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There’s more to being a principal than agents often expect, requiring them to have a genuine business mindset and step away from personal ambitions, according to a REB top agent.
PRD Port Stephens principal Dane Queenan has shared his top advice for agents considering opening their own real estate office, warning that the role of principal is not for every agent.
According to Queenan, to be a successful leader, agents should have a genuine drive to run a business, rather than simply good sales skills.
He said that agents needed to put their own ambitions aside, be prepared for larger cash flow gaps, and become accustomed to taking responsibility.
“Becoming a principal is not automatically a promotion; there is so much more to it than I even knew we were getting into at the time,” he told REB.
More than just sales
Queenan said being a principal was about far more than selling property, as it also required a genuine interest in running a business.
He said the right agents for the job had strong administrative skills, a focus on compliance, and the ability to engage the right people on their team.
“[Also] financial management capability, leadership and HR management skills, and patience for long-term business building, not gratification and success,” he said.
He said many high-performing agents didn’t genuinely enjoy or thrive in those areas, and the principal role could pull them away from their strengths of listing, negotiating, and closing deals.
“This was something I identified very early on and have a team to support me in the day-to-day business operations so that I can focus on continuing to list and sell,” he said.
Putting ambition aside
While having a business mindset is essential, Queenan said agents will know they’re ready to become a principal when they can step away from their own ambitions.
“Readiness isn’t about being a top agent, it’s about wanting to step away from sales dominance,” Queenan said.
“In my case, the transition accelerated when my business partner at the time retired. I always had aspirations of fully owning the business one day, but the opportunity evolved earlier than anticipated.”
He said agents were likely ready when they could be comfortable reducing their personal production, and were committed to building a business, not just their own gross commission income (GCI).
He also said agents had to enjoy managing people and processes, and needed to be prepared for income to be less commission-driven.
“Many top performers discover they earn more by maximising listings, building personal teams, and leveraging brand support without carrying business overheads and responsibility.”
Carrying the business’s results
In addition to putting personal aspirations aside, Queenan said being a principal meant taking responsibility for everything that happened in the agency, not just their own deals.
He said this included trust accounting and legal compliance, HR issues, business profitability, insurance, litigation risk, office culture and retention, and most of all, staff performance and satisfaction.”
“You’re no longer just accountable for your own results; you carry the business, the brand, and the people within it.”
“For many sales-driven agents, these responsibilities drastically reduce the time and energy they can dedicate to listing and selling.”
Weighing up financial capacity
Even when agents believe they have the required skills to run an office, Queenan said that starting an agency requires a substantial financial commitment.
He said new principals needed funds to cover an office lease, fit-out, operating costs, and staff wages, even before their own income was generated.
Additionally, he said principals had to ensure they had sufficient funds for brand establishment, insurance, licensing, compliance systems and a minimum of 3–6 months in cash reserves.
He also said that, as a principal, income was earned differently than as an agent, with office profits shared across various expenses.
“You’re funding other agents before yourself, and cash flow gaps can be significant.”
“A driven agent focused purely on personal income can often out-earn a principal without the financial risk. It’s definitely something to seriously weigh up,” he concluded.
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