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Know Your Own Culture First Dominate Your Market by
Dominate Your Market by Making a Positive First Impression
With Real Estate Webmasters, opportunities abound for Mid-Atlantic firm
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by Paige Tepping
As President and CEO of Northrop Realty in Clarksville, Maryland, Creig Northrop’s goal is to teach others to be better than they were yesterday. “If you grow your people, you will grow your company,” says Northrop, who has spent the past 35 years implementing this very philosophy.
for his brokerage since the launch of their website. “Morgan provided us with great ideas, which he continues to build on, as he wants to be better and better. We not only appreciate what he’s doing, but also the fact that he makes himself available to be involved as well,” says Northrop, who points to SEO as one of the biggest benefits in working with REW. And in today’s COVID world, where it’s more important than ever to have a consistent look and feel across the internet, the team at REW continues to go above and Having jumpstarted his ca- ity to lead by example as beyond to get the Northrop Realty reer working alongside his one of the key factors in name in front of the masses both mother, it didn’t take long his continued success prominently and professionally. for Northrop to realize that over the years. “You have a very short window to he wanted to branch out on “Real estate is not just make a first impression, and Real his own, and so, in 2000, a job for me, but rather, a Estate Webmasters does a good job he and his wife created the Creig Northrop Team, which Northrop lifestyle. It’s about having good people in your when it comes to making that first impression,” says Northrop. went on to become the No. 1 team life and building a company around Looking toward the future, in the nation three times over. those people,” says Northrop. Northrop has his sights set on
In 2018, it was announced that “I like people who are smarter dominating the Mid-Atlantic—with the Creig Northrop Team would be- in their arena than I am,” adds REW being a prominent piece of the come Northrop Realty, a Long & Fos- Northrop, who felt an immediate puzzle in making that happen. ter Company. Today, Northrop Realty connection with Morgan Carey, CEO “As a web company, Real Estate is a full-service brokerage that em- of Real Estate Webmasters (REW), Webmasters is open when it comes ploys 300 real estate professionals who loves his business the way to working creatively,” concludes spread among 14 offices in Mary- Northrop loves real estate. Northrop. “I’m very proud to be land, Delaware, D.C., Virginia and Working with REW for the past working with them.” RE Pennsylvania. six-plus years, Northrop has nothing
With a passion and love for what but good things to say about the ophe does, Northrop points to his abil- portunities that have been created
– CREIG NORTHROP President and CEO, Northrop Realty
What Partnership Is Right for You?
Joint Venture Partnerships by the Experts at CMG Financial
In today’s exceptionally busy housing market, broker-lender partnerships are more important than ever. The right partnership can give you the opportunity to grow your business through market cycles and deliver a consistent client experience. If you’re starting to think about a lender partnership, you’re probably evaluating your options and comparing the differences between a desk rental, marketing service agreement (MSA) and a joint venture. Each partnership level has its own benefits, and the right partnership choice starts with what you’re looking to accomplish with the relationship, what you’re willing to invest and what you’re looking to get in return. Desk Rental: Testing the Waters A desk rental is a common partnership arrangement where a lender will lease office space or an actual desk within a real estate broker’s office in exchange for referral business. With a desk rental, you get a lender who is available to answer your questions on-site without a significant upfront investment. For a desk rental to be compliant, the real estate broker must lease the office space at market value to the lender.
With a lower upfront investment, a desk rental will be a limited revenue opportunity. Additionally, a desk rental comes with a limited commitment from the organization. With less of an investment, the lender can choose to leave or change offices fairly easily.
A desk rental could be an opportunity to try out a partnership and see if it’s the right move for you. It has a higher level of compliance comfort but will have limits with the amount of revenue it can generate.
MSA: Dating More Exclusively An MSA is defined as a relationship between a real estate broker and a lender in which the broker agrees to market the service of the lender in exchange for a marketing fee. An MSA provides the lender with additional lender-focused marketing that has the potential to increase revenue. In this relationship, it can be hard to balance expectations between the lender and the referral partner. Due to the structure, it is based on services rendered, not normal operating financial best practices.
An MSA can sometimes create compliance issues. The Consumer Financial Protection Bureau (CFPB) states that “any agreement that entails exchanging a thing of value for referrals of settlement service business involving a federally related mortgage loan likely violates RESPA, whether or not an MSA or some related agreement is part of the transaction.” To remain compliant, MSAs require a substantial amount of documentation. Additionally, MSAs tend to have a higher lender turnover and lack the ongoing return on investment of a more balanced partnership. Over time, the turnover can erode the confidence of the referral partner’s organization, thus devaluing future opportunities.
This type of relationship requires you to collect better intel and set well-defined expectations with your lender from the start of the MSA. It means that you need to be organized in advance to meet compliance requirements and, most importantly, it means finding a partner that isn’t just transactional.
