Keeping your team upbeat

Real Estate Broker/Owner with Summit Realty Group, Inc.
For Brokers
2008 List Issue: Keep Your Team Upbeat

Today's uncertain business environment is a pressure cooker for brokerage managers. How do you keep your associates productive and upbeat? How can you cut costs and generate more business? Tap ideas here from veteran brokers and management pros.

What's Popular in Training Today
Are You Brand Consistent?
10 AfBA Mistakes That Violate RESPA
How to Downsize Effectively
Should You Partner With Online Listing Sites?
Effective Communication: It's No Mystery
3 Easy Ways to Green Your Office
How to Deal With Gripes

What's Popular in Training Today

Different times call for a different training emphasis. Although prelicensing classes will never go away, brokerages and real estate schools are scaling back their offerings to prospective practitioners because fewer people are entering the industry.

"No one's pulling in the prelicensing business anymore," says Ruth Fennell of Lakeshore Properties in Gallatin, Tenn. Fennell hosts classes for brokers under the Accredited Buyer Representative (ABR®) and Seniors Real Estate Specialist (SRER) programs, among others, and teaches sales techniques and brokerage management. Here's what's hot in training today:
  • Proactive marketing. The difference between proactive and regular marketing is outreach. In a proactive open house, for example, a sales associate goes to apartment buildings where the monthly rent is similar to what the mortgage payment would be on the featured house and invites those renters to come to the open house.
  • Back to basics. Sales volume was so high during the housing boom that many newer practitioners could make money before they received a good grounding in the basics, but those days are gone. Today, "relationships, resiliency, and routine are what people are going to need to stay in this business for the long haul," says Wayne Paprocki, a real estate instructor in Northbrook, Ill.
  • Marketing metrics. Practitioners can no longer spend money on marketing without having a clear picture of the results they're getting, and that's not something many practitioners have learned to do. "If you held an open house, did anyone show up?" asks Fennell. "If you put an ad on a Web site, did you get any hits? Associates have to be taught to think of marketing as an investment, not as an expense, and you can only do that if you know how to measure your results."
  • Niche areas. Working with seniors is a big area now, given today's demographics. Same with Gen Xers. Other growing niches are foreclosures and short sales, although these aren't for everybody. "If you spread yourself too thin, you won't be good at anything," says Fennell.
  • Risk management. With home prices down, flat, or not rising as rapidly in some markets, many customers stand to lose money and that means a higher risk of lawsuits. "Risk reduction is new to our curriculum," says trainer Diane Flannigan, "because, when strong appreciation isn't smoothing things over, people are more apt to sue."

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Are You Brand Consistent?

Are the brokers and sales associates who represent your brokerage putting the right company face in front of consumers? It's not enough for them just to use your logo the same way you do; brand consistency goes deeper, to your brokerage's core values, says Martin Jelsema, founder of brand management consultant Signature Strategies in Denver. Here are three steps to promote consistent presentation of your brand.

1. Start with a brand bible.

Include your mission statement, core values, company persona, and ideal customer. This is also where you standardize your brand: what your logo looks like, its size, where it goes on a page, and so on. You also set standards for other branding elements like company colors and taglines.

2. Look for inconsistency between your ideal customer and your brokerage persona.

If you're targeting young urban couples, for example, your persona must be youthful and hip, with a sophisticated Web presence that doesn't skimp on information tools such as blogs, videos, podcasts, and RSS feeds. If you're targeting growing families, your persona should mirror that by showcasing your involvement in schools, sports, and charities.

3. Look for inconsistency between your persona and how your sales associates operate.

If your persona is meant to attract young urban households, your sales associates must respond to their e-mail every day, ideally several times a day. If it's meant to attract growing families, your associates should be active in the community.

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10 AfBA Mistakes That Violate RESPA

Real estate brokers are increasingly using affiliated business arrangements to grow their bottom line. To avoid violations of the federal Real Estate Settlement Procedures Act, brokers need to exercise special vigilance, says attorney Phillip L. Schulman.

