Profitability Through Per-Agent Productivity with Jim Remley | Ep 017

For insights into starting, growing and optimizing your real estate team, we're talking with Jim Remy.

I was one of the first people in the country to start a team. Where do I see teams going is an interesting question.

I think he started a real estate company with a friend who grew it to 17 offices across Oregon. He later took a 30 agent team and grew it to 250 agents.

You as a team leader, your number one job is to be a rainmaker and whatever you're doing to generate leads and you master that, that's what's going to attract people to join you.

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, 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 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 forest 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, the offer writing process, the follow up process. Is it, 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 it 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 about like a highly product 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 gonna 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. Trul 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 really understand the process. That's why we step back in and that's why 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 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 wide range of experiences your 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 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 back then was, well, hire an assistant. And that was kind of the team was your. 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, 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 qu their 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, you, 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 have, has a very specific role, and the most 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 a, 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 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 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 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 hand out 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 room. Once other 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, connected 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 agen, 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, 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 that's 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, et cetera. 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, 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, every position. So that Somebody could step in and do the same position with just looking at the knowledge book, 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 close to 1,000 transactions and that alone for some people it could be worth $100,000, $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 leader. 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, 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 there'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 homebuyer 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, I think the bubbles in, within the group, within the team, yes, but not teams versus teams in the same team. I don't, 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, 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, decade 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 firm, 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 going to 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 going after experienced agents and then our whole business has exploded from there. 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 30 agents to 250 agents. 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, look, you know, coming in with lower caps and lower caps and lower caps 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 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, 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 marketing and all the hard work stuff through 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 all we had 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 looks 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 to 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 a 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 a reality. So they may have a big operation and 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 hinge the keys and say, please take over. You got. When you're taking over, you have to make sure you have economy of 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 we'll attract more. More agents to join us. And that. That was basically the two paths. We never went into an area cold 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 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 a place you would work for if you had the opportunity? And we did recruit, I would say five.