Finding the right people to work in your commercial real estate team is a challenge at the best of times. The people within the team should have the right skills for the local property market, they should be self-motivated, and also professionally skilled to build their business personally and then to support the growth of the brokerage.
When you find the right people, without the right support and interaction you can lose them just as fast as you found them. That is because reward and opportunity ‘change the goal posts’ for many agents. As an agent grows their results in market share and commissions, they start to see where further opportunity exists. Without appropriate support and reward they move on.
To compensate for this problem, many principals and sales managers will have a system of training and recruiting, however the most important factor to handle here is the retention of good staff and top agency performers. When you find a top agent, the focus should be to keep them and help them succeed.
Here are some tips to help you assemble a good real estate team of skilled and professional people:
- Commission – We should put commission on the top of the list here as most top agents will want to see how they will be rewarded for personal improvement and achievement. Without that ‘vision’ they will struggle with the required action in the market. Set some thresholds in sales and leasing that allow agent commissions to grow through the year. A sliding scale of commissions paid to individual agents can be set with reference to gross commissions earned breaking through barriers such as $125K, $250K, $350K, and above $450K. A lot will depend here on the type and size of property that an agent can work on; there will also be a need to consider agent skill, and the brokerage resources used in the process. The resources cost money to provide and on that basis some reasonable percentage of the gross commission will need to come back to the business. Most top agents still must pay 40% of their gross commissions back to the brokerage to offset for those resources and support systems. Rarely will you find a top agent that does not have a good support team behind them.
- Training – It directly follows from the previous point that training and personal improvement will help an agent move ahead quickly and grow commissions. Part of that process will be practice, skill, and knowledge. You cannot be a top agent without those things. If any agent is struggling to create business, take a look at how they are growing their skill base (if at all). A small bit of ‘redirection’ will go a long way sometimes to get an agent back on track and building results in listings and clients.
- Skill Mix – All agents will bring particular skills to your brokerage. Those skills should be assessed as strengths or weaknesses. The weaknesses should be removed by training and development. The strengths of an agent should be nurtured and optimised. A good sales manager or brokerage principal will do that.
- Administration Controls – Many sales people are not good at administration and ‘follow through’; it is a factor and challenge with the ‘average sales character’ across most businesses, and real estate is no exception. A real estate sales manager has to work with the performance problem so the typical sale or lease is not impacted by poor systems and agent follow-up.
- Brokerage Services Provided – Look for the complementary services that are needed to make a brokerage strong and successful. They will usually cover sales, leasing, property management, across retail, industrial, and office property. Special skills are required in each case. The clients that you serve and those in the property market today may require specialised skills with their listings and property challenges; have you got the people and the processes that can do the job?
- Administrative Support – This is a ‘grey area’ for some brokerages. Most agents will slow down or struggle with too much administrative ‘paperwork’. Unfortunately most listings will create significant amounts of paperwork and that work still has to be done by someone. If the brokerage is retaining a reasonable percentage of the gross commission to pay for ‘on-costs’ and support (at least 40% of gross commissions), then the administrative support should be provided by the Brokerage for individual agents. In and ‘ideal world’ the ratio of administrative support is about 2 agents per support person. The support person would then be taking calls when the agent is out of the office, processing the listing, creating the marketing material, lodging listings onto the portals and the media channels, processing and tracking the sales and leasing files, putting together information memorandums, and updating the database. It should be said here that this administrative person should have solid and well developed skills in the real estate business; it is not a job for a ‘junior’ who cannot type, think productively, or support the characters and the challenges of the sales agents (and there will be many). When you cut corners in ‘administrative support’ the real estate business and the agents will suffer. That will then mean less income.
So there are some important factors here to consider and fund if your brokerage is to be successful in the local property market. You could say that it is a ‘bit of an equation’ and the parts of the equation are constantly changing.