But We Have Free Coffee

I was sitting in a boutique broker’s beautiful office listening to the owners vent about their frustration with recruiting. Attracting strong agents was a challenge for them, but equally frustrating was that after onboarding recruits, they often lost them to other brokers once they began producing. The managing broker said, “I feel like we are training the competition.”


I thought for a moment and finally said, “you don’t have a recruiting problem or even a retention problem; you have a value problem.”


Although the two business partners were well-known in their area, they had settled into comfortable roles as the firm’s top producers. While there were more than fifty agents on the roster, the owners along with half a dozen agents, represented more than 65% of the production. Worse, most of the agents completed less than two transactions a year with a large number actually doing zero, nada, zip — none.


They were struggling with the fact that as hard as it was to recruit agents, once they began producing, those agents were recruited away by other brokers. They felt it was because they could not match the commissions other firms offered. They also didn’t attract many experienced recruits, so they focused on brand new agents and their turnover was frustrating. 


What is their value proposition? The website listed a number of benefits to agents for joining their firm including:

·       Competitive commissions

·       No required meetings

·       No floor duty

·       Beautiful offices

·       Free coffee 


Not exactly compelling stuff. 


For selling brokers, there are unique challenges in balancing personal real estate clients, managing their agents, and running the business of the brokerage. They were both exhausted and looking to make changes in how they run their business. 


It was obvious that they weren’t communicating much in the way of value to prospective agents or even to their existing ones. There was very little discussion about how the brokerage enables their agents to provide better service and be more effective in better serving buyers and sellers. They spoke little of training and support for the agents or understanding what agents would need to be successful by joining their brokerage. With historical data from the National Association of REALTORS documenting one-third of new agents dropping out within the first year and almost 90% within the first five years; training, support, and coaching are critical to agent success. 


The brokerage owners also spent a lot of time telling me about their recruiting “pitch”- why agents should join their firm. They spoke glowingly about their personal success, reputations, longevity in the market, etc. Their philosophy was to give their pitch to anyone who would listen and hope for the best. They were also not selective in terms of who they targeted to recruit. They were working on the old “throw enough out there” mentality. 


Recruiting is a key component of success; it’s production insurance for the broker in today’s changing industry. However, recruiting is NOT selling your brokerage with a fancy presentation. It’s all about asking select candidates the right questions to find out an agent’s needs and wants as well as what problems they have with their current brokerage. Knowing this gives you the opportunity to make an agent’s problems go away by joining your firm.


It’s also about focusing on the candidates who make the most sense and qualifying them early on to focus on those specific needs. Most brokers also tend to forget to nurture their existing producers which is dangerous because those agents are their competition’s recruiting candidates, too.


For the two partners, recognizing it was time for a change in their brokerage was a crucial step. Today, because the market has been good for several years, there are too many brokers who are satisfied with the status quo. Many are certain that they won’t have to make major changes to the way they conduct their business. This strategy will become a dangerous proposition in terms of recruiting and retention as the market continues to shift. 


For brokers who want to ramp up their recruiting and retention, here are five key components for focus:

1. Develop a strong value proposition – Companies providing more agent value stand out from the competition because a strong value proposition positions the brokerage as a competitive market driver. Just as with pro athletes, successful agents want to be part of the winning team. The broker that provides the leadership, support, resources, tools, marketing, accountability, and more that drives successful agent productivity is the winner in recruiting and retention. 

2. Recruit for culture – Cultural fit is one of the most important aspects of successful recruiting. How an agent blends with your company’s culture is critical to overall success for everyone. The most successful recruiting brokers will pass on adding an agent — even a top producer — if that agent doesn’t fit with the culture. Maintaining a winning culture is important for both the success of your brokerage and of your agents. 

3. Eliminate the non-producers – Unless they’re paying their own way for the privilege of hanging their license with you, bite the bullet and eliminate your unproductive agents. They stand in the way of recruiting and retention of stronger agents. Brokers often say, “but they aren’t costing me anything.” That’s not true. Non-producers rarely “win the listing” because they don’t have the skillsets to effectively compete. The business your unproductive agents lose to your competition represents serious dollars out of your pocket. 

4. Promote coaching and training – Ongoing coaching and training tailored to an agent’s needs as well as areas of focus, strengths, and individual personalities is the key to success for many agents, from newbies to seasoned veterans. When coupled with experienced mentors, agents learn proven techniques, processes, and tactics as well as accountability that keeps teams on path. It could be the difference between success or becoming another agent statistic.

5. Highlight agent recognition – For most agents, bragging rights are just as important as the commissions (and possibly even more so). Local agent recognition within the market should be showcased both inside your brokerage and to the outside community. Effective use of marketing and social media tools helps tell your agents’ stories and promotes well-deserved recognition.


Good recruiting and agent retention are the lifeblood of a brokerage and a key growth tactic. Recruiting based on your value proposition is much more effective and profitable than simply trying to match your competitors’ splits. Brokers need to enable their agents to get more listings, complete more transactions and be more effective in their roles as trusted advisors. 


It’s a lot better than free coffee.


This article was written by Rick Ellis, MBA and published in Realty Biz News


Real Estate Bubble: Yay or Nay?

There has been a lot of industry speculation over the past months from various industry professionals and consumers whether we are seeing the beginning of the next housing bubble reminiscent of the mid-2000s.

Most adults over the age of 35-years old remember that when the rising real estate bubble burst, it tanked much of the U.S. financial system; not to mention the real estate industry. For many, the pace of rapidly rising real estate today feels reminiscent of those days. Interestingly, in most major markets today, the average price of real estate is now higher than it was at its 2006 peak.

However, this market is very different than it was during the crash of some years ago for several reasons. Click here to review four simple graphs from Keeping Current Matters that demonstrate why we are not in a current housing bubble. 


Corcoran Expands to the Cayman Islands 

Corcoran continues international expansion with a new presence in the Cayman Islands. Long recognized as a beautiful Caribbean destination with world renown banking and finance, the Caymans welcome the brand. Corcoran Cayman Islands, previously known as Prime Locations Cayman, remains under the direction of Paul Young and is located in the heart of Seven Mile Beach on Grand Cayman. 



Corcoran now has more than 150 offices in 40 markets across the United States. Corcoran is growing and we’re looking for a few good firms to grow with. Click here to learn about the Corcoran Network.


High-end housing markets see an influx of millennials

After years of waiting on the sidelines, the Millennial generation is now pouring into homeownership at a record pace, accounting for the largest share of all homebuyers in the United States in 2020, 37 percent, according to a survey by the National Association of Realtors (NAR). And now that they have surpassed the baby boomers to become the largest living adult generation in the United States, housing experts predict demand will remain strong for years to come. Read more.


New home construction soars 22% as America finally starts building houses again

After a decade of construction that has failed to meet demand, homebuilders are stepping up their efforts to match the red-hot U.S. housing market. Learn more.


Realogy named to “World’s Most Ethical Companies’ List” again for the 11th time

“Integrity is a driving principle of our business, made even more important because of the work we do every day to support one of life’s most meaningful and significant transactions: buying and selling a home,” said Ryan Schneider, Realogy’s chief executive officer, and president. See more.


Mortgage Applications Little-Changed Despite Big Rate Spike

Despite the surge, mortgage applications didn’t respond in a major way.  Refi applications only fell 3% from the previous week. Purchase applications actually managed a small uptick of 1% after last week’s more substantial 9% improvement. But context matters. Read full article.