The ABC’s of Agent Hiring – Oops, They Did it Again

by Kris Berg

Realtor, Associate Broker

Author website

I sat down today fully intending to log my own comments on the ongoing dual agency debate. Yawn… I will save it for another time.

Somewhere along the way in my thought process (brought to you by Tylenol), I drifted to the big news this weekend: Britney Spears is apparently channeling Jeff Brown. The big news is not that she has joined the follicly challenged-by- choice ranks of our own Bawld Guy or even that she is an emotional train wreck, but that she seems to be self-destructing. Here is someone with some talent (I will table the “how much” argument) and a truckload of marketability. I have to wonder, then, how she got to this point. Was it too much to soon, was it burn out, was it the challenge of competing in a cut-throat industry, or did her handlers simply not adequately prepare her for sustained success?

These questions, of course (because my brain works in mysterious ways), led me to consider the evolution of the real estate agent. First, I will offer a couple of maxims which few industry insiders will argue. There are too many licensed agents, the ease with which one can obtain a License to Sell is shameful and serves to bastardize the profession, agents are not highly respected by the general populace, and individual brokerages are in large part to blame for what I see as the industry’s current public relations crisis.

I am going to give Glenn Kelman credit for that last one. In my recent sit-down with him, he commented:

Brokerages recruit more agents than a market needs because they want the split or they want the desk fee.

We know why this is. Brian Brady talked about the formula for broker profitability and how the A, B and C agents must all be courted. My question is, why do the brokerages seem to court the newer or lower producing C agents without the intent of giving them a realistic chance of becoming an A agent? Further, why do I see so many C agents who do not possess the fundamental skill sets or traits that could ever allow them to be A agents? Instead of hiring with an attitude of “if we throw enough warm bodies against the wall, one may stick”, shouldn’t the brokerages be hiring and training in the same way any other industry does? One does not need a college degree to work at Jamba Juice, but I would submit that even Jamba Juice has minimum hiring standards.

Another Trip to the DMV

In San Diego, we just changed our lockbox vendor. This meant that thousands of agents, all agents, had to attend a mandatory lockbock exchange extravaganza to turn in their old equipment for replacement. In the past, I have referred to this kind of event as a trip to the Department of Motor Vehicles (DMV). In an industry with too few barriers to entry, this event could be viewed as a cross-section of America. I witnessed, in horror at times, the varying sizes, shapes and flavors of the Professional Agent, many of whom should not be allowed to even operate a motor vehicle. There were the very capable and accomplished agents in attendance of course, but it took me about a nano-second to distinguish between the “Great Potential” and the “Will Never Complete a Transaction” camps. Funny my Broker couldn’t tell the difference when hiring. Or could they?

“And I Have Excellent Problem Solving Skills…”

Thinking back, I still chuckle at my first “interview” with a Broker. Newly armed with a license, I like most agents had enjoyed a previous career. My experience had been that your would-be employer would want to see your resume, would be interested in your past accomplishments, successes and credentials, and would ultimately make the decision to hire you or not based on this information. Yeah, right. It took me only a few incredulous moments to realize that I was supposed to be interviewing them. I could have waltzed in missing a large portion of my frontal lobe and on life-support and would have still been greeted by a manager gushing about the superiority of their new agent training – “Pick us!”. An intermittant heartbeat was all that was standing between me and the exciting world of real estate!

Out On a Limb

Too many of you will relate to my licensing experience. You are given a book which you are supposed to read, but you don’t. You must pass an exam on said book before applying for your license which, in my case, involved showing up at the open-book-testing-center and ungumming the pages on a need-to-know basis. Any trained chimpanzee can pass the exam (no offense to our brachiating friends).

