September 2017 - NWMAR
If your brokerage isn’t a well-oiled machine, a crack in your operation may open a trickle of departing agents that soon turns into a stream emptying your talent pool. If that’s the case, you need to find ways to quickly seal the leak. Agents are leaving, but they don’t have to go if you solve some issues.
Problem: Imposing Fees
It’s not unusual for brokers to charge a fee for some services, like maintaining a mobile listing site or featuring listings on realtor.com®. And while some agents may prefer paying a fee over doing it themselves, others, particularly younger agents, may prefer to do the work, said Max Pigman, senior vice president and chief ambassador at realtor.com®.
“On the Gen Y spectrum, those agents already have those techniques and habits down,” Pigman said. “They would see it as a negative to charge them a fee for what they’re already doing on their phone at Starbucks.”
Solution: A Choice to Opt-In
Instead of imposing a fee for all agents, develop a system where agents can opt-in to certain services. For example, instead of hiring an administrative assistant to handle the back-end work for every agent, let the agents decide if they want to pool together to cover the service fee needed to hire a shared assistant.
“It creates a neat way to retain agents,” Pigman said. “If they like the services being provided, they certainly don’t want to create that wheel somewhere else. They think, ‘I can’t take that assistant with me.’ ”
Problem: Unnecessary Overhead Fees
A large brick-and-mortar office building may seem impressive, but the overhead fees required can dig into bottom lines, and you may not even need one. Big office buildings used to evoke a sense of pride and accomplishment––kind of a proof of success, according to Pigman. Older agents may value it, but younger agents may not care as much.
“Many younger people don’t care about or want a big company. It’s nice to have, but the majority of
If your large overhead fees are squeezing agents out, you may want to consider downsizing, then putting that saved money into online real estate.
“If I were a broker owner, I’d be looking at how do I create a place that’s functional but not have this huge monthly rent,” Pigman said. “I would spend that money on SEO and SEM so I have a great perception online, and shift those offline marketing dollars to online spending.”
Problem: Not Bringing in New Talent
As Pigman noted, bringing in new and younger agents is vital. And not bringing in new talent is a problem, even if your current agents aren’t leaving.
If you are having a problem recruiting younger agents, your brokerage might not be technologically appealing to the younger demographic, or you might not be offering the right services.
Solution: Getting Plugged In
Figure out what kind of technology you use and what you might be missing. Consider offering virtual meetings and paperless operations or adding cutting-edge email services, like BombBomb, which allows your agents to send video emails to clients and provides analytics on client responses. You can also manage lead activity and maximize conversion ROI with FiveStreet.
However, anticipate the possibility of pushback from agents who may not be technologically inclined.
“There are a number of things that agents don’t want to learn but can’t ignore,” Pigman said.
If this applies to your agents, consider offering training and hiring an IT professional to assist with day-to-day issues.
“I’ve seen lots of brokers do this to show older generations. They do this, and they realize their agents won’t go anywhere,” Pigman said.
By providing support for common tech problems before they happen, agents are less likely to become frustrated, and more likely to learn the new system and feel like a valuable asset.
While it was once common for REALTORS® and brokers to divide their time between office space and field work, times have changed. Now, agents and brokers spend more time working from their laptops or tablets, and less time occupying those pricey office suites.
As a broker, switching to a virtual office space and working from home (or at a listing, or in a coffee shop), may seem like a cheaper way to manage the business, but is it practical?
If you are currently leasing office space for your team, switching to a virtual space could save you money. But the real advantage to going virtual and working in the cloud is that you and your team can always be connected.
“Being able to be very dynamic and having everything at your fingertips—always—is the biggest advantage,” said David Newcombe, designated broker for Habitat Urban in Arizona.
While most offices exist in a 9 to 5 world, having your office with you wherever you go makes it easier to work around your clients’ schedules, or to set your own schedule.
If you do decide to go virtual, you will “have to work harder on broker communication,” Newcombe says. Without the water cooler around, you will need to set up times to talk with your agents and your office staff, send regular memos to keep everyone in the loop, and find more inventive ways to train new hires.
Virtual offices may also create some inconveniences on the client side. “The client needs more than just a Starbucks to meet in,” Newcombe said.
That doesn’t mean you will risk losing clients. You just need to find another way to meet and finalize deals.
“Think forward as to what affiliates might work with you to provide conference rooms for occasional special client meetings,” Newcombe said.
Finding the Right Equipment
If do decide to switch to a virtual office, having the right technology in place is key to a successful transition. Newcombe recommends starting with the right customer relationship management software.
“Don’t always go for the obvious old tried and tested solutions,” he said. “There are many great new products on the market that you can customize to fit your brokerage like a glove.”
Once you have a CRM system in place, a handful of productive tools will keep your business running smoothly. At the very basic level you will need an email client, online-based cloud storage, compliance and filing software, and word processing software. Newcombe recommends looking into:
- Google Apps to manage things like email and appointments.
- Google Drive to store, create and edit shared documents.
- Dropbox to store shared documents.
- Evernote Premium to store documents and links.
- LoopNet for compliance and brokerage files.
- A virtual whiteboard like Asana.
Making the Transition
With the right planning, transitioning to a virtual office could be completely painless. Start by setting regular meetings with a time and place for all of your office administrators, marketing specialists, Web designers and REALTORS®. Having regular meetings will help smooth the transition.
