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There are just over 1.5 million Realtors in the United States, as of July 2021, according to the National Association of Realtors, and another 500,000 or so real estate agents. That’s 2 million real estate professionals in the United States alone! And yet, team leaders and real estate business owners still struggle to find, partner with, and ultimately retain real estate agents. Why is it? And what can we do about it?
The thing is, most people get into the real estate industry for freedom. The promise of financial freedom and flexibility with their time is what excites agents in the first place.
However, freedom (often coupled with lack of discipline) is what crushes agents initially, keeps them from succeeding, and often pushes them to leave the industry altogether.
By creating a culture of freedom and discipline, you will have a much higher rate of retention long-term. Here are some of the main retention issues and how to fix them.
This could be one of the most significant issues for agent retention and yet one of the easiest to fix. After all, it’s just a numbers game.
According to the National Association of Realtors, the median gross income of Realtors was $43,330 in 2020, a decrease from $49,700 in 2019. According to NerdWallet, the average annual living expenses in the United States for a household of four is $85,139. As you can see, predictable income (or as predictable as you can get as an independent contractor) is essential to keep agents on your team.
So, how does one create predictable income when your “paycheck” is entirely dependent on how much time and effort you put in, the market, your clients, the bank, inspections, etc.? Half of which is not in your control?
You focus your team members on what they can control (lead generation, understanding the market, leverage and relationship management) — while you, as team leader, create a model, system, and platform that your agents can plug into and accelerate their success.
Predictable income comes from a predictable focus on the most critical activities. And the easier you can make that process for your agents, the higher likelihood they will do those tasks, see results, and use that momentum to earn the income they desire continuously.
- Do you have a CRM for your team to use?
- Are you coaching them through tough negotiations to keep the deals together to get to the closing table (and to the commission check)?
- Do they know where the next deal is coming from, and do they have several in the pipeline at all times?
Furthermore, it’s essential to do two things.
- Know your agents’ income goals
- Coach your agents on sound financial management practices
Part of the reason agents have unpredictable income is because they don’t even know what their income goals are. If you are clear on your agents’ income goals, you can simply work backward based on general market and team data to determine how many transactions they need to close at what average commission rate.
Then you put a plan in place for them to hit that number each month. And have a contingency plan in place for any months that the goals aren’t hit.
Ultimately, it’s never about how much you make, but rather how much you keep (and invest). When was the last time your agents sat down and looked at their personal finances, cut expenses or set longer-term financial goals?
By providing personal financial education to your agents, they will learn good financial management strategies for life. Whether that’s paying off debt, creating an emergency fund, cutting expenses, or investing in passive income channels, all of those provide a more stable financial position from which to show up each day and lean into their real estate business with less worry and unpredictability.
Lack of growth
Growth comes in all sorts of shapes and sizes (financial, physical, spiritual, professional, personal) — but it all comes down to one thing, as humans, we were meant to grow, change, evolve, learn and progress toward self-actualization.
When agents feel stifled, held back or simply like they are no longer growing, they will often look for another opportunity where they don’t feel their growth and potential are hindered.
It’s so essential for leaders to constantly be raising their leadership lid and staying 10 steps ahead of their team for that reason alone. I believe that business is nothing but a conduit for our personal growth. This means I am committed to growing constantly, but it takes time and energy to do so. However, it’s what allows our entire organization to be continually growing.
Whether that means I’m sharing a new concept I learned from my meditation teacher or a new business model I’ve been studying or challenging the organization to join me in training for a triathlon — growing and sharing that with others is part of everything I do. And it has trickled down throughout the entire organization.
Beyond the personal growth side of our organization, it is just as essential to have tactical training and coaching models for new agents and experienced agents always to be learning and adding to their tool belt.
I recommend creating a monthly real estate and sales training calendar and making it available to all agents, along with productivity coaching, leadership coaching and business training options. Continuing education is vital for retention.
In addition, agents want to know where they can go and grow within the organization. Opportunities for growth (or lack thereof) are a big reason agents look elsewhere.
We make sure to share the growth paths available in our organization — for agents who want to take a leadership role in the future, love sales and want to remain on the independent contributor path or want to partner with us on one of our other businesses. Showing what options are available and a straightforward way to get there is what matters here to agents.
Real estate is a gratifying career path, but it can also be pretty darn tough. There is a lot of competition, a constantly changing market and economy, and a lot of emotions to deal with daily.
Ensuring that your team is an inspiring and supportive group to be a part of is vital for the long-term retention of agents. Agents have their pick of brokerages and teams. If you want your team to be the one that agents are attracted to and stay with over the long run, it comes down to culture.
First, are you clear on what your culture is? Look, not all cultures and environments are for everyone. Get incredibly clear on what your team culture is and then share that openly and honestly. It’s better to be upfront about who you are and have an agent pass on joining your team than spend the time and energy trying to win them over after they find out what your culture genuinely is like.
Conversely, it’s also a heck of a lot easier to retain an agent who aligns with your team’s mission, vision, values and culture.
It starts with transparency (whether that culture is about personal growth, bottom-line numbers, team BBQs or radical conversations). It’s uninspiring when the agent had one expectation for the team’s culture, but the team’s actions aren’t necessarily matching their words. If agents don’t align with the culture because they misunderstood or were given an altruistic mission statement that wasn’t rooted in action, they are likely to leave to find a culture that better fits them.
One type of culture isn’t necessarily better than another. It pays to be upfront about your culture and then focus on attracting (and retaining) the agents who want to be a part of what you are building.
Some of the most common retention issues I see revolve around culture, growth, and income. At the end of the day, agents aren’t going to stay if they are not earning enough money to support themselves and their families. (And that’s the minimum expectation. Ideally, they would be able to fund their ideal life.)
Nor are they going to stay if they receive ongoing support to continue to thrive in a culture and environment that makes them want to get up and get after it every day. Being an independent contractor is not easy, even on the best of days.
Adam Hergenrother is the founder and CEO of Adam Hergenrother Companies