Industry Insiders: How elite agents manage sales staff

Starr Partners Merrylands director Matthew Carpenter runs his business in an unconventional way.

In his three offices, the brand is the star, not the agent. None of his agents has exclusive clients; none is featured in marketing material. At the same time, the business supports them by handling all their admin so they can focus on listing, selling and prospecting.

The other Top 100 agents at the roundtable event, Nigel Mukhi and David Howe, were fascinated by this unusual structure. What followed was a lively discussion as they peppered Mr Carpenter with questions… 

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How do you run your teams on a day-to-day basis?

Nigel Mukhi, McGrath Estate Agents Neutral Bay

I’ve got myself and two others. I’ve got an associate agent for prospecting, then I’ve got an EA who does all the admin side of things.

Matthew Carpenter, Starr Partners Merrylands

You guys must know exactly what each other do if you come from the same office, I’m assuming?

David Howe, McGrath Estate Agents Northbridge

We have different teams. Nigel is with Neutral Bay and I’m with Northbridge [both in Sydney]. I have six on my team, actually, and we have two teams within a team. Monday morning, I always have a meeting from 8:30 to 9:30 to talk about what we are going to do for the week, what the targets are, how many phone calls they need to make, how many listings we need to get, how many appraisals we need to get, how many properties need to get sold – that’s all on record on Monday. Then on Friday, at about 5pm, we have a review of what we did for the week. I give them an incentive for achieving their targets, so it motivates them.

Matthew Carpenter, Starr Partners Merrylands

We run very differently to that. I do basically everything: listing, selling, prospecting, negotiating, keeping deals together, and my wife, Christine, comes in a couple of days a week to do some of the paperwork in the background. We’ve got 63 staff among our three offices, including a strata management and property management department, but I run the branch up in Pemulwuy. We’ve got five agents in that office, but they all work for themselves – not commission, only debit-credit. They basically list, sell and prospect. The only thing they don’t do is all the administration. That gets sent back to the Merrylands office, where they do all the sales notes, exchanges and so forth.

David Howe, McGrath Estate Agents Northbridge

So the agents don’t do any administrative work?

Matthew Carpenter, Starr Partners Merrylands

No.

David Howe, McGrath Estate Agents Northbridge

And the company will pay for their support staff?

Matthew Carpenter, Starr Partners Merrylands

Correct. We pay for the support staff as a business, each listing agent has a personal assistant and an admin personal assistant. Only the seniors have a sales cadet. The idea of a sales cadet is that they come and work with that senior for six months, and after six months they go out into debit-credit. It’s just to make sure we’re not putting someone out there into people’s lounge rooms trying to secure business and losing it. You won’t see [agents’] names on any internet exposure. We don’t actually publicise the individual agent; all the business comes back in and then we send it out to the agents. It’s not based on areas that they look after.

Nigel Mukhi, McGrath Estate Agents Neutral Bay

So you don’t have farming areas or anything like that?

Matthew Carpenter, Starr Partners Merrylands

No, we farm the entire area of business. We have 50,000 units in our franchise area; as a business, we farm that entire area, and as the business comes in it goes out to people. We charge a 15 per cent admin fee on top of every sale and it works well. We find that if someone left our business tomorrow it wouldn’t have any effect on business whatsoever.

David Howe, McGrath Estate Agents Northbridge

Is there incentive for the more hard-working agent to work harder to get a bigger market share?

Matthew Carpenter, Starr Partners Merrylands

They get paid more. They get paid more commission if they work harder. Naturally, the ones that have been there a long time are working their databases, so I’ve got about 6,000 potential vendors in my area in my database after 16 years. Because we don’t publicise each person’s individual name, they don’t run as an EBU [employee business unit]. But we do all the admin side for them, so all they need to do is prospect, list, negotiate, sell and keep deals together, then the average agent will do $35,000 to $40,000 a month in commission.

Nigel Mukhi, McGrath Estate Agents Neutral Bay

So if someone needs to enquire about the unit size or whatever, who do they call?

Matthew Carpenter, Starr Partners Merrylands

We have three offices – Pemulwuy, Merrylands and Wentworthville. Depending where the property sits, it will be notified. Between 9am and 6pm there is someone on office time, so if any of those three offices receives a call enquiring about one of those properties it will go to the person that’s on office time. They might be sitting in our Pemulwuy office, or they might be sitting in our Merrylands office, but they’ll be there for two hours. So if an inquiry comes into the Merrylands office, it might get transferred up to Pemulwuy through the ReNet database system. If someone’s sick from any of those three offices, we just put someone else in that office time slot.

David Howe, McGrath Estate Agents Northbridge

Maybe that’s a system unique to your business?

Matthew Carpenter, Starr Partners Merrylands

Unique, yes. I don’t think it would work [everywhere], but it has worked very well for us over the years. It allows up to keep control and monitor what’s happening. Everything’s logged, like how many enquiries we’ve received each day, who took those enquiries and what the conversion rate was from enquiry to an appointment.

