The Super Agent
It seems to me that the agents who post and comment on RCG are ‘mom and pop’ agents whose business is limited to their ability to work with clients directly throughout the real estate transaction. I’ve not heard from any of the ‘Walmart’ agents who have built organizations allowing them no upper limit on their ability to service clients. In fact, many comments and posts have implied that the latter approach is bad for the consumer. Is Walmart bad for the consumer? We all may hate how Walmart shuts down mom and pop stores that can’t compete with the scale and volume pricing of Walmart, but does this have anything to do with the end consumer? Macroeconomically and politically, absolutely; however, consumers have voted with their wallets that the Walmart model makes sense.
When an entrepreneurial agent builds a business, hiring a licensed assistance, then listing specialists, then buying specialists, then a business manager, then a lead manager, why do the lone agents seem to have little respect for the organization they have built? Given the state of the industry today, as others have defined it, where new agents get little training and modeling by experienced agents, wouldn’t such a scaled organization be welcomed? Think of the licensed assistant? It seems to me that by working with an agent so successful and productive, this assistant would be exposed to every type of transaction, and grow up to be a better agent.
To me, it’s the scaled super agent business organization that would be the best place for a new agent to learn the ropes. As many have written here on RCG, the traditional brokerages have little motivation to spend a lot of time growing an individual; however, a good super agent aligns incentives so that the training and modeling he/she provides others within his/her organization contributes to the organization’s bottom line, and such an investment pays off as productivity grows.
Do consumers suffer with these super agent organizations? The mom and pops would claim they do, for in their paradigm, the real estate transaction can only be truly successful if the agent is hands-on throughout. Do the consumers feel slighted, unsatisfied? My guess is no, for the most part. No matter big or small, an agent needs a bedrock of referrals to succeed long term. Clearly, these super agents excel in lead generation and marketing, but a happy client is a happy client, and they’ll refer their friends.
As a new agent, and as an investor, I would love to be in a position where I could lead an organization and model it for success, and get paid handsomely for it. If any super agents are out there reading RCG, I’d love to see your perspective represented here on these pages.
About the Author: Eric Bozinny
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Walmart is great, in the short-run (lower prices help the people that shop there). Seriously. But don’t use them as an example business for RE to model itself on, because the long-term impact is extremely negative. In the long run Wal-mart does a “great” job of lowering the economic standard of living for people that work there, because the wages they pay are lower than the wages those people made before, and most have to get government assistance for healthcare (further burdening the least economically secure states where Walmart has the biggest presence).
Moreover, this article in Fast Company points out that Walmart often drives their own suppliers into bankruptcy by insisting they lower your prices every year and threatening to stop doing business with you if you don’t comply. In the short-run, many companies respond to this pricing pressure by outsourcing labor (and laying off Americans), but achieve a bump in sales (usually not profits). In the long run, many go bankrupt or realize they can’t make any money selling at Wal-Mart and are replaced by other suppliers willing to enter the low-low-cost death spiral for a while.
You can be a “low cost” store and not have these issues. Target, Costco, many online only merchants, etc. All of these places offer reasonably priced merchandise and lower the cost of goods for people buying them, but they resist the urge to drive their suppliers and workers into bankruptcy just to squeeze out the last bit of sales growth or quarterly profits. None of these are non-profits, to be sure, but they’re not single-mindedly focused on “low low prices” as a driving principle.
Back on topic, what you’ve mentioned is a nice thought exercise, but I’d bet that a significant percentage of the “mega” agents you mention spend almost all their time getting new leads, and almost no time handling their clients or getting referrals. They’re focused, as you point out, on “scaling their business”, not servicing their clients. I sincerely doubt most of them subsist on positive referrals , which is why they advertise so heavily. To be sure, if they don’t service their clients at all, they will fail to scale their business. But as the Wal-Mart example points out, you can “get by” doing the minimum to service your clients for quite a while before your poor business practices have any effect on your bottom line.
In anecdotal conversations with my friends, everyone I know who went with a mega-agent felt like they were in a “RE assembly line” and has mildly negative opinions, even though they got the place they wanted/sold their house eventually, of the entire RE industry. Is that what you want? Sales at the expense of long-term viability? It’s these type of agents, IMHO, that convince customers they might as well be doing much of the work themselves and using a discount/online brokerage.
Great points. Substitute Target or Costco in place of Walmart, and can’t a scaleable, client service business work? If a super agent were to put client service as his business’ most important value, wouldn’t this work? I worked for an Internet advertising agency for 9 years. As a start up, we could give clients lots of attention. As we grew, client service remained our company’s number one value, and we were able to scale while providing good service (there were hiccups, of course, but the problems were quickly corrected by focusing on our core values.
I agree. There are some super agents that you see on billboards and that seem solely to be marketing machines. However, I have to believe that there are many who have succeeded in keeping a focus on client service as they grown.
Just as there are individual agents who are both good and bad at client service, the same is probably true at the super agent level.
Eric makes some good points here. I basically learned the ropes of the business by working for one of the so-called “superagents” and in terms of a training ground, that was probably the best way to learn – total immersion into all aspects of the business, high volume of deals being done by the team on a monthly basis equated to lots of transactions to learn from, the opportunity to learn more in a year or 2 than a normal agent might learn in 5-10 years, hands-on training from a top producer, the excitment of doing a lot of deals and making a little money along the way, etc.
