When I started Urban Compass, I did my best not to make any assumptions about the real estate industry. Although I worked as an agent with my mother to help pay for my college tuition, my professional career after college was primarily in management consulting and private equity.
I did not bring veteran real estate experience to the table, but I did import critical philosophies from professional service industries: be humble, ask questions, don’t make assumptions and, perhaps above all, listen to your clients. To that end, within the first 12 months of launching Urban Compass, I personally met with more than 1,000 agents, gathering feedback and insights that proved to be invaluable in building our business.
As a member of the industry, I firmly believe it is our responsibility to work toward building a stronger, more productive real estate sector. This process begins with transparency and dialogue. We still have a lot to learn here at Urban Compass, and we’re going to keep asking questions. But in the spirit of transparency and dialogue, I thought it would be valuable to share with the brokerage community the 10 most important lessons I’ve learned while building Urban Compass:
1. Treat your agents like clients: This is a critical mindset for us. We work for our agents, not the other way around. Walk the halls, listen to your agents and build for them. They’re your on-the-ground ambassadors and you will learn more from them than from anyone else. Top agents should be treated like partners, as they are in any other advisory business (law firms, consulting firms, investment banking, etc.). This means involving them in strategic decision-making and hiring while incentivizing them to help you grow the company.
2. Empower your agents to operate like the CEO of their own business: After surveying agents in New York, the results showed that the average agent spends 89 percent of his or her time on non-core tasks, such as preparing client presentations and developing comps. By providing our agents with the technology and business resources to streamline these non-core tasks, we’ve enabled them to operate more like a CEO and focus their attention on the highest-impact activity – advising and building client relationships.
3. Obsess about hiring; create a culture of excellence and likability: There isn’t a great company in the world that doesn’t obsess about hiring. The best hiring practices reflect a commitment to building a long-term culture of excellence, as opposed to meeting short-term revenue goals by filling desks. We’ve learned that “A” players want to work alongside other “A” players, so it’s important to build a strong nucleus of talent – people who are not only successful and productive, but who also are likable. One way we’ve done this is by instituting a comprehensive interview process where each candidate interviews with an average of six people, including other agents. We want everyone to be proud of the people they work next to.
4. Hire people that buy in, not those who want to be bought out: Commission splits, salaries and profit-share opportunities will always be important, but requests for outsized packages are the best indicator that a candidate isn’t a good fit. We believe that passion often is the defining trait between being good at your job and being great. Hiring people who are passionate about what you’re building – and who demonstrate the drive to help build it right alongside you – is always the best answer.
5. Foster collaboration, not competition: The benefit of recruiting and cultivating exceptional agents is lost in a culture in which agents are pitted against each other. Management and agents both must recognize the value of everyone playing for the same team. While each agent has his or her own unique business approach and best practices, some of our best ideas are born when we pool our knowledge and collaborate.
6. Invest in your core competencies, don’t outsource them: Whatever your core competency is, make sure you are at its forefront and constantly pushing the envelope. Our core competency is technology. To build great, truly game-changing technology, we hired engineers who would understand what our agents and consumers needed by listening to them and working alongside them. Since launching, we’ve hired more than 20 engineers from companies like Google, Twitter and Facebook; outsourcing technology was never an option.
7. Empower a variety of business models: There’s no single way to win as a real estate agent – it’s the brokerage’s responsibility to adapt to the agent, not the other way around. As brokerage management, we owe it to our agents to reciprocate their effort and creativity. Agents are some of the most entrepreneurial people I’ve ever come across, and finding ways to empower their creativity has proven to be very productive.
8. Think outside the (mail)box: The common denominator that agents, sellers and developers are clamoring for is a smarter way to reach prospective buyers. Mailers, print advertisements and word-of-mouth will always have their place, but they only scratch the surface of the potential exposure channels. The ability to adapt and communicate at a high level across new channels – such as social and new media platforms – is a complicated function that requires commitment at the core of the business.
9. Promote thoughtful and beautiful design: We have entered an age where great design drives business success across industries – the consumer’s eye has been trained to recognize and respond to thoughtful design with crisp messaging. A strong internal design department and culture of design thinking is important to foster.
10. Finally, treat your fellow brokerage firms like the partners they are: Real estate is unique in that we are partners in transactions more often than we are competitors. With over 80 percent of transactions being co-brokered, it is in our collective best interest to build a strong brokerage community with core values of respect, integrity and hard work. Although we will compete with each other for agents or business from time to time, we are partners more often than not.
Robert Reffkin is the founder and CEO of Urban Compass.