By Eugene L. Meyer
With the shifting market, brokers are shedding agents who thought real estate was a walk in the park only to learn that the path can be treacherous. But they are also adding others who are undaunted by cyclical ups and downs and able to bring value to a business whatever the economic climate.
For some brokers, that means raiding other firms for the best and the brightest, or, to put it more gently, recruiting "crossovers."
"I believe that the existing agents are now more ready to make a change than they have ever been, because they are looking for solutions to the challenges they are facing," says Beverly Steiner, regional director for Northern California and Hawaii of Keller Williams Realty. "We don't really have a pitch. Our deal is to look at the individual, see their needs, experiences, where they want to go to the next level."
Looking Outside the Box
Others, such as Carolyn Hemlinger, president of Coldwell Banker Mid America, are finding potential new sales agents in other fields, such as teaching, that require similar skills.
"Teachers seem to do well at this," explains the Des Moines, Iowa-based real estate executive. "They're organized. They're accustomed to overcoming any objections. They seem secure in their own skin. They are a good target for us."
To reach this new pool of potential agents, the firm recently advertised in the Des Moines Register and mailed postcards to 300 teachers within a 50-to-60 mile radius.
The teacher-targeted message was simple and to the point. Superimposed on a blackboard full of mathematical equations is a frowning face and the words "Your current income." A larger smiley face appears next to "Your income selling Real Estate," with the promise of "Unlimited income potential. Set your Own Hours."
The first mailing quickly drew 15 interested callers, but it will be a while before viable candidates go through the licensing process and an FBI background check. The Des Moines-based firm already has one former principal and fifteen former teachers among its 300 agents at seven branches.
Hemlinger's next plans to target nurses. Like good real estate agents, she notes, "They're on their feet, work long hours, are used to working with people, and have a huge customer contact base as well."
Christopher Galler, a senior vice president of the Minnesota Association of Realtors, also sees teachers as potential real estate agents. "They come with very good counseling skills and are a little more patient trying to explain all the details of a real estate transaction," he says.
Other groups could also make the grade in this market as successful real estate agents. "Mid-level managers from other areas being down-sized and laid off are coming into our industry and bringing in a lot of their skills," Galler says. However, "brokers are being more selective. More and more are realizing it's not just bringing in bodies who can pass the license test."
The goal now, he adds, is to recruit agents "with better business acumen," and because "times have changed," it's more important than ever to ask agents "more pertinent questions, to ask about their expectations, and to help them build business plans rather than have them just knocking on doors."
Steiner notes the changing marketplace demands more of all agents. "Instead of just running into clients easily," she says, "you really have to go out and seek them, have systems, be in constant contact with your past database, understand challenges of the seller, understand what a buyer might be thinking."
Real Estate Experience Still Best
But not everyone is bullish about casting a wider net for untested agents. "New are wonderful, but 80 percent are not in the business two years after they get their licenses," says former broker Richard Robbins, whose international coaching firm RRi is real estate focused. "The key to success right now is to chase experienced sales people, who already have market share, already have proven success."
The way to do this, he says, is to start with a list of professionals you'd like to recruit, then become "their broker before you're their broker" by tracking them, sending them frequent e-mails and postcards, meeting them for breakfast, allowing them to print offers in your office. "Become their resource center," he advises, so that when they are ready to switch, "they don't phone anybody but you, because you've brought value to them beforehand."
The bottom line, according to Robbins: "If you recruit experienced agents, you are gaining access to someone who is probably going to be in business two or three years from now. When they come to you with their market share, you're taking that away from another brokerage."
Quality, Not Quantity
While the number of agents continued to grow last year, even as sales of existing homes slumped, the barometer membership of the National Association of Realtors could drop from its record 1.4 million by 6 to 8%, NAR chief economist David Lareah recently told the Wall Street Journal. But, especially in a down market, brokers will always be on the lookout for new recruits who can produce results.
