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When Your Broker Competes

Published by mystery blogger October 11th, 2007 in Real Estate Confidential.

Last week, while ARDELL was writing “Does your broker sell real estate?” on her ActiveRain blog I was in the middle of writing my post ” Does your broker compete?” and I had my original post all set to go and I was just about to hit publish when it dawned on me - the two are so the same, but yet so different and while it can be beneficial for a broker to be active - I don’t feel that a broker who actively sells is a good thing.

ARDELL says “Training is more than showing you which forms to use when it sells. Training should be about how to get it sold”. Which is true and I can not argue that point. But I can argue that a broker who sells and works with their own buyers when they have agents within an office creates for bad business. I don’t think that a broker should actively work with buyers as clients, because that broker wants to make that sale (Ok, let me just say that maybe not all brokers - but most).

ARDELL also says “So if you have a Broker who also sells real estate, instead of viewing the Broker as a competitor, maybe you should focus on some of the real advantages”. This would be true if the broker was not my competitor.

Let me just use this example: My Broker took a sale right out from me recently, his cousin was looking for a house to buy and was in a time crunch. I found them a house after 5 meetings with them off of MLS and they were thrilled. To make a long story short, the deal feel through in the eleventh hour and they were even more crunched for time. My broker took them out one morning while I was at one of my other listings open house, without me knowing and showed his cousin a house that was also on MLS - Needless to say - they bought that house and closed very promptly. I was axed out of the equation.

My broker directly competed with me and stole a sale from me. Regardless if it was his cousin or not, I was working with him for more than one month and I was set to take him to see this house after my open house (we are talking about 2 hours difference). When I called the buyer/cousin to confirm our times - he informed me that he just put in an offer with my broker and was waiting to hear the outcome.

Need another example of when a broker competes?

Three months ago, I went on a listing appointment. While I was at this listing appointment the sellers seemed scared about selling and they needed more time to think on what they wanted to do. They were unsure if they were staying or moving out of State. I did not push and I was not aggressive. I left that appointment reassuring them that when they were ready to sell - I would be happy to help them. I spoke with the husband more than 5 times within the three month period, going over pricing, talking to them about my marketing plan and etc. Less than three weeks ago, while I was not in my office my prospective seller called my office looking for me and asked for me by name - he lost my cell phone number. My Broker happen to answer the phone and assured my seller that he would help him and proceeded to list this property right out from under me. What I find absurd is that my broker continuously assured this seller that he was taking care of it, FOR ME. Which was clearly not so when I saw the listing under his name and no mention of me. He stole my listing point blank!

Reasons why agents should not work in an office when a Broker competes:

  • The Broker has the power to squash your sale to make a sale on his own.
  • Does not present your offer from your buyers until his buyers puts in a better offer on one of his listings.
  • Holds your offer until other agents or one of his own offers comes in which is higher.
  • Will encourage a bidding war within the office because he knows all offers.

I would like to think that there are more Brokers out there are like ARDELL, but I am sad to say that in my neck of the woods, there is not. I feel that if a Broker is active it is solely for the reason to relay their prospects to their agents.
Let me define a Broker’s/Manager’s job:

  • Mentor - the agents within the office.
  • Train - the agents the proper way to fill out forms, take photo’s, talk to buyers/sellers.
  • Teach - the agents how to do open houses, the agents how to list a property.
  • Direct - the agents when there is an in house sale.
  • Motivate - the agents to market including blogging.
  • Assist - the agents with the inspections, attorneys and closings.
  • Diffuse - any problems that might arise from the agents within the office.
  • Share - information, prospects and listings.

Bottom lines are what matters. When the bottom line consistently goes into the Broker’s pocket the office falls apart. A Broker who is educated is by far better than a Broker who competes!

This is our inaugural Mystery Blogger Post. Welcome Mystery Blogger!

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  • I really hope you are no longer at that office where the broker stole your listing client! I'm not so sure about the broker's cousin you were working with - was that a referral that he took back?

