This is the third article in our new series covering broker recruitment strategies. This article details the steps a broker needs to take for a highly effective interview to take place and the main characteristics to look for in an ideal hire.
The first article covers the creation and maintenance of a broker’s recruiting plan and goals and the second article covers broker solicitation techniques depending upon the type of hire required.
Pre-screening prospects
As an employing broker, once you’ve located a potential hire, you need to vet them to gauge their individual potential. Before calling a potential applicant in for an interview, gather fundamental information about them first to determine whether a face-to-face interview is merited. This saves you the time of interviewing a candidate that is clearly not a good fit for your operations.
To gather this preliminary information, a prudent broker gives prospective hires the Agent Interview Sheet to be completed remotely. The prospect prepares and submits the questionnaire to the broker, providing the broker with critical information about the qualifications of the prospective employee. Before conducting a personal interview, the broker reviews the information contained in the interview sheet. [See RPI Form 500]
The Agent Interview Sheet asks prospective hires to enter information about their background, education and real estate-related activities. When they fill it out and return it, their conduct indicates they are legitimately interested in being hired at your brokerage, as opposed to casually probing the job market, and therefore may not be a productive expenditure of your time. [See RPI Form 500]
The Agent Interview Sheet collects personal information on the prospect’s:
- real estate license status and background, including:
- their Department of Real Estate (DRE) license number and the date it was obtained [See RPI Form 500 §1.1];
- other professional licenses or endorsements they hold [See RPI Form 500 §1.2];
- any negative actions taken against the licensee or the existence of a criminal record [See RPI Form 500 §§1.3-1.5];
- professional affiliations [See RPI Form 500 §2];
- educational levels attained [See RPI Form 500 §3];
- real estate activity conducted [See RPI Form 500 §4];
- personal contacts known to the prospect who may serve as references [See RPI Form 500 §5]; and
- conditions of employment. [See RPI Form 500 §6]
When reviewing the completed and returned Agent Interview Sheet, determine whether the prospect’s answers align with your recruiting plans, recruiting goals and business model. [See RPI e-book Office Management and Supervision Chapter 2]
When you determine the prospective hire is worth your time and energy, based on their information provided by them in advance on the questionnaire, you may then schedule an interview with the confidence doing so is worth your time.
The broker supplies information
Brokers, by experience, tend to be more organized than agents. Brokers who employ agents are also better able to anticipate the income and expenses an agent will incur than recently licensed agents.
It is the broker who is best able to draw a conclusion about the agent or broker-associate’s future with the broker’s office, not an agent new to the world of real estate sales or who has been languishing in another office due to inadequate or nonexistent planning and organization.
A broker’s primary objective when hiring agents is to increase the gross broker fees received by the office without a disproportionate increase in operating expenses.
For the broker to make hiring a productive endeavor, the broker needs to organize an agent selection and evaluation plan to avoid a high turnover of agents who remain with the office for only a short period of time then leave — resulting in sunk time and energy. [See RPI e-book Office Management and Supervision Chapter 2]
Long-term employment of agents contributes to a favorable industry-wide reputation for the broker and provides a return to the broker for the resources invested with each agent during the employment process and the agent’s start-up period.
Energy, money, time and enthusiasm all wane fast when the turnover of talented agents in an office is due to the failure of unrealistic expectations held by the agents.
A broker’s full disclosure — upfront and prior to employment — covering the agent’s likely income and expenses, and why the fee sharing and expense allocations are reasonable, leads to a realistic expectation of income by the agent.
Related Video: Right to a Fee
Click here for more information on this topic.
Revealing income and expenses
When a broker interviews an agent, the agent needs to be supplied with information on the income and expenses they are likely to experience while employed under the broker. [See RPI e-book Real Estate Practice Chapter 2]
To assist the agent in an analysis of potential earnings, an agent prepares an income and expense data sheet. The agent enters the approximations made by the broker for the various expenses a typical agent experiences during their first year with the brokerage office. [See RPI Form 504]
The income data the agent needs to collect includes:
- the price range of property the agent is most likely to list and sell;
- the number of sales the agent is likely to close in that price range during the first year;
- the gross broker fees generated by the number of sales during the first year; and
- the share of the gross broker fees the agent will receive under the fee-sharing schedule offered by the broker.
