OpenDoor is laying off 35% of their workers. Compass 15%. Redfin 7%. Sounds terrible. But, in the big picture it’s nothing. Venture backed companies represent a small percentage of the agent market. The vast majority of industry upheaval will occur within the Independent Contractor world of the franchise sales agent. These people don’t announce layoffs, they simply disappear.
It has been written that during the last downturn the industry lost over 300,000 agents. The current Pandemic situation could create agent losses easily doubling that figure. A loss of over 600,000 agents sounds devastating! But, in truth, it’s probably an appropriate market correction.
There are roughly 1.3M agents today. Economists have noted, given the number of yearly transactions, the required industry workforce need only be around 250,000 agents. In 2019, the industry accounted for roughly $70 billion dollars in agent sales commissions. 2020 is predicted to cut that number in half. Terrible? Not really, as we are still talking about $35 billion dollars in commission money up for grabs.
As more agents question the financial viability of the franchise business model, look for Atlanta’s independent brokerages to lead the way. Prior to the Pandemic, the trend of “team building” had been the latest agent craze. Now, more than ever, the concept makes practical sense. Whatever security, comfort or benefit an agent found within their franchise environment prior to the Pandemic, it probably won’t be there after we get through this transitional period. So, if an agent is thinking of their future, where do they turn?
What is a team? How do I find one? Are teams different? Are teams specialized? What is considered normal for a team? How do teams function, operate and share work load? Agents have a lot of questions about teams? So over the next two blogs we will discuss all things, “team”.
Wynd Realty is the brokerage service provider for Modern South Properties. The team lead for Modern South is Phil Karp. Phil has years of experience leading a team concept. We wanted to know from Phil, what he has seen that worked and what didn’t. For example, I was surprised to learn how much time, and effort is spent on chemistry.
“Waiting and searching for the right teammate is key. The worst thing you can do is add people who just don't fit with your personality or vision. It wastes more time and money than you think. A bad agent is a bad agent, and trying to change an adult's way of thinking is like turning a battleship”.
Sounds like a lot of Human Resources. Karp agrees. “Team leads need to be concerned about their teammate’s income, motivation, knowledge base, and more. Each person is unique. Each person is motivated by something special to them. For some it's money, others it may be the freedom of the job. You have to find ways to get connected with your team”.
Full disclosure: I’ve worked for a ton of idiots in my time. People who were put in their roles because their bio read well, they knew somebody or they “looked” the part. The sad unifying trait to all those bad managers was their lack of empathy or disregard for the human element.
“Without attention to the human element, the team will fail. Some team leads just want licensed bodies. They'll throw them against the wall and will see what sticks. I want to invest in a person that sees the benefit of that investment. You mention empathy are a requirement, I’d like to add patience to that list. We want agents to focus on the client first, knowing the commission will come after. That means a lot of upfront work. And for the team Lead, it means being accessible almost 24/7”.
“Chemistry is so important. Teams need to run in sync. We are small businesses, where every dollar in and every dollar out counts. No time or money to waste and poor service by any team member has the potential to wipe out years of positive results for the whole team”, Karp added.
For agents, Modern South Properties has a profile. “We like to add agents that have little to no experience in the industry. I'm not too interested in having to break bad habits”.
But, bad habits abound. Literally thousands of traditional agents are currently evaluating the cost/benefit of continued franchise affiliation. Weathering the Pandemic as a standalone agent will not be an option for many. Teams are forming. There is both safety and comfort in numbers when facing the unknown.
Next Blog: What to look for in a team. How to spot the bad. And of course, money; costs and distribution.
For additional information about Modern South Properties: