In this article, we’ll explore what a real estate broker needs to consider when recruiting brand-new agents. Compared to hiring producing agents, hiring new licensees can be deceptively easy. With a simple job listing on popular job board sites, an influx of eager new agent leads is almost guaranteed. However, this ease in recruitment masks the expense and effort required to support and train new licensees, most of which will never generate income.
At LeadUp, we track agent metrics and develop algorithms that help brokers recruit and retain producing real estate agents. Here are some statistics we must remember before considering a new licensee.
- Over 50% of agents will leave the industry before their 2nd year.
- On average, agents will change brokers 3 times in their career.
- Most agents close 0 transactions/year.
Why agents fail is a topic for another post, but odds are the new agent that we hire and train will leave us, never sell a single home, and fail. Of course, we can take steps to improve retention and training, some of which we will cover here, but unless this agent is an employee, new agents will be subject to the statistics listed above. It’s part of the business. This doesn’t mean we shouldn’t onboard new agents, it just means they should not be the primary focus of our recruiting and retention efforts. It also means we must be selective, set clear expectations, and provide solid training. Let’s explore these key concepts to help your office become the go-to brokerage for future top producers.
Hire Selectively
Considering the significant investment in time and money required for training new agents, typically around 10 hours per month per agent, we must limit the number of new licensees to ensure adequate support. Let’s perform a quick thought experiment and assume we have a full-time employee who exists solely to support and train agents. In many offices, this role falls to the broker, multiple staff members, or other agents, but for simplicity, let’s pretend we have an employee like this. If it takes 10 hours of dedicated training and support per new licensee, this employee can support about 14 new agents at a time. Now, we encounter a crucial question: how do we prioritize support for our proven producers? Agents who contribute to our bottom line and have achieved success against the odds? Allocating 100% of our support to new agents would neglect the needs of our established producers, and even a 50% allocation might be insufficient to maintain their satisfaction. We need to strike a balance. Perhaps we could allocate around 30% of our efforts towards new licensees ensuring the majority of support goes towards our experienced producers. With this approach, a full-time support employee could effectively assist 4 new licensees at a time. In reality, this staff member may not exist or likely has other responsibilities dropping this number even lower. This low capacity for new agents underscores the importance of being selective in the agents we invest in and support.
Set The Right Expectations (During the Interview)
Brokers should emphasize high expectations and training commitments from the outset to gauge a new licensee’s level of dedication. During interviews, ask probing questions that delve into candidates’ motivations and expectations as a real estate agent. By understanding their reasons for entering the field, brokers can assess whether candidates have realistic expectations and a genuine passion for the profession beyond financial gain. Here are some interview questions we should ask new applicants to set high expectations and weed out the unprepared.
- Why did you want to become a real estate agent? We need to understand their driving force and expectations. If their answer is “make lots of money“, they do not have realistic expectations.
- What days can you commit 1-2 hours to training each week? Try to get specific dates and times of availability. You may offer an online training option, and that’s fine, but we want to hear a commitment to training, not excuses for why they cannot commit.
- How will you support yourself financially if it takes you 2 years to get your business started? Given the statistics, it is very likely they will need to have another source of income. Agents need to know we are there to support and train them, but their ultimate success depends on their willingness to learn, grow, and prospect.
- Where do you think most of your clients will come from? We know the answer is their sphere of influence (SOI) and the referrals stemming from it. They might not realize it yet, so we should let them know this upfront. Beginning a real estate business carries inherent risks, including the possibility of failure. Understandably, some agents may feel reluctant to market/prospect to those closest to them, fearing the social repercussions of failing in the eyes of their SOI. However, this hesitation may indicate a lack of readiness or commitment to their new career path. If they can’t overcome this hesitation, they will probably fail anyway.
Investing in Training and Development:
If we’re taking on new licensees, then we need to invest in training and development. Here are some ideas to create comprehensive training programs.
Skill Training Programs: Skills training should cover the real estate transaction process. Each lesson should focus on practical knowledge agents need to know or learn to serve their clients. This can include local regulations, industry updates, and negotiating tactics. You can also bring in other industry participants to teach these lessons. Look to your mortgage, title, insurance, or escrow agents for topics. They likely have a class they like to perform.
Business Training: New agents must learn business concepts like branding, marketing, and lead generation. Teach them how to make themselves and their services stand out in the crowded real estate industry. If you offer exceptional technology, use these courses to demonstrate how your tools can achieve specific business outcomes.
Mentorship Programs: Pair new agents with experienced professionals who provide guidance and support during the first few transactions. This hands-on approach will accelerate agent success and create a positive culture within the brokerage. Note: Only select mentors with the experience and time to handle a new agent. Overloading a mentor can push a producer out. In the beginning, it can be helpful if the broker takes on this role to understand firsthand the strain of a mentee.
Group Training: Group training sessions allow your agents to share what they are experiencing in the market and learn from each other’s experiences. It’s healthy to create an environment of support where all agents feel they are part of the same team.
Online Options: Offering online training may be necessary to accommodate the schedules of new agents. As we mentioned, they likely have other jobs. If your brokerage does not offer online training, look for packages that can be purchased, or start filming your live training sessions and upload them to YouTube. These videos will make great social media recruiting content too.
At LeadUp, we help brokers recruit and retain quality real estate agents using powerful technology. If you’re interested in recruiting and retaining more qualified real estate agents, book a demo with our team to discuss your strategy and see how our technology can change your office’s approach to growth.