017 Profitability Through Per-Agent Productivity with Jim Remley

No matter where your business is today.

Or where you want to take it.

You'Ll get there faster and more profitably with an operating system. Welcome to Team os, your guide to.

Starting, growing and optimizing real estate team.

Here's your host, Ethan Butte. For insights into starting, growing and optimizing your real estate team, we're talking with Jim Remle. A few fun facts off the top. He started a real estate company with a friend and grew it to 17 offices across Oregon. He later took a 30 agent team and grew it to 200, 250 agents. Today he helps team leaders and brokerage owners with per agent productivity and profitable growth. Thanks so much for talking Team OS today, Jim.

I'm excited to be here. It's quite a privilege. Thank you Ethan.

Yeah, I'm excited to do like I want to get into per agent productivity and profitable growth. There's a lot layered under each of those and I want to do it from two perspectives as well. Of course, your own direct team building efforts and of course all of the work that you're doing across a variety of, of teams and brokerages now essentially in a consulting capacity. But where we're going to start, Jim, is where we always do, which is a must have characteristic of a high performing team. When I offer that to you, what comes to mind, you know, I think.

The must have characteristic of a high performing team would for me would be the ability to have some empathy. And I know that sounds a little different, a little outside the box, but empathy for your team members, what they're going through, how you can help them grow and scale themselves because ultimately, ultimately that's going to be how you're going to grow and scale the entire team and then empathy with your clients, where they're at in their lives, where they're at in their situation. What I find is that sometimes teams can get transactional and they can look at notches on a belt and say we closed 100 transactions, I want to close 150 or I want to close 120. And they lose touch with relationships, I lose touch with empathy and then their business kind of goes sideways. Empathy is what's going to drive, should be driving most of your decision making.

Interesting. So I mean you hear it but not necessarily as this must have characteristic. Right. So I like rating, raising this up. It's a reminder that this is a human to human business. No matter how much kind of technology and all the different forms that takes, it really is a human to human piece. I guess go one layer deeper there like what is the human component of this? And feel free to even just share the obvious and walk into maybe something that's less obvious.

Yeah, I'll give you an example. My wife and I are buying, we're in contract to buy a second home in Las Vegas. And so you forget the force for the trees when you actually become a buyer again and you're actually in a market you've never been in, how foreign the whole situation is as a buyer. So from the, for me the empathy part of it is let's, let's rewind the clock. Take yourself, put yourself in the buyer's position and then walk yourself through every single layer of your business. From the first point of contact, to using a website, to driving by properties, to seeing properties, to the valuation process, to the offer writing process, the follow up process. Does it feel like world class service, like the best of the best of the best or you just kind of ho hum and it's just transactional and it's just like we're moving you through the process so we can get to a closing. I think, you know, having a, having a reset around that is really important and then being self critical, really being, having the ability to critique your business model is really, really important.

So good. I want to, I'm going to go at this one more time. I love the way that you broke down all the stages of it. I think when I'm thinking like a highly productive solo agent who's thinking about starting a team or bringing some people around them perhaps with ambitions of, you know, making it a very, very large team. Whether or not that's true doesn't matter. For what I'm going to kind of set up and ask about which is breaking down each of these steps, being honest and self critical. I think that's a thing documenting what's going on there and where I really want to go. Just dwelling in this human idea again is, you know, as we implement repeatable steps, whether that's automated, whether it's intelligent, whether it's just like we're going to use a human to make this easier for me so I can focus on essentially what I think we're really trying to do is automate up to the point where I now have the time and the ability to take what I know and adapt it for this individual human being who's in front of me. Automate all the things that are true of 95 to 99% of people and use the time savings to be empathetic, truly in the moment, to do it before the interaction, during the interaction and after the interaction. Does that sound about right to you?

Yeah, I think the. Everybody wants technology to make it a more seamless, frictionless process. Right. So you're trying to remove friction out of the equation. And I think there's a lot of opportunities for that to happen. Where you want to step back in is where you want to deliver the highest level of service. And so these high service moments, these euphoric moments where you need to help buyers, we understand the process. That's where we step back in and that's where we earn our money. If it's all automated, then you got to say, well, this is. Can be commoditized to the point where do we need an agent and do we need an agent? That is costing me 20, 30, $40,000. So now we got to step in and be the surgeon. So I'm the surgeon with the gloves on. I only come in to do the surgery. Everything else my nurses handle, you know, and everything else they're touching. But up until that point, when I want the surgeon, I want the surgeon.

Yeah. Really, really good analogy. I hosted over 270 episodes of a show called the Customer Experience Podcast. And one of the theses I withdrew after kind of reflecting on all of those conversations was essentially what you just described. And it's a layer onto your initial response too, which is as you're reviewing these things and documenting what you need to document so that someone else can step in and support it, as you're maybe offloading some of the activities to automation or other tools or technolog technologies. The language that I like here is moments that matter. You know, like when you need to step in and create these particular moments where. Where your expertise, your empathy, super matters. What I call moments that matter. Okay, I would love to hear your perspective before we get into your personal story. Although some of your response here might be layered with some of your personal experience of personal story. Give us an overview of the team model. I mean, you've been in the industry for a couple few decades. You have a w range of experiences yourself, both directly and through serving other people and they're in helping them with their businesses. Give me a quick rundown on past, present, future of the team model. Like when did this language emerge to you? What were some of the most interesting or challenging things about it? Where are we in the team movement? Is this something that's going to be dominant for, in your view, dominant for five to 10 years? You know, and we're kind of like riding up into that kind of plateau. And then something else is going to like, where are we in the team model? Past, present, future, high level?

