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Real estate duets: Looking for some advice from seasoned partnerships

I am able to generate business- both real and potential business, but I find myself in a situation where I want to team up with another Realtor. I’d like to partner with someone to share the work load, and keep transactions running smoothly.

To that end, I’m asking the Bloodhound family: What advice can you give me? How do you create a partnership? Formally or informally? Do you have a clear distribution of tasks and jobs each person performs? Is everything delegated ahead of time? And even as I write this, I’m answering my own questions, so perhaps better questions are these: What do you know now that you wish you knew then? What were the best mistakes you learned along the way? What one thing do I most need to prepare for?

I want the real dirt about partnering in real estate. If you want to email me privately, I’d welcome that. I can keep a secret. :-)

Related posts:
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  • Real Estate Partnerships Under Attack in Congress
  • Going Fishing? Try to Land the Whales

  • 19 comments

    19 Comments so far

    1. Missy Caulk June 30th, 2009 3:39 pm

      Teri, partnerships don’t work. Someone needs to be a leader. Trust me I have seen them fall apart over and over again.

      I have had a team for 12 years and it continues to grow but I am the leader, rainmaker whatever you want to call it.

      You can call me to discuss and we can go back and forth and I would be glad to help you, send you my buyer agency contracts etc.. my assistant contracts.

      A partnership in corporate business is the worst way to go.

    2. Dan Connolly June 30th, 2009 7:21 pm

      Teri,
      Partnerships are like marriages….without the love. They are incredibly difficult to make work and are generally a prescription for disaster. The idea of two people sharing tasks and commissions may sound nice, but I was in a real estate partnership and it really didn’t work that way. I don’t know any agent partnerships that have endured.

      Some tasks are more fun than others, some are just plain boring. Who decides who does what? What happens if your partner doesn’t work as hard as you do? What happens if one of your past clients call up and say come list me, and it sells right away…are you really giving up half the commission to someone who just filled out paperwork for you, and dropped off a sign and a lockbox?

      I think you should think about hiring a secretary. Even one who works part time can be a huge help. My ideal employee is a Mom with kids in school who wants to work from 9:00 am to 2:30 when she goes off to pick up her kids.

      There are also a lot of agents who know a lot about the business and wouldn’t need to be trained in every aspect, who aren’t making it now, and would love to work for a salary.

    3. Mark Green June 30th, 2009 7:45 pm

      My friends thought I was nuts to give equity away instead of simply hiring for the positions I needed help in. In retrospect, without my 2 biz partners I wouldn’t be nearly as inspired every day and there’s a good chance I would have run us out of business. I’m super aggressive – my partners are both pretty conservative. Together we balance each other out.

      I only have one tip – make sure you’re philosophically aligned. Well, you can never be 100% sure, but you get the point.

      I wish you all the best of luck, it’s a very exciting proposition.

    4. Tom Bryant June 30th, 2009 8:44 pm

      Partnerships can be difficult, as has been noted above. I worked with a partner from 1986 until his death in late 1993. At the beginning of the partnership, he was the rainmaker; by the end, the roles had reversed. Too, at the end, I was supporting us both due to his declining health. But this was a moral, not a business choice, which I regret not at all.

      I worked solo till 2003, when my wife was diagnosed with breast cancer (she’s doing great). I wanted more time with her and the kids and took on a partner, resigned to the idea that I would get by on less. I had my biggest year ever, and so did he (by far). We have always split commissions and costs 50/50. The workload is uneven from time to time, but equal overall. In my opinion, the nuts and bolts of a partnership can always be worked out. But it’s critical to partner with someone who has the same moral and ethical outlook. Because failing that, the partnership is doomed. I consider my partner a good man, a devoted father, a hard worker, and someone that I’m proud to know. I have complete trust in him and his judgement.

      Partnerships can be testy, but when they work, they can uplifting and affirming in a business that is often just the opposite.

    5. Teri Lussier July 1st, 2009 5:10 am

      Wow.

      Thank you all for the great advice- you’ve each pointed out a few things I didn’t consider- for that I’m very grateful. Looks like in my desire to retain some privacy, I’ve left out important points to what is really going on, which doesn’t change the advice you’ve all given, but will give a better idea of what I’m looking at.

      Missy- I will definitely be contacting you. Thanks for the generous offer. And I do understand your thoughts about partners vs teams.

      Dan- Thanks for that perspective. I’m not in a situation where a salary hire is an option right now.

      Mark- Philosophy. Thanks for stressing the importance of philosophical alignment.

      Tom- I’m a 17 yr BrCa survivor myself- you made a great decision! And you kind of outed me and my situation…

      Here’s the thing: I’m going to be a Stay At Home Mom for probably the rest of the year, maybe longer, while I take care of a family member. On the other hand, I’m generating more business, and opportunities, than ever before.

      I’ve worked hard to get my business going, and for my own mental and emotional health, I don’t want to lose that. I’m not really deploying all the weapons in my arsenal yet, because I’m taking, and losing! more business than I can comfortably carry. But I won’t, and luckily don’t have to, put my business first right now.

      Because I’m generating business, and I’ve worked to create a unique business identity for myself, I don’t want to give that up to work *for* someone else, which might be the obvious choice. I’d like to continue to do what work I am able- homework: Marketing, advertising, taking calls… What is difficult for me is scheduling and keeping appointments. I need a licensed Realtor to work with clients. It seems backwards to do things this way, doesn’t it? It will take a lot of communication with everyone involved- including clients, to make it work.

