Ep010: The Number One Trait to Look for in a Broker

Transcript

Welcome to the Connect Practice Track & Grow podcast. Habits, routines, motivations, and mindsets from some of the most successful real estate professionals among us. Check out the show notes at ConnectPracticeTrackGrow.com. This show is brought to you by the Strategic Resource for Real Estate Professionals, creating and coaching business opportunities and strategies that support and add value to the lives of real estate professionals at the StrategicResource.com. And by ROOST Real Estate Co., today’s real estate agent doesn’t follow old rules. She makes new ones. Learn more at careerwithroost.com. Good morning. I’m Chris McAllister, and I’d like to welcome you to this episode of the Connect Practice Track & Grow podcast.

I want to talk to you today about the number one trait to look for when choosing a broker. Whether you’re just getting your license or a veteran thinking about making a change, today’s episode is for you. When it comes to finding the right broker, there’s really only one rule. Seek out a broker and a brokerage that is aligned with your vision of how you want to conduct your personal real estate business. It’s not as easy as it sounds. There are many ways to approach the business of real estate. What’s more, your approach will likely change and evolve over time. So it’s critical that you select the real estate brokerage to associate with that is aligned with your approach to the business and your values.

To get started today, I’d like to share an example of an agent whose approach to the business has evolved over time. Priscilla McNamee started off as a young, motivated real estate agent who approached the business as if she was shot out of a cannon. She was all over the place and excited to try anything that would allow her to establish herself and support her family. Her role models were successful veterans whose approach to the business I would best describe as traditional. And Priscilla initially associated with a well-known local brokerage in Springfield, Ohio that I would describe as what I like to call a legacy house.

It’s a place where it was very established, very traditional, but it was also a place where the agents were very competitive with one another. They were also very status driven and they were incredibly interested, excited and involved in the social aspects of being a member of the local board of realtors. And the other defining characteristics of this group of agents was that they were externally motivated by the I.O. Association of Realtors Sales Awards and also quite frankly pretty set in their ways. But remember, this was back in the day before the internet transformed our business. This is 20, 25 years ago. Back then, we realtors owned all the information and controlled all the information about listings for sale and we guarded that knowledge like our lives depended on it.

And certainly our livelihoods did. Like many of us getting established in the business in the late 90s and early 2000s, these people that Priscilla was modeling herself after, they were the best in the business though. And they were the, their examples that we all looked to and mentors that we looked to for guidance. So I first met Priscilla when I opened the RE/MAX franchise in Springfield, Ohio in 2003-2004. We were the only national franchise option for realtors at that time in Springfield. And we were able to attract several veteran agents, including Priscilla, over the first few years I owned the franchise. Priscilla was promised that the RE/MAX brand would lend her instant credibility in the market.

After all, RE/MAX at the time was the largest and most trusted real estate brand in the world. And while we had some incredible technology at RE/MAX, you know, especially relative to the local mom and pop competition, Priscilla and I eventually both realized that she had traded a local legacy brand for what became in effect a national legacy brand. RE/MAX was not all that. I’ve learned so much from RE/MAX and quite frankly, the best part of my association with RE/MAX was being introduced to Brian Buffini, a Buffini company at a RE/MAX convention. And Brian’s description of what it really means to build a referral based real estate business instantly resonated with me.

And I’m a Buffini company client to this day as is for real estate company. But Buffini and company showed me a new way forward in the business that was based on long term productive relationships, not short term and of the moment transactions. This idea and the way Brian articulated it was transformational for me and ultimately for Priscilla. Fast forward a few years and we get to the real estate crash of 2008 and 2009 when I ended my association with RE/MAX and started focusing on my personal practice. And I rejoined the brokerage that sponsored me when I first got my real estate license back in 2001.

During that time, Priscilla went back to work at the same local legacy house that she was with before joining me at RE/MAX. But Priscilla never forgot the lessons that she and I learned from Brian Buffini and they stayed with her even as her fellow realtors continued to approach the business as a series of transactions. Even though by this time Zillow and the rest had taken what had been information only realtors had and started sharing it with the rest of the world for free. So the traditional way of doing business at the legacy house brokerage got harder and harder as Zillow tended to in Realtor.com and some of the others continued to grab information share on the internet.

And what happened was it got harder and harder for we realtors back then because the general public started to see each and every one of us, each and every agent as the same as every other agent. And when you think about it, this made sense because at that time very few of us were offering anything of value to our clients that went beyond what they could find online. So we were used to having all the information and suddenly we didn’t have all the information anymore and it took some time for most of us to find a new value proposition that could set us apart from the competition.

