The career path for real estate agents is a lonely one, driven by the ruthlessly competitive nature of sales. As a result, brokers don’t often focus on keeping their sales agents happy. After all, agents who leave are easily replaced — right?
Yes, but not really. While there may be a seemingly never-ending pool of new sales agents to pull from, a new sales agent brings in much less income than an experienced sales agent. Therefore, a broker’s goal needs to be to maintain their productive sales agents as long as possible.
How does a broker distinguish their brokerage from other brokerages, especially those that might be offering more competitive fee splits?
Aside from offering more money — which almost always works, but has its obvious downsides — brokers need to show their appreciation to gain their sales agents’ loyalty. One way is to offer extra benefits other brokerages aren’t even thinking about.
Bonus benefits are separate from the normal services brokers provide their agents, often for a reduced commission split. These regular benefits may include:
- a desk;
- use of a transaction coordinator;
- errors and omissions insurance;
- lock boxes;
- multiple listing service (MLS) and local board fees; and
- advertising materials.
Of note, some brokerages offer full or higher fee splits to their agents in exchange for fees covering all of these expenses. Read more on agent compensation structures here.
Redfin, a national real estate brokerage, offers its agents numerous perks on top of the regular benefits that smaller brokerages usually reduce commission for, including:
- full-family medical, dental and vision insurance;
- three weeks of paid vacation each year;
- eight sick days a year;
- paying for the agents’ cellphone plan;
- covering mileage for showing around clients and public transit to get to the office;
- paying local association and MLS fees;
- parental leave;
- a 401k investment plan; and
- stock options.
Redfin is a model unto itself, and thus has the resources to offer this broad array of benefits. Smaller brokerages lacking the resources to offer perks like insurance and parental leave can focus on smaller extras, including:
- use of the brokerage’s technology;
- access to customer relationship management (CRM) software;
- access to a professional photographer for listing photos;
- occasional or regular catered lunches for the office;
- gift cards to coffee shops for agents to treat their clients;
- covering a portion of or all of their agent’s continuing education (CE) costs; and
- end-of-year cash bonuses.
Brokers can consider offering these perks to all employees, limiting them to high performers, or a mix of the two. Employees thrive on positive recognition, so bonus reward systems can improve morale and give agents a good reason to stick around longer.
Editor’s note — Brokers interested in offering education benefits for your agents, check out first tuesday’s free broker appreciation program, CalPaces. This program offers education discounts, recruitment tools and the popular first-time homebuyer guide.
Alternative bonus benefits
Why don’t real estate brokers offer more of these perks?
Most brokerages are simply too small and the enormous overhead expense of providing benefits like those mentioned above simply isn’t covered by the number of transactions most brokers close.
For example, Redfin closed over 35,000 home sales in 2017, plus received referral fees from an additional 10,800 home sales. In contrast, most brokerages typically see a couple hundred transactions close each year, at most.
Further, these big benefits usually come hand-in-hand with a salary structure, which isn’t for everyone. In fact, in real estate circles, salaried individuals are often looked down upon, as choosing a salary over the endless possibilities of a commission-based income denotes an aversion to the risk that most real estate agents thrive on.
Brokers unable to offer bonus benefits due to financial constraints can still find other creative ways to retain sales agents.
For example, brokers can set up a clear path of advancement in their brokerage structure, starting with licensed showing specialists, to a regular sales agent with their own bushel of clients, to lead agent specialist who mentors less experienced agents, all of these promotions coming with higher commission splits. Inform new agents about this path and give them goals to shoot for.
Brokers can also set aside regular time to meet with their agents, be they new agents or well-seasoned veterans. Take them out to lunch to celebrate closing a big transaction. Take them out for coffee every other week to check in and see how you can help them grow their clientele. Communicating and maintaining a friendly, helpful spirit with your agents will help grow that sense of loyalty that will help retain top talent.
Agents and brokers — What is the best type of benefit you can imagine receiving at a brokerage? Are these types of benefits a reality in some cases, or still just a dream in the real estate industry? Share your thoughts in the comments below!