    Office managers who also sell or list, except in the very smallest of companies, make it look like the company isn't successful enough to pay their broker to stay inside and recruit, train, and manage.

    Ardell is successful enough that I can understand why she wouldn't want to give up her real estate clients to simply manage, but I wonder if they should really make someone else the "managing broker" and make her the "office mentor."
  • Mystery Blogger,
    My experience has been that a selling broker is always a competitor to the salesperson in this scenario. It is an undeniable law of nature. The sheer power that the broker has cannot be overcome by the agent. The broker will always win. Period.

    This unfair advantage will breed discontent throughout the entire organization and will ultimately cause agents to leave the company. Agents need to know that their broker "has their back" and is loyal to them. A level of trust needs to be created and constantly reinforced.

    I like the fact that there are brokers out there who will crawl on the floor with their agents. It shows a level of involvement that is truly commendable. Many brokers could learn from this, and I believe everyone would benefit. Maybe you should share this with your broker.

    I don't believe a Broker needs to actively sell in order to be in touch with the industry. Just being deeply involved with agents on a regular basis should take care of that.

    I am a broker for 350 agents and do not sell anymore. My time is best used to make my agents become better agents, and to not compete with them. I have not yet crawled on the floor with them, but would, if it helped them get a listing or a sale. Ardell sets a great example.

    Thanks for the great post.
  • As an owner/managing broker/active salesperson, I am acutely aware of the elephant in the room. However, I feel that as an active agent I bring more credibility to my mentoring. I bring active field experience to my training. I teach with more confidence. I direct with a true understanding of problems. I motivate by advice and example. I assist with proven field-tested methods. I diffuse with empathy. And maybe most importantly, I share MORE information, prospects and listings by playing in the game instead of just coaching from the sidelines.

    There is a line between being a broker/active agent and being a competing broker. I am sorry you found yourself on the other side of that line. I opened my office with 6 agents only two short years ago and we have grown to 18 agents plus 2 full-time staff. I believe it is because I am an active agent who is also the managing broker, not in spite of.
  • Great post! Very relevent issue in the Hamptons. Interestingly enough, several of the major companies out here have consistently had their principals as the top selling brokers year in and year out, even though the agents complain about it, they have stayed with it, because on the other end of the scale, the non-selling brokers are typically just administrators who have very little business savvy.

    That, however is changing. One of the majors here is in for a big fall soon because their managers abuse their position and take food out of their agents mouth on a consistent basis.

    I agree that a broker should "stay in the game", but conduct themselves "beyond reproach", ensuring that their is no question as to where their business came from. md
  • If you have someone like Ardell or Brad as your broker, perhaps having a broker who sells would work. Yes, actively selling real estate helps when it comes to training, mentoring, etc., but the broker should only work with their direct sphere.. If their sphere happens to get in touch with an agent in their office or team and they start working together, the broker should step out of the way.

    Unfortunately, I have personally witnessed as well as heard many instances where the broker stole clients and/or did many of the things listed above. The latter seems to be more so the case than the former and is the reason why all agent should be very, very carefuly of their broker being an active salesperson.
  • Fascinating post, near and dear to my heart.
    I have worked for selling brokers and it is usually a losing proposition.
    If you work for Jim Smith, Real Estate Broker, trust me ~ everyone who calls will ask for Jim Smith.
    And, your broker will also skim off the best leads for himself most of the time.
    The ultimate insanity is to work for a selling broker who requires you to have a web page on the company's website and direct all of your e-mail to your broker's domain.
    Guess what happens if you leave ~ your leads and all of your e-mails will go to the broker!
    I once worked for a selling broker and was foolish enuf to use the company 800# in my advertising (ages ago, when I ran print ads!).
    I got a call one day from a referred client, telling me that my broker had tried to hand him off to a junior agent after he had specifically requested me.
    Gee, what a shock ~ that junior agent was on a 50/50 split vs. my 90/10 split.
    That same broker submitted all listings to the franchise's international website, then any responses were directed to the "relocation director" ~ who just happened to be his wife.
    Those leads were then distributed to agents in the office after subtracting a referral fee for a "company lead" instead of giving them to the listing agent.
    Small wonder I work for RE/MAX now ~ we don't do that to each other.
  • Touche, Phil and Danielo!
    Phil, isn't it nice working in an atmosphere of "focusing on the Associates business vs the Brokers? That's what I love about Remax, it's truely win-win. md
  • I agree that brokers who sell must do it properly. However, it can be done with great success for everyone involved. If a manging broker is just a salaried manager, why does he/she really care about their agents' production? If considering a new broker, be sure to find one who is either active in real estate or has some portion of their pay tied to their agents' production. The managing broker is often one of the most visible people in a brokerage company. Attending events, association meetings and conventions just for the purpose of recruiting does not benefit the existing agents. In fact, it harms them with more internal competition for leads and often the lowers the quality by hiring inexperienced agents.