Priscilla slowly realized that the way to differentiate herself was to focus on relationships and build a referral based real estate practice. She struggled to do this, however, because her vision of the business was completely out of blind, out of line with the way her brokerage approached the business. So Priscilla was moving one way, relationships and her legacy house brokerage was continuing to stay stuck in the past and focused on transactions. Meanwhile, within months of leaving RE/MAX, I started dreaming about what a real estate brokerage might look like that did focus exclusively on working with and supporting individual agents who wanted to approach the business like I did.

So in 2014, I opened ROOST Real Estate with that idea in mind to do just that. A few months after that, Priscilla and I had lunch and she agreed to join me at ROOST and during that meeting I could tell that Priscilla was fully committed to working by referral. She even hired a personal success coach of a peeping company that has helped her triple her business over the last five years. She is today the leading real estate broker in Clark County. And while she became that success, she’s also been able to carve out more and more time with her family. She’s living a big, beautiful life and shares her passion and mindsets with anybody that will listen.

She’s truly a leader in our business and I am super proud of her. So if the number one trait to look for in a real estate broker is that they be aligned with you, how do you find that broker? Well, the first step is to get really clear on how you want to do business. You have to ask yourself, how do I want to approach the business of real estate? And it’s a sneaky question because it sounds simple, but it takes some serious thought and self reflection to answer. Lucky for us, I got a tool to help you get to the answer in, I would say, less than 20 minutes.

So you can find the eight success mindsets scorecard at www.8successmindsetscorecard.com. And this tool provides you with a series of questions and statements that relate to the eight success mindsets that I’ve identified that are common to the most successful real estate professionals among us. And by success mindsets and by successful professionals, I mean people that are highly productive, enjoy a fabulous income, but at the same time are enjoying life. And that’s really what it’s all about. So when you go up, when you log in, www.8successmindsetscorecard.com, you’ll find that each of the eight mindsets that make up the scorecard has four columns or stages. And these create a continuum.

And as you go through the scorecard, if you find that your scores fall mostly in stage one, you’ll likely recognize that your approach to the business of real estate is more transactional in nature. It’s not a negative, you know, a transactional approach is not a negative at all, despite, you know, how it may sound or how I may portray it. Lots of realtors score themselves primarily at stage one across the mindsets and they do incredibly well. And a realtor with a more transactional approach simply tends to be task oriented, focused on their numbers and always on the lookout for that next quick opportunity to get to the closing table.

And if you have a transactional approach to the business, finding the broker who can help you think critically about your, you know, your task oriented action and financial plans may be a top priority for you. So if you do find yourself to be more transactional. If you’re a real estate professional, you want to find a broker who does the same. If your scores cluster around the second column or stage two, oftentimes you may be a new agent, or you may be an agent that’s had some time in the business, but you’ve yet to experience all the benefits that real estate license promised, or that the real estate career promised when you were getting your classes they can care of.

Folks in stage two tend to value training and community, and they generally, and again this is a generalization, it’s not true for everybody, but generally they have less ambitious goals than those in the other three stages on the scorecard. Many in stage two see real estate as more of a job than a profession or an entrepreneurial opportunity. So a lot of the folks in stage two, they’re excited about real estate, they’re looking for something new, but they really haven’t crossed that threshold to being completely 100% in business for themselves and responsible for their own success. So in stage two, just like stage one, finding a brokerage that is aligned with not just your vision, but where you are personally in the business today is critical.

If your overall scores fall mostly in column or stage three, you’re likely an established professional with years of experience and an extensive book of business. Your approach is likely more traditional in nature, you’ve probably been in the business a few years, and you do very well, or would do very well, in a brokerage environment where hard work and long hours are rewarded. If you find yourself scoring more prominently at the far right hand column in stage four, then your approach to the business is going to be likely more relational in nature. For you, a relationship is far more valuable than any single transaction, and finding a brokerage that shares your relationship-oriented approach to the business is going to be critical to your long-term success and overall happiness.

So my advice is to look for a broker that’s motivated to promote your personal connection-making activities. Look for a broker who’s going to help you enhance your personal practice that you’re going to continuously get better at what you do. Support your business based on your personal success goals and metrics, and hopefully coach you for never-ending personal growth and development. So now that you have a clear idea, hopefully after doing the scorecard of how you want to approach the business, you can target your search to a specific category of brokerage that will likely be a great bit for you. So there are essentially four categories of brokerages in our business.

