The crucial roles of leadership, proper messaging to employees and agent retention in tough times were the main expert opinions provided by several residential real estate company leaders at RISMedia’s Real Estate’s Rocking in the New Year virtual conference, held earlier this month.
In a session titled, “Proven Strategies for Winning in a Changing Market,” Helen Hanna Casey, CEO of Howard Hanna Real Estate Services, moderated a discussion that included panelists Keith Ard, president of RE/MAX Gold Nation; Michele Harrington, COO of First Team Real Estate; and Scott Durkin, CEO of Douglas Elliman.
Helen Hanna Casey: I think the first question everybody wants to know is about the changing market. What does it mean to you, Michele?
Michele Harrington: 2023 is going to be a little tough. 2022 was tough for a lot of our agents. The thing we have to realize is that we’re never going to have another year like 2021. There are things you can do to increase income and market share. And that is taking over new farms, exploring different ways of getting business. It doesn’t always have to be the market that carries you. I think it’s going to be tough, at least for the first half, but we’re going to see a better second half. We have to work harder, we have to capture more market share, and there’ll be many opportunities to do that in 2023. I’m actually really excited about the year in general.
HHC: Let’s go to Keith. What does the changing market mean to you?
Keith Ard: 2022 really came on strong very quickly and changed us. We all had to pivot. Consumers got very concerned, but now, months later, we know what we need to do. If you think about how many consumers were not able to be served in the last market, and now focus on them, this market is tailored more to a different consumer. Now it’s just a matter of finding your footing as 2023 kicks off, realizing that there’s plenty of people that need our help, and let’s go win this year.
HHC: Scott, you’re in markets all over the place, so what do you see?
Scott Durkin: I think this market has changed the landscape and is also bringing in a new level of buyer that was shut out the last time because they may not have had the cash, the inventory or the agent. So now we’re seeing a market that is one of opportunity. And I think with all of the press regarding interest rates and the slowing of the market, which really was based on the lack of inventory, it gives them a chance now to be more aggressive, come forward with offers and expect to get some concessions from the sellers.
So we’re seeing a lot of activity. Now, there are agents that do well in this market. There are agents that do better in an upmarket, but the last four to five months we had a little bit of a coma, or a hiccup. I think 2023 is shaping up to hopefully bring more people into the market, and the interest rates will drop.
HHC: I think we’re all optimistic, but for those who are willing to work, this is a great market because so many opportunities are available. But we do have to go through some weaker times perhaps. And one of those challenges you face is how to keep your leaders focused for the best results in this kind of a market. Let’s go to you, Keith.
KA: I think that leaders need direction, and when there’s confusion, the best thing we can do is be very specific. All of us need to operate at our best, and that means we’re going to need to say no, and be focused on the three to five things that are most important to the results and the mission of our organizations. We can help our leaders guide the agents in very specific ways to help them find their footing, and focus on the positive opportunities. Guide with clear and simple direction.
HHC: Any other thoughts on that, Scott?
SD: For your upper management and the leadership of all of your branches or regions, you have to let them know if you’re still their partner. Because your compensation plan may worry them if they won’t reach those numbers. Take it upon yourself and your executive board to redo those plans and give them something to reach for that they can. Because if you’ve given them a plan that’s not changed for next year, you’re going to have a lot of unhappy managers, and unhappy managers mean you’re going to have a lot of unhappy agents. You have to really put forth the fact that you’re still partnering with them, they’re still an important part of the company, and that you will all get through this together.
HHC: Michele, do you have anything to add?
MH: I think that hard times create great men and women. I look at this as an opportunity for growth for our managers and for our leaders to embrace confrontation and accountability and get into those uncomfortable situations where they’re talking to agents about their business and what they need to do to make it grow in a harder time. I’m really excited to see our leadership team grow during this time, and am definitely going to be holding them accountable.
HHC: So you have to make some tough decisions, and that’s one of the things when being an executive is not always easy. You are the one that’s accountable for everything. Scott, how do you handle making those tough decisions?