We all readily admit that the material on the exam does not prepare you for the real world business of representing real world people in the transfer of a huge commodity. Therefore, we must rely on our new agent training to fill the void. Now, times have admittedly changed since I was “trained”, but here is what my preparation consisted of. We reviewed the contracts (not all of them, but the biggies), we learned how to use a cross-directory to find a phone number for an address and vice versa (thank goodness those days are gone), we were instructed in the intracacies of bulk mail, nailing your “sphere of influence”, passing out pumpkins at Thanksgiving and flags on the 4th of July, and were coached on the proper method of fielding an “up” call (“That home is pending, but WE HAVE OTHERS!”). There was no discourse on ethics, fiduciary responsibility, or client representation. All training was geared toward preying on that unsuspecting victim. When it came time to open my first escrow, I had to ask “how”. Even this bit of minutia escaped the training agenda.

Guess Who’s Coming to Dinner?

We are coming off of nearly a decade of enjoying the all-you-can-eat real estate buffet. Too many agents joined the ranks, for sure, and there was enough on the table to allow everyone to get fat. The Brokers were no exception. Their open bar policy worked in large part because aptitude and skill were not critical ingredients of success. The biggest challenge an agent faced was getting the yard sign erected before being trampeled by a pack of hungry home buyers waving checkbooks. Now, things are different. Too many agents with too few skills are left exposed. The consumer thinks our job is easy because it was easy, or at least it was easy provide crappy representation and deliver a satisfying outcome. Yesterday, it was all about the food. Today, it is about the dining experience and many will leave hungry – sadly, both agents and consumers.

I don’t want to be misunderstood – All brokerages are not created equal. But, as a business, a brokerage is going to be necessarily concerned with the bottom line. I would love to see Ram Charan spend a day at my (any) real estate office. The same flawed philosophy that drives a Broker to embrace the arrival of any person bearing a license and a pulse is the same philosophy that causes a Broker to turn a blind eye to unhealthy business practices on the part of the independent contractors under its employ. I am aware of one very prominent, high-producing agent in my market who is functionally illiterate and guilty of ethical infraction upon infraction yet continues to be heralded by his company. He could virtually commit adultery in the office lobby during working hours, and the Broker would be most concerned with how to spell his name on the production award plaque.

The Blind Date

So who is to blame for our negative image? First and foremost, the brokerages. Real estate is a business, a business for which too, too many people can meet the minimum qualifications. It is the Broker’s job to undertake the initial cleansing process. You can’t simply pluck someone from the street and expect them to succeed. And, please, stop rewarding less than stellar behavior. Just because someone lines your pockets in the short-term, I beg you to consider the long-term repercussions on all agents, particularly those attempting to perform to a higher standard.

If you continue to go on blind dates, your chances of finding a meaningful relationship will be slim. Some people, licensed or not, are simply not cut out to succeed in this or any business. Real estate in particular requires a variety of skills: Business acumen, personality, tenacity, desire and, yes, intelligence, to name a few. Others, like the gentleman I saw in the grocery store on Superbowl Sunday wearing a Chicago Cubs shirt, are well-intentioned but misguided. Give them real-world advice and real, applicable tools that they can use to attain success, and they just might learn the sport. Finally, there are those who are misinformed but perhaps trainable. Like the pair of new agents I encountered several years ago, some just need to hear the real deal. I offered an open house opportunity to the new “team”, at which point they replied, “We don’t work Sundays”. Both are still in the business, and both are working Sundays.

They Won’t All Be Rock Stars

Not every agent can or wants to be a Russell Shaw. Some will ony aspire to or are simply capable of only making a very good living. Before you can be the Millionaire Agent, you have to be the food-on-the-table agent, and before you can earn a paycheck, you have to have the foundation for success. A truly great agent needs to possess a dozen or more diverse, inherent qualities to be successful. The “very good living agent” need only possess perhaps half of these qualities. Some come to the table with no skills and no future, and it is the Broker as hirer that has the duty of making the distinction.

Which brings us back to Britney and our own public image crisis. Brokers for sure have the responsibility for not cluttering the industry with a bunch of William Hung’s, performers which clearly will never find success and only serve to make a mockery of those who are talented and capable. But it doesn’t stop there. The agents with true potential are perhaps a Broker’s biggest challenge. Left to swim unsupervised in the Independent Contractor pool, left to proceed through a highly-competitive environment unchecked and mismanaged, many will make questionable choices which may prove embarrassing to themselves and to an entire industry.