When it comes to running a productive real estate firm, no detail is too small. From office renovations to training programs, today’s top brokers understand that there is a wide variety of factors that lead to profitability.
This point was underscored by panelists at RISMedia’s Power Broker Forum, held on May 15 during the REALTOR® Party Convention & Trade Expo in Washington, D.C. Titled “Power Broker Strategies for Increasing Productivity and Profit,” the Forum was moderated by John Featherston, president & CEO of RISMedia, and Gary Scott, president of Long & Foster Real Estate.
Featherston and Scott led a panel of leading brokers who discussed in detail their strategies for running a profitable firm, even in the face of the recent real estate downturn and the market’s slow climb back to recovery. Panelists were: Todd Hetherington, CEO, NM Management/CENTURY 21 New Millennium; Ron Croushore, CEO, Berkshire Hathaway HomeServices The Preferred Realty; Scott MacDonald, president, RE/MAX Gateway; and Ken Baris, president, Jordan Baris REALTORS®.
“Three or four years ago, we wouldn’t be discussing increasing productivity and profit,” says Featherston as he opened the Forum. “We would be discussing survival. To paraphrase Steve Jobs, ‘Sometimes life is going to hit you in the head with a brick; don’t lose faith, stick to your core and you’ll be alright.’ Well, all of us in this room were hit with that ‘brick’ and are facing a different marketplace today.”
And in this new marketplace that’s emerging from the rubble of the real estate downturn, brokers and their agents are faced with new possibilities for winning…albeit on a challenging new playing field.
Assessing the Market
“In 2010 and 2011, this NAR meeting (in Washington, D.C.) was held in a different environment,” remarked Gary Scott. “But in 2012 and 2013, we began feeling robust and brisk again.”
So far in 2014, however—although low interest rates prevail—real estate is off to a slow start. According to Scott, this could be due to investor activity impeding the usually healthy first-time homebuyer segment, and/or harsh winter weather dampening market activity early in the year. “March and April were good in our markets,” Scott added, “but spring didn’t spring to the degree we had hoped.”
In order to remain productive and profitable in these fickle, somewhat unpredictable market conditions, Scott explained that high-performing agents at Long & Foster are “blocking and tackling, paying attention to fundamentals, and taking advantage of technology and innovation to ramp up their successful practices of the past.”
Scott also emphasized the necessity of taking a strong stance in a somewhat shaky market. “You need to have a sharp, distinct vision and know what your value proposition is. Otherwise, we become very little to hardly anybody.”
Planning for Accountability
According to Todd Hetherington, the way to run a successful firm is “to do business in a way that is fun, fair and profitable.”
While Hetherington’s 18 offices have fared well, they are still shy of projections. “We need to get laser focused on making up for lost time,” he explained. “We beat the market, but were off from what our predictions were. The question then becomes, ‘how do we change the way we do business?’”
For Hetherington, that change took place in his company 10 years ago when he reworked every job description to include the phrase, “to create a positive customer experience.”
“Two years ago, we started doing business relationally as opposed to transactionally,” says Hetherington. “I know that sounds mundane and simple, but the reality is, it’s life-changing. The relationship is what we’re building, not the transaction.”
An integral part of creating this fundamental change company-wide was the introduction of systematic coaching for every agent—coaching that focuses more on life goals than business planning.
“The business planning aspect of coaching has always been there,” Hetherington explained, “so we made sure we reversed the order and started coaching sessions with, ‘How’s your balance?’ To me, the word balance is everything. You can’t accomplish everything in your life if you don’t have proper balance.”
For agents who thrive on getting granular, a detailed, 21-page business plan is created. “About 20 percent of our agents will want a detailed plan; most want a one-page game plan.” Either way, the plans include family, personal and spiritual goals as well, and are jointly signed between the agent and the “branch leaders.”
“We hire branch leaders, not branch managers,” explained Hetherington. “A manager manages things; a leader manages people.”
Handsomely paid branch leaders at Hetherington’s firms—who, by design, do not have a real estate background, but often a corporate or military one—are tasked with holding agents accountable to the systems that will lead to accomplishing the goals laid out in the business plan and creating the necessary balance to achieve success.