And I call these the 100% shops, the mass market franchises, the legacy houses, and the right bit partners. And learning about the general characteristics of each brokerage category will instantly focus your search for a brokerage aligned with you. So first of all, let’s talk about the 100% shops. And I don’t know what market you’re in, but in the markets we serve, I look at 100% shops like Bathom, Red One, Emerge. And these are great homes for transaction-oriented professionals. Not only is the relationship between the agent and the client transactional, but so is the relationship between the agent and broker. So there’s some alignment there. And these brokers provide limited support, but they generally charge limited fees.

So consequently, they expect very little from their agents, and the agents that are successful there expect very little from their brokerage. These brokerages tend to focus on having a high agent count because the average annual sales of the agents overall tend to be rather low. So the 80-20 rule is relevant in the real estate business. I would say that easily 80% of the business is done by 20% of the realtors today. But in some of these 100% shops, and I would say most of these 100% shops, it’s probably closer to 99.1%. 1% of the agent population is doing 99% of the business. So you have people who are extremely successful, and then you have a whole bunch of people who aren’t doing a whole lot because they’re not personally invested in the profession.

The culture at these 100% commission shops, these 100% shops, I best characterize as being hands off. The offices tend to lack a lot of professional camaraderie. There’s not a lot of shared vision. There’s not a lot of mentoring, training, or personal coaching. And the tools that these brokerages provide range from absolutely nothing to an extensive menu of extras and add-ons that come in at an additional cost or monthly fee. And the successful agents and team leaders at these brokerages, the people who really excel in this environment, all the money that they save, that they might pay a traditional broker, these successful folks take that same amount of money and often more, and they reinvest that back into their personal businesses.

And what they essentially do is they create a brokerage within a brokerage for themselves and their team. So let me digress for a moment before we move on to the mass market franchises. And one of my favorite stories about an agent who got their start at a 100% shop is Ann Sparks in our office in Springfield. She was my guest on our last Connect Practice Track and Grow podcast episode. Ann got started in an office just outside of Springfield that’s a newer franchise and only charges an annual fee and then a transaction fee on their first 15 sales. The offset, of course, is the women to cost is that she also enjoyed limited service, mentorship and limited training.

So Ann was disillusioned. She had chosen the wrong brokerage. She was doubting her decision to pursue a career in real estate. And then she downloaded my book, How to Make it in the New Real Estate Business. And then she actually listened to my very first Connect Practice Track and Grow podcast that she did with Susan Elliott last summer. So she’s a woman after my own heart, right? She listened to my stuff. She read my book and she liked what she heard and she reached out to me. And Ann immediately fit right in with our culture and joined us. She was excited to begin learning how to work by referral.

She was excited to use the tools we provide, the training and the resources. And we also paired Ann with Tina Bleything in our Springfield office, our agent success coordinator. So she had a buddy right from the start to help her get started on the right foot with us. Long story short, Ann is having a great year in what quite frankly is still a challenging real estate environment as I record this in April of 2023. So that’s Ann’s story. And we’ve talked about the 100% shops and the next category of brokerage I want to talk about are the mass market franchises. And these are like the Keller Williams’s of the world, DXP, even Exit Real Estate, which is still very big in Canada.

And the mass market franchise real estate brokerages, these folks often offer an extensive training program and they use this training program, this library, this catalog as a means of attracting new agents especially and the agents who are seeking safety and essentially the security of a job. So these folks haven’t quite made the leap to being a business for themselves. They’re still looking for sort of a hybrid situation where they feel like they are on their own and they have some freedom, but they’re still a big part of their mind that’s looking for the security of a job. The commission split structure of these brokerages often designed to incentivize agents to stay with the company by capping their commission splits at a predetermined amount depending on the market once they’ve earned a certain amount of commission.

And while mass market franchise real estate brokerages may offer extensive training libraries and video resources, the fact is these tools, they’re just, they’re not valuable. They’re almost useless in isolation because the tools need to be accompanied by practice, repetition and experience in the real world. So without the right mindset that you’re going to go out and approach people, make some connections, get belly to belly with people and get started helping them buy and sell houses. You can watch all the videos you want in the world, but they’re not going to get you anywhere in isolation. Successful real estate agents are typically driven by an intrinsic motivation, intrinsic ambition. They’re self motivated and you can’t train self motivation.

It’s something that successful agents come with, like batteries included. So again, I’m all for training. I’m all for resources. I’m all for having that library. But there are certain things about being a successful entrepreneur and a successful real estate agent that you just can’t train into existence. So many new agents, you know, they tend to begin their careers at mass market real estate brokerages for the training alone. The problem is they often fail to find success. They become disillusioned and they either end up leaving the industry altogether or for those that want to continue to stick it out and find a new way, they seek out a brokerage committed to their ongoing professional success and personal development.

