Why’d You do it?
Many of you know that Rick and I left Coldwell Banker in July of this year. We get all kinds of questions from friends and colleagues, the main ones are “Why did you leave?” and “How did you do it?“. ( I apologize for the length of this article in advance….so unlike me.)
Before I explain, let me first say that Coldwell Banker was good to us, we learned a great deal the 4 plus years we were there, their corporate structure fit our business model and we would not have changed a single thing. The decision to leave came about because of a shift in our business due to the fluctuating real estate market where Coldwell Banker was no longer meeting our needs and was not helping our goals. We left doors open and were so glad that neither locks were changed nor ugly communications sent out as we had seen many times when colleagues left big brokerages.
Decision to Leave
With big corporations come rigid rules. We joined a big brokerage for the big name and the corporate backing. Rick and I both had corporate backgrounds and appreciated structure and set rules. There were procedures for everything, had to follow a chain of command and it was a relief not to be penny picked for signs, desk fees, copies, office assistance, open house ads, business cards …….(the list can go on forever with some brokerages).
But as the real estate market started to change and main-stream marketing was no longer effective, we had to work on our brand more than ever before and were making sales from our own Internet marketing, not so much from The Mega Brokerage National Marketing efforts.
After months of not getting leads from our brokerage, not seeing results from their marketing efforts, and starting to see resistance from our office with regards to our methods, we knew we had outgrown the Mega Brokerage. Our business model had changed from right under our feet and Coldwell Banker was no longer a good match for us.
Where to go?
We started researching several local brokerages to see who would be the best fit. Would it be a virtual office? Could it be another Mega Broker with less rigid rules? or would we go with a boutique company that believed and would compliment our efforts?
The third one won. Priding ourselves in customer service and having learned the importance of engaging people with blogging and social networking, we were impressed when the CEO of Majestic Properties took time from his day to meet with us and give us some F2F (that’s Face-to-face time for the text challenged ones).
It was not a hard decision, we then had to figure out how to make it happen without the move killing our bottom line.
How did we do it?
Rick and I are the most black and white people you will meet and everything we do has to be by the book. We are not the sly people that can slither through situations but had a challenge before us. We knew we could not take our listings if we left (about 18 of them at the time), and any pending transactions would be capped and loose a lot of money. We also knew that if we announced our departure, there could be a possibility of being asked to leave on the spot and would not have a chance to breathe.
We decided to speak to all of our listing clients and tell them the truth; we had outgrown our mega brokerage and the listings did not belong to us, but CB. We told them that although they were our clients, we were not allowed to solicit their business. If they wanted to continue to work with us, they would have to wait until their listings expired. We explained that our listings would be reassigned to another agent who would be thorough and would handle the sale of their property. (We knew this from an agent that had left our office the previous year and we had been assigned as the “handling agents” in the interim).
I had to admit I felt good when a lot of our clients were outraged that they had hired us not the brokerage and felt cheated that another agent would be assigned to them. We told them that we could not solicit their business and it would be up to them to make the request.
I am happy to say that all but one of our listings wanted to stay with us. There is no price for Loyalty in our business and was so happy to hear our clients wanted us, not the brokerage.
Breaking the News
We broke the news to our manager the day we decided to leave. We had grown very fond of everyone in the office and it was not an easy thing to do. No locks were changed, doors remained open for us and our manager was sad to see us go. She explained what would happen with the remaining listings and pending deals and asked us to reconsider. We already knew the steps and there were no surprises, we had made the decision to make the change and live with the consequences.
Fast Forward 4 months
It was not easy and there was a lot of stress involved. I think what made the move smooth was the fact that we knew what to expect and we did not try to fight it. We followed protocol when it came to split changes and loss of commissions. The fact that all but one client stayed with us was more than we would have expected. Some of the clients that remained wrote letters to the broker and were released, others had to wait for the listing to expire.
We are so happy with our new brokerage and see such a different attitude when it comes to bending the rules and understanding that in a challenging market, flexibility is key. In addition to all the red-tape we had to to through, we see camaraderie in our new office and people learning from each other instead of always being on the defensive. The fact that we can now talk to our broker when we have an idea and don’t have to go through a chain of command and wait days for a response is huge for us. We have grown in 4 short months and although we ask ourselves why we did not make the move sooner, we know that we had to wait for the perfect time
I was waiting for things to cool down to tell this story in order to give you a more objective viewpoint of the process. To make a move from a big brokerage you need to really plan and make sure you are making the right decision.
- know what protocol is for your current brokerage when someone leaves (where listings stay, if there is a change in commission structures, what happens to pending deals, what communication will be allowed with all parties once the change is finalized).
