A recent spate of agency consolidation doesn’t mean independent businesses can’t succeed, although some are vulnerable due to a reliance on outdated practices, the head of an independent agency-focused coaching and support network has said.
“A lot of agents and agencies got through 2011 based on 2010-[era] strategies, but that won’t work in 2012,” Michael Sheargold, founder and CEO of Real Estate Results Network, told Real Estate Business.
Earlier this week, prominent inner Sydney-based independents Sarah and Kate Lorden merged with McGrath Estate Agents, while Ray White Group and Harcourts have also announced a spate of independent agencies joining their ranks.
Principals and agents who continued to avoid frank conversations with vendors about price were an example of this outdated approach, he said.
But while consolidation is occurring in the real estate industry, he said an independent agency can succeed if the principal understands the local market, and vendors feel like their needs are being met. He said the Melbourne market – where independents dominated – showed that larger franchise groups didn’t always dominate in every market.
It’s the quality of leadership that ultimately determines how an agency will perform, Mr Sheargold added.
“A lot of principals are struggling with the leadership required to recruit, train and keep great people.”
This was particularly tough for principals who previously excelled as sales representatives, but who had limited experience as business owners.
Yet a commitment to improving their skills could address this deficiency, he said.
“You’re looking to get better before you need to get better,” he said of those principals who tend to do well.
“My network isn’t based on compliance, it’s based on commitment.”
Real Estate Results Network gives independent agencies access to training programs, systems and strategies and online resources. The group commenced in 2005, and represents 800 real estate professionals across Australia and New Zealand working in more than 30 agencies.
Only one agency can be a member in any one designated market, Mr Sheargold said.