SD: I think you have to pivot. I know that’s sort of an overused word, but I think the playbook has changed and you need to really get your book in order. And as a company, and as leaders of these companies, we have to reset everything. We may even have to reset expectations and what our budgets will be. You can’t just wait along the sidelines and let the market take care of itself. We can change the market as fast as technology works, and get it moving much quicker and much more solidly.
HHC: Michele, how do you make those tough decisions in these changing times?
MH: You just have to be a little bit more careful. Decisions have to be made with more tact and more care because in 2021 you could make bad decisions and still be fine because the market was carrying you. Last year we had to be more careful, and this year we’re going to have to be even more careful. So where are you going to spend your money? Maybe it’s not the best time to experiment on technology that’s going to cost you a fortune, maybe it’s the best time to just go back to door-knocking and back to basics. Those decisions really need to be thought about carefully when you’re looking at a softer market than we’d love to be in.
HHC: Keith?
KA: First, we have to lead the entire organization. And sometimes that’s not popular, but we have to focus on what’s best for the entire organization. Secondly, we have to get the message and messenger role. What is the message? Who is the best messenger? We as executives have to take the tough messages and deliver them in an inspiring and honest and authentic way so that people understand that our decisions are being well thought-out for the health of the entire mission. And that everyone will benefit if they trust in the decisions being made. That starts with leadership at the top, then you can delegate next-tier decisions or messages down to the organization. But the key messages, the main messages and the toughest messages should be delivered by senior executives.
HHC: How do you deliver messages today? We went from in-person to I’m not there to sort of hybrid today. So how are you delivering messages?
SD: I think it’s up to you to take the bull by the horns and not give them the bad news, but partner with them and say we need to curb some spending, advertising, marketing, events, whatever it is. So you partner with them on it and the bad news becomes, wow, I have someone helping me. I have someone who cares. And it’s really important. You can’t wait and think that it’s all going to go away. Numbers don’t rise like sourdough bread.
HHC: And just waiting for the interest rates to fall is not the answer, is it? Keith, you want to add something?
KA: We have to lead from the front and be in the trenches with our teams. During previous seasons we’ve been with the pandemic and other things and defaulted to video or to mass messaging, so there’s a time for that. But there’s also a time for strategic messaging that gets down to the market level, the office level, and in some cases the agent level. So if we’re leading from the front, I’m calling more agents now than ever before. I’m texting more agents than I’ve ever texted directly, making sure they know I’m here and part of their resources and value. We have to get into exactly what we need to do for the given situations we’re in now.
HHC: Michele, you’re in southern California, where it’s beautiful all the time. Is there a difference there in how you communicate?
MH: We don’t have to worry about snow or rain when we’re getting around to the offices. That’s a beautiful thing. There are a lot of different ways we communicate, but I really rely on our managers. I try to do a lot of communication through them so they can communicate with the agents in person. I’d love to get around to more offices in person, but it’s hard to get everywhere.
HHC: That leads us to the question beyond communicating, which is what we’re doing with our agents so they can work effectively. Because so many agents were out there flying by the seat of their pants the last year and a half. Let’s talk a little bit about that. Michele, because you were just on that track, could you continue?
MH: Absolutely. What agents need right now is coaching and accountability. And a lot of companies don’t have the ability to do that, they don’t have the staff. So it’s coaching, it’s accountability, it’s one-on-one, it’s interactions with top-producing agents. It’s training classes, role-playing, and we have the ability to really thrive in that to be able to show our value this year.
HHC: Scott, do you have anything to add?
SD: You need to sort of wipe the slate clean for your training because it should mirror your top agents, the ones that are really doing well in this market. There are certain markets that allow some agents to thrive. You have to be present and not let any phone call go to voicemail. The worst thing you can do is not answer the phone because you think something’s wrong. It’s very important to always be available, and also to get together with everyone. If you can get to other offices in other locations, that’s even more important.