Well, I can tell you, I was one of the first people in the country to start a team back in the early late 80s, early 90s. The teams were just like very, very beginning, right? The big thing that was back then was, well, hire an assistant. And that was kind of the team was you and your assistant, right? So my buddy and I formed one of the first teams in Oregon. And in our market, nobody could understand it. Like, what do you mean you guys are. You guys are partners? They thought, are we romantically partners? We're like, no, we're not romantically partners. We're just a team. Right. They just couldn't quite wrap their minds around two guys partnering together to form this team. We then had an assistant. What's changed over time is I think you've seen over the last 10 or 20 years where the team has become essentially a mini brokerage within a brokerage. And so what's happened now is now each of the team members has a very specific role. And the most effective, effective teams really have broken down those roles. So it kind of McDonaldized it if you want to take it there. So you've got it. You got a tc, a transaction coordinator handling just transactions. You've got a listing coordinator, you've got buyer's agents, you've got admin people that are running the, you know, the marketing. You might have a social media expert on staff. So there's. Everybody's got their little niche that they're specializing in and they're working it. I see the most successful teams are, are niched that way. I see some, some team leaders are like, all my people do everything. And I'm always like, well then you're really just have. Have a brokerage and they're just, you know, it's a little bit. It's not really a team structure then, so. And the reason why you want to get really niche with it is that those people become really, really good at their job and they get really to the place of being an expert in their little niche, their little fiefdom, and that's where you want them to be. Where do I see teams going is an interesting question. I think teams are absolutely going to be the dominant players. I think right now I see teams growing to 60 to 70% of the overall GCI in the country. I think that's where we're headed. It could go to 80%. I see that it's going to be very Difficult for individual solo agents to compete with them at scale. Not that I think you won't see people doing 20, 30 to 50 transactions very, very successfully. But people getting higher than that without a team would be very difficult. But where do I see teams going? I like this concept that I've kind of been working with my, some of my team leaders with, is to do a virtual team. Let me tell you, the concept of a virtual team. The idea of a virtual team is over the last, let's say you go back five years or 10 years, there was a model and there's still a lot of agents that are hanging by a thread onto this model where they were going and buying Zillow leads or realtor.com leads. They were hiring buyer's agents. Then they were taking these leads that they're getting from Zillow, realtor.com handing them the buyer's agents. And the agents there would grind through and they'd get to their 2 or 3% close rate. And there was a spread there that could be made. They could make 20 or 30% and get an ROI on that money. Today, that doesn't work. In fact, there's a negative 32% ROI on that investment. So you're actually losing money for every dollar you invest. So you can't have agents, buyer's agents, sitting there with their handout saying, give me another lead, because that doesn't work anymore. So we have to do. We got to totally transition our thought process. So my thought process is a virtual buyer's agent could be a virtual showing agent. This is where you look in your office and you say, that's a good agent. That's a good agent. I don't want them to have my desk every looking for a handout, but I'm going to use as a virtual part of my team. So I go to the agent, I say, listen, I've got some overflow leads. I'm going to have a steady stream of, for my sphere of influence on the marketing, I'm doing them maybe five to ten leads a month. I'd like to hand those over to you. And when I do, you're going to represent yourself as being a part of my team transactionally within that transaction. And when you close that transaction, we're going to split it 50, 50, 60, 40. Whatever your number, you pick. And during that, you're going to be reporting to me just as if you're a team member. Every week you're going to give me an update. You're going to be on our CRM system. I'm going to be watching everything you're doing. If you don't perform, I'm not going to use you anymore. But now it's virtual. They can still run their own business, they can be their own solo agent, but transactionally they're with me on the team now. I don't have to settle for, you know, an agent that may be kind of on the fence of being a solo agent versus on a team. So I see that being a new progression in the industry. Myself, personally, I'm advocating for that.

Really interesting. When you said virtual, initially I thought like, you know, highly distributed geographically and, you know, connecting as we're connecting now on a virtual, you know, virtual meeting, virtual call, video call. But this reminds me of some of the origin stories that I've heard from some very large team leaders today, which is, you know, I was the first to really dominate my local market from an SEO perspective. I all of a sudden couldn't handle it anymore. Of course, I already had, you know, a couple assistants alongside me, and I would do these kind of like these deals with other agents in my office. Do you see this similar or do you see this, like, different, or do you just see this as, like, this is what it's going to be?

For me, I see it as a progression for a lot of team leaders because they're going to want to alleviate some cost out of the structure. Because if I have that buyer's agent, I'm probably paying for their realtor dues or MLS dues or, you know, dues. Maybe there's some split with the company, some desk fees. I'm going to eliminate all that cost. And now it's just going to be profit for me when they close a transaction. So I'm looking at it again, getting kind of back to this idea that I'm running a brokerage within a brokerage. In essence, I'm a lead generator, I'm a rainmaker. I'm handing leads to these people. And this is where the. I think the mistake comes from some team leaders that say, I am going to recruit people and they're going to bring me business. If they're able to create their own business, they're not coming to work for a team. It's just there's no reason for them. So you, as a team leader, your number one job is to be a rain maker. And if you can figure out your SEO, your online marketing, whatever you're doing to generate leads and you master that, that's what's going to attract people to Join you virtually or not virtually. So that's where I'm from.

Really good. So I hear from you a very strong, you know, leads based like this is what is attractive about this to a lot of folks. We just need to be efficient about it. The other arguments that I hear for a solo agent who should be joining a team, whether they're new or they're experienced, and we're going to get a little bit into some of that nuance too because I know the idea of recruiting more experienced agents more often is, you know, unlock that you're helping people with. But you know, another one I hear is like lifestyle. And part of this goes into that specialization you were talking about before. I don't need to be good at all. 37 pieces of an average transaction. I can focus on the six or eight that I really love and I have specialists to do it. And if heaven forbid, I get sick or injured or something, I need to step out. There are these documented process that processes that, you know, my partner agent can step in and I know they're going to do the same thing in about the same way, consistent with the same culture, supported by the same specialists, etc. Like there's a. There's kind of a lifestyle benefit to it too, besides leads and besides kind of like the support and lifestyle dynamic. I guess layered in the lifestyle dynamic is this idea that I'm focusing more of my time and attention on things that I like and that I'm really good at. Therefore in theory I should be more productive. I might even do more transactions, for example. Are there any other benefits that folks might be overlooking about the team opportunity?