It was the education of a lifetime in a way, and I’ve frequently advised new agents that it’s one of the best ways to learn and learn fast. But in my case at least, it also led to burnout, resentment, and ultimately separation after I got enough experience and insight to start questioning the way things were being done.
And as jcricket pointed out, the level of service often suffers because the superstars frequently spend most of their time, marketing, and attention trying to generate new leads/clients rather than taking care of the existing clients. As a result, the team I was on got shockingly few referrals or repeat business when compared to the overall numbers we were generating.
In the end, it was as much about learning what NOT to do as it was about learning what TO do. I couldn’t stand that constant dissonance, and eventually decided to go it alone. Certain ethical issues and challenges also contributed to my leaving, but that’s another story for another day.
But the education in itself was priceless.
Gordon,
Without the details…what kind of general ethics issues surfaced?
Eric,
I think you guilty of that which you accused Ardell, which is lumping together an entire category and generalizing on its individuals’ character, motivation, beliefs. Greg and I are indeed a ‘mom and pop’ brokerage, but not for the reasons you mention, nor do we share the point of view you ascribe to businesses our size. You are comparing the traditonal business model to a scaled super agent business, as if consumers have only two choices. We entered this business probably like you… recognizing that we can use technology to create a different business model, one that is client focused and scalable. You describe your vision of this here… now go create it! That’s what we’re doing.
Cathleen:
I never meant for ‘mom and pop’ to come across as pejorative. In the context of my Walmart analogy, ‘mom and pop’ is an oft used term to describe the smaller businesses. Sounds like you and Greg are more like McLendon Hardware….multiple locations, but not big box.
By the way…I LOVE what you, Greg et al have done with Bloodhound! The innovation you’ve introduced will help you gain the edge as the market moves down.
I’m assuming you’re speaking mostly of brokerages that are “100%” companies? I’m in the Naples Florida real estate market and I have had nothing but positive support from my brokerage. The culture at our company is to support those around you, lend a hand when your colleagues need it, and make sure everyone is well informed. By doing these things as a team, our reputation as a brokerage rises in the community.
Eric, A little surprised you didn’t ask how I sold and closed it with the owner dying in the middle of the listing. Just want to know how to “lead an orgainization, model it for success, and get paid handsomely for it.” Maybe I need to do 100 ways “it’s broken…” Like when an Office Manager tells me I sell my listings too well because she needs some lingering on market ones to advertise the company with…only time I was ever “fired” in my life, and because I did my work “too well”…the owner hired me back in 10 minutes as soon as he heard what happened, but…
We make the big bucks to work for the client, not to hire a bunch of people to do our work for us.
[...] I see a parallel between this and the super-sized agent phenomenon that was the subject of some spirited discussion recently at the RCG. More agents have begun adopting the team business model wherein you have your front man, or woman, and a cast of thousands working in support who actually perform the tasks of showing, negotiating, coordinating escrow, etc… A brokerage within a brokerage, if you will. I am not even on the fence on this issue. Steve and I have shunned the Walmart approach to real estate for years. If you hire me, you should get me. As a consumer, I would find it unacceptable to hire Agent X but have my MLS printout read “call Agent Y with all questions and offers” (an all too common occurrence in our market). Sure, this approach may allow Agent X to service more transactions, but it will not allow that agent to serve more people (remember, the guys that hired you?). But, I suppose it is these same super-sized agents that are far too busy or important to blog, and fearing they may miss the blogging bandwagon but lacking the knowledge to get started, the desire to learn, or simply the desire, find it acceptable to delegate responsibility. I refuse to assign responsibility for my clients to another, as I don’t believe that is in my clients’ best interests, and I certainly am not ready to have others do my online talking. We blog for many reasons. Most will likely agree that what started as a don’t-miss-the-boat endeavor, a quasi-commercial venture cloaked in non-commercial sheep’s clothing has evolved into something entirely different. Those of us that spend our time blogging have found an outlet for our opinions (group therapy, if you will), and believe that the forum allows us to not only interact with our industry peers, but expand our knowledge by benefiting from their varying ideas and perspectives while sharing information and insight with past, present and future clients. It’s rewarding to think that someone might actually be reading this, but if a blog falls in the forest and no one is there to hear it… It really doesn’t matter. I’m having fun. And no one is putting words in my mouth. [...]
[...] Our disagreement (not an argument, more like an ongoing debate) specifically dealt with Greg’s comment on a recent meeting of a local association of Realtors, called to discuss the slow seller’s market in the valley southeast of Phoenix. I argued that without having been there to hear the real-time conversations, Greg couldn’t possibly know the motivations of the meeting participants. Had I been involved with this association, I might have attended the meeting, if I thought I could have come away with any good ideas to help my selling clients. I argued that by drawing assumptions on the character and motivations of the individuals who attended, Greg was behaving no better than the silly bubble bloggers who toss out small minded remarks at real estate agents like ignorant “witch” burners of old slung mud balls at ancient widows, like bratty kids tease abandoned cats today… senselessly, and with mean spirit. Why, I had even ribbed Seattle Eric for making broad assumptions. No way was I going to settle for Greg to not “do better.” [...]