- Do a little research and find out how others that have left have been treated and learn from their mistakes
- Be honest – always keep in mind the Code of Ethics and make sure you don’t violate any laws or rules
- Have realistic expectations
- Be upfront and communicate the process to your clients
- Have a solid plan and schedule
But the most important piece of advice I can give you is to really analyze the reasons you are looking for change and make sure you assess the consequences to make sure it is worth the trouble and aggravation. I take a deep breath 4 months later when I look back at all the obstacles we had to go through – for us it was worth it and if I had a chance to do it differently, I would not change a thing.
October 27, 2008 at 1:54 pm
I left coldwell banker 4 years ago. no regrets
October 27, 2008 at 2:00 pm
We moved to our current broker about a year ago and couldn’t be happier. 99% of the people we talk to don’t care about the name on the sign in the front yard.
Of course it’s much easier to move when you don’t have any listings at the time.
October 27, 2008 at 2:52 pm
Ines, good for you. I made a change, this past January. The hardest part was all the things on the internet that had to be changed. I’m still running across them. The systems (in office) were different, different forms the broker wanted etc…. I have not plans to change again, but if I ever did I would just start my own, with just me and my team.
You are right, none of my business has come from the broker. Although I still get referrals from Remax agents that I had met being with them so long. I always would say, “I’m with KW now, not Remax.”
That was not a problem for any of them.
October 27, 2008 at 3:31 pm
Ines – congratulations on moving forward with your career! We left Coldwell Banker 5 years ago (they purchased the company we were with, and we stayed for nearly a year to experience it). Yes, they’re a great company and were very good to us, but it was time to move on. We, too, were doing a lot of internet marketing and doing our own branding and advertising. Hope to get together with you soon!
October 27, 2008 at 3:37 pm
T – there’s a time and place for a big brokerage – for those that have figured out how to do it without them, it makes no sense.
Ben – I was actually concerned about the move because Europeans usually look for the brand and big name. Our business is only getting better – the brand worked for us when we first started, now it’s a matter of assessing our business model and growing at our pace with no restrictions.
Missy – of course the paper work takes a toll and is never fun, I still find profiles to this day with CB (think of all the networks we have joined just in the past year alone!) 😉 I also agree about the next move being our own. I also have to tell you that people have not even mentioned the change – we were “rick and ines” before the move and have always marketed as such – now the move is towards “Team Miamism”.
October 27, 2008 at 3:40 pm
Hi Sharon – one thing I do have to say about Coldwell Banker is that their training when you are a new agent is fantastic, really recommend it for new agents. Hope to see you at NAR next week in Orlando.
October 27, 2008 at 3:58 pm
What worked in the mega agency will work in the Mom and Pop store, you will win.
There is no way to accurately value doing it for yourself rather than under someone else’s banner. There is a feeling that sets in, Maslowe (1954) said it all in his writings on human needs. After a while the true feeling of success can only be found when you do for yourself, for your own reasons and in a manner of your own choosing.
The needs of self-identification (belonging to the team) and self-esteem (standing out while a member of the team) are met and satisfied, leaving the need for self-actualiztion unmet. This need is only fed when you do things your own way for your own pleasure.
You are traveling up Maslowe’s Pyramid:)
October 27, 2008 at 4:00 pm
Ines, I’m glad it’s working out for you and Rick. I know I’m *so* glad we opened up our own shop in February.
I do think it’s kind of sad (and a testament to your old broker) that fear of being asked to leave early forced you to feel you could only give same-day notice. As a broker, I would want my agents to feel they could tell me anything, and I certainly wouldn’t screw them if they announced they were leaving, particularly with all the sound reasoning and thought you went through.
“She explained what would happen with the remaining listings and pending deals and asked us to reconsider.” Personally, I think too many brokers hold agents hostage through listings and pending deals. I’d rather have agents that want to be in my brokerage, as opposed to agents that are there because they can’t afford to leave.
October 27, 2008 at 4:56 pm
Jay and I left Century 21 to go to a larger more progressive Prudential agency in 2005 and since that time Prudential has changed or better yet maybe I should say has stood still and not changed with the market. I’m thinking smaller is better and a boutique type firm is very appealing.
October 27, 2008 at 5:05 pm
Thanks for sharing. I’ve often wondered about those rules. I’ve come to accept that we work in a transient industry. Mortgage, title real estate. Life goes on and you never know….you could end up working with those same folks again in the future.
October 27, 2008 at 7:52 pm
Steve – loved the way you put that – thank you. What’s ironic in our industry is that we, as Realtors are constantly branding ourselves and our business – we pay for our marketing and when you look at the big picture, you start questioning why it is that you need the Mega Broker, or the small one at that.
Real Estate is shifting and if the big dogs don’t see it, they will miss out.