Well, from a leadership perspective, if you're the team leader, one thing I do think that a lot of team leaders are not great at that they need help with is systemization of their, of their entire business model. So they're great at sales, they're rainmakers, they're alphas. But they're not great at detail. It's just by nature, right? That's just a kind of a two separate kind of skill sets. So I think the best hire that a team leader can do is an admin that's going to work on systemization at a desk level. Like let's work on the TC structure and how that's flowing. Let's work on the listing coordinator, let's look at how that's flowing. So they step in and like you're saying, document it. I call it having knowledge books for every position so that somebody could step in and do the same position with just looking at the knowledge books, whether that's Trello or whatever you're using. But yeah, walking and walking in that and stepping through the system. So I think having systemization, I think the coaching and mentorship is a big part of why somebody's going to join a team as well. Because they're going to want to say I want to be trained by this agent that's closed a thousand transactions and that alone for some people it could be worth a hundred thousand dollars, $200,000 getting that hands on training where I can go on a listing appointment and watch somebody that's done a thousand of these things just crush it or overcome some negotiation barrier which I would have never overcome on myself by myself as a solo agent and they just seamlessly, effortlessly, effortlessly go through it. That level of coaching, even if you only do it for two or three years, you join a team just for that purpose. That is huge.

Right.

So I think those are big, big things as well.

What do you think about teams supporting teams within their structure? Where I was in my head was I was thinking about this person who was attracted to join this team because of the accomplishments of the team. I get to learn and grow alongside this person. I get to model some of their behavior. I get to inherit some of their systems and processes that they were smart enough to have turned into playbooks or knowledge books. Something else that I've heard is that, you know, the opportunity for me to grow my own team within this organization is also another lever for retention. Thoughts or observations on whether or not to support teams within your team does that? I mean, obviously it's a layer of complication, but it's also potentially some upside for you and for retention. What have you observed around that?

I would be careful of it. I've never seen it done successfully. I'm going to put it that way. If somebody's doing successfully, I'd love to see it because I haven't seen that done yet. But it doesn't mean it's not happening. But I haven't seen it done yet. I think if you were going to do that, I would probably reframe it as not a team but a group within the team. So that group could have a specialized group like that group could be. We're going to do waterfront properties within the team group and that's our. We're the waterfront group, we're the luxury group, we're the first time home buyer group. And having that specialized niche kind of bubble I think would be an effective kind of thought. You Know to go, because then you could brand it around that. I think you might get some brand confusion if you've got two teams that are kind of got different branding. And it's, it's. It could get very confusing very fast. So I think the bubbles within the group. Within the team, yes, but not teams versus teams in the same team. I don't see that happening myself.

Very good. Okay, I would love to hear, before we get into some very practical tips around per agent productivity and some. I have some very specific questions for you about profitability. I would love for context, for you to share at a high level your two main stories of growing from, hey, let's partner up to, hey, we have 17 offices across Oregon and we're kind of pioneering the team model, you know, decades ago, as well as that, that growth story from 30 to 250 agents give us some high points on both of those kind of story arcs. For context.

Sure. So when I first started 23 years old, my buddy and I, I started 19, but we formed our first company at 23. And when I started, I thought I had this thought process that I could go out and hire people and have them do what I was doing. So I thought, I'm gonna go after new agents because I can coach them, I can train them, I can mold them, and they'll be just like me. I'll just have a bunch of little clones of me out there. And so I started doing a. At that time, we did a room where we would fill a hotel room, conference room up. We would advertise the heck out of it. Every month we'd put 50 or 60 people in the room. I'd get up for an hour. My buddy and I get up for an hour, two hours, and we rah, rah everybody by getting their license. You know, you get four or five people that would sign up for the real estate classes and maybe get one or two out of that group that would join the company, and we were able to grow. But what I found after a few years of doing that was that there's an 87% attrition rate in the industry. No matter how good a trainer, no matter how good coach, no matter how good your systems are, 8 to 9 out of 10 are still going to fail. So what I found was I needed to pivot my, my thoughts and my processes towards recruiting experienced agents. And this still applies today, whether you're a team leader or whether you're, you know, brokerage owner, which I coach, both. So I pivoted about five years in And I'm a slow learner. So five years in I started to go after experienced agents and then our whole business has exploded from there. We, we started recruiting some of the best of the best in the industry. And we grew from, you know, as one office to 17 offices. And I got lucky and sold in 06, got recruited to come down and do it again in Southern Oregon. Took that company from 38 to 258 to again focusing on recruiting experienced agents. The in terms of the attraction, which is recruiting is a whole topic we could spend hours on. But the agents are attracted to companies and teams that can help them with one thing and that's helping them sell more real estate. Right? So this, there's a fallacy out there right now. It's especially prevalent and pervasive in the industry that it's all about commission splits. And so you've got all these companies that are, you know, coming in with lower caps and lower caps and lower caps and, and you know, got one company at 16, then another company at 14, then another company at 12. And pretty soon we're paying agents to work for us. That doesn't work. And that just completely collapses your profitability as a team leader and as a brokerage owner. And it's not about that. It's, you know, because 100% of nothing is nothing. What we got to focus on these agents on is we're going to take you from closing two transactions a year to closing 10. We're going to take you from closing 10 to closing 20. And we're going to do that through systems and training and coaching and technology and you know, overall profit, you know, overall profitability. And that's what you're selling, is you're selling, I'm going to help you be more productive.