Joint Venture: A True Partnership A joint venture is the entrepreneurial option for brokers and lenders who can use their success in growing their company and apply it to maximizing the value of a mortgage relationship. A joint venture is defined as a standalone mortgage operation, which traditionally has shareholders that include both a mortgage company and a referral source. As its own legal and financial entity, through ownership, a joint venture is the compliant way to maximize the earning potential in a mortgage relationship. When you partner with an established lender, you gain access to all of the services of the parent company. This means that there is a clear operational, marketing, technology and customer service model for your brokerage to easily adopt and provide optimal value for the partner’s company.
There are three different partnerships that require different levels of capitalization. Each level has its pros and cons in regard to revenue caps and operational control. The three levels are broker, correspondent and full agency. Here is the breakdown of each model:
• A broker venture is the lowest capitalization required of entry. This model requires all loans to be sent to a third party to complete the mortgage process. In return, it can cause a loss of control and servicing for the client. Due to high-cost lending laws, revenue is limited.
• A correspondent venture has a higher capitalization of entry but more overall control of the mortgage process. In this model, the venture funds most of its business on its own, resulting in higher revenue opportunities. • A full agency venture has the highest barrier of entry.
It allows the venture to become eligible to apply for a
HUD license. This allows you to fund all loans including FHA loans, thus maximizing revenue and increasing the customer experience.
When forming a partnership, your choice depends on the type of customer experience you want to deliver and the level of return you would like to get. Essentially, the more you invest in your partnership, the more autonomy you have over the operations of the entity. The greater risk you take with that ownership is offset with the reward of providing a mortgage model that is centered around your business.
Why is a joint venture partnership more valuable? Joint ventures represent the premier partnership model in the mortgage industry. It gives brokers a compliant partnership to operate freely with the tools of an established lender in a compliant environment. Joint venture partnerships give brokers access to impactful marketing, advanced technology and a proven lender experience in today’s mortgage environment. A joint venture partnership is the best partnership tier for brokers with an entrepreneurial mindset and the desire to take control of their own company. RE
4 Steps to Building a Team
Commentary by Josh Harley
Have you reached a plateau as a solo agent? Here are four essential steps to building a successful real estate team.
STEP ONE is evaluating your systems and processes and writing things down to be emulated. For solo agents, everything you need is in your head, but when you run a team, that no longer works. The same goes for scripts. You may know exactly what to say and when to say it, but how about your agents? Evaluate your tech as well. Will it work for a team? Can it transfer leads and manage sales? It’s also essential to hire a transaction coordinator and a marketing assistant. Hand over the tasks that don’t make you money so that you can focus your team on those that do.
STEP TWO involves creating and understanding your value proposition. Show potential agents why they should join your team and agree to pay you a split. By creating a solid foundation in step one, you’ll have a fair value exchange to justify the team split. While you handle the training, support, expenses, branding, marketing and lead generation, your team can focus on working with clients. They may be giving up 50% of the commission but only handle 30% of the work. That’s fair.
STEP THREE is deciding team structure. There are two main team structures: the mentorship model and the leads model. In the mentorship model, you personally train and coach your agents. Agents are drawn to your success and want to emulate you. While rewarding, this model can become a revolving door. Just when the agents start making you money, they decide they’re ready to fly solo.
A second approach is the leads model, which is employed by many top teams across the country. In this model, agents are attracted to you because you’re giving them leads. The benefits of this model include immediate gratification to you and your agents. You’re providing them leads, so they begin closing business quickly. Unlike the revolving door of the first model, your agents become addicted to your leads. It’s harder for them to leave because they don’t have the ability or money needed to generate the leads for themselves. The drawback in this model is the cost.
STEP FOUR is deciding on compensation. Splits matter. One of the biggest mistakes I see teams make is not charging a high enough split. With an 80/20 split, your team has to close five sales for the same income you’d earn closing just one sale as a solo agent. With a 50/50 split, agents keep their 50% share while you have 50% to pay for operating costs and have a little left for yourself.
Be patient when hiring. If you’re doing it right, you’ll interview 10 agents for each one you hire. Build a culture that rewards agents for hard work, celebrates their successes and supports them through losses. Create a sense of family. Doing these things will allow you to build a team and a business where everyone wants to show up every day and work their hardest. RE
Josh Harley is the founder and chairman of Fathom Holdings Inc. (Nasdaq: FTHM). Harley is a Marine Corps Veteran and an advocate for servant leadership and placing others first. For more information, visit www.FathomCareers.com.
How Do You Sell More Homes, Faster?
