Without question, one of the biggest challenges when recruiting and attracting agents to your brokerage is whether to invest in a newly licensed real estate agent. The harsh reality is, while you may think a rookie agent could be a future star, it’s still a lot of energy, time and work to get them running on all cylinders.
Published in the New York Times, “In 2021, there were a record number of real estate agents in the United States, according to the National Association of Realtors (NAR). More than 156,000 people joined their ranks in 2021 and 2020 combined — nearly 60% more than did in the two years prior.”
Yet, we know that only two of 10 real estate agents will launch a successful real estate business that can survive past the first 2 years of launch.
The age-old question remains: how, as a brokerage leader, can you capitalize on the revenue opportunities this growing group creates, without draining every resource your company has?
Here are ten best practices on how you can get your rookies rolling.
1. Back to basics business training and etiquette. Use already built on-demand programs like NA365 Missions or Roaring Agents that have non-brokerage affiliated curriculums to teach basic business practices. NAR reported that 84% of newly licensed real estate agents do not have prior finance, business, retail or sales experience. Take them back to the most basic functions of our business and build them up from there.
2. Standardize paperwork and forms. Every company operates paperwork differently, but it doesn’t mean that you have to keep answering the same question twice. Train once in person, and record a reviewable video on each paperwork task. The answer to “how do I write a contingent offer again?” can easily be answered with a video link to the solution late on a Saturday night.
3. Reward and motivate differently. The truth is, after taxes and fees, even the most successful new agent will not make a profit in the first two years. While established agents could take the same volume and record a profit, new agents are likely still funding reserves, marketing budgets and establishing best practices. Find ways to acknowledge their success that are unrelated to volume or gross commissions. You need them to dig into the details and do the work consistently. Every successful agent knows, if you do the work, the money follows.
4. Empowering self-management. If it’s true that many new agents lack the skills in basic business, a good test to see if they have the ability to launch their own business is to empower them to find a support network. Tell the agent before you recruit them, “Here are five tasks you must complete prior to working here.” If they can’t follow simple instructions, chances of them build a successful business are low.
5. Know your worth. Your commission and fee structure should match the value proposition you offer. Show the prospective agent what resources you will provide to help them be one of the “13%” who makes it in this business. Provide them with a clear path to success based on performance.
6. Define a clear goal. New real estate agents don’t have a benchmark on what the average real estate agent does in terms of production and commissions. It’s easy to talk ourselves into (or out of) our potential. By sharing the average statistics with the new agents, along wtih common mental traps (e.g. your family and friends are not likely to use your services in the first few years), it can help frame what reasonable expectations will be of the market, and themselves. It enables you, as their manager, to also see which of your new agents are mostly likely to succeed and dedicate resources to them.
7. Workbooks and baby steps. Your expectations of your new agent must be achievable. Outlining clear benchmarks on a calendar for your new agent’s progress is important. You can’t expect them to eat the whole elephant in a week.
8. Mentors are choices, not directives. As part of the first two weeks, give them a start-up task to interview and find a mentor. Do not assign one. Matching a new agent to a busy agent with the promise of mentorship is a recipe for disaster.
9. Streamline the process. The language of real estate could be brand new to your new agent. Create a document that outlines the process of writing a contract and what to do after it’s accepted. If “this, then that” statements in a chart are easy to follow.
10. Set dedicated meeting times and SLA’s (service level agreements) with your agent. “I am available to you at “x” time. If you are writing a contract on the weekend, this is what to do when you need help.” If you can set clear boundaries on the onset, you’ll thank yourself on the weekend.
These 10 steps take a bit of preparation, but with some effort, you could begin recruiting new agents and helping them succeed. Or conversely, weeding out the ones that should have kept their day jobs.
Shelley Zavitz is an agent with Dwell Realty and an author and trainer in Portland, Oregon.