HHC: Keith?
KA: I think this is going to be a season of leadership. In the last market we were in, at times, the leaders were almost frustrated because it wasn’t that they weren’t needed, it was that it was very difficult to connect because the agents and teams were moving so quickly. And so they’re kind of getting back on their game right now and enjoying the time, the collaboration. And it does happen at the ground level. If we can help our leaders be relevant in the big picture, they’re going to take great care of the agents. The agent who hasn’t gone through a market shift has a different need in some cases than a seasoned agent or team that’s already been through a shift or two and is already adapting. So they’ve got the view and the skillset to help.
HHC: You’ve all talked about managers and leaders, and we’ve talked about how you need to keep them up. But I don’t know that everybody understands the importance of the role of managers. Keith, could you talk a little bit about what you call branch leaders, and how they make a difference in the agent’s life?
KA: I think first and foremost is they have the most personal connection to the agent. So they know where the agent’s at, at any given time. They know what might be going on in their personal life, in their business life, and they know how to help because many of them have had relationships for a very long time or have been in their roles for a long time. And so their job is to really know how to help. Our job is to make sure they have the tools and the resources. So we do gatherings every week, very specific to topics, whether it be development or growth of our organization. And we are also helping them bring new people in, which brings new ideas in.
HHC: Michele, anything to add to that?
MH: I believe managers are our biggest value proposition, the most important thing that we have in our company. A lot of our managers have been with us for 20, 30 years. The agents rely on them, they’re their coaches, their friends, they hold them accountable. I keep a really close relationship with our managers and they have a very close relationship with the agents, and that’s how we thrive.
HHC: Scott, how about you?
SD: I think the cream rises to the top, and especially now you’re going to find out which managers might need some help, and some managers might not make it. So you need to be really aware of how they’re doing. They are the liaison between you and the agents. And oftentimes they don’t communicate well because they’re afraid to tell you that something’s amiss. And many times they wait until it’s too late. You have to earn their trust that no matter what they deliver to you, you’re able to turn around and help them.
HHC: Scott, how do you retain and recruit agents in this market?
SD: Retention is key in this market because as we know, people tend to move around in a down market. If they’re busy and super successful in an off market, they don’t want to talk to you. But now there’s opportunity. You look at your production list and see who you need to make a phone call to because they may not have had a great year, and the only way for them to get out of that slump is to get to another company.
On the recruiting side of it, everyone in the pool. There’s opportunity out there because as much as you may think it’s only your problem, everyone else is having the same problem. And I think agents move more in this kind of market than ever before because they need a restart. It’s important to have a recruiting piece as part of the compensation for the management to get out there and get people, which as we know ultimately leads to more market share and higher dollar volume.
HHC: Michele, are you seeing anything different than what Scott said in terms of retaining and recruiting agents right now?
MH: In times like this, it’s easier to recruit and retain because when the market’s carrying you, you don’t need great coaching, you don’t need great technology, you don’t need great marketing. But when the market gets tough, you need those things. We’re a full-service brokerage, so we’re not the cheapest game in town, but we offer a lot of service. You need a lot of service and a lot of support when the market is tougher. So retention I think is easier for us in times like this. And the same with recruiting. We have companies in our area that are going out of business, so we can roll those agents into our offices. Can you make headway without a great coach, without great systems, on your own so to speak? Or do you need a full-service brokerage? Agents need us more right now.
HHC: Keith, we talked about financial security and what that means in retaining agents when they believe their company is financially stable. Can you give us more input on that?
KA: It really starts in the past with how we have built our organizations to be resilient. We shouldn’t shy away from making tough decisions that make us healthier. And I think that agents will appreciate that. If they know that good decisions are being made by seasoned leaders to make the company stronger, that gives them that sense of security. This is a season of value propositions.
Stay tuned to RISMedia for more reporting from this year’s Real Estate’s Rocking in the New Year.
