The Birth of a Brokerage
It’s been six months since the lovely wife and I launched our independent brokerage, and six months since I wrote my first post on Agent Genius, Your New Brokerage Business Model Sucks!.
It’s been a busy six months…
I thought I’d take a moment to share some of the trials and tribulations of giving birth to a real estate brokerage. I don’t write this to bask in the glory, Lord knows we’ve made or share of mistakes — with many more to come. Maybe someone can take something away from this and make their brokerage launch flawless (I know you are out there…). Maybe someone will decide, “if Jay can do it, so can I”. And maybe some sage Ag readers can say, “Yo! You might wanna try this.”
Fundamental Mistake #1
We’d originally planned to have the brokerage consist of me, my wife Francy and one friend of ours.
So much for planning. We’re currently at eight agents. Clearly that’s not a huge number, and likely someone out there is thinking, “What a pipsqueak. Eight agents hardly a brokerage makes”. But the simple fact is, our agent count is 170% higher than what we’d thought about and planned for.
Enter fundamental mistake #1 — not planning for growth. Even if you don’t think you are going to grow, you just may find out otherwise.
Hindsight being 20-20, we should have laid out contingency plans for growth rather than shooting from the hip. Shooting from the hip on the other hand, leads us to something I think we’ve done right…
My old broker had rules cast in stone. Black and white, no room for adjustment or creativity. This rigidity was a prime factor in our decision to leave and forge out our own shop. If I’ve learned one thing in the short six months I’ve been a broker/owner it is to be flexible. While we have certain standards that will never be compromised (ethics and customer service to name two) you have to be able to change and adapt, often on-the-fly.
Fundamental Mistake #2
Being flexible is good. But systems are important too. Of course we did all the things required by our states rules and regulations. Documents are filed (electronically wherever possible), notices are posted in compliance with arcane rules. Agent credentials are vetted appropriately. Where we erred in the beginning was not having internal brokerage policies and forms for every foreseeable contingency. I still need a “new agent on-boarding process”. Some forms need to be uploaded to our private website. It’s all little stuff, but little stuff has a way of piling up over time. Fortunately, my failure to sweat the small stuff is offset by the single most critical thing we did right…
Hire the Best Agents
I remember my former broker telling me when he first heard we were leaving the mothership, “You’re going to lie awake at night worrying about what your agents are doing.”
Actually, I sleep like a baby.
We hired good agents. Really good agents. Agents that know their stuff. Experienced agents that have the same general customer-centric philosophy we carry through in all aspects of what we do.
I’ve turned down agents that wanted to come to our brokerage. One was quite perturbed, and loudly claimed, “You can’t do that. You have to hire me!”
No, I don’t.
I think the traditional brokerage model of hiring anyone with a license and a pulse has played a significant role in damaging the credibility of real estate agents in the court of public opinion. Sure, I could make more money hiring any John Doe out there. Collect a monthly fee and hope little Johnny sells a home to Aunt Sally or stumbles into a listing. I could go to a real estate school, which continue to crank out wanna-be agents at an alarming pace, and toss out a beautiful “Join Us!” pitch. I could talk the talk. Tell them I’m going to teach them all about the new age ways of Internet and social media marketing and prospecting. Heck, I could probably leverage our virtual office and no sales meetings — tout “work from home!” and pick up dozens of agents practically overnight.
But I enjoy sleeping well. I like not worrying about getting a call or a certified letter from some lawyer or the Department of Real Estate. I love knowing our clients are in expert hands. And I like taking one tiny step toward improving the perception of real estate professionals.
There is Still Much to Learn
Six months clearly does not make me an expert broker/owner. Far from it. I will make more mistakes. Hopefully we’ll continue to do some things right and I know we’ll improve. I am always open to suggestions from anyone — agent, broker, new, experienced, young and old.
Am I glad I did this? Let’s put it this way. I was told by someone I respect tremendously that after six months I’d be saying, “Why did I wait so long?”
They were wrong. It took about two weeks.
September 17, 2008 at 10:44 pm
Jay – Congrats on your new brokerage and your stellar growth! Your comments about hiring the best agents echo those of my broker (not sure why he hired me though). He practices quality over quantity in his business and he sleeps like a baby too. Must be a coincendence… lol
tony - vidlisting
September 18, 2008 at 3:15 am
Congrats on the unexpected growth. It’s a good problem to have.
I sent this link to my General Manager who also just opened a brokerage in South America. She runs a one of the most popular spanish language real estate blogs (https://blog.casacomprar.com) and the opportunities just grew into a brokerage. Great tips for her to get started.