Nigel Mukhi, McGrath Estate Agents Neutral Bay

So the lister doesn’t necessarily sell the property?

Matthew Carpenter, Starr Partners Merrylands

That’s correct. The lister will run his open houses, but most of the buyer enquiries for that property will come through the system and one of the selling agents will actually sell it. The majority of our transactions are 50/50, so the lister will get 50 per cent and the selling agent gets 50 per cent..

Nigel Mukhi, McGrath Estate Agents Neutral Bay

If the listing agent has a buyer for that property can he sell it?

Matthew Carpenter, Starr Partners Merrylands

We find it works well for our vendors because you’ve got 17 sales agents and they’re all fighting to sell this one property. We run a unique selling method called Property Launch. It’s like a pseudo-auction where we’re on the market for two weeks; during those two weeks, we simply show it and at the end of those two weeks every single sales agent who’s shown a buyer through has the opportunity to sign a contract and we’ll basically open up all the offers in front of the vendor.

David Howe, McGrath Estate Agents Northbridge

Are your properties usually private treaty or auction?

Matthew Carpenter, Starr Partners Merrylands

At the moment, about 80 per cent auction and 20 per cent Property Launch. Anyone can show the property and everyone’s awarded the same commission if they actually sell it. So if you sold the property you’d get the same commission as Nigel, and vice versa, but only one of you can sell it. We don’t restrict who shows it, whereas I think with a lot of the models it’s only that listing agent that can actually show it.

Nigel Mukhi, McGrath Estate Agents Neutral Bay

Run me through an auction, then... If David and I have each taken a buyer through, those buyers are at the auction?

Matthew Carpenter, Starr Partners Merrylands

You’re there with them. Say David’s buyer buys it: David gets 50 per cent of the sale, or if it was David as the listing agent he just made a 100 per cent sale.

Nigel Mukhi, McGrath Estate Agents Neutral Bay

Do you find that causes any issues in the team at all?

Matthew Carpenter, Starr Partners Merrylands

None at all.

Nigel Mukhi, McGrath Estate Agents Neutral Bay

I think if it’s the same as that tender process, essentially the agent’s doing the same amount of work, it’s just that one buyer’s got bigger pockets than the other.

Matthew Carpenter, Starr Partners Merrylands

And one salesperson’s a better negotiator than the other, but they’ll move that buyer that missed out on to another property and it keeps working out.

David Howe, McGrath Estate Agents Northbridge

It’s a system that will work probably for them, but to bring that system into our work area…

Matthew Carpenter, Starr Partners Merrylands

Oh, I’m not saying to change.

David Howe, McGrath Estate Agents Northbridge

From the way I see it, I think it’s more cut-throat. The agents will be fighting each other to get that property sold. Right now for us the listing agent controls the whole situation and they get the seller as well. We open all our listings to all our colleagues; if they have a buyer, they can introduce them and then there’s a referral fee.

Matthew Carpenter, Starr Partners Merrylands

It’s not as high as the selling fee would normally be, is it?

David Howe, McGrath Estate Agents Northbridge

For auction it’s only 20 per cent, so it’s not a lot but it still gives them the incentive.

Matthew Carpenter, Starr Partners Merrylands

And that’s a mutual agreement between the franchises and everyone follows the same system?

Nigel Mukhi, McGrath Estate Agents Neutral Bay

Correct, from head office all the way down. We very rarely go out of our own areas. We specialise in our areas, so I went with David up to Castle Cove on Monday. I’m sort of out of my depth in Castle Cove so it’s natural that I take David there. If I had something in one of Shane’s [principal Shane Smollen] offices in Hunters Hill, I don’t want to spend 45 minutes driving to Hunters Hill and back each time, so I’d refer that to Hunters Hill but they’d pay me a referral fee.

Matthew Carpenter, Starr Partners Merrylands

We do the same within other Starr Partners offices. If I’ve got a property up in Castle Hill, I don’t know the market up there and the chance of me walking in the door and securing that business is going to be very low, so I’ll take one of the Castle Hill Starr Partners offices. If we attend the market appraisal, it’s our list; if we just refer it, it’s a referral.

Nigel Mukhi, McGrath Estate Agents Neutral Bay

So with Starr Partners how many offices have you got?

Matthew Carpenter, Starr Partners Merrylands

It's 36 now.

Nigel Mukhi, McGrath Estate Agents Neutral Bay

And does every franchise run the same system that you are doing or is it unique to your offices?

Matthew Carpenter, Starr Partners Merrylands

The offices do run pretty much like us. Some of the newer Starr Partners offices are starting to have your model, where it’s more profiling of the individual agent for that individual property. It was something that was a concern many, many years ago when you’d train a great agent, he’d become profiled and then he’d open up across the road and take his business with him. The model started from that concept and our retention for our salespeople is high. I’ve been there 16 years, and some have been there longer than me.

David Howe, McGrath Estate Agents Northbridge

You mentioned you run a PA, is that PA paid by yourself?