How distributed were these, like geographically were you serving, you know, three markets with 17 offices or you know, just kind of go one layer into there like in terms of, you know, the expansion rate or what pieces were in place or how you're kind of doing some of that decision making. Like I think we can open two more offices here and there. And here's why, like break that down a little bit more for someone who's thinking about it's my impression is that you were dominating a couple of local markets with 17 offices. But I could be wrong about that.

No, you're absolutely right.

Give me a little bit more on that.

So we went from zero to being a market dominant leader in our little hometown. Right. So we were number one in market share in that market in that town, we ended up, we ended up with three offices in our hometown. So we had our mothership and then two other offices. And honestly we acquired one of them. One of them was a company that came and sold to us a franchise that said, we want to join you. We bought them and then another one we just opened at a second location and from there just kind of spidered out from there with ancillary markets. And we did get pretty spread out. I mean we got as far in our market, I'd say 120 miles in north and 120 miles south. And we kind of covered everywhere between with 17 offices. So we ran it with a mothership kind of mentality where all the admins done through the mothership, all the accounting and the marketing and all the hard work stuff to the mothership and then all the offices might have one admin person in each of the offices. And then, you know, our office locations back then there wasn't. It was not a virtual environment. So we have physical locations in all 17 spots. We did end up actually licensing our branding and our technology and our training and our coaching to a couple. Not a lot. Two or three offices that paid us a transactional fee per transaction closed. So that was another part of our model. But that, you know, that's kind of the way it built out that. And it took some time. It was like it was overnight, but it took some time.

I see this going one of two ways, although I'm sure there are many other versions that I'm sure that the truth is maybe not even anywhere near one of these two, but it's, you know, we think there's an opportunity in this geographic area. Let's go do some research and see if it works out. The other path, I think maybe even more likely is, oh, we know Jeff and Tina and they're amazing and they see things the way we do. And so let's partner up and open this office over in this market because they already have a good presence there. And this seems like a good partnership. Like for example, office 14 or 16 or 12. Like what, what were, what were some of the precursors to saying, okay, this is our next thing?

So we basically went into markets one of two ways. Either A, we acquired an office so we bought an office, or they came to us and said, we want join. Like in the Eugene market was a great example. We had a guy that wanted to sell. He had 40 or 50 agents at the time and we bought his company. And when I say bought his company in a lot of Cases, especially in today's market, I'd say 80 to 90% of the offices in the market are losing money. I mean, that's just the reality. So they may have a big operation from the outside, they may look super successful, but most of them are losing money. So there are a lot of them would be glad to hand you the keys and say, please take over. You got, when you're taking over, you have to make sure you have economy scale and you can make it profitable. We could. We knew what we were doing, so we were able to take that Eugene office and turn it into an office that was very successful. My partner did that and ran that very well. And then there was other opportunities where we just, as you said, we knew an agent or a couple agents in that market that wanted to have a presence there. And we said these are strong enough agents that if we put an office there, we know will attract more, more agents to join us. And that that was basically the two paths. We never went into an area called and said we're just going to put a location here because we think, you know, we'll pray to the gods and if we build it, they will come. We never did that.

Yeah, good. And was the path from 30 to 250 agents similar? Was that acquisition or was that a recruiting effort? See what your contacts are doing on Zillow. Monday, December 8th join follow up Boss for a sneak peek webinar where you'll be among the first to see how to get Zillow searching, browsing and saving insights for the contacts in your database directly inside. Follow Up Boss so when a past client of yours gets that late night and extra bedroom would be really great right now. Kind of feeling you'll know before anyone else who's showing high intent to buy or sell insights about what's happening right now so you can deliver a personalized touch at scale. See what your contacts are doing on Zillow. Monday, December 8th at 1pm Eastern, 10am Pacific. Learn more and sign up through the link in the description below. You're in your podcast app. Check out the description of this episode right down below. It's the first line and the first link. Now back to the conversation.

So that a little bit different. We ended up with three offices there. So we had a mothership. Again, super successful mothership number one in market share. Then we went to the next ancillary market and we did acquire an office, but we acquired a small office and what we did there, which I think is something a lot of team leaders should do in Brokerage owners is in the process of acquiring that office. I went and met with every top producer in the market. I had somebody that I worked with that got me an invitation or got me into those meetings. And I said, listen, we're going to buy this office and we're going to build an office out here's my vision of it. Is this, is this a place you would work for if you had the opportunity? And we did recruit, you know, I would say five or six major players so that when we opened, we had a powerhouse right out of the gate. So yeah, that was. And then the Eugene office, which was another office, was another acquisition. So. Mothership. Mothership and two acquisitions.

Very good. So I heard you say something that. And then you brought it to the present, which is something I've been hearing presently, which is it's actually a pretty good time if you're in the right financial position and you have your, you know, your operations in order. It sounds like you, you guys did at that time in both of those stories that it's actually a really good time to do some acquisition because there are people at a certain point in their, in their career that say, okay, I'm ready to be done with this. It's, you know, I'm either exhausted or it's not fun anymore, or I don't see a way out of, you know, this, this kind of financial trap that I'm in in general. I mean, obviously we can point to the, the dramatic slowdown in just transaction sides, period. But what are a couple other keys to running a business profitably in good times and bad, or at least running it well enough in good times that you can, that you can get through the bad. Like, you know, for folks that are, that look successful from the outside but are not running a profit. What are some of the common themes that you've observed?

