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12 May 2010

Attributes of Great Real Estate Firms

Last week, Steve Murray and Nicolai Kolding closed out the REAL Trends Gathering of Eagles conference in Dallas, TX with a presentation highlighting, in their opinions, the key attributes of great real estate firms. The audience, which consisted mainly of some of the largest and most productive brokerages in the country, listened intently. At the end of the presentation, the audience seemed to agree that their observations were “right on the money.” I do as well, and thought they were worth sharing.

They identified 5 key attributes.

1. Strong Leadership

Leadership was determined to be the single greatest predictor of success.

2. Ability to attract and retain talent

Research conducted by Real Trends concludes there is a direct correlation between an increase in closed sides and an increase in the number of sales associates.

3. Focus on your model

There is no evidence that one business model is any better than another. What is key is choosing your business model, committing to it and building value around it. Companies that try to be all things to all people ultimately disappoint themselves and others. Five types of business models were identified:

  • Graduated commission plans
  • High commission concept
  • Capped company dollar
  • “Freedom shops”
  • Online and/or discount models

An interesting observation made was that the more commission plans a company has seems to directly relate to less company dollar. In other words, more plans equals fewer company dollars. The advice given was to keep commission plans simple with limited options that stay true to your operating model and value proposition.

4. Customer Service Focus

We have been focusing the last 10 years on creating favorable online impressions with our clients. However, when human contact is disappointing, that favorable impression is lost. Truly successful tools and services recognize that customers demand responsiveness. We have to do a better job at customer service if we want to be a great real estate firm.

5. Ancillary services are part of the core offering, not add ons

Firms can no longer view mortgage, title, escrow and insurance as add ons. They are necessary core competencies to the successful real estate firm.

I think these 5 attributes make a great score card for any real estate broker to do a self-evaluation on their business. How would you rate your firm in these areas? How would your agents rate you?

Thanks to the REAL Trends team for a great conference.

7 thoughts on “Attributes of Great Real Estate Firms

  1. Love the article Wendy 🙂

    I would make #4, #1 and add

    A commitment to Technology, both as company presence and an Agent training offering. It's more important now, than ever before. We have close to 200 Agents, and just over 80 of them are "Highly active" in our Social Media and Internet training program…my 1 on 1 time is booked out til June 24th, and I have to figure out how to get to them sooner. We initiated a Monday "Group Therapy" class for 1 1/2 hrs to help get them the answers and support they need while they await the personalized 1 on 1 stuff, but we need more to handle the demand!

    I know, great problem to have, but a problem non the less!

    @CBRELongBeach

  2. #1 makes sense. Different models and you see some dominate their market and some fail .It all comes down to execution and implementation.

    #2 of course. you can never have enough productive real estate agents. and keep in mind, the quickest way to change market share is through agent growth and attraction. If you attract a number of agents to your company that do $10 million in volume a year, the market share shift is actually $20 million, because that other come lost the $10 million now.

    #3 People panic when there are too many choice becomes not making one and going to the brokerage that has fewer choices.

    Steve – is a super smart, savvy guy and has a great ability to dissect and simplify info.

  3. #1 makes sense. Different models and you see some dominate their market and some fail .It all comes down to execution and implementation.

    #2 of course. you can never have enough productive real estate agents. and keep in mind, the quickest way to change market share is through agent growth and attraction. If you attract a number of agents to your company that do $10 million in volume a year, the market share shift is actually $20 million, because that other come lost the $10 million now.

    #3 People panic when there are too many choice becomes not making one and going to the brokerage that has fewer choices.

    Steve – is a super smart, savvy guy and has a great ability to dissect and simplify info.

  4. #1 makes sense. Different models and you see some dominate their market and some fail .It all comes down to execution and implementation.

    #2 of course. you can never have enough productive real estate agents. and keep in mind, the quickest way to change market share is through agent growth and attraction. If you attract a number of agents to your company that do $10 million in volume a year, the market share shift is actually $20 million, because that other come lost the $10 million now.

    #3 People panic when there are too many choice becomes not making one and going to the brokerage that has fewer choices.

    Steve – is a super smart, savvy guy and has a great ability to dissect and simplify info.

  5. I thought a lot about this post, and I'm going to respond to it from a different point of view;

    I think the attributes of a great real estate firm is the quality of the product they put out;
    -does it meet the real needs of buyer and sellers
    -does it talk to them in their language
    -does it help speed up the sales process
    -does the company make it easier and less time consuming for buyers to find their dream home online
    -do they provide information that's valuable to buyers and sellers
    -do they have a great marketing program that's real marketing rather than a street sign and an mls listing -do their listing descriptions create a memorable impression and do they make you say wow I may have just found my dream home!
    -anyone can sell homes in a great market but does the firm have the ability to sell homes when the market's bad
    -and will they only hire top notch talent or will they like most, hire anyone who's breathing

    All this other stuff is nothing more than a basic business model, but it's far from what makes a "great firm". To me a truly great firm needs to have the ability to motivate and make their agents productive, and to make their listings stand out from all the other homes for sale. Other than that all you may have is what you think is a "great firm" to work for, but in reality all you end up with is a firm that does nothing different from any of the other firms.

    The major commercial real estate firms have this ability because they look at their service business as a real business with goal that have to be met or the agent's fired. That's what's needed in the residential side of the business.

    The ultimate test is, can you prove to consumers why you're a great firm, and why you're better than your competitors. If you can't, then it doesn't matter what we agents think

    Those are the attributes of a great real estate firm. I don't think there's to many who can live up to that.

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