As we arm today's real estate professional with the best tools and greatest systems available to ensure success, let's not forget that the most powerful arrow in their quiver is a winning exit strategy. We have a responsibility as Broker/Owners and Managers to educate and structure their business not only for success today, but to enable them to have a business worth selling when they are ready to leave the business. Additionally, we have the opportunity to maintain our market share by helping them transition into retirement.
The result of the most recent NAR survey provides us with only one conclusion. We need a solution! The average age of today's successful realtor coupled with their desire to retire indicates that within the next 5 to 7 years many of our best agents will leave the industry. Here's a practical plan of action to enable retiring realtors to transition into retirement, sell their business for an acceptable financial reward and maintain your market share. A plan that everyone wins!
Our first step is to Determine the Players, in other words, who will win this plan. Look not only in your office, but on your recruiting list to determine who will be retiring within the next 5 years. Then determine how everyone can benefit from implementation. Look beyond the obvious…it's certain that not only the retiring agent, but new agents and especially, you the Broker/Owner/Manager are players and need a plan of action.
The second step is to Ask the Right Question: Formulate a series of questions to qualify if the Agents have a business worth selling. This is quite a powerful question to ask individuals and teams on your recruiting list. If they haven't considered selling their business, have them join your office! This will certainly enable you to overcome the objection…"I'm only going to be in the business a few more years…"
The third is a critical step for success and often the hardest to implement: Designing a Salable Format. The retiring Agent must have a data base that is in a salable format! No more pulling files, searching for tiny slips of paper and relying on brain power! The retiring agent must set up in a contact management program that is comprehensive and dimensional. In this program depth and dimension = Dollars. One of the best ways to ensure the format is in a marketable format is for you to engage in the process. Your back office software should provide a viable solution! AccountTECH software (visit www.AccountTECH.com) offers such a solution. There are multiple data entry ports, but the Broker/Owner can manage this input from the back (internal) side of the transaction, which is a VALUE added benefit to the agent and total insurance that the data is being updated properly. Our recommendation, find the software that works for you and start today! You are building equity for your associates as well as your firm.
Step four enables us to Overcome the Obstacles encountered when implementing a successful retirement program.
* Tracking and Accountability becomes a huge obstacle unless you commit to keep the system simple! Your program should be structured in a simple format that is fair and equitable to all parties. You eliminate the challenge of second party referrals when you pay a royalty on all transactions completed.
* How will the business grow? And who will pay for advertising costs…these questions must be addressed and agreed upon contractually in the early negotiation process in order to ensure that all parties are well served and satisfied at the end of the day.
* What if the agent leaves? Again, if the agent purchasing the business leaves
your company prior to fulfilling the terms of the agreement, the data base should become the property of the Broker and the Broker would have the right and authority to find another buyer and the stream of revenue to the selling agent should not be interrupted. This too must be covered in the early stages of negotiation!
Another critical step is in Setting the Ground Rules. You should establish guidelines for both the seller and the buyer. Structure a plan that protects all parties, not only for the present, but for the future. Determine payout (%) for successful transactions closed and have all parties agree. Establish terms of the contract. We strongly recommend that this document be drafted by an attorney. Upon agreement, all parties should sign and date. If any issues arise during this time, it's imperative that you know the rules and that the rules are in writing!
The sixth step involves using your sixth sense! Coaching is the key to continued success. You may have Review the Structure with all parties and adjust specific areas when needed. Allow players to play to their strengths and not to their weaknesses. Encourage the buyer to delegate tasks and focus on income producing elements of the business. If the buyer is overwhelmed with the amount of business, coach them to grow their team. Provide them with team guidelines and set them up to succeed!
Celebrate the victory! There is not more rewarding experience than enabling your retiring agent the opportunity to enjoy life after real state with a royalty income provided by this program. Additionally, it is a great recruiting tool, excellent retention tool and you maintain your market share and build equity in your office!
By offering a successful program you enable your retiring/relocating agent to see themselves in a different way. You will discover that remarkable things start to happen once this occurs! Again, this is program in which everyone wins!