    Don't be sheep and foloow blindly into a national brand, just because it's a national brand. Dig in and learn their management structure, learn the company's growth strategy and learn the brokers management style and compensation methods.
  • I am an independent broker and I am the vast majority of my 2-year old company's production. I have been fortunate to attract 12 licensees to my firm, some of whom are license dockers and others who are active to varying degrees. I am certain that my own production has attracted every one of my people.

    Any broker who sandbags, undermines or steals clients from his agents is doing something contrary to his prime directive, which should be to build and grow the organization. Making a quick buck on the back of your agent is a sure fire way to lose the agent, for one lousy commission. That manager should be fired. No broker serious about building a company would do such a thing. Err on the side of making money for your licensees. You'll do better for yourself in the long run that way.
  • miamism
    The local KW office in my neck of the woods has an active broker that I considered competition. It was the number one reason I left the office. I had similar situations and did not find it conducive to good business.

    How can you work in an office where there is no trust and you don't know if business will be snatched from right under you? I learned by lesson and I will never work in an office where the broker is active in sales....and as much as I love Ardell....a lot of people would not see it her way.
  • I am sure there are horror stories from every type of broker management setup. My point is... not all selling brokers compete and there is a way for a win-win situation. In my particular case it works because I sell commercial properties and land while the majority of my agents sell residential. I do have a couple of other land and commercial agents, but they chose to work for Maxsell to learn more about commercial and get hands-on mentoring. Currently, I give them more referrals than they generate on their on. Hopefully that will change as they learn more and more confident. Bottom line is...I don't make money until they produce closings. It would be counter-productive for me to compete for their business when the whole point of hiring them is so they produce more business.
  • miamism
    Brad - it would be a good idea for you to talk to your agents to see how they feel. I can tell you my "competing broker" felt exactly as you do....and she still does. I'm not saying you are the type that would ever take business from your agents, but it's good to look at yourself from another perspective.
  • The broker you describe is not so much a "competitor" as he is a thief. You'd be wise to cut ties with this clown asap.

    Any "broker" who sells real estate should put this question at the top of his or her client qualification question list.

    "Will you be considering any other agents from MyCompany Realty for this job?"

    If the answer is yes, graciously bow out and provide your assurance that the client is in excellent hands with the other agent. If the answer is a clear no, go for it!

    It's also a good policy to make it clear in the office that you are open to explaining how you came to work with any client.
  • Hey, MB. Been there, done that. I left. Here was my experience. Even a well-intended, ethical working broker is going to skim business whether they mean to or not.

    I saw the monster rear its ugly head in the form of geographical farming, and I saw it happen time and again. If a seller wants to interview agents, they often will call the top agent from two or three top companies. If I as a seller get one shot at Company A, who am I going to contact - The top agent or the Broker Owner of the whole dang thing? I have got horror stories, but suffice it to say that working for an office with a working manager is a recipe for disaster. There are too many alternatives for the agent. Run!
  • First, a short chat with Joe and Rudy. I didn't respond to this post initially because I don't like talking to anonymous bloggers. I like to know who I am speaking with and blogging is about Transparency. How can you have transparency and hide behind anonymity? So the whole "posted by Mystery Blogger" thing doesn't work for me.