So that’s my quick assessment of the mass market franchises. And now I want to talk about the legacy houses. And these… Types of brokerages are often found at some of the most storied, prestigious and traditional brands in the business. So legacy houses, think of Caldwell Banker or Century 21 or Howard Hanna. Even Berkshire Hathaway is a very traditional legacy house, even though as a brand they haven’t been around near as long as Caldwell Banker, Century 21, etc. So these brokerages have a long history and a tradition of excellence going back a decade. These companies were formed when brokerages were highly selective about the agents they invited to join them.

And the culture at these firms, as I’ve said earlier, can best be described as traditional. They’re compelling offer to agencies, their name recognition, brand, history and status as a highly respected brand. These brokerages and the agents who work there are focused on, to a huge degree, and part of this is because they’ve been in the business for quite a while, but they tend to be focused on holding on to what they’ve worked so hard to get their entire careers. They’re also very focused. You know, they’re not interested in new tech or shiny objects for the sake of trying something new. These brokerages also tend to have deep and extensive institutional wisdom.

And I have to tell you, you know, these are the bedrock foundation of the real estate industry. At these brokerage you find a mix of professionals. You find the large group of realtors that are joyfully celebrating their purpose and continuing to add value. And they just love the business and, you know, they’ve been at it for years and they’re going to continue, you know, as long as they possibly can. The other thing though that you often find that these legacy houses is, you know, a not insignificant subset of agents that, you know, I don’t mean to sound cruel, but you find a bunch of, not a bunch that’s not fair.

But you find agents here are kind of holding on, you know, for dear life to what they already have because they can’t imagine doing anything differently or finding new ways to add value or adapting, you know, how they approach the business. So that’s the legacy houses. And finally, my fourth category of real estate brokerages is what I like to call the right bit partners. And I believe right bit partners are the future of real estate and being a right bit partner to our agents is what we aspire to be at ROOST Real Estate Company. So here’s my vision of a right bit partner. The right bit partner brokerages, they combine a vision for the future with the very best practices of the past.

New professionals choose a right bit brokerage based on shared values and they stay because of the opportunities they and their brokerages and brokers create together. Productivity for the new professionals comes from activities that promote and enhance their relationships with people who already know, like, trust and support them. They prioritize connections and they prioritize adding value to the lives of past, present and future clients. The new professionals at the right bit brokerages are some of the most productive and profitable realtors in the industry. They have the tools they need to track their lead generating activities, multiply the value of every listing they accept, expand their personal brand and generally generate far more leads, referrals, appointments, contract and income than their peers at the other three brokerages.

The new professionals achieve a balance between their personal professional lives that other realtors can only dream of. They intentionally craft careers worth pursuing and lives worth living. They’re successful on their own terms and by their own rules. So in reality, there is no right or wrong way to approach the real estate business. With the right broker by your side, nothing can hold you back from using your own goals, motivations and mindsets to propel you forward. The key is finding a broker who is aligned with your values, shares your mindsets and has a deep understanding of how you want to approach the business. So in closing, I want to share a eight success mindsets scorecard success story.

So again, you can find the scorecard at www.8, the number eight success mindsets scorecard.com. So we recently brought on a newly licensed realtor who is also going to help us in our property management department. His name is Trey Buccio from Dayton, Ohio. Before we extended an offer to Trey, I asked him to complete the rused version of the eight success mindset scorecard. And if you want to check out the rused version, you can find that at www.greatfitagent.com. So Trey went to the scorecard and after completing it, we had a conversation. For the first time in his fledgling career, Trey found the words to express the kind of business he wanted and had dreamed of.

And he even said to me after completing the scorecard, he said, quote, it’s like you know me better than I do. That’s the kind of feedback that just makes my day. And I am confident that Trey will enjoy a long and successful career with us because our values are aligned and we’re a great fit for each other. Okay, that wraps things up for today. I hope you’ll download, if you haven’t already, your free copy of my new book, Eight Success Mindsets of the New Real Estate Professional and learn how to craft a career worth pursuing and a life worth living. And you can download that at eightsuccessmindsets.com, the number eightsuccessmindsets.com.

And again, if you want to jump straight to the Eight Success Mindsets scorecard, check it out online at www.eightsuccessmindsetscorecard.com. And thanks for listening to today’s episode of the Connect, Practice, Track, and Grow podcast. And there we have it. Thanks for listening in. If you want to continue the conversation, go to www.ConnectPracticeTrackGrow.com. That’s ConnectPracticeTrackGrow.com where we have additional information about the podcast, archived episodes, and an option you can select to be a guest on the show. We’d love to hear from you. So that’s it. We’ll be back next time with another episode of the Connect, Practice, Track, and Grow podcast.