Matthew Carpenter, Starr Partners Merrylands

PAs are paid by the company on the basis that every sale they make, the PA will receive $450 from that sale. The balance would go to the business and a small percentage to the listing agent controlling that PA. It does cost the business a little bit, but it’s also good because for that six months we don’t have some lunatic out there killing the business name. We’ve got guys writing $300,000 a year and we’ve got guys writing $1 million a year, and they all have the same opportunity. Every single one of them gets handed the same amount of enquiries, the same amount of listings – but the ones that go out and door-knock or letterbox drop, you can see the difference in the return they get.

David Howe, McGrath Estate Agents Northbridge

Wouldn’t there be jealousy among the agents if you go to door-knock and I consider that my patch?

Matthew Carpenter, Starr Partners Merrylands

You don’t have a patch.

Nigel Mukhi, McGrath Estate Agents Neutral Bay

So what’s going to stop an agent door-knocking a street, then another agent door-knocking that street the next day?

David Howe, McGrath Estate Agents Northbridge

That would be very confusing for the potential seller.

Matthew Carpenter, Starr Partners Merrylands

We have a register, so if they door-knock a street or do a price drive in a street, they get one month. During that one-month period, if an enquiry comes in from that street they will get it, so they are given that reward – but it’s not their patch. We’ve got 50,000 homes [and] the whole area gets covered by the business. We do a drop every two months to the entire patch. It’s a Starr Partners brochure, it’s always retaining the business back to the business, and we recoup that through that 15 per cent.

Nigel Mukhi, McGrath Estate Agents Neutral Bay

I pay my two PAs, David pays his 4 or 5 PAs. Out of our gross commission we pay for printing, posting, envelopes, any personal marketing, business cards – the only things we don’t pay for is desk, phone and internet.

David Howe, McGrath Estate Agents Northbridge

But our commission scale goes from 40 per cent right up to 60 per cent.

Matthew Carpenter, Starr Partners Merrylands

And what’s the average income of an agent in this area under that structure. What are they making per annum?

Nigel Mukhi, McGrath Estate Agents Neutral Bay

On average I’d say about $500,000.

Matthew Carpenter, Starr Partners Merrylands

So they’re ending the year on $500,000?

Nigel Mukhi, McGrath Estate Agents Neutral Bay

No, that’s gross, so it should be about $250,000 to $300,000. The top five in our office would be anywhere from $1 million to $3 million.

Matthew Carpenter, Starr Partners Merrylands

Even though the agent is paying all those wages out, does the business actually do that on their behalf?

Nigel Mukhi, McGrath Estate Agents Neutral Bay

No, I’ve got my own accountants, I do all my own banking.

Matthew Carpenter, Starr Partners Merrylands

How does that work in terms of hiring and firing? Do you still have to go under REEF [Real Estate Employers Federation] in terms of hiring and firing?

David Howe, McGrath Estate Agents Northbridge

We are a member of REEF, but hiring and firing is up to the agent.

Nigel Mukhi, McGrath Estate Agents Neutral Bay

We have a management team in our office. Our management team is head trainer, two sales managers, chief operating officer, COO training coordinator and CEO. They don’t sell: they look after recruitment and staff training. Each agent is assigned a sales manager, then there’s a head trainer as well. We won’t put anyone into the business without a three-step interview. Two sales managers have to interview and then the final decision is with the agent.
 

Some people say a price correction is coming. If there were to be some substantial drop in market activity and prices, how prepared are your businesses?

David Howe, McGrath Estate Agents Northbridge

We are always prepared for the ups and downs. When we were in the down market a few years ago we geared ourselves to make sure we maintained market share, and that’s why we didn’t suffer any market drop when the market went down and ultimately gained market share when the market rose. I think a good agency must be prepared for an eventual drop, but in saying that I don’t think the Sydney market will suffer a big drop. I see potentially a small correction, but not a big one.

Matthew Carpenter, Starr Partners Merrylands

Our business is structured for change if the market does turn. At the moment we’ve got 12 to 18 registered bidders per auction. Our average time on the market is 14 days for a tender and it’s four weeks for an auction. At the moment we’ve got about a 98 per cent clearance rate based on that structure. I’ve been [an agent] since 1997. In 2005 and 2006 we had a correction, and I actually found that to be a better market than it is now. At the moment we’re not getting to know anyone: they’re buying a property, moving on, buying a property, moving on. In that [earlier] market we got to build relationships and it’s actually hooked us now in listing product against our competitors.

Nigel Mukhi, McGrath Estate Agents Neutral Bay

I think if your agents are skilled up – knowing how to deal with an auction with 18 registered bidders is different to dealing with an auction with one registered bidder. I think the good agents shine in the tougher market and they will find it a lot easier to pick up market share as long as they’ve got that skill set – whereas in a strong market with limited stock, it comes down to more competition around fees and cost of sale a lot of the time. 

Click here to read the second part of the discussion, in which Mr Mukhi, Mr Howe and Mr Carpenter discuss time-management strategies.