    But I just got home and read this email in my inbox:

    Subject: "Your Fans Demand an Appearance"

    "http://blog.sellsiusrealestate.com/real-estate-confidential/when-your-broker-competes/2007/10/11/ :)"

    So I hate to comment without knowing who wrote this post, but here goes:

    WAA WAA WAA!!! What a whining crybaby! The broker gave you his FREAKIN' COUSIN and you BLEW IT BIG TIME!!! The Broker didn't cut you out for Crissake! He GAVE YOU his own COUSIN! His cousin was left at the 11th hour with no house! How embarrassing is that for a Broker! Then you acknowledge the people were in a total crunch time bind and you were too darned busy to accommodate them.

    I would have done more than jumped in and ended my cousin's agony, I would have broken your kneecaps!

    It was HIS COUSIN may I repeat that, his OWN cousin...not a Company Lead...His Cousin. Go apologize and stop badmouthing him and be happy his cousin found and got into a house.

    Happy Bob?
  • Now, that's what we call a biting comment, Ardell.

    We may be wrong, but maybe, just maybe, you would have not sharpened your knife so keenly if you knew the identity of the mystery blogger. And even if YOU knew the identity and still ran the blade through, others might have tempered their comments if they knew the mystery blogger.

    We raised the question of the self-censoring blogger:
    http://tinyurl.com/2b855z

    We think transparency is a double edged sword and anonymity is not always a bad thing. Obviously, we don't have the answers. So the mystery blogger is a way to experiment and explore the issues without identity getting in the way. That's what makes costume parties so much fun :)

    The mystery blogger is not truly anonymous, since we know the identity (but will not reveal it).
  • If I knew it were Rudy, I clearly would not have worded it that way :) So point taken. Not knowing the identity of the poster could have its advantages and disadvantages, depending on the kind of responses you are hoping to garner.

    I didn't run a blade through. I just whacked him/her upside the head. No blood. Just a bump on the noggin.
  • Ardell,

    That is the unknown-- the type of responses you'd get.
    In addition, how one would write if they had the anonymity mask on.

    My personal opinion is that writing would be uninhibited-- both in the post and the comments. It may have something to do with human nature. Like when you go to a costume party-- it seems like people are less inhibited with the mask on. I need a shrink to comment on the subject :)

    -jf

    Yeah, that sledgehammer will leave a bump :)
  • hi ardell!

    sorry ardell, not my post. who the heck is bob? are talking about brio bob? did he egg you on? he's a funny dude you know......

    hi bob!

    i think people get way too carried away with all this transparency mumbo jumbo. the fact is, some things are just best discussed in private. and when someone does take the time to address issues or experiences publicly on a blog, there is a reason for it. whatever the reason, the author surely knows. anonymous or not, the mystery blogger raises some interesting points. those who commented added valuable feedback. at the end of the day - we had a darn conversation.
  • I didn't mean that you wrote it Rudy. I meant I knew if it were someone like you, I would have never said it. So Joe's right on that one.

    Bob is a hoot and smart and a hard worker and a great Dad and...they don't come much better than our Bob.

    I can't imagine there is anything I can't say to Joe on a blog and that needs to be said in private. You? Well, maybe :)
  • hi ardell!

    "You? Well, maybe :)"

    Likewise :)

    - rudy

    p.s. yeah, we had some fun with broker bob in sf ;)
  • This is a sticky widget between the broker that rips off the agents vs the broker that saves a deal. Both sides have a strong personal position. I have found over the years, that it is in my best interest not to depend on my broker to assist me and learn to call on experts.

    It's nice to think that your broker is an ethical, law abiding, professional but until you learn for sure, it's best to assume that you need to protect your interests as an agent. Check out the legal facts, become an expert with your contracts and board ethics. Then you will have better control of the deal. I have done business in many states and was ripped off last year at Running Y Ranch in Oregon by a developer's broker when I was the client! Go figure. I'm still learning the fine art of protection.
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