Often, recruiting the right agents can be just as challenging as selling a home in an overstocked market. "You have to have good pipeline of names and follow up and follow up and follow up until sometimes you think you could just jump off a cliff," says Cyndy Laird, in charge of recruiting for Dallas-based Real Living Lone Star. "We try to cover it all."
What that entails in her case is, first, sending postcards to all those who, according to the Texas Real Estate Commission, are preparing to become licensed, "in the hopes that they might call."
Laird says she also tries to gain entry to privately-run real estate schools, speaking at breakfasts or lunches where she can pass out cards about her company to prospective agents. Real estate seminars are similarly good recruitment venues.
Most effective, though, is finding new recruits through agents already in the firm, asking these colleagues constantly, "Who have you been doing a deal with who is a great agent?"
"None of this does any good unless you follow up over and over and over again," Laird says. "I call them give, six, eight times until I realize they're going to do something else. There is just a lot of follow-up and you can't stop. It is not much different from selling a home or working with a FSBO (For Sale by Owner); you just keep calling."
Refining the Selection Process
To select candidates, Laird has two sets of questions, one for experienced agents, and another for new ones. New agents are asked about their expectations, "to determine whether or not they are realistic." She questions experienced agents about "more behavioral types of things," including their history and production in the real estate business.
"There is no doubt about it, there is a slack-off in good people wanting to enter real estate as agents," she says. But real estate continues to draw new people, at least in her area, she says, where "real estate schools are packed."
Still, experienced agents are often a better bet. "I'm talking to crossovers from other companies every week," she says. "Now is a good time to focus on them, because if the market's going soft, they need be with a company that gives them lot of support and a lot of tools."
With Real Living, a large national franchise operation, web-based tools include, Laird says, "everything an agent needs," from e-mail to time management to contact information and other databases.
In the recent past, says Toronto-based recruiting guru Don Kottick, "People assumed there was a pot of gold at the end of rainbow. As a result, more prospects were available for the recruiting pipelines. With the correction in the economy, there are fewer new agents coming into the business."
In this changed climate, Kottick says, brokers must be much more discriminating because bad hires can be costly. "As the market slows, there's a cost associated with unproductive agents," he says, citing a National Association of Realtors survey that put the annual cost at $10,000 to $40,000 per agent. "As the bottom line gets tighter, you want to make sure you aren't carrying people who cost you money."
Technology and the New Recruit
The costs associated with such agents include general overhead, administration and marketing. "When the bottom line profit is reduced, you must make sure you hire better," Kottick says. "And as a result you may bring different things into your operation, enhance your development and training program to reduce turnover, and make a better selection. You need better mechanisms to help you choose, a more predictive element in bringing in agents."
Kottick's conversation is sprinkled with phrases such as "lead generation," "drip campaigns" and "prospect management." He markets his Real Estate Simulator program as a way to winnow out job applicants who lack the aptitude and skills to succeed in the industry.
New recruits, Kottick says, must be technologically savvy, "because the whole industry has shifted to be more technology-based, computer-literate. You want somebody that comes with kind of a good sense of business practices. You want somebody that doesn't come in with preconceived notions, that is trainable and willing to learn best practices, always continuing to improve, who is really goal-driven and has good human communications skills as well."
In this market, Kottick notes, "You have to look at new and innovative ways to attract these individuals. This is why you see people going to job boards, making use of blogs and hosting more career nights."
"Real estate is not an easy job; it takes lot of work," says Leslie Rouda Smith, a Lone Star Real Living franchisee with 55 agents. "A lot come into the industry thinking we're just order takers and make all that money. And that's not how it is. That's not the real world. We're not looking to have the largest number of agents. That's not our business model. Ours is to give them the tools and technology to make them best they can be."
The top 500 Power Brokers in RISMedia's 19th Annual Power Broker Survey expect to hire a total of 68,749 agents this year.
Power Brokers reported "Recruiting/Retention/Training" as their issue of top concern-ranked number one by 39% of survey respondents.
Source: RISMedia's 19th Annual Power Broker Report & Survey. For more information, please visit rismedia.com.