The biggest issue is going to be their per agent productivity is very low. So they're supporting a large body of agents, but you know, most of them are not producing any sales. So we have to rethink our business model and say if I'm going to run a company, I've got to have agents that are productive. So the first thing every, everybody that I'm coaching, when I'm sitting with them for the first time, I'll say, what's your pur. Agent productivity? And they'll say, I have no idea. I'll say, let's figure it out. So what you're going to do is you're going to run your MLS stats, you're going to figure out how many transactions on average your agents were closing. And in most markets, there was just a new study done around this, by the way, and they did a, they did a study of 2,000 agents in five metro markets. Over 50% of that body was closing zero to one transaction a year. And then 70% were closing less than five transactions a year. So for most offices, we need to get that number to 7, 8, 9, 10 to be making profit. Profit, right. If, if our agent body, 70 of them is closing 0 to 5 transactions, we're probably losing money. So we probably are not profitable. So when I'm looking for targets, I can go in and I can just look at agent productivity and say, this is an office guy that has 80 of their agents closing 0 to 5 transactions. They're probably not profitable. It's pretty quickly easily viewed right there. And that there's probably a lot of reasons around that could be technology, could be systems, could be coaching, could be mentorship where we could step in and say we're going to help these agents get more productive really, really fast. And if you can step in to a meeting and say, guys, you know, the office leaders decided to make a change, the ownership is going to change. But I want you to know something. The only reason we're making this change is to help you guys sell more real estate. I want to take you all from where you're at, which I know your numbers, and I want to help you grow. And in our path, we're going to show you how to grow. And you get people excited about that, they will, they will follow you. But when you make it about them and not about you, you, yeah, really good.

And that was of course, the recruiting message as well. They want one thing and there are lots always to talk about it. I, I appreciate, by the way, you already answered one of my assumptions, which was that or which was I was going to phrase as a question, which is that per agent, productivity and profitability are two sides of the same coin. Is it as simple as, like, are these the three main levers? Leads and lead flow, agent count and staff support. And you need to keep all of these kind of imbalance and when they're in balance, you can find a profitable balance in there, assuming that there is some cost, whether you're, you're buying them through a direct partnership or whether you're just buying them outright or whether you're investing in such a way to generate them. Let's just call all of that, you know, cost per lead that, you know At a certain point we have more leads than our agents can responsibly handle, let's say. So we need more agents. And of course we're just have more agents, more transactions. We need some more support staff. But those things are never perfectly imbalanced. But are those the three. Are those about the three levers to focus on in terms of profitability or is there a big, you know, missing fourth piece or is one of the. One of those doesn't belong?

For me, it's. It's training technology, which technology is going to be lead flow. Training is going to be also be like lead flow, helping agents create their own leads. Right. But I'll tell you, there is a missing component there and you can really identify weak companies really quickly. This way is overall listing count at the company. So listings drive sales. So listings, it's like a grocery store. If you've got inventory on the shelves, buyers are going to come in. The inventory is empty. No buyers are going to come in. So when I'm looking at a possible acquisition target, let's look at their listing count. If they have a very low listing count, basically they're out of business. We have a strong listing count now. We've got a robust company. So all, everything that we do as a company, every single thing we're driving towards higher listing counts because the listing leaders dominate the market, whether it's agents or companies. So if you, if you can get your agents to get out there and take listings and dominate the listing field now you're going to dominate the market really quickly and you're going to dominate the lead the legion because leads flow from listings in general. So the more listings you have, the more lead flow you have have. So that I think that's maybe a fourth leg to this as well. Staff is important as well. Although I will say that because of technology. Quick story on this. When I, when we started this company, when I took over, we had. We had about 10. We had 30 agents and about 10 staff people. It was kind of crazy because they had lost a ton of agents. They had gone from 50 or 60 and got down to 30. So we've taken that same number of staff, went from $100 million in production and now doing $1.4 billion of production. We have about 16 staff members today, but we've 10 xed our volume with not 10 xing the number of staff. We don't have 100 staff members. Right. So the reason for that is technology. Technology has enabled us to be much, much more efficient with a lower Staff count versus the work output. So we can actually have much, much more economy of scale today than we've ever had.

Yeah, I've heard that story on this show before too. And it was framed in. We needed a lot of those people at the time because build the systems we needed to build the processes we need to integrate these things together. And at a certain point it was really hard to do, but I had to let you know x percent of them go because we frankly didn't need them anymore. We just need them to kind of set up and build. And then once we're running, you know, the technology itself is so scaled that, you know, and frankly, that's what you need.

Yeah, exactly.

100% key to profitability.

Yeah.

Listings. I want to spend a minute there, you know, as we record this in Q1, 2024, for folks watching or listening, because people will do it at different times. Some people that did the minute it releases and some people, you know, a year later or more. Obviously, listings are the key to this market because inventory is so challenged. But listings are always to. To your points that you've already made, always a really important part of a successful business. What are you seeing or hearing folks doing right now to really emphasize within their organizations to success generating more listings?

Well, a couple things. One is understanding where the listing is going to come from. So the number one place where listings will come from in 2024, without question, is the Silver Tsunami. So Silver Tsunami is people that are 45 to 55 years old. Exactly. My demographic. Right. That are. And yours as well, because. Empty nester. Right. So you're an empty nester. I'm an empty nester. I have four kids. They're all gone. So we're in a place. We just had this happen where we had a 4,000 square foot house, a pool that we never used, and two levels and all these bedrooms and we just never used the space. So we sold it and we now, now we have two houses, one here. We're buying one in Vegas. Right. So that's a classic example of who's going to drive the market in 2024 is the silver Tsunami. People that are not interest rate sensitive because they probably paid off their loans or have very low loan on their property. So it's not as a big a deal. And they've got some, some equity they can play with. So when I'm targeting this as an officer, as a team leader, I gotta say, okay, now I'm gonna go after this group. How do I go after them? I'm Targeting people that have owned a house over 15 years that are in my this age demographic. I'm gonna do that virtually and through physical mailings. So I'm gonna have a layered approach with, you know, Facebook ads and Instagram ads and TikTok ads and, and YouTube ads. And I'm also going to have, for me at least I'm going to do a massive amount of mailings of these neighborhoods. They're much more susceptible to mailings and they're much more likely to respond. So that's, you know, that would be one approach for me is understanding the target audience you're going after. That's the number one target audience for 2024.