Jay – it is very sad and for us it was the hardest thing to do to wait to the last minute to announce it. We felt we were not being honest with our office and we were keeping a secret – too bad is has to happen that way. Truthfully, if there wouldn’t have been a “hostage situation”, we would have left earlier.
Moni – and the way you and Jay run your business, you may also want to consider being on your own.
Jillayne – you bring a very good point – as I said, we left in good terms and you never know where life may take you….the doors are certainly open.
October 28, 2008 at 12:02 am
A lot of the big dogs don’t get it. They are clinging to the old ways. I interviewed with Coldwell in my area. They weren’t allowing IDX on any web sites. All you got with them was a web page. They were obviously trying to control the listing process which is not what I had in mind. There was no way I was going to build my brand in such a situation.
October 28, 2008 at 12:51 am
I left C21 earlier this year. The only broker in my market area that will not release listings is Coldwell Banker. I opted to move to another brand for two reasons.
First, I have owned and operated a business with 40 employees large overhead and open everyday of the year beside Christmas. I know what it costs to pay rent, have liability on a lease, pay for all the utilities and overhead, plus the on going headaches (liability) of a business. I have not even got into payroll and employees who don’t show up for work. I knew that going on my own to save money is a big myth in the real estate business.
The company I am with now has a CAP on commissions and the low cost to hang my license at my current company could not be duplicated elsewhere. The profit sharing was a nice extra as well. The annual cost hang my license with Keller Williams is very far below what it would cost to go on my own.
Second, Sales is a contact sport, isolating in a smaller environment just shields my listings from exposure. I have always reaped big benefits from being in a big company. I know of several listings and one I recently sold because I was constantly talking to other agents in the office about my listings. I am very active in my association but I know without a doubt, that I can attribute the sale of several properties I had a hard time selling by talking them up in the office.
If you are not a broker, then you have to work under a broker…..IMHO, better that broker be big, but at the same time be capped on what they can take from you and not limit your ability to market yourself.
If you are looking to a brand (be it national or regional) to be progressive…..Good Luck, that is a big myth they all try to portray.
Realolgy – C21, CB, ERA, Sothebys and BHG = Dinosaurs
Remax – Nothing progressive coming out of the agents from that franchise around here.
Even the company I am with (Keller Williams) still teaches Cold Calling; for crying out loud!
Those of us that have struck out on the tech side on our own are still the early adopters and will be for quite a while.
I can’t reiterate enough. Get your best split possible. Get an annual cap on that split. E&O is a broker profit center and needs to be negotiated to a flat fee and not a per transaction fee. If you are paying a royalty on every transaction for the year….there are other companies that will cap that fee too.
October 28, 2008 at 1:27 am
“E&O is a broker profit center”
Not for every broker Ted. We’re not all the same….
You can also open your own brokerage and not have rent and utilities and a lease liability.
And no one will tell you to cold call unless you tell yourself.
October 28, 2008 at 1:49 am
>>Having dealt directly with an E&O policy before joining the ranks of the big firms, that was the first laugh I had at C21.
>>Sure I could work out of my house, but I’m just a little too gregarious to isolate that much. As much as my clients love me, a real office adds to professional credibility more than the room behind my Garage.
>>No brokerage has required cold calling around here for years….the fact that it is still taught as a strategy is hysterical. Yep….even a blind squirrel can find a nut every once in a while.
October 28, 2008 at 9:23 am
Thanks for sharing your story, Ines. I left CB several months ago for a boutique brokerage with a progressive Web 2.0 mindset and wish I had done it sooner! I had a history with CB that spanned over 18 years because my father has been an agent there since he became licensed so it was a tremendously emotional decision. Upon making the decision to leave I met with the President and she could not have been more supportive. She even said that if she were in my shoes she would be making the same choice! The door remains open and she even said she would help me if I ever needed any help or advice. Coldwell Banker is a solid firm with great brand recognition but they are a staunchly traditional, brick and mortar firm that refuses to acknowledge and evolve with the times. My current brokerage not only encourages learning and interaction but actually teaches us SEO, has a fantastic split, and offers a leads program with no referral fee! How long will it take before the traditional companies stand up and take notice that the world is changing and if they don’t change with it they will (and rapidly are) going to become totally irrelevant? Stories like ours will become more and more common as agents realize that the mega firms have too much politics, red tape, and too little flexibility. I commend you on taking a leap of faith and hope others will follow the lead.
October 28, 2008 at 10:14 am
Ruthmarie – I’m sorry to hear that – I did have my own page and IDX while with CB – I have to tell you that any company that restricts agents’ marketing efforts is only limiting their own bottom line…..crazy!
Ted – I really like the KW business model, so much so that I joined a KW office before CB. The way the office is handled and controlled and the way that business model is followed by its brokers is huge…..needless to say, I was not happy w/ it and left 4 months later.
