Where Agents and Brokers Earn Their Commissions

Recently, our daughter Alexandra Lund graduated from Syracuse University with two diplomas – one in Entrepreneurship from the Whitman Business School, and another in Advertising from the Newhouse School. She also received the Cuse Award for outstanding performance and leadership in NCAA Athletics. The dance team had never placed in the top 25 teams in the nation before Alexandra arrived. Her freshman year was a blow-out because of COVID – no national competition. Nonetheless, they still practiced every day. During Alex's sophomore, junior, and senior years, they placed in the top 10 every year. One of her coaches that has worked with her since the age of 9 always taught her:

You earn championships in your preparation. You pick up the award at the competition.

Isn't the same thing true for real estate professionals?

Yesterday, my good friend and business colleague, Mark Mclaughlin, reminded me that in many ways, it's the effort and preparation that drives great brokerage companies and agents to succeed. In his article titled the 3 Rs – results, rules, and records, he writes:

Those individuals and companies that focus on perfecting the expression of their value proposition will gain market share.

At WAV Group, we define effort and preparation as the sinewy tissue that holds the relationship between the agent and the client together. It's a patchwork of influences that cause agent development – which includes showing up to office meetings, coaching, training, technology adoption, marketing for new relationships, and an incredible effort to stay in touch with people you know. All of this is the preparation that leads to well-earned success, the commission is merely the award.

Sure, the antitrust litigation and settlement will change the way real estate commissions are awarded starting in August. Companies and agents who do not put in the work to prepare themselves for change will not be on the podium accepting awards. If firms do not have strong brands and an office full of agents who have deep, well-earned trusted relationships with their clients – they will fail. The days of licking quick and easy transactions off of the grass are fading, if not gone forever.

A note to agents: Beware of commission programs from brokerages that are too good to be true.

If your firm does not have the income to invest in the brand, the management team, compliance, training, and technology – you will not get the support that you need to succeed. The extra dollars you may earn in the short term are not worth it. Seek out firms with significant listing market share and great support. Top performance and growth across our industry is correlated to market share in your market. Partner with one of the Top 5 firms and you will be fine. The awards will come your way.

A note to brokers: If you are not a top 5 firm in market share, become one.

Merge with like-minded firms in your area until you get there. Cutting support and technology to save your bottom line will lead to the failure of your agents to get the support they need to compete in a changing market. Grow or die. If you don't know how, click here to buy our book, Acquiring More Profit, for $120, and read it. It's a detailed playbook on mergers. Just follow the steps.

To view the original article, visit the WAV Group blog.