Game Changer Tom Hosack managed to expand his firm last year with a focus on recruitment and M&A despite the tumult triggered by the COVID-19 pandemic.
In October, Berkshire Hathaway HomeServices The Preferred Realty in Wexford, Pennsylvania announced it acquired Stouffer Realty of Northeastern Ohio. The deal added 250 agents to the business.
The deal continued The Preferred Realty’s M&A streak, with Hosack crediting M&A with about three-fourths of the firm’s growth from 2016 to 2020. Going forward, however, Hosack says The Preferred Realty will shift toward a more balanced approach to bringing on agents: a 50-50 split between M&A and recruitment.
Stouffer Realty now operates as Berkshire Hathaway HomeServices Stouffer Realty. Today, Hosack serves as co-president and CEO of The Preferred Realty and of Stouffer Realty. Gary Stouffer is president of Stouffer Realty. The two men oversee a brokerage powerhouse with more than 2,100 agents who work from more than 60 offices in 22 counties in Western Pennsylvania and Eastern Ohio.
The enlarged company now ranks 21st across the U.S. based on units, according to RealTrends 500 data, and ranks No. 7 in the Berkshire Hathaway HomeServices network.
Now that the merger has closed, Hosack wonders how the growth-by-acquisition strategy will work, given the industry’s mostly dismal numbers during much of 2020 and the “insane” numbers now.
“I think the next two quarters are going to give us a better insight as to what this market and industry are going to do, and we’ll have to shift with it,” he says. “I remember years ago, someone gave me a book and it was really good, and it said, ‘It’s not the big that eat the small, it’s the fast that eat the slow.’ And if you’re not on this — on a daily basis and really working — you can get run over pretty quickly.”
Hosack isn’t inclined to get run over, quickly or otherwise.
Aside from making acquisitions, his firm regularly focuses on recruitment and retention. The Preferred Realty’s No. 1 market position in Western Pennsylvania helps draw new agents, and its mentoring program helps keep them.
Each virtual mentoring module lasts 45 to 90 minutes. Afterward, agents undergo assessments to ensure they absorbed the knowledge. Aside from the online learning, a new agent works with a mentor on their first three transactions. The mentoring program has performed so well that brokers across the country have inquired about adopting the platform, Hosack says.
“The great thing is when you’re acquiring experienced agents, you’re not spending a lot of money. If you can hire them organically and grow them, it’s a lot better,” he says.
Hosack says The Preferred Realty relies on some good old-fashioned marketing to help fill its stable of agents.
“I’ll give cards to waitresses and people in the service industry, and say, ‘You’d be a great agent if you want to get your license. Call me’,” he says.
Modern marketing tactics come into play, too. For instance, the firm pays for digitally generated leads. And current agents talk up The Preferred Realty on social media.
Once an agent becomes part of The Preferred Realty family, Hosack wants to put more emphasis on retaining them. Toward that end, he recently hand-delivered orchids to new agents who had reached certain sales volumes.
“I always say, ‘It’s not the 30 bucks we spent on the flower, it’s the fact [that] I drove to their office to hand it to them’,” Hosick says. “I just think the more managers and leadership can focus on retaining and making our agents happy, it’s better time and money spent than trying to get experienced agents to jump ship.”
Looking ahead, Hosack envisions leaning more on recruitment and less on M&A to entice agents to come aboard The Preferred Realty ship. In other words, organic growth will increase while growth by acquisition will decrease.
“The challenge that I think we face is, we need to create a space that’s attractive to our millennial or future agents,” Hosack says. “But we need to make sure we’re careful that we don’t tick off the [veterans] that are paying our bills right now. But I think that we’re starting to see that seesaw tip, and managers are trying to relate to agents that are generationally totally different from them.”
Tom Hosack of Berkshire Hathaway HomeServices The Preferred Realty was a RealTrends 2021 Game Changer. In the past five years, between 2016 and 2020, his firm saw 118% growth.