in our industry. Though many would say that the days of traditional brokerages are quickly fading, I happen to disagree.
I still believe there is a place and a need for the traditional brokerage firm in our industry, one that leads by mentorship and by example.
The three-fold question then becomes:
- What does great leadership look like?
- What does it not look like?
- Is there room at the table to sit on both sides of the desk?
Before I continue, I want to let you know that the firm I chose to hang my broker’s license under now is only my second brokerage in my 30-plus years in the industry. Obviously, I don’t make a habit of playing musical chairs with my brokerage.
And between my tenure in real estate and my time spent serving as the president of my association, I know the difference between good and bad leadership.
What great leadership looks like
Having had the privilege of working under great leadership for the past 11 years, here are the do’s of great leadership as I see them.
- Provides accessibility to the entire team
- Creates a cooperative culture among its agents with information flowing freely, working as a team and not as individuals
- Offers layers of support in all aspects of business including weekly workshops, meetings and training on new technology
- Operates with total transparency and makes the compensation structure known to all with no secret dealings
- Shows 100 percent dedication to its agents and their quest for market share and long-term success
- Evolves constantly in regards to image, brand, resources, training programs and technology
- Honors fiduciary duties to its agents by never forgetting that agents are the cornerstones of the company
7 don’ts of real estate leadership
Perhaps more critical, there’s a list of don’ts that I’ve seen in my career. Great leadership does not do the following:
1. Compete with its agents
Meaning, to be an effective leader or manager, you cannot be in direct or indirect competition with your agents to list or sell. In most areas, the ratio of clients-to-agents is such that many agents are competing for business from the same small client pool. You cannot sit on both seats and expect to have your agent’s best interest at heart.
2. Divide its attention
As a leader, your focus must be your agents. Being both a manager and an agent is like being a cop and a firefighter at the same time. Both are full-time jobs.
Think about this logically. If a manager is showing listings, taking buyers out to see property, holding broker previews and open houses, navigating escrows and interfacing with his or her own clients, how much time is left to provide support to agents?
And where is the manager’s attention being focused? On you and your clients, or on his or her own business and clients?
At best, a manager, who also operates as an agent, has a divided interest. At minimum, he or she will have limited time for his or her fellow agents, and he or she will end up competing against fellow agents for potential clients. This is far from a win-win.
3. Offer secret deals as a recruiting or retention method
One of the biggest mistakes a firm can make is a lack of transparency. Too often, I have seen companies offer secret deals as an incentive to retain or attract agents to join the brokerage.
Newsflash: These deals never stay secret, and sooner rather than later, other agents find out that they are not that special anymore and some new hotshot got a better deal. When these secret deals are discovered it causes dissension in the company. Plus, it’s a non-sustainable formula.
I’m reminded of a friend who planned to join our brokerage long before he actually did. Every time he talked about leaving his brokerage, his company kept throwing money at him to stay.
The gimmick worked for a while, but as the company did not have the support, culture and many other factors it needed to grow his business, the agent eventually left.
Please don’t misunderstand; I totally endorse different levels of compensation and splits based on performance, as long it is consistent and transparent to all.
4. Create a business model with the emphasis on selling the company
It used to be that selling a successful brokerage was a by-product of having built a successful company with substantial market share.
These days, brokerages launch with the goal of building a company that can be sold to a national chain within five or 10 years.
5. Make technology its cornerstone
Artificial intelligence (AI) and technology are very important components in a growing and successful brokerage, but they are secondary to hands-on management and daily human interaction.
6. Foster an attitude of individuals or lone rangers
You will never realize your potential or find success if you are working as an individual where the flow of information is not part of your daily routine.
If there is a disconnect between you and your brokerage, there will be an inherent disconnect between you and your clients.
7. Dishonor its fiduciary duties to its agents
Personally, I would like to be the boss of everything. However, as professionals, we have a fiduciary duty when it comes to the roles we play.
What I’m saying is that the ethical decision between “can” we sit in both seats or “should” we sit in both seats, needs to be addressed.
I am reminded of a quote from the movie Jurassic Park that said: “Your scientists were so preoccupied with whether they could, they didn’t stop to think if they should.”
That same question is what I am posing to our industry: just because we can, should we?
At the end of the day, a true leader knows which chair he or she should sit in.