Commentary by Frank Chimento
For decades, real estate professionals have wrestled with finding the secret to overcoming the challenge of staying top of mind with their spheres of influence and past customers. In fact, our industry continues to report that 90% of consumers love working with their real estate agent, but when they move again in seven to nine years, only 13% work with the same agent.
Recently, Berkshire Hathaway HomeServices CEO Chris Stuart was paraphrased as saying that agents need to “…mind the loyalty gap, and enormous business opportunities exist in doing a better job of keeping up with past customers and spheres of influence.” He’s not wrong, especially when considering that our industry reports that upward of 86% of an agent’s business is procured from their sphere of influence. Typically, real estate agents miss out on repeat and referral opportunities because they lack consistent follow-up, fail to provide relevant value and miss the correct timing to make the most impact.
Creating customers for life is no longer an abstract concept. It’s now a practical reality thanks to MooveGuru’s acquisition of HomeKeepr. Together, these two organizations have unveiled the industry’s only all-in-one mover- and home prorelated concierge service designed to keep agents in front of their customers, for life. By providing utility connections, the best rates on home services, and valuable discounts for national and local retailers, the MooveGuru customerfor-life program solves the loyalty gap challenge. Never before have agents and brokerages been able to stay top-of-mind while providing real value to current and past customers through complete automation in an all-in-one platform.
Simply put, many real estate professionals attempt to stay in front of their spheres of influence and past customers by providing off-the-shelf, real estate-focused newsletters, emails, postcards and social media posts. What’s often missing is the “sticky factor” or “value” to the end user or consumer. Providing discounts and coupons on home-related products and services customers are seeking creates a connection that drives repeat engagement and a spirit of reciprocity. Everyone likes the person in their life who brings them gifts in the form of discounts and special offers for the products and services they already want to purchase.
MooveGuru sends discounts on services (including utility connections) frequently used by homebuyers and sellers to clients, branded on behalf of agents and their brokerages, with partners in every major brand as well as large independents.
Also, timing is extremely important. Did you know that 93% of Americans order pizza on the day of their move? Did you know that homebuyers shop for homeowners insurance about 35 days before closing? And, within 10 days after moving, homeowners reestablish their grocer and pharmacy relationships. All of these (and many more) moments in time create multiple, ongoing points of engagement for you and your customers. Having a system that provides this while you focus on the highest and best use of your time is a gamechanger in our relationship-driven industry. RE
Frank Chimento is VP of Sales and Biz Dev at MooveGuru. For more information, please visit www.mooveguru.com.
Leadership to Survive... or Thrive
Commentary by Ashley Bowers
“Pivoting,” “unprecedented,” “new normal,” “stay safe.” These are all words or phrases that quickly became a part of our everyday conversations last March. Business leaders across the country were scrambling to chart new courses in a changed world. At HomeSmart International, we decided to take a different path.
I found myself seeking moments of self-reflection, looking to find calm in the storm and being thoughtful about next steps rather than reacting to each piece of news and every prediction about business and life. It was a good reminder that in times of turmoil, it’s important to focus on what you can influence and/or control.
We knew we had a solid plan for 2020 and had already started executing on it when our world changed last spring. Industry sources said we’d be down 70%, but our data was telling a different story. We saw a path to recovery that wasn’t as dire as the experts thought, but knew we needed to take some steps to get there. We ramped up communication, adjusted our approach to our revenue goals, went virtual and kept service as our No. 1 priority. As fall rolled around, we were back on pace for the year, employees were engaging in the culture and optimism could again be felt through our every move.
The lesson in this crisis isn’t the successful tactical steps we took to survive, but the fact that we already had our organization’s foundation in place to succeed when it mattered most, allowing us to focus on what we could control. This meant that we didn’t need to reinvent our company in the middle of the crisis like many others.
For years, we have been putting everything in place to be able to handle what 2020 threw at us, both good and bad. Rather than rashly go into survival mode and pivot, we trusted our plan, kept working it and relied on our culture. This kept us from making it up as we went and lurching from rash decision to rash decision. Our long-held philosophy of leading to thrive and playing to win paid off.
With the pandemic’s end hopefully in sight, and the promise of normal life returning soon, it’s critical as leaders that we don’t chalk it all up to surviving another uncontrollable crisis or we will miss very valuable lessons. But if we pick and choose the things we wish to keep with us, we are fooling ourselves into thinking we couldn’t have done any better. We need to keep it all. The good, the bad, the tears, the success, the rebuild and more. By embracing all that 2020 brought us, we as leaders will forever be in a position to lead our teams to thrive. RE
Ashley Bowers is president of HomeSmart International and has more than 20 years of experience in talent management and organizational growth industries. She thrives on empowering teams to achieve success and drive profits, and brings a unique approach to organizational leadership. For more information, visit HomeSmart.com.