Yeah, really good. And there's a ton of education that can be done. You mentioned a few of the channels you can distribute through, but I think of it as like an educational effort. There, there may be people who, and add to this as soon as I stop, which will be just a second. There are probably people that this is a ripe opportunity for, but they've never put the pieces together to say, oh, this is an option for me. I mean, it's one thing to say, let's be present with messages like these so that when someone thinks about downsizing, they maybe think of us and reach out to us. It's another thing to say, hey, is this true? Is this true and is this false? Well, you might not have considered blah.

Blah, blah, blah, blah.

Like, like I think they're probably in this tsunami. People that don't even know that they're part of this potential tsunami 100%.

And there's. Yahoo did a finance, did a whole study on this and they, they believe over the next 10 years that's there's 30 million people in this category of people that may be selling their houses. But we, what we did kind of to your point is we created a, in our coaching group, a series of five we called the five whys. What are the five reasons why somebody might consider moving that are in this demographic? Because the worst thing that we see happening with agents is that their marketing is basically this. If you want, you know, call me if you want to list your house, that's their marketing. The second marketing is call me to find out what your house is worth. Sleep or boring. We've all gotten that marketing message a million times. That's not talking to the five reasons why somebody may want to come to market. Right? So for instance, we will talk about, you know, downsizing. We'll talk about, you know, just exactly what I did downsizing. But also maintenance, the cost of maintaining the house. We'll talk about capturing your equity that's sitting in your house, that's kind of lost money that you're not using, you know, fully. We'll talk about the idea of being the number one reason why people will move is being closer to family and friends, especially retiring people. So we'll hit all those categories, but we'll do it over time. So Facebook ads, Instagram ads, TikTok ads, all hitting that same, same comment. But then another layer is they'll get the mailings as well. That's hitting the same thing where people are like, you know what? I do want to be closer to my grandkids. That's the number one reason they're going to move. So you know what, maybe we should talk to Jim now. And so we just go through educational process.

Love it. I, we've been talking condo lifestyle at my house just so that like, if you're not there for some period of time because you're visiting family or friends or doing other things, no big deal.

Yeah, who cares?

Set up that nest thermostat and adjust as necessary. Yeah, really good. Appreciate that so much. Let's double back into per agent productivity. It's part of the recruiting conversation, it's part of the training conversation. It's probably the single most important factor in profitability. It sounds like I don't want to isolate one thing, but. And I know it's a big category, so I felt pretty safe in saying that. But, you know, from this recruiting perspective, what are, I mean, obviously it's, you know, if you're at X, we're going to get you to 4x and we're going to do it over a period of time through these milestones or through these gates. What are some of the keys to just getting into that conversation? I mean, the same way you broke down the Silver Tsunami, like, if you, what I'm imagining here is a team leader who is, you know, in a very small operation, they have ambitions to maybe double it in size for the next X number of months. Whether that's 12 or 36 doesn't matter. And this is going to be a good opportunity for them. What are some of the, what are some of the messages or like what are some of the sparks to even initiate this? To say, I have something that can help you.

Well, first there's something called the Hawthorne effect, which is a really interesting psychological effect. And the Hawthorne effect just states that we as human beings, we all perform at a higher level when we're being watched. When we're not being watched, we'll sink to the level of mediocrity that surrounds us. So when you have a brokerage leader or a team leader, it's very easy to get caught up in your own stuff, like your own listings, your own sales, your own transactional problems. And you stop watching the people that are around you. And when you stop watching, they sink to the level of mediocrity that they think you can get away with. They'll do just enough to not get fired, basically, and some will do less. So what we have to do is to say, number one, we're watching. And here's how we're watching. And when we're having a conversation with somebody that's joining the team, it starts at that initial conversation. We say, listen, our goal is to help you go from where you are to where you want to go. And you're going to set the goals, not me. So what would you like to do? And they'll say a number one close. 10 million, 20 million, whatever. I'll say, now here's how we can help you get there. But you have to be a part of this. I measure you by two things to be to. To remain on this team, and I think it's a privilege and an honor to be on this team. I measure you with two things. It's either participation or performance. So performance means you're out there taking listings, making sales, doing everything we're asking you to do do. If you miss one of our office meetings or a training session, I'm going to get it because you're out there crushing it. I want you to. All of them. But I'm going to understand, okay, on the flip side, if you are not out there producing, you're not making sales or taking listings or doing things, I'm asking, I'm going to expect that you are participating in every single thing we're doing. Every training event, every coaching session, every mentorship thing, everything we're doing, I want to see you there. So it's either participation or production. I want to see both. But if I see neither, you're not producing and you're not participating, there's not going to be room for you at this team. So here's what we're going to do. We're going to do a daily, we're going to do a weekly. If you're a team leader, you can get away with this. At a brokerage level, it's a little bit different, but a team level, we're going to do A weekly huddle. And the weekly huddle is a stand up 10 minutes. We're all going to go around the room, we're going to talk about what we're doing, what we're doing, what's in our pipeline. So that's going to be my process of kind of watching this them. If I get to a point where I have somebody that's not performing on a regular basis, I'm going to give them a sheet which I call my daily dashboard. And my daily dashboard is going to measure all activities for the week and they're going to turn it in every Friday. I'm going to say, I have to have you do this so we get you back on track. If you don't do this, I'm not going to have room for you here. And then if they don't do it for three or four weeks, I cut them. Right. It boils down to agent productivity. At a brokerage owner level. It's a little bit more of a delicate dance because they're independent contractors, but you still need to have the dance and you need to talk to them. The magic words, whether you're a team leader or brokerage owner that you should be using with everybody that you're managing all the time is when I'm meeting, if you're one of my agencies, I'm just going to have a conversation with you in the hall and say, Ethan, how's your pipeline, man? How's it going? I want you to know that I care, but also that I'm watching and it's not going to be about how's your day, how's this, how's that? I'll get to that. How's your pipeline? And they're going to say, oh, it's not good, let's talk about it. What can we do to fix it? Let's get on the same page. Let's do a coaching session so they know that every time I'm going to be talking to them it's going to be about pipeline and we want to get you to a winning position. So that's kind of the way I approach it.