The whole big office concept in order to talk and related to a team is definitely a myth. I can tell you that when I plan a brokers open, I call each local agent personally and invite them to come. I have great rapport w/ all of them, no matter the office and it has to do more with the way you engage your colleagues than the office you are in – thanks for you take btw.
Jay – cold calling is not for everyone, and some agents still live by it…to each its own. E & O , well…..when it comes to getting actual representation, it doesn’t matter who you paid.
Nicole, thanks for sharing your story as well and CONGRATULATIONS!! My biggest problem with the big brokerages was the whole “relocation and referral” issues. To think that if you referred a client to me I had to go through their relocation department and give away 40% is absolutely insane!
October 28, 2008 at 12:29 pm
Hey Ines… congrats on your move. I also left a bb (big brokerage) just about 2 yrs ago and joined KW – progressive and my goodness, soul! yes, I said soul…
Anyway, I have a friend moving to Miami next spring – I’ll surely send them your way!
Have a terrific day!
October 28, 2008 at 1:25 pm
Hi Jennifer – thank you and congrats on yours. I think it’s important to point out that working with a “progressive” brokerage is not for everybody.
Study your needs – look at your options – there are plenty of brokerage models out there – Mega Brokers don’t mean as much to many agents today.
October 28, 2008 at 6:14 pm
Ah, my favorite subject!
I love the conversation about big vs. small and old vs. new. All of it leads (as it should) to the question
“what is each party bringing to the table”
That’s what we all should always be asking. The reason that bb is dead or dying is that they forgot that they actually need to deliver value. They have been taking your money so long that they just think they deserve it I guess.
October 28, 2008 at 8:42 pm
Matt – the question of “value” is very subjective and in my opinion a lot of the Mega Brokerages do offer value (they wouldn’t be as strong if they didn’t) – I can say from my own experience that I used every resource available to me while being in CB and have no regrets but as our business model changed, so did our needs.
I do think that if a lot of these Mega Brokerages would change their rigid structures somewhat, they would have a lot more satisfied and producing agents – to me is a no brainer….but making them feel hostage and hearing all the horror stories from agents that have left, leaves a sour taste for many and a hint of “fear”.
Eric- New Orleans Condos and Lofts
November 2, 2008 at 12:03 pm
I am not ready for a move but you always have to keep your options open. Knowing what the market has to offer is important. I see my company training, recruiting, and then watching most of the promised ones leave for better commission plans.
If you are unhappy then get to a place you may like. Business will continue without you if you let it.
November 2, 2008 at 7:15 pm
Hi Eric! Absolutely, options open and really look at the options, it’s not always about better commission plans….especially if you have no experience and need training.
November 5, 2008 at 5:10 pm
I know CB can be a little “stiff”, but overall I really like them, and I’ve been to other companies too… Here’s why I like them…
1. They pay for the first couple of ads in the paper.
2. They pay for Open House ads.
3. They have a great location for an office.
4. Even though I thought I was not too happy with having to refer my outgoing referrals to the corporate referral dept, in all honesty they do a great job.
5. Best Mortgage company I’ve dealt with overall is NEMoves Mortgage (part of Coldwell Banker).
6. I can do anything I want on the web in terms of having my own IDX and I pay for it with an outside vendor.
7. Most of my calls from the internet go all to me.
8. I can have my blog provided I have a disclaimer (and I do).
9. Legal is free.
10. Excellent support and training. Ongoing and also continuing education for maintaining my license.
11. Very fair and competitive compensation plans.
12. A great manager.
The independents in my area, for the most part, are either with one leg in the grave, or they are generally arrogant and “backwards”.. Couple of good ones but they have hardly any recognition. Keller Williams? I’ve been there for 2 years in my area.. No comment, but I’m not there.
November 5, 2008 at 5:30 pm
Jim – thanks for your opinion – I liked CB as well for everything you mentioned (except the office was horrible and I was embarrased to take clients there).
The ads were on and off….not really a plus because each office had a quota and there were way too many agents.
Free legal – awesome! definite plus – except the time the legal department cracked a joke about Rick and I making each other company in jail after we reported a mortgage fraud scam to them.
Compensation plans were really bad IMHO
Giving 40% of my commission to relocation eventhough I didn’t have to go through them was unacceptable
Great manager – absolutely!! The couple of managers we had were A1 but the one we have now is top notch as well.
To think that last week I was contacted by a local news station to do a Luxury REal Estate Market Piece and my broker was available to me on the spot and willing for me to show one of his Luxury Listings…..is priceless – I would have never had that support in CB.
Again, what’s important here is for everyone to weigh the pros and cons and feel happy with what they are getting and for your business style to match that of the brokerages and for your expectations to be met.