The Importance of Having the Right People at Your Real Estate Brokerage

Making profits in a real estate brokerage is challenging at the best of times. We need to make sure that we are operating as efficiently as possible—and this article is going to explore one of the ways to do this: hiring the right people.

First off, let's realize that 65% to 70% of expenses in operating your brokerage consist of rent and salaries. This is true across the industry—just two numbers account for over one-third of your expenses. And the rent, once you have decided on location and signed a lease, is pretty much fixed. Unless you have a landlord who likes a good sob story, don't waste your time agonizing over it. But salaries are another question. There are lots of things to consider when you look at what you are spending in salaries.

First off, hire the right people. A staff member at $40K who does half the work of the $50K staff member is NOT a better deal.  We see brokers shortchange themselves all the time by trying to skimp on salaries. And consider that the staff member probably interacts with your agents more than you do. For anyone who hasn't already, we highly recommend reading the book Good to Great by Jim Collins which has an excellent description of the topic of having the right people on board. A 50% more efficient employee at 33% more cost is a great deal!

Now take those people, the largest amount of the expense in running your office, and make them more efficient. Start asking the questions about what your staff do, when they do it, where they do it and why they are doing it. If the answer is, "We have always done it this way," then a cold sweat should break out on your forehead.

There is a huge danger in offices, especially the ones that have grown a lot, of getting stuck in ruts. What worked well in the past when you had 40 agents and one office probably isn't going to work with 240 agents and five offices.

Having an efficient business with the right people in place will pay dividends!

To view the original article, visit the Lone Wolf blog.