Love it. And I love the way that you broke it down into something very, very practical. I've always enjoyed, back when I was doing a lot more work in office, I always enjoyed this process of leading and managing by walking around and sparking some of these conversations just to get at one level. For me, it was like a pulse, like, what's the tone? How are people responding? And of course, every single one of those then has the potential to become a coachable mom. Really appreciate that. A really difficult aspect of team leadership that I have observed is those folks that are caught in between. I'm not sure if I want to leave production or not. I'm not sure if I'm ready for full time leadership because it's completely different than me being like an amazing agent who just absolutely dominated this market for 5 years, generated all this business and now I need to start building around me to support all the opportunities that I've created. How, how are you advising people or kind of look, what's your line of inquiry for folks who are trying to decide and I'll give you a very specific example and maybe you can coach to this. You know, it's me, a part time assistant, a full time assistant, a buyer's agent alongside me. We're doing really well, it's profitable and I'm, you know, I've got a couple other agents that, that kind of want to join us. I'm just not sure if we're ready yet. And I'm on this path. When should that person start to be considering whether or not this is right for them and if so, what is the right time to step out of sales? Like, because detention is really difficult for people to manage. I'm responsible for all my agents to have these conversations like the one you just talked about. How's your pipeline? Let's talk about it. But I also need to be accountable to all of my clients as well. And this just becomes like this really difficult. Like if you thought it was hard, you know, selling 100 houses on your own with a part time assistant, like this is a different version of the same challenge. So in light of kind of what I just shared there, you know, what's your line of inquiry or what's your line of recommendation for someone in somewhere on that path.

So if your goal is to exit production, which I think most team leaders, that's kind of where they, that's a little bit in the mix. They all kind of want to do that. At some point you first have to establish what's the number that I would have to be closing, what would my team have to be doing in order to hit that exit strategy? Right. And I get this with brokerage owners that are also competing. So this is very similar for a brokerage owner that's also still selling. They'll say, jim, I want to exit selling. My first question is what's that number going to have to be then how many transactions is your office or your team going to have to do to support that. So you got to start to work towards that number and you got to get that number out there. Is it 50 transactions a year? Is it 100 transactions a year?

Year.

Until you cross that threshold, you probably can't do it. I would say as well that here's the number one mistake though that team leaders make that are trying to exit is that they are way too cheap. And I'm going to be honest, right. This is just the reality. And they're too cheap in the sense that they think that they're going to have these people that are buyer's agents or listing coordinators that are just going to run the show without a leader leading them them or having a very high level like them agent in the, in the hot seat, he, he or she is going to have to put a good, I mean really good solid agent into the chair that they were sitting in. So they're going to be a strong listing agent, strong buyer's agent, strong negotiator. That's going to cost them quite a bit of money. It's going to cost them maybe $200,000 a year minimum. Could be $300,000 a year. It ain't going to be $50,000 a year. It's not going to be $60,000 a year because these agents will go sell on their own. But if you pay somebody a solid, really, really good amount of money now it allows me to exit and really do some of the fun stuff or do the things I want to do. And I'm still making five or six or seven, $800,000 a year. That's okay. You're gonna have to give up the two or three hundred thousand dollars. That's the, that's the, that's the inflection point. That's the challenge point. And that's a place where a lot of team leaders just can't get to, but they have to if they really want to exit.

Really good. This, this idea of a. Starting to think about who would be a good candidate to take that chair over and just the idea that the chair exists and it needs to be occupied. And it all, to me it comes down to a lot of self reflection, a lot of goal setting for yourself and then again this kind of clarity on the financials of it can the organization sustain. Something else that I hear a lot is that, you know, when I stepped out, you know, I had the assurances that all these people were going to step up. I handed over my, my processes. I had, you know, some, some staff in support of them, but they just didn't do it as fast or as well or as, you know, dutifully as I did. And so there's this kind of surprise and disappointment. I think this idea of creating the role as well as this kind of alignment or this vision with this person in advance of the move actually happening with some shared targets reduces the likelihood of it going kind of sideways. Anything else? You know, when you think about the, the brokerage owners and the team leaders that you're coaching right now, see, I mean, obviously, again, beginning of the year 2024, what are some of the themes like coming out of Q4 and coming into the new calendar year? Like, what's really top of mind for a lot of folks right now?