Red flags for HUD enforcers include:
  • Juggling shares. Don't rearrange share percentages in an affiliated service business each year based on the volume of business a salesperson submitted the previous year or divide profits based on referrals instead of ownership interest in the venture.
  • Mistiming affiliated business arrangement disclosure. Don't wait until closing to reveal that a service is provided by an AfBA; disclose the fact at or before the time of referral.
  • Tying the monthly marketing agreement fee to referrals. Don't make the mistake of basing the next year's marketing fee on the number of referrals received in the previous year.
  • Paying third-party sales representatives on a commission basis. Only W-2 employees can receive transaction-based compensation under RESPA.
  • Using a real estate practitioner as a mortgage broker. Taking a loan application is an actual and necessary service, compensable under RESPA, but most states require that an individual acting as a loan officer be licensed as a mortgage broker.
  • Receiving less than market value for services, such as payroll, performed for an affiliated business. Make sure the fee bears a reasonable relationship to the value of the service.
  • Basing office rental rates to third-party service providers at a brokerage on a monthly services fee similar to that charged to real estate agents at the company. Calculate charges for space on the fair market value of the square footage under the lease.
  • Compensating referrals from past customers. Giving a gift certificate to a past customer, as opposed to a current one, for every friend or relative of theirs that closes with your title agency violates Section 8(a) of RESPA.
  • Contracting out substantive services. HUD expects affiliated businesses to use their own employees to provide such core services to the public.
  • Offering sales associates officewide incentives for referrals to the broker's affiliate service business.

Schulman is a partner with Kirkpatrick & Lockhart Preston Gates Ellis LLP in Washington, D.C., and a consultant to NAR on legal issues relating to RESPA.

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How to Downsize Effectively

Losing associates in today's sales environment doesn't have to mean skimpier revenue if you manage your operations with a few commonsense principles in mind, says Wayne Paprocki, a real estate management instructor in Northbrook, Ill.
  • Know who's leaving. Your middle performers are your firewall, and aren't likely to be the ones saying goodbye in a slowdown. "They're comfortable where they are," says Paprocki. It'll be your best or your weakest performers who'll leave.
  • Bottom-up losses. If 15 percent of your weakest performers leave, you suffer minimal losses for two reasons, says Paprocki. One, their combined revenue likely isn't much more than that of one star performer. Two, chances are good they're leaving the industry, not going to another brokerage. Thus, if you haven't already set up a license holding company, you should do so. This is a separate legal entity in which these associates can hang their license and refer business your way for a fee. By giving them an incentive to send you clients, you're softening the blow to your bottom line.
  • Top-down losses. If you're losing 15 percent of your top performers, you need to do two things:

1. Reduce your fixed costs by scaling down your physical operations. That means shrinking your office space and reducing the number of computers and phones you maintain.

2. Transition to more remote operations. Recruit high performers with offers of generous splits and plenty of flexibility. These are the people who will work mainly from home and won't need your office space. They'll keep a lot more of their commissions but they'll cost you less, too.

No matter what position you're in, there's one approach you always want to take: Constantly be moving your newer associates into the comfortable middle through continuous training and motivation.

"Move them from closing $1 million a year in sales volume - where they're at risk of leaving the industry - to $3 million or $4 million, where they're established and have a base," says Paprocki.

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Should You Partner With Online Listing Sites?

Yes, if they reach consumers you can't reach effectively and have a business model that's compatible with yours. No, if they make their money selling leads from your own listings, or have an incompatible business model. Here's more on these ideas:

Yes, yes
  • Yes: Some national search sites generate huge traffic because they enable consumers to interact with listing data in an engaging way. For instance, some sites pinpoint each listing on a map and serve up comparables, with photos and neighborhood data, among other information. "Those are the ways consumers want to interact with data online," says Dan Duffy, president of United Country Real Estate in Kansas City, Mo. "Sites that are capturing Web traffic are doing so because of the superior way they present data."
  • Yes: Look for national search sites that keep their data fresh. "A lot of these data aggregation sites have a major problem, because they require you to put up your listings and they don't have a systematic process for taking them down," says Duffy. A good site, he says, will have a clear protocol for putting up and taking down listings and enable you - albeit with some upfront investment - to automate that process.

No, no, no
  • No: Stay away from sites that make their money by charging you referral fees or generating advertising revenue by showcasing your competitors' banner advertising when someone's viewing your company listing, says Duffy. "We stay away from those sites." A better approach is to partner with sites that charge based on an annual subscription fee. And if a site showcases advertisers, be sure the ads on listing pages are reserved for non-brokerage companies.
  • No: Avoid sites that are designed to capture consumers mainly for their own mortgage or other settlement service operations. In some cases, says Duffy, a lead aggregation site "is really just a portal for some mortgage company, or they're selling the leads off to a mortgage company, and I don't want one of my broker's leads showing up at some mortgage broker that would hand the lead over to another real estate broker and title company."
  • No: If the site's reach is limited, don't bother-unless the site attracts a niche that fits your model. Duffy says his company partners with a small site specializing in historic homes because that's a market niche that makes sense for his brokers.