Before you lose the office entirely, Newcombe says to “make sure your REALTORS® are as tech savvy as they can be and used to working without paper.” Also, offer training on any software you will be using and provide agents and staff with a list of equipment they will need to buy.
In a limited inventory market, many of our professional conversations center on multiple-offers situations for sellers. There are plenty of courses and guides on how to position a home to receive the maximum return based on competitive offers, as well as how to present multiple offers to our sellers in an organized fashion.
There is very little literature, however, on effectively writing simultaneous offers for buyers. This is a unique approach not widely practiced, and therefore, it must be done with great care and full disclosure.
Full Disclosure on Simultaneous Offers
For the buyer agents willing to go against the grain, writing multiple offers for one client in the same weekend for different houses might work. They may risk blowback from the listing agent, however. Full disclosure is imperative. Written acknowledgment from the listing agent and the seller is even better.
Most listing agents are protective of their sellers and do not want to disappoint their clients with frivolous offers. Most sellers of their personal home want a buyer who falls in love with their house and negotiates in good faith to secure it.
However, this multi-offer approach could work in the best interest of a frustrated buyer tired of making offers and being repeatedly outbid, and every REALTOR® is charged with working for his or her client’s best interest.
Advantages of Simultaneous Offers
Making simultaneous offers on multiple homes at the same time can be labor-intensive and isn’t appropriate in all situations, but it does provide some advantages to certain segments of our home-buying clients.
Investors are one set of buyers that can benefit greatly from the practice. They’re often looking for a certain style of home—in a certain price range—and hoping to purchase multiple homes within a short time frame.
Agents who represent buyers know in competitive markets like we’re seeing today in many cities, each week’s listings are met with multiple buyer offers. Running clients around to see new homes every week, selecting one, and being outbid by other buyers can be a vicious cycle.
For an investor who has a bit of latitude in terms of style and price, writing offers on multiple homes at the same time can create the opportunity to lock up a number of properties in a short timeframe or—at the least—to improve the probability they will secure one property in a given week.
But for the traditional home buyer looking for a primary residence, the tactics may require more research and some nimble paperwork. Buyers searching for their own home will usually be much more specific and critical about the home they’d like to buy.
There are often those who are searching in a fairly homogenous neighborhood or development in which the majority of the homes are within their desired criteria. If you’ve already been through a number of unsuccessful bidding wars with them, they may be ready to start pursuing a more aggressive strategy with simultaneous offers.
Buyer Must Have Intent
To be clear, writing simultaneous offers should only be done when the buyer fully intends to buy any of the homes involved.
This is a process that works within the professional standards of our industry when the buyers present a good-faith intent to buy—and don’t intend to fish for seller contracts only to decide later which ones were worthwhile. Buyers should be of the mindset that whichever seller signs the contract first, that’s the house they’re buying.
Homebuyers can gain a significant advantage in a market leaning so heavily toward sellers. A typical showing schedule includes visiting the week’s new listings with our clients on Saturday and then writing a single offer for their top choice on Monday or Tuesday when the sellers are reviewing offers. If, instead, we write offers on two or three homes during the weekend, we may be able to force a seller’s hand a bit.
Two Ways to Present Simultaneous Offers
There are a couple of distinct ways to present these offers.
The first is more of a power play, which may or may not be to your advantage depending on the situation. If the home sellers in a neighborhood are regularly waiting to review offers until after the first weekend on the market (usually Monday or Tuesday at a specified time), you might submit multiple offers on Saturday. Let the sellers know your strong buyer has three offers on the table, and you’ll be pulling the other two offers as soon as one seller signs. It just might be the bold move to shift a bit of power back to your buyers.
The other option is less aggressive, yet still strategically significant. You can simply write three offers for three homes and triple your clients’ probability of securing a home on any individual weekend. Given the amount of time, travel, and emotional effort buyers in these ultra-competitive markets go through on a weekly basis, the comfort of securing a home meeting most of their preferences may be more attractive than endlessly hoping for the perfect-home scenario that might never materialize.
I’ve personally handled these situations myself, as have agents on my team. This tactic requires much more upfront discussion with clients as well as with listing agents as to the ramifications of each offer and the strategy for dealing with them upon having one accepted.
Manage Simultaneous Offers the Right Way
Out of respect for our industry associates and their clients, we should be prepared to immediately rescind any other open offers once our buyers have reached mutual acceptance on a home. Writing simultaneous offers might give us some leverage, but the goal isn’t to unduly burden sellers and listing agents with offers that won’t come to fruition.
As long as unaccepted offers are pulled quickly and the sellers’ agents are informed in a timely manner, agents can create a strategic advantage for their buyers and still leave all of the sellers involved in a position to consider other offers. Based on the current market, they’ll likely have plenty of them.
Writing multiple offers for buyers isn’t always the right answer, but in some cases, it’s a very valuable tactic.
Buyers aren’t the only ones who get burned out in this inventory-crunched market—our agents do, too. Getting buyers into contract and headed toward a successful closing often requires some creativity, coaching, and even extra paperwork.
Writing simultaneous offers might just be the tactic that works for your clients and your agents, but it needs to be done with great care and full disclosure.
Guest post by Sam DeBord, managing broker of Seattle Homes Group with Coldwell Banker Danforth and a state director for Washington Realtors. You can find his team at SeattleHome.com and SeattleCondo.com.
Editor’s Note: This article has been updated for clarity.