Well, I mean, there's a lot of good news coming into the market in this year. I was just in the coaching session this morning. We're talking about. Consumer sentiment is up 29% over the last two months. I know this. We don't know when people are going to listen to this. But it is a good sign that coming into the first quarter, 2024, there's some, there's definitely some, some strength. One of the biggest, most interesting things I found was there's a new study out from Zillow that shows that we had kind of what's called rate lock hesitation. For sellers that have a super low rate of putting their house on the market, giving up that rate, that rate lock hesitation is starting to dissipate and that more and more sellers are willing to come to market even though they got a low rate. And that's been a real, real hold up in the marketplace. We're starting to see that dissipate. So I think there's some good news, you know, on both sides of those fences, buyers coming back to market, the Fed's gonna starting to say that they may reduce rates three, three times in 2024. So I think there's some good, good things happening. Here's the biggest challenge, though, for agents. The biggest challenge is as we see the market improve, and it will improve, in my opinion, dramatically this year. And we just. I was just looking at the pending sales this morning. They're up 4% just this month. My question to my coaching students is, is your business up 4% so far this month? And if it's not, then you got to stop blaming the market. It's not the market, it's not the interest rates, it's not the weather outside. It's not the time of year. It's your strategy, right so if you're not in tandem rising and as a team leader and as a brokerage owner watching and rising with the market, then that's a, that's a signal that your strategy is flawed and you got to fix your strategy. So this is where I think that team leaders and brokerage owners need to really be self critical and every quarter do a kind of a reevaluation of their strategy. Am I keeping up or surpassing the market or am I falling behind? And a good way to look at it and an easy way to look at it is your overall market share. So all of us have a market share. Your team has a market share in the market. Maybe you're 1% of the market, maybe you're 2%. Whatever your mark number is, is. But your office has a market share. What's that number? Are you gaining market share or losing market share? That's going to be the ultimate list litmus test of whether your strategy is working or not. So those are things I'd be looking at.

Great. You've mentioned I've got a few standard closers and I'm really looking forward to asking this. I got one more quick one just because you mentioned three or four specific studies and by the way, for folks watching or listening, I'm going to do my best to go round those up and drop some of those links down below. If you're watching in YouTube, it's down below in the description. If you're listening to podcast apps down below in the description. If you're at real estateteam os.com it's obviously right there as well. What is it? What high level are you subscribed to? A bunch of. How do you stay in touch with with industry news yourself?

My four or five top sources. Okay, so I'm using Zillow research and if you just type in Zillow research you'll get it. That last study I was talking about rate resistance instance, is the Zillow research. Another one I'm looking at quite a bit. I look at Inman, but not all. Not as much as you might think. I do look at the NAR Economist blog which is a really good source of data. I'm also looking at Redfin which has good solid data there. Those are my top three or four that I'm pulling data from as well. I also use Casey and Blog because they're pulling from a lot of places as well.

Yeah, I have a lot of respect for KCM and what they're doing. Okay. Okay, revised. I'm going to link Those up down below so you could go read and look at whatever you want. Thanks so much for sharing those, Jim. Before I let you go, three pairs of questions. You can answer one or the other on each one. What is your very favorite team to root for? Or what is the best team you've ever been a part of besides, you know, the real estate teams you've been on?

Best team I've ever been a part of would be part of a team that we did a what was in my newspaper route. So we had a, we had team newspaper route where we all kind of took turns doing the route together. And it was a good tight little team. We had a great time. I was 12 years old. We made a bunch of money. It was, it was my first entrepreneurial experience. So that was my first one.

Love it. Sunday mornings at 4am so so much good stuff there. I mean my, my crack of dawn or pre dawn stuff was, was swim team. But the I wish more people had the opportunity to take paper routes these days. It's just not as big a thing. What is one of your most frivolous purchases? Or what's a cheapskate habit that you hold onto even though you probably don't need to?

Cheapskate habit would be. I'm definitely a fan of used bookstores, so I could spend 10 hours in the used bookstore. Love to find old self help books and pull great ideas out of there. That's my cheapskate thing.

Love it. A friend of mine, he refers to himself as the sales historian. He's been finding and reading hard hardcover copies of like you know, 70, 80, 90, 100 year old like business books and it's amazing how much, how much is true today from things published 80, 90 years ago. Human Psychology. Okay. How do you, what does it look like for you to invest your time and attention into continuing to learn, grow and develop or what does it look like for you to invest your time in resting, relaxing and recharging?

Definitely a big believer in resting and relaxing. My wife and I play hard and we work hard, so, so I'm probably take more vacations than most people. We're gone, you know, seven, eight weeks out of the year minimum. So we like to travel so that's, that's what we do to recharge and reset.

Awesome. Any favorite spots on the globe?

We just for the first time went to the Bahamas, which is amazing. I've been to Australia, which is also amazing. Want to take my wife there? We haven't been to Europe yet, so that's another Big bucket list we're working on. We actually have a map above our desk that all 50 states. We got married six years ago so we're trying to hit all 50 states together. We've gotten through about, I think we're about 20 in now. So we got about 20 left. So we're trying to hit them all.

Awesome. Some of them, some of them were brought to more often than others, certainly doing industry related stuff and some of them in general are more desirable than others, depending on your, depending on your preference. I appreciate the dedication to hit all 50, Jim. This has been an absolute pleasure. I wish you continued success in the year ahead both in checking off off states as well as checking off spots like Europe as well as in your own business. If someone wants to learn more about the kind of coaching and consulting that you're doing or they just want to connect with you in general, where's some places you'd send people?

So I'm all over the social media world as e real estate coach. E like elephant e real estate coach. So you can Find me on TikTok and Instagram, Facebook everywhere. We also have a website called erealestatecoach.com where people can go and jump in. We've got a great website webinar on there right now. It's two hours of recruiting and retention ideas that people can get a lot out of. It's free and they can jump in there and check that out. But if anyone wants to reach out to me, they can also go to the website.

Awesome. Sounds really good. Again, I will link that stuff up right down below wherever you're watching or listening. Jim, I appreciate you so much and I hope you have a great rest of your afternoon.

My pleasure being here.

Thanks for checking out this episode of Team os. Get quick insights all the time by.

Checking out real estate teamos on Instagram and on TikTok.