The agent-broker relationship, like so many others, is a value-for-value proposition. The agent brings value to the broker and the broker returns value to the agent. Ideally there is an equilibrium in this exchange of value and both parties benefit. The agent brings something to the broker and the broker brings something to the agent and everyone involved is able to do more and be more.
The ordinary real estate broker wants to constantly add agents because that’s how his business grows. What he wants from them (what they bring to the table) is their own personal sphere of influence – however big or small – which may become buyers and sellers with the company, thus expanding the broker’s reach.
The broker hopes and prays that each agent he adds will also become a successful prospector for new business. He hopes that each agent will become successful calling on FSBOS, cold calling, farming and so on, ultimately bringing in far more business than is generated by the existing sphere of influence. Though few agents ever really excel at this, those who do are Stars.
Since most ordinary brokers have the same tools and the same basic offer to agents, the agent’s decision about which broker to work for usually comes down to two factors: personality of the office and commission split. Since personality is hard to change and mostly reflects the leader, the ordinary broker relies heavily on high commission splits to agents to get and keep salespeople.
So the value-for-value exchange between a broker and agent in an ordinary real estate office is this:
The agent agrees to expand the brokers business at least to the agent’s sphere of influence and hopefully beyond,
and
The broker agrees to give the lions share of the commission to the agent on closed transactions.
At Help-U-Sell it’s a whole different proposition.
A Help-U-Sell broker expands his or her business through marketing, careful leads management, constant exploitation of the opportunities that exist in the marketplace and through consistent follow-up with past customers and clients. The Help-U-Sell broker doesn’t add agents unless or until the business has expanded to the point that he or she needs help. Agents are brought in to help the broker handle the business the broker has created.
The Help-U-Sell broker says to the prospective agent, ‘I’ve built this business and have all of these buyer leads I can’t get to. I want you to take the leads I’ve created and convert them to sales. Period. I don’t want you to prospect for new business, I don’t want you to call FSBOS or Farm. I just want you to convert the leads I’m already generating. And I’ll pay you a reasonable commission split to do so.’
The value-for-value proposition between a broker and agent in a Help-U-Sell office is this:
The agent agrees to become expert at converting buyer leads into sales
and
The broker agrees to maintain a steady flow of leads into the office and to the agent.
See, it’s a completely different proposition.
So how do the two propositions stack up? Well average per person productivity in ordinary real estate is abyssmal. Most agents muck along doing 3 – 6 transactions a year. In may places if they do a dozen they get an award! At Help-U-Sell we’ve set the bar at 2 a month, 24 a year. In many offices that’s a minimum standard: what an agent must do to continue to tap into the flow of leads.
Unfortunately, ordinary agents get very hung up on commission split. It doesn’t matter that they may be doing only three deals a year, if they’re commanding an 80% split that means they are a great agent! Once they fall into this line of thinking, it’s very hard for them to recognize the value of leads over split. That’s why Help-U-Sell brokers usually build their teams with new licensees, ones who haven’t been tainted by the tired old agent-oriented business model common in ordinary real estate.
Another ADDENDUM:
So I’ve already had calls. Agent X with ABC Realty asked: ‘What’s the long term payoff for an agent at Help-U-Sell? I’m not sure I want to spend the rest of my life doing two deals a month.’
Well, then, do 5 or 7 or whatever! But I don’t think that’s what you were asking. You’re asking how Help-U-Sell agents grow. The answer is: they grow in two ways:
1. They become ever more effective in converting leads and build their production to the point that they realize their goals.
2. They expand their repertoire, learn how to work with sellers in the Help-U-Sell system, how to market and generate leads. In other words: they become brokers and open their own Help-U-Sell offices. It’s a big step with big rewards and a very different focus. Where the agent is focused on converting leads, the broker is focused on generating them. The broker generates leads through marketing, through listings and by carefully managing the lead intake process in the office. It’s a very big job with very big rewards.
In addition to questions about growth, it seems that some agents doing average production in ordinary real estate are intimidated by 24 sides a year as a minimum standard. Don’t be. If you work at it, you should be able to double your personal production when you move to Help-U-Sell. You will have no more prospecting demands, no more listings to manage, no more price reductions to orchestrate. You’ll have lots more time for working buyers and you won’t even have to look for them! We’ll give them to you!