Retention Series: Doing the Math for Your Agents

If an agent is coming to you ready to leave because of splits, there’s likely a deeper issue at play.
Shot of two colleagues having a discussion in the board room.

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Agents often blame the money, especially their commission split, as the reason they want to leave a brokerage. Yet, it’s usually not the main culprit, says Stephen Snider, managing broker at ONE Sotheby’s International Realty in Aventura, Fla., where he manages 330 agents. The issue is likely more comprehensive, such as an overall struggle to make a living from real estate or dissatisfaction with the office culture. It’s important, then, for brokers to get to the heart of the issue. Open the door for communication and create a safe space where agents feel comfortable sharing their grievances with these guidelines.

Identify the Real Pain Point

Begin by identifying the agent’s real issue, suggests Whitney LaCosta, executive vice president at Howard Hanna Coach, REALTORS®, in East Northport, N.Y., who oversees 700-plus agents. “Sometimes, they use the money as an excuse for not wanting to talk about their pain point.”

Ask them why they want to leave, and as their broker, do a deep dive yourself to try to discover what’s causing them discontent, she suggests. Upon reflection, you might realize that you haven’t been providing enough support or that you’ve been neglecting office culture.

Provide Targeted Help

Based on what agents reveal as their pain points, LaCosta will offer targeted assistance, whether it’s helping them create an action plan or teaching them how to use tools offered by the brokerage. To entice agents to stay, Snider will sometimes offer to pay for a coaching program or airfare to another city so they can attend one of the brokerage’s networking events. Often, agents will say they don’t know how to build their referral business—and paying for their travel can help with that, he explains.

Explain the Brokerage Value

In a changing market, agents need more support, says LaCosta. To emphasize this point, she’ll try to help agents see the monetary value in the brokerage’s tangible assets, like office space and marketing materials, and intangible assets, like training, administrative support, referrals and a positive work culture. “Agents can have a hard time putting a number to those things,” she says. “But, when they don’t have them anymore, they’re less successful.”

To help them understand, LaCosta asks agents about real scenarios. If they hadn’t had the support of their manager, for instance, would they have closed a particular deal? Since they made $6,000 from that deal, that support was worth $6,000, for example. Similarly, if their brokerage didn’t provide access to pricey marketing materials, would they have been able to land a high-end listing, which is worth a lot of money in commission?

If they continue to doubt the brokerage’s value, Snider will ask them, rhetorically, why top-producing agents are choosing to remain on the team. They’re finding compelling reasons to stay, and these probing questions are designed to help agents think through things rather than decide based on splits alone.

Show Them the Untapped Value

Often, agents leave a lot of the value their brokerage offers untapped. Adoption rates say quite a bit, and in most brokerages, agents don’t take advantage of the tools offered or their association membership benefits. Many times, they do not ask their broker for advice or network with agents in other areas for referral opportunities, say Snider and LaCosta. The network alone is sometimes a selling point for retaining agents.

When agents express dissatisfaction, Snider and LaCosta will ask them whether they’re taking advantage of these offerings and connections. If they’re not, they can suggest some key components to start.

Remind Them the Grass Isn’t Always Greener

Agents often look for the shiny penny or magic pill, says LaCosta. But at the end of the day, success as an agent depends on waking up every day and working hard—regardless of the package another brokerage offers. If they leave, they’ll be taking themselves with them, LaCosta says. That means no matter what the next brokerage has or says they provide, the agent takes their personality traits, strategies and struggles to the next place. If they’re not willing to work through or refine those things, they might end up with the same problems in a new place.

To give agents a dose of reality, Snider will explain how, say, a 2% increase in commission from another brokerage likely won’t translate to much more money. Especially if the agent only closes one or two deals, the total amount will likely be quite small, adds LaCosta.

Time is a key factor as well. Snider will remind agents that getting their business up and running at another brokerage will take about six months. If they instead invest that time and energy in their current business, they’ll likely boost their earnings.

Deemphasize Splits

What matters most is the money agents take home at the end of the year, LaCosta says. For instance, even if their split at another brokerage is 100%, they might make less money than if they stay put with a lower split. At a new company, agents might have to pay their own marketing expenses or for a desk, which adds up quickly. The bottom line: Fine print assessment is important, and an agent needs to know what to look for outside of splits.

LaCosta sometimes tells agents that when splits are higher, agents might do less business. “It’s about mindset,” she says. “If they’re getting a bigger piece of the pie, they might feel they don’t have to work as hard, when instead, they should work on making the pie bigger and bigger.” 

Underpay Transaction Fees

Agents will sometimes complain to Snider about the transaction fee his brokerage charges (because the brokerage’s commission split is low). “Agents will feel like we’re taking a million dollars from them,” he says. However, he explains that the fee adds up to a nominal amount for agents who earn commission on many transaction sides in a year.

Keep the Door Open

Sometimes, an agent has made up their mind to leave, says LaCosta. When top-producing agents tell her they’re switching brokerages, LaCosta will hug them and say, “I hope one day we are back under the same roof, and I hope you don’t mind if I reach out to you periodically to see how you’re doing. Call me if there’s ever a problem.” With this approach, she’s trying to recruit them back during the exit interview. If they regret leaving, they’ll feel comfortable returning, she explains.

Both she and Snider emphasize that in the real estate business, it’s critical to keep good relationships with agents, especially since you’ll likely cross paths with them again.

A Guide for Retaining Your Agents

We know that agent retention is top of mind for many brokers, especially in a changing market. This series explores the various approaches brokers take to keep agents content. 

Communicating With Your Agents

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Prepare for the Market You're In

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One Size Does Not Fit All

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Prep Agents for Opportunities in the Marketplace

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