September 18, 2008 at 4:10 am
You’ve got twice the number of agents my company has and we own our area. I’m sure you’ll continue to do well because you care about the details (which so few people do) without overlooking the big picture (which way too many do).
September 18, 2008 at 5:55 am
Congratulations for congratulating yourself!
Seriously, a strong point here is that YOU and your wife feel you’ve made the right decision. I totally understand your reason to think you as a broker need to have flexibility with the changing times but smart enough to also realize you need to have standards, too.
The internet is the “great equalizer”.. in terms of exposure for real estate brokerages of all sizes. I don’t think it matters how many agents a company has; it’s now becoming a question of how many QUALITY agents does the company have. Good thing I am high on my company; with CBRB, where I am affiliated with, due to management and training, I feel I have both.
If I move to Arizona, may I apply to your company? I have “credentials”.. I can still keep my blog name .. (mass=big, heavy, etc…)?
September 18, 2008 at 8:10 am
Jay, how I admire you, One day I’ll do it, I’m sure. Just need to get over that branding thing, which is only in my mind. My team calls me Betty Crocker. Why?
Well she is not alive anymore but her name lives on, so they said you can be Betty Crocker, let your name live on and someday pass the torch,
You are right, hiring the right agents, being flexible, and having good systems makes me sleep at night too.
September 18, 2008 at 8:29 am
I’m absorbing like a sponge and I’m so glad it’s going well for you. I totally agree about volume hiring, I hate to be placed in the same category as a mediocre agent just because we are in the same office.
September 18, 2008 at 9:14 am
Missy – I’ve met you. There’s no question you can do it! You are bright, know your stuff and you are personable.
“The branding thing” comes up frequently. Yes, there are advantages to having a name like C21, Re/max, CB, KW etc behind your name. But I am fully convinced the vast majority of people don’t chose an agent because they are wearing a gold jacket or have a thing for balloons. Granted it’s only been six months, but we have yet to loose a client because we aren’t affiliated with a large franchise. In fact, we’ve had two sellers that said one factor in choosing us was we were a “local Mom & Pop shop”. It’s never even come up in conversation with a client or prospect, only with other agents…
We may not have all the tools or clout that a national franchise has, but technology is a great equalizer. Providing kick ass customer service is an even better one.
September 18, 2008 at 11:13 am
The world of real estate professional’s needs more Jay (and Francy) Thompsons…I love your outlook, willingness to critique yourself, the industry and having the courage to go out there and do something about it.
You are a building a brand Jay, and a damn good one!
September 18, 2008 at 1:06 pm
“They were wrong. It took about two weeks.”
I think that was a message meant only for me. The fear of something new and unknown has kept me on the sidelines. Thanks for the gentle nudge, Jay.
September 18, 2008 at 8:04 pm
Jay can you see that?? It’s me giving you a big thumbs up.
I went on my own in April and have not looked back (yet). I spent years at a big franchise brokerage with a broker’s attitude of “I know there’s problems but I can’t do anything about it). After getting my broker’s license I was recruited by a long-time contact to develop and run a successful brokerage. However, my adoption of contemporary real estate ideas clashed with his status quo atitude towards the indsutry and brokerage management. I finally walked away from it.
We may have slightly different ways of operating but we share many of hte core values of the “new” real estate indsutry. Hopefully we wil connect and share ideas over time.
To everyone else on the sidelines talking about going on their own, you have a great pool of people more than happy to be a sounding board for ideas and questions.
September 18, 2008 at 10:09 pm
I have to hand it to someone willing to put their mistakes in front of thousands of eyes.
I dont get the connection with the picture though. Too esoteric for me.
September 19, 2008 at 8:14 am
As an agent, leaving a large national brand to go to Thompson’s realty, I could not be happier and glad I made the move. Like JeffX said- the industry needs more like Jay and Francy!!
September 19, 2008 at 8:34 am
@Cooper – not esoteric, just the way my brain works. I tried to find a pic of a “long and winding road” and settled for “light at the end of the tunnel” — let’s just hope the light isn’t an oncoming train…
@jeffx – thanks for the kind words.
@jeremy – do it. Just do it.
@matt – would love to connect some time. Speaking of connect, go to Connect NYC in January!
@jamie – we are more glad than you are!
September 19, 2008 at 8:39 am
You know how I admire your hutspa, and I don’t even know how to spell “hutspa.” Continued success to you! You deserve it.
September 20, 2008 at 9:36 pm
Jay – Fanatastic growth – there’s never growth without some growing pains; I know you and Francy will make it happen – i’s who you are.
Someday, I’m going to put my foot in the water 🙂