The likely gross fees the broker is to receive, and the agent’s share of those fees, are entered on the sheet arising from the information obtained in the interview. [See RPI Form 504 §§1 and 2]
Ultimately, the sales goal set by the agent is reflected in the amount of after-tax income the agent seeks for themselves to maintain their standard of living. [See RPI Form 504 §11]
Related article:
Form of the Week: Agent Interview and Income Data Sheet — RPI Forms 500 and 504
Conducting the interview
During the interview process, be proactive by showing prospective finders, agents and broker-associates the value of joining your brokerage office. Give prospects a list of all the unique benefits your company has to offer.
Review the Agent Interview Sheet with them, discussing the findings to verify the prospect’s education and professional background. [See RPI Form 500]
Find out what motivates them. You might assume agents always go where higher commission splits are offered. However, that is not universally the case. Many are looking for training along with the support of a good company to help them succeed or improve their sales numbers.
Pay attention to your prospects’ needs and give them what they want. The success of your staff directly affects your company’s success. Keep your training program for new recruits up to speed with today’s real estate market and technological advances.
Recruiting is not just about replacing and finding new talent — retaining is equally important.
Make sure you have a strong retention program in place for your most talented staff, along with an environment that promotes productivity and success. Keeping your recruits happy for the long haul is important to the growth of your company. Otherwise, you’re treading water.
When your agents and finders are happy, chances are you are too!
Assessing characteristics
When interviewing, ask questions that will determine whether the prospect’s characteristics are in line with the goals you initially set out for your agents and broker-associates you want to hire.
The following seven habits and characteristics are found in great agents:
- a positive, energetic attitude;
- initiative to set and achieve professional goals;
- willingness to create and follow a schedule based on their goals;
- discipline to stay consistent in their lead-generating activities;
- knowledge of sales and closing scripts and a commitment to practice them regularly;
- openness to continued learning and education; and
- versatility to adapt to diverse clients and situations.
Determining whether the prospective hire’s traits are conducive to your own goals and having an open dialogue about your expectations and their behavior allows both you and your prospective hires to make an informed decision about whether they will thrive at your brokerage.
Related article:
The agent’s right to compensation
A real estate broker is required to have a written agreement with each of the licensees acting on their behalf. The agreement covers material aspects of the employment relationship between the broker and the agent or broker-associate.
Realty Publications, Inc. (RPI) publishes two employment agreements used by a broker employing a licensee to perform agent duties on their behalf. These employment agreements are:
- Sales Agent and Broker-Associate Employment Agreement [See RPI Form 505]; and
- Independent Contractor Employment Agreement — For Sales Agents and Broker-Associates. [See RPI Form 506]
Brokers typically negotiate fee sharing arrangements which call for the use of an independent contractor (IC) agreement to document their employment of agents. [See RPI Form 506]
Alternatively, brokers may choose other pay and tax withholding arrangements documented by an employee agreement form. [See RPI Form 505]
An IC agreement, in contrast with an employee agreement, is used to avoid withholding and employer contributions by real estate brokers. [See RPI Form 506 §2.13]
Regardless of the written employment agreement used and signed by the agent, the broker and agent are compliant with Department of Real Estate (DRE) regulations.
Despite the labels given to these agent employment forms, an agent or broker-associate is always considered an employee of the broker under California’s labor law. Thus, the broker is liable as an employer for their agent’s wrongful conduct. Even when an IC agreement is used to document the employment, an agent may not permissibly act independent of the broker. The broker employing agents using an IC agreement still owes a duty of supervision to the agent as well as a mandated worker’s compensation policy. [See RPI Form 506]
After discussing the terms of employment set forth in the employment agreement with your prospective hire, it’s up to you to make the final call.
When the prospect and you can come to an agreement on income and expense data and the terms of employment, and you have determined their characteristics are a good match for your brokerage, you can move forward with employing them by having them sign and agree to the terms contained in the employment agreement forms. [See RPI Form 505 and 506]
Related article:
Form of the week: Agent and Broker-Associate Employment Agreements — RPI Forms 505 and 506
Getting the interviews started
Not sure where to find new talent?
Brokers with 10 or more employees are eligible to join firsttuesday’s CalPaces program, a Broker Appreciation Program that gives brokers access to recently licensed agents and broker-associates through its Recruit Local Licensees feature.
Through this feature, brokers can find new potential recruits, making the steps towards conducting an efficient interview quicker, easier and customizable to your desired location.
Join CalPaces today by calling 951.781.7300 and asking to speak to a CalPaces representative or by visiting CalPaces.com and leaving your contact information.
Broker members in CalPaces pay nothing for the service.
Related article:
Want to learn more about broker oversight, interviewing an agent and anticipating an agent’s income and expenses? Click an image below to download the RPI books cited in this article.