Always test.

In many cases, you won't know whether a site meets your criteria without running a test. Duffy says he uploads a sample of real property data to a site and then generates buyer inquiries to monitor the response. If, in his test, buyers receive contacts from competitors' sales associates, for instance, he knows the site is spreading his leads to more than the broker who posted the listing and he won't partner with that site.

"The one thing we don't want to happen is to have our listing drive traffic to a Web site, buyers come in, and, ultimately, the buyers end up at three different offices in the same community and everyone's hustling for them," says Duffy.

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Effective Communication: It's No Mystery

The open flow of information between sales associates and their customers and clients was the one essential characteristic of all real estate brokerages deemed top notch for customer service, sales leaders said when REALTOR® magazine hosted a roundtable discussion on customer service late last year. Here's what good communication includes, according to the roundtable participants:

1. Associates know their customers' preferences. Each customer is different in terms of communication, so it's important for sales associates to take the time to say to their customers and clients, "I want to know what your communication needs are. I want to know how frequently I need to talk with you. How detailed do I need to be? And how would you like me to communicate with you?" Getting those service expectations up front heads off problems later.
Chip Bell, founder, Chip Bell Group, consultants, Dallas

2. Keep clients in the know. As associates communicate with clients, they should mention what's happening on a contract or on any contingencies. In all conversations or correspondence, associates should disclose what the next step is, what the other side is doing, and whether there are any red flags.

3. Empathy is central. Being a good communicator means putting yourself in your customers' shoes and trying to solve their problems rather than letting your own problems or incentives interfere in the relationship.

Source: Traci Entel, principal, Katzenbach Partners, New York, and Kelli Todd, president and CEO RE/MAX All Cities Realty, Los Angeles

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3 Easy Ways to Green Your Office

Small steps can give you bragging rights to catch the eye of environmentally conscious consumers.

1. Recycle your old computers. You can donate them to schools and charities or offer them to your associates and staff, or you can send them back to the manufacturer for disposal. Dell, for example, recycled almost 80 million pounds of used computer equipment in 2006, the company says. For a fee, the company supplies a report showing how your data was cleansed and the units recycled.

2. Install eco-friendly carpet. Don't limit yourself to carpets with recycled fibers, though that's a good first step; choose carpeting that comes in small tiles so that you can replace damaged or stained sections without having to buy an entirely new carpet. Also, buy from companies that take your old carpet off your hands for recycling.

3. Make recycling easy for your associates, staff, and customers. Many states operate recycling programs whose goal is to make it easy for small businesses to dispose of recyclables such as paper and plastic bottles. Contact your state's small-business division to see what's available to you. The National Recycling Coalition can also provide ideas and points to resources.

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How to Deal With the Gripes

If sales in your market are in the doldrums, is discontent in your office on the rise? It doesn't have to be, says performance coach Brian Norris. But keeping complaints in check has to start with you, not the gripers. Here are seven approaches for tamping down a bad case of the gripes among your sales staff.
  • Lead by example. You set the tone, so it's imperative that when you're in the office, you reflect the attitude you want to see in others. "You don't have the luxury of wearing your negative emotions on your sleeve," says Norris.
  • Hold a formal complaint session. Provide complainers with a public forum for airing their gripes; then use the forum to brainstorm solutions, and try to come away with two that appear workable.
  • Listen more than talk. Whenever you meet with your associates one-on-one, spend most of your meeting listening. When it comes your turn to talk, though, take enough time to be confident you're understood when you outline what's expected of your associates.
  • Squelch gossip. There have been stories in the popular press recently saying gossip isn't all evil, but that doesn't mean it belongs in the workplace, says Norris. It creates animosity. If someone's badmouthing colleagues, invite the gossiper to join you in confronting the colleagues. Don't be surprised if the gossipers balk-but also don't be surprised if they cool their gossiping.
  • Confront negative behavior. Just as children act out to get attention, your sales associates will push a confrontation to get your attention. People "want to be confronted; otherwise they don't know how they're doing," says Norris.
  • Be serious in your warnings. If you say an associate has one more chance, back it up: If they fail to change, you have to show them the door. "Respect is by no means a given just because of your rank or title," says Norris.


Make them positive. When you confront associates acting out, assert that "we" have a problem and "we" need to find a solution. Ask them to frame in their own words the impact of their behavior on others in the office, and don't let them shift the focus by complaining about the actions of others. "It's not about anyone else; this is just about your actions" is the way Norris frames it.

Source: "Overcoming Negativity in the Workplace," Brian Norris.

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