A Modern Day Heir
A Florida broker was getting up in years and ready to slow down to enjoy the fruits of all his labor. Over coffee with his son he said, “it’s time for me to start planning my retirement and I’m thinking about giving you half the business. You’ll need to become an agent and learn the ropes from me so that before long you can take over running the company.”
The son shifts uncomfortably and says, “Gee Dad, you know I don’t like sales. I
don’t think that’s such a good idea.”
The father is surprised; he thinks a moment and responds, “well, then you can learn the inside operations. Work in the office, learn the systems, the MLS, the backend, accounting and all those parts that make the business run.”
The son ponders, frowns and while shaking his head says, “I don’t like working in an office all day. It’s just not my thing.”
Now the father sees his future plans falling apart and he is getting frustrated. He loudly blurts out, “I’m offering you half my business and all you have to do is learn either sales or operations. What is it you want me to do?”
The son thinks a moment and says, “it’s easy Dad, just buy me out.”
The housing market is on a sugar-high of activity right now. Everyone is busy, markets where there is migration from high density areas such as the northeast and West Coast are especially slammed, bidding wars dominate many markets and inventory is becoming very scarce.
Even still, many brokers are looking ahead contemplating the not-too-distant future. The industry is changing at a pace unlike we’ve seen before. Competition, security, finances and eventual exit strategies are at the top of the list of brokers’ concerns.
Smaller brokerages where the broker/owner is personally buried doing the listings, showings and selling of real estate are generally so busy they don’t have time to think strategically. Their focus is on closing the deals…right now. In larger companies where the agents are working the deals, the brokers are recognizing the financial prospects ahead thinking about the challenges, they need to invest into their brand and scale their growth to be more competitive and profitable. Then of course there is the eventual exit strategy.
There are three primary paths today for brokers:
- Continuing on the current course generating as much income as possible
- Plan for a purchase or merger opportunity for your company
- Scale up your company to eventually cash out for a bigger payday
The key to the having the strongest eventual exit strategy is having a healthy brokerage with good company dollar and profit.Often the easiest and most cost-efficient method is anaffiliation model, similar to a preferred-vendor program. The necessary growth tools and resources are provided, along with high-end marketing, technology, lead generation, international affiliations, referrals, relocation, training, support and more. In some models, you still retain control and maintain the local market branding and recognition that you have built over the years. For many, one of the greatest values is in the expertise so that the broker doesn’t always have to be the smartest person in the room.
Sam Walton said,“Capital isn’t scarce; vision is.”Let’s talk; we can help you with both. Finding your vision and providing the capital and expertise to get you to your goals whatever they are.
Company Dollar Drives Value
Company dollar is a primary driver impacting a brokerage’s value. It’s basically what the broker has left after commissions and referral fees are paid. It provides ownership the means to cover the operational expenses, service any debt and provide profits for a return on his or her investment. Here are five proven steps to build better company dollar.
1. Focus on growth
Agents prefer to be part of a vibrant, growing organization. It provides the opportunity to attract agents and teams as well as merger candidates. Increasing market share has a direct impact on value.
2. Ongoing recruiting
Your recruiting focus should be on the right candidates, those who fit your culture and provide you a reasonable company dollar. The market’s top agents will have to be bought with high splits (kiss company dollar goodbye) and the newbies require so much time that they take you away from running your company. Your best bet is to actively recruit moderate producers at lower splits whom you can increase their production and earnings and still have a good company dollar.
3. Focus on productivity and accountability
It’s all about the basics. You can’t control an agent’s income, but you can direct their activities that lead to success. Make them commit to performance standards and hold them accountable.
4. Lead generation
Company-generated leads with a 50/50 or 60/40 splits build company dollar. Focus your marketing on lead generation, manage them with an effective CRM and focus more on conversions than the number of leads generated.
5. Inventory control
Listings belong to you; not your agents. Do not allow your listings to sit for too many days on the market tying up your inventory along with your company dollar and profits. Make certain your agents service your listings properly so that price reduction conversations can happen often and quickly.
New companies are joining The Corcoran Group each month and there is another very big announcement as the Aloha State has a lei with our name on it. ? ? is thrilled to announce our newest affiliate, Corcoran Pacific Properties, in Hawaii. ? Read more: https://bit.ly/3ljs6VF
Grow with Corcoran
We’re growing and we’re looking for a few good firms to join us. Does your brokerage have what it takes to claim the Corcoran name in your market? Find out more about Corcoran: Rick.Ellis@corcoran.comor https://www.Corcoran.com/brand.
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Robert Schiller offers his outlook on the housing market and economy
Due to COVID-19, the outlook is an unprecedented situation and therefore these are uncertain economic times. The spike in unemployment shows that people’s sentiment about business has changed but in what direction this will turn, is not yet clear.
The three asset classes that are still highly priced are the Stock Market, Bond Market, and Housing Market; because of the belief that the Federal Reserve has lowered interest rates. However, because of the world wide phenomenon of COVID-19, at any point, any of these asset classes, there exists a possible decline in the next coming months.
Watch the complete interview on CNBC.