Looking toward 2023, many agents, concerned about the shifting market and its impact on their business, are considering a move. Perhaps the change required is not their location but their mindset. Here are a few real-life examples that apply to real estate.
Brokerage minus agent equals same habits
A number of years ago an incident with a table saw required a skin graft to repair one of my fingers. They took the donor skin from the inside of my arm close to the elbow. Imagine my surprise as the wound began healing and hair suddenly appeared on the side of my finger where the injury had occurred.
Looking closely, I realized the skin used to repair my finger had a number of hair follicles in it and, regardless of the fact that the skin had been relocated, the follicles continued to do what they were designed to do.
This principle applies to many areas of our lives. As we grow into adults, we are shaped along the way by circumstances and events that establish our beliefs and lock in behaviors. Thus, regardless of what location or situation we find ourselves in, we tend to respond the same way.
In the same fashion that I cannot consciously stop the hair from growing out of the skin graft on my finger, our ingrained subconscious dispositions lead us to react a certain way in specific circumstances. This can be good or bad, depending on the behaviors and the environment.
You can’t just pluck a bad habit
As an example, let’s look at a marriage. Most of us can behave contrary to our predispositions long enough to convince someone we are a worthy partner. Once the ceremony is over, however, there is no longer any need to impress and our behavior reverts to normal.
If “normal” includes bad habits, they can blow up the marriage. When a marriage ends, some choose to remain single. Others, however, get back into another marriage, sometimes very quickly. Figuring they know what mistakes not to make the second time, they plunge ahead.
Bad habits, unfortunately, are like the hairs on my finger: Even if I pluck or cut the hairs, they continuously reappear.
Consequently, while statistics tell us that 50 percent of today’s marriages end in divorce, the failure rate for second marriages is at 67 percent and for third marriages, 74 percent. Turns out, unless we take specific actions to remove those recurring bad habits, they will continue to show up regardless of how well-intentioned we might be.
The grass is greener
This also applies in the real estate arena. Many Realtors are discovering, due to emerging market realities, that they are doing a substantially lower level of business than just a year ago. This is beginning to cause significant hardship for some, especially those whose real estate practice is their sole source of income.
Brokers realize this and are out in record droves looking to snag those agents who, assuming their problems are tied to their current brokerage, are looking to switch. With promises of better training and support, recruiters are assuring potential recruits that the grass is indeed greener on their side of the fence.
In reality, in the same way that second marriages tend to fail at a higher rate than the first, second brokerages fare in a similar fashion. Regardless of the promises of the new broker and the best intentions of the agent, unless significant changes are made internally by the agents themselves, it is a classic case of lather, rinse, repeat.
Although true that some offices provide a poor environment for success, in many cases, the agents do not need a new location, they need new habits and behaviors that will drive their business differently than before. Additionally, the changing of the brand, along with the expenses of signs, cards, email addresses, websites and other collateral, could be an unnecessary expense and actually detrimental in a declining market.
The bottom line: If an agent is going to switch brokerages, they need to make sure they are doing it for the right reasons.
5 reasons to make a brokerage switch
An article I wrote earlier this year goes into this in detail. Here is a summary of the top five reasons to consider a change in brokerages:
Nothing is more important in a business than the correct culture – defined by Indeed.com as “the set of behavioral and procedural norms that can be observed within a company — including policies, procedures, ethics, values, employee behaviors and attitudes, goals and code of conduct. It also makes up the ‘personality’ of a company and defines the work environment (e.g., professional, casual, fast-paced).”
A healthy business culture allows diversity, freedom and promotes opportunities for growth while others could best be described as “toxic” – a heavy-handed, top-down environment that stymies creativity, limits opportunity and views the company’s purpose as a way to enhance the broker’s life instead of existing to provide opportunity for the agents.
Feel threatened, abused, stymied, inhibited or stylistically mismatched in your current office? It could be time to look for a better cultural fit.
Nurture, encouragement and training are required to build an effective practice. While some brokerages provide extensive training for agents at multiple levels, others leave development to the agents themselves. If you have reached the point where you need support but cannot find what you need in your current brokerage, it could be time to look for a new company that provides the tools you need to get you to the next level.
Leadership is everything: While inspired leaders can galvanize an organization to continued levels of growth and development, poor leaders can enmesh agents in a quagmire of mediocrity.
Toxic leaders can not only prevent success, they can do extensive damage. If the leadership in your brokerage does not inspire, motivate and provide the growth opportunities you need to advance to the next level, you might look for another agency with better leadership.
