Bought & Sold: Agent Secrets

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Real Estate

Entering our second month in the global pandemic of Covid 19,  I can't help be amazed at some of the kindheartedness that exist around the world. One of my favorite Facebook groups is called “View From My Window” where people post pictures of their views from their homes.    Inspiring and complimentary comments are made from one corner of the earth to another.  I also can’t help to be disappointed closer to home where typical interpersonal relationships in the work environment still plague daily life. Just because we are sitting inside trying to stay alive and positive does not mean we are immune from humans acting in their own selfish ways and against their own interests. We are certainly not immune to our own emotional reactions.

I proudly work with one of the largest world-wide real estate companies.   Even though a majority of Americans place real estate agents’ integrity on the same bottom row of the ethical totem pole as car salesmen’s, a majority of real estate agents work hard and ethically to provide honest services to their clients. It has to be said because it is unfair not to.  It also has to be said that there are enough “bad eggs” out there to warrant our ground level totem pole status.   

My company and office have been providing round the clock resources / classes/ meetings and materials so that every agent has what they need and want to further their real estate businesses.  Technology is embraced, inhaled and practically worshiped at Keller Williams. The expectation is that agents are their own business owners.

But not every agent believes in that goal.

In Maryland, agents must work under a broker and most agents don't want to take on the responsibility or liability of being a broker for themselves.   They like the idea of a bigger umbrella - sometimes a national one - to protect their heads. They also want to have the luxury of blaming someone else for their mistakes and failures: “I didn’t do enough business there, they didn’t teach me anything…”

Brokers, too, like having more agents in their offices: more agents usually means more income.  Even if an agent is not earning a lot in commissions, office fees, flat fees, and E&O fees are all a boon to most brokers.  

Many agents are content with being simple vassals of marketing propaganda for some brokerages who are obsessed with size.  Agents want more commissions, a better split, and to pay less per month to their brokers. But many have no idea how to budget; they have no idea how to allocate for marketing;  how to make hires for teams;  how to pay taxes or even that they are supposed to run their business like a business.  Almost all are independent contractors; you’d think they would want to act like an independent business owner.

The relationship between broker and agent should be mutually satisfying and symbiotic. Each fulfills the needs and wants of the other.  Keller Williams provides an enormous amount of educational and professional support for the agents who affiliate themselves with us.  KW is throwing itself into technology with a passion.  KW is not the “cheapest” broker to affiliate with but it gives agents the most bang for their buck.  No other company can compete with all the technology, training, professional development and advancement that KW offers agents. Let’s also not forget profit share and owner opportunities. In return, agents at KW pay a “cap” and a franchise fee; participate in the Agent Leadership Counsel if invited; are expected to continually excel in customer service and help grow their offices if so inclined. KW is not unaware of office sizes.

However, there's now a vile trend in the industry because of that previously noted obsession with size. Brokerages are actually paying agents to associate with their brokerage. In the 1980s it was quite common in the corporate world for highly sought-after employees to be given signing bonuses.  This trend has re-emerged in the real estate world but not with the same gusto in search of talent.  Agents have been offered “marketing” bonuses to affiliate merely to increase the agent count of that brokerage.  Agents have been required to sign binding contracts to remain an active agent at that brokerage for a minimum period of time - usually five years or they have to pay back either in full or in part the “bonus” received. Keep in mind that many brokerages operate financially in the red.   Keller Williams is one of the few national brokerages that believes and practices not having debt on the books. Have you checked out some of the stock prices for some national companies? They are in debt and almost worthless.  

Yet the practice to “buy people” into your brokerage continues. These companies would rather be in debt, barely offering services to their agents so as to increase their agent count.   I liken it to indentured servitude - a practice akin to slavery in which one signs their life away for a certain period of time so as to work (in the fields, factories, etc.)  for another in  hopes of one day being free.  Women especially were expected to provide services “above and beyond” the contractual agreement.  (I wonder if males and females receive equivalent signing bonuses?)  Instead of offering legitimate and worthwhile services from broker to agent so agents can increase their business and evolve into financially secure enterprises, brokerages are literally luring agents into servitude without any substantial hope or likelihood that the agent can ever learn to become an independent business owner. 

Why are some taking the bait and being lured?

They are cash strapped and a check in front of their face is like winning the lottery.
They are not thinking of their long-term goals.
They have no ambition or hope to be an entrepreneur or business owner.
They were unhappy at their last brokerage.
They think they will be provided an opportunity to become independent.

There is not much to be done about the lack of foresight for the first three excuses usually provided by agents as to why they eagerly accepted the idea of being bought.  But for the last two reasons, brokers need to ask the agent “WHY?” 

If an agent is “unhappy” at their last brokerage they need to first ask themselves WHY? They should provide an answer for themselves.  Then they need to actually communicate with their broker.  Brokers are not mind-readers.  Brokers are also not ass-kissers - or at least they should not be. Agents need to be honest, timely, follow-up and make an effort to help their broker understand what needs are not being met. Honest and caring brokers are usually more than willing to listen and do something to assist their agents in any way they can. I know mine is.  

The agent then needs to ask WHY and then HOW they will be provided more opportunities for advancement in their business at the other brokerage.  Can they truly compare apples to apples between KW and this other brokerage? Furthermore, what is the most they can ever achieve at this other brokerage?

The most regretful fact remains: the agent is nothing more than an indentured servant to that brokerage.  NONE of these brokerages provide an opportunity like KW to potentially be an investor / owner in the company.  NONE.  You will NEVER be equal to the one who signs that bonus check. You will work for them; you may make some money, but you will NEVER be one of them. Your worth to them = the amount on that check. 

KW is not in the business of issuing checks in the hopes of an agent affiliating or staying with our office.

KW IS in the business of developing business people:


You can’t have any of that if you are an indentured servant.