Should You Recruit Real Estate Agents?
Should You Recruit Real Estate Agents to your real estate brokerage is the main question that I would like for you to think about as you review our real stories and tips below.
This can be a huge profit center for you and your real estate company. However, it is imperative to structure a plan from the beginning in order to expedite growth and make residual income without jeopardizing other income sources.
Why Do You Want To Recruit Real Estate Agents?
I think it is important to clearly think about why you are interested in recruiting real estate agents for your real estate firm. What is the reason? Are you good at managing people? Are you very successful and want to help others achieve the successes you’ve had? Do you just want to make extra money by leveraging others?
I think you really should write down your why and back into structuring how you are going to move forward.
Are You Hiring Real Estate Agents
This was a real call that we were getting to our office over the first several months of being in business. I kept asking myself and my sister, are we leaving money on the table if we don’t hire them?
We did a lot of contemplating… We will make more money, but what will this really entail? I’ve seen the headaches of past office managers / brokers and what they’ve gone through…
The Beginning In Real Estate Recruitment
You see, my sister and I opened up Maxim Realtors in 2006. We had intentions on staying small. My sister, me and a personal assistant in a 900 sg ft office. And that was it. So we thought…
We had intentions on growing our real estate company in terms of our personal volume sales. Not growing in terms of agents and employees.
These are two different animals to generate revenue and this is what this article is all about. To help you understand what really is needed to set this up correctly if you move forward in recruiting real estate agents to your company.
I Was Enticed By Realtor Recruits
Prior to, we were with a few companies charging 20-30% of each one of our deals. So I was doing simple math in my head. If each agent sells $3MM worth of real estate a year with a GCI of $90k, that would be $18k to the house at 20%. Not bad, right? Get 10 agents and that is $180k.
What if we got to 30 agents. 50 agents. Where could we really take this? But… What kind of work would this all entail? Let’s face it, if each agent averaged the $3MM mark, that would equate to about 13 transactions a year per agent. Do the math of say 60 agents doing 13 deals a year. That would be 780 transactions. That is a lot of moving parts.
But… Let’s Go All In & Recruit Realtors
Jen and I started to bring on agents organically. These were agents who we worked with or were friends on Facebook seeing what we were doing. We would attend Realtor events and talk to agents and try to recruit. We brought on a good handful fairly quick…
Resources Needed For Recruiting Real Estate Agents
I quickly realized this was not just about bringing independent contractors on board and let them free to go out and sell real estate. They all need help, guidance and oversight.
I learned two quick lessons.
#1 – Liability
As the broker of record and owner of your real estate firm you are responsible for every action, contract, addendum, additional language, marketing content and much more of your agent’s performance (good and bad). With or without your knowledge.
Over the years, I have seen a lot. Some agents do some stupid shit that could have ended very badly for them and us. So, choose wisely who will be representing you and your brand. ** Also consider doing background checks. In our contractor agreement, it clearly states we have permission to pull background. You never know someone’s past until you know someone’s past.
#2 – Help & Guidance
I underestimated the amount of time that was needed to give to these agents. Even the seasoned agents still needed help. And not to mention the time invested into additional training and accountability.
So be sure to understand where each agent is coming from. How many deals have they done in the last 12-24 months? What do they need help with? How much training do they need? Try to get this info when you are interviewing them!
Recruiting agents can provide you and your brokerage with a lot of residual money if done correctly. So, I am all for it! However, you must have a plan moving forward.
So if you are moving forward, let’s maximize the residual money and figure the best plan to be efficient with your time.
Who Is Responsible If You Recruit Realtors?
Who is going to be responsible for Recruiting, Training, Accountability, Contract Reviews and Coaching? Is it you? A partner? An Employee?
Are You Recruiting and Training?
You may want to structure this lucrative profit center with you as head of development. However, if you do this, then I would encourage you to not be a competing broker. Meaning you do not sell real estate yourself.
Again you need to have someone to be dedicated to the agent’s success. So if this is you, be all in! This should be your main FOCUS!
Or Hire Someone To Recruit Real Estate Agents For You…
If you are very good at real estate sales and enjoy it, then you may want to consider hiring someone or bringing on a partner to run this side of things.
This way you can still sell yourself and reap the rewards of leveraging other agents in residual income. There is also a big advantage to this especially if you are a decent producer.
Lead By Example
You also should consider hosting a roundtable / training at least once a week on various topics that work well for you.
Your Recruiter can use YOU and your success as a tool to recruit other agents as well. Bill at ABC Realty is a top producer selling over $20MM of real estate a year. He is looking to bring on a select number of agents into his group. Is this something you would be interested in learning more about?
Again, people want to be around other successful people. So if you are a solid producer with a good name in the industry, it could be a great tool for your partner to bait agents in. ** But be sure to give some value whether it is webinars, once a week roundtable, paid one-on-one coaching, etc.
What Does Your Future Company Look Like?
Now you have decided to build your real estate company and recruit agents, what are you offering? What does it look like? Start scribbling this down.
It doesn’t need to be organized just yet. Just write down what thoughts come to mind. Draw pictures. Have fun with it! What does the culture look like?
What are other companies doing? What are they offering? What do you like that they offer? What is their culture like? Call agents with those companies. Hire someone to interview with these companies and provide detailed feedback.
Questions You Should Answer
What trainings do you provide? What commission plans do you offer? Will you have accountability and coaching plans? Is there an additional cost for this?
Are you taking on new agents or sticking with veteran agents? If only veteran agents what is the minimum annual sales you will accept? How does the agent sign-on system work? Are you going to have brick and mortar offices? Does it make sense to have office overhead in your market? What new costs will increase or arise when you bring on agents?
Build Your Real Estate Firm To Sell It With Realtor Recruits
I’ve read in countless books that you must build any company with the mindset that you will sell it one day. A few things will happen when you do this.
#1 – Income / Expenses – You will learn to know your numbers very quickly and will be extremely organized. If you list your real estate firm for sale, a new owner is going to look at net profit after all expenses. So if your numbers are not on point, a buyer will know this right away. Your bank accounts, P&L’s, Bills, etc will all have to align.
** All of this documentation will have to be provided in the due diligence period. So keep the books clean, organized and archived.
#2 – You Become More Motivated – You will see your net income grow year after year (hopefully) and at any point in time you will understand the true value of your company.
So if your net income averaged over the last 3 years was say $250,000 and we take a 3 X multiplayer, we can come up with a $750,000 valuation!! Pretty cool huh?!
#3 – You Might Just Sell It – I never thought that my sister and I would sell our real estate firm. However, it was an exciting and fantastic learning process for us! We got a fair valuation for our company, still remained 20% owners and to this day, remain as active broker associates with our company.
Sell Your Real Estate Brokerage
There are plenty of buyers out there to purchase real estate companies. Again you have to have a good name / reputation and good income and you can stand a good chance at selling your real estate company in the future.
Just be sure it is the right fit! We lucked out with our new partners. They didn’t change much with exception to provide us with more ideas, manpower and resources. So choose wisely! Your agents are relying on you.
Recruit Realtors By Giving Leads
Need phone numbers? FSBO’s, Expired Listings, For Rent By Owners,
Pre-Foreclosure (Short Sales), Geo Areas – The link below will waive their $149 sign on fee!! Explode your business right now!
My goal over time is to keep providing you more and more information and resources on this website including exact templates, agent sign-on procedures, office manuals, real estate agent recruitment scripts and marketing techniques (online and active).
So bookmark this site and go through all the content. We are here to help you on this exciting venture!! To our success!!