As we are entering a changing market, brokerages that thrived during the superheated market of the past few years may not have the support you will need to weather and succeed in the new reality. Many brokerages, caught off guard by the sudden decrease in sales, are slashing support to simply survive.
If the market downturn is leaving you out in the cold, you might consider a company that will be able to provide the level of support you need to stay in business through the downturn.
If your current brokerage provides the culture, training, leadership and support you need to become a top producer, then your prospects by staying could be larger than if you went to another brokerage that simply provided a higher split. Successful agents understand that it is not about the split. As someone famously stated, “Do you want 90 percent of a grape or 50 percent of a watermelon?”
If the environment is correct, the money will follow. If you are dissatisfied with the splits or financial arrangements in your current brokerage but are happy with the culture, leadership, training and support, sit down with management and negotiate. Truth is, you might get better financial terms elsewhere, but may lose out on the things that provide the environment necessary for growth.
If you cannot come to an agreement and you truly believe you will make more elsewhere, it could be time to switch.
On the other hand, if your current financial arrangement is great but is lacking in the support and tools you need to succeed in the new market, then a switch to a company with the methodologies to succeed going forward, regardless of the split, could be a no-brainer.
Is it you? 3 alternatives to consider
Although many believe a change in location will be the answer to their woes, they should consider looking inward first.
Here are the top three things to consider when it is obvious things are not going well:
1. Hire a coach
In the same way a marriage counselor can look at relationships from an objective, outside position and offer help that could save the marriage, a coach can examine your business and provide the requisite direction and tools for growth.
2. Consider joining a team
In a downward market shift, many agents with minimal production levels find they can no longer survive in the emerging reality. Some estimates project that up to 250,000 real estate agents could leave the industry this coming year.
While a team could help provide a lifeline to failing solo agents, many agents believe their current split outweighs the advantages of being on a team with the normally lower splits. Those same agents fail to understand that after they pay all their expenses, they actually end up with less than agents on a team who, although their split is lower, have all of their expenses covered by the team and have the support required to do a higher volume of business.
Here are a few of the many great reasons to consider joining a real estate team:
- Visibility: Mega teams are much more visible than solo agents.
- Training: Most teams have significant training opportunities.
- Leads: Many teams have extensive lead generation levers.
- Camaraderie: For many, working in a group is preferrable to being alone.
- Work-life balance: Teams remove the minutia so you can focus on your 20 percent and have more free time.
- Support: Teams typically have great internal support mechanisms.
- Systems: Effective teams can afford the requisite systems required for increased volume.
- Marketing: Teams can usually market much more effectively than solo agents.
- Knowledge: The knowledge base on teams can be huge and is typically very accessible.
- Accountability: Accountability is the breakfast of champions and teams usually have accountability structures built in.
3. Change your habits
What is usually required when a market changes direction is a change in habits, not location. In the previous superheated market, seemingly all that was required of an agent was the ability to fog a mirror: the actual skills and habits needed to succeed long term were not a prerequisite. In this new market, actual skill is required, which flows from the development of consistent, measurable habits.
I recently surveyed a number of local area agents and was shocked to discover that most did not have an active database, did not know where their business came from, were not monitoring expenses and did not keep track of their numbers. Given their lack of knowledge of the fundamentals of their business, if they succeed in 2023 it will be based on blind luck, not competence.
Going forward, successful agents need to develop habits that center on the following:
- Building and maintaining an active database (sphere of influence): If you do not have a database of at least 200, you will not have the industry’s most basic criteria. Contacts should be in a comprehensive CRM and should have a concrete plan such as a 32-touch system.
- Developing effective time management and time-blocking: Without effective time management, agents are blown about by the wind of others’ whims and follies.
- Enhancing communication skills: Prospective clients need to know who you are, how you can help them and why you are the agent of choice.
- Solidifying a dynamic work ethic: It has been said that 90 percent of success is showing up. This means getting up on time, locking in production rhythms and working even when you don’t feel like it.
- Adopting a growth mindset: Successful agents have finely tuned habits of reading, ongoing study and sharpening their saw with consistent training and development. The minute an agent adopts a laisse faire attitude toward growth is the moment they start sliding backward.
- Accepting accountability: Whether from a coach, trainer, accountability partner or team leader, accountability is critical to ensure you are developing and maintaining the habits required to stay on track.
If you are unsure of how to develop new habits, I’d recommend you read Atomic Habits by James Clear and Four Thousand Weeks – Time Management for Mortals by Oliver Burkeman.
Looking to relocate? You might get a momentary boost, but that will disappear quickly as your innate habits show up once again. Look to improve first — chances are, once you’ve gained control of your habits you may discover that it is not your location that needed to change … just your mindset.