      I’m thinking this might be a temporary situation, but either way, a clear indication of what each of us expects from this is imperative, as I can see from your advice.

    6. Cheryl Johnson July 1st, 2009 8:09 am

      Teri, for your particular situation — needing to be at home for a few months — I’m wondering if some kind of temporary referral partner might be the direction to go.

    7. Don Reedy July 1st, 2009 8:20 am

      Terri,

      I think Cheryl has a great idea in a temporary referral partner.

      Last year I had two major surgeries, which pretty much made it impossible to see clients for about 9 months of the year. I made a living, and kept going, by explaining my needs to some agents I knew and trusted, and they worked with me throughout the year to tend to and care for clients I had already brought on board, and to continue working with new leads I was bringing in via the net or networking.

      So, think about Cheryl’s idea. Most agents love to take referral business from another agent who is sending them business that is qualified. You shine there, so you should have folks lined up at your door.

      You and your family continue to be in our prayers.

    8. [...] Real estate duets: Looking for some advice from seasoned partnerships – Teri is thinking about teaming up and forming a partnership and asks for advice. The comments [...]

    9. Teri Lussier July 1st, 2009 2:08 pm

      Hi Don & Cheryl-

      That’s what I’m doing right now, and it’s okay, except it just seems odd to generate business for the purpose of referring it to someone else. I know it’s done all the time.

      Plus, as someone emailed, the MREA way is to build that team!! :-)

      I don’t know, weighing my options, still working on finding the balance.

    10. Erion Shehaj July 1st, 2009 3:28 pm

      The only ‘ship that doesn’t sail is a partnership

      Teri,

      I think for your particular situation, it might make sense to work out a profit sharing deal with an experienced agent that might be suffering on the lead generation side but that would be good at conversion and transaction management if given the opportunity. The assistant route might work, but you will waste some business until you bring them up to speed.

      But whatever direction you choose, put it on paper, on purpose and don’t leave ANY gray areas.

    11. Teri Lussier July 1st, 2009 5:45 pm

      Erion-

      You might have hit the best option for me right now.

      >But whatever direction you choose, put it on paper, on purpose and don’t leave ANY gray areas.

      Excellent advice. As I was writing the post, that became absolutely imperative to me. Everyone needs to see it in writing, and understand it. It’s still a business plan, even if it’s not the plan I’ve been working.

    12. Greg Dallaire July 1st, 2009 7:49 pm

      Erion really hit the nail on the head in my opinion. But along with the great advice up above be well aware of the consequences of having a partner.

      If you don’t mind giving up some control you may be able to make a partnership work. Team’s can last a very long time when built correctly and will create sound revenue for you when you plan to retire or exit the business.

      Short term partnership may work long term you have to build a team if you want the real rewards. Just my two cents :)

    13. Jody Cowdrey July 1st, 2009 11:01 pm

      In my opinion, the only reason to form a partnership is if your partner has more interest or is better at doing the tasks in which you have no interest or can’t do.

      I agree with Missy and Greg in that the Team situation is better in the long run without a doubt. Get someone who is good at making follow-up calls to leads, a buyer agent to show property, and an admin assistant to handle the paperwork, showings, calls, etc (this doesn’t have to happen at first though).

      In my opinion if you refer the business to another agent you need to just let it go at that point and hope something pans out. You will almost never be satisfied with what that agent will do with the lead. Most agents are HORRIBLE at follow-up (if they even know what the concept is) and for this reason it’s good to have someone who’s responsibility it is to JUST follow-up with clients until they’re preapproved and ready to see houses, at which point the buyer agent would take over. I understand this may not be an option for you – to pay someone (we pay $10 an hour plus 10% of the paid commission to our Inside Sales Agent, who works 4 hours a day, 5 days a week on the phone), but I think you’d be happy with the results. The trick is to find the right people.

      Anyway, good luck to you!

    14. Teri Lussier July 2nd, 2009 5:29 am

      I can’t begin to tell you how glad I am that I asked this question before making a decision.

      I’m really grateful for all the input. You’ve forced me to consider all my options, look at the pros and cons of what I’m doing. That’s exactly what I was hoping for, but you all have given me more than that.

      Greg- I keep hearing that a team is better than the partnership. I’m dusting off the MREA.

      Jody- Thanks for the insight into your team. It’s nice to have a little glimpse into how a team might function.

      >Most agents are HORRIBLE at follow-up (if they even know what the concept is) and for this reason it’s good to have someone who’s responsibility it is to JUST follow-up with clients until they’re preapproved and ready to see houses, at which point the buyer agent would take over.

      Excellent advice.

    15. Sean Purcell July 2nd, 2009 11:05 pm

      Teri,

      Put me on board with the team concept (MREA is a damn good blueprint). I’ve written before that the team is the best direction and ultimately, the law firm model is the most powerful team. Either way, it’s all about the rain maker and that’s you Teri.

      One other thought: Jody said “if you refer the business to another agent you need to just let it go at that point and hope something pans out.” I would go a step further; if you refer business out, you’d be best to let that client go as well. Odds are they will continue to work with the new agent. That’s not a sound business plan going forward. Using a buyer’s agent or licensed assistant on your team, however, keeps the clients in the family where they belong.

      Best to you and yours…

    16. Robert Worthington July 3rd, 2009 8:54 am

      The team concept can be a great way to make more money and have more friends. It really depends on the attitude of the members and the teams overall communication and jealousy factor. Personally I choose the team method; however; I am solo right now until I find that home-run agent who has ethics and morals and the right attitude.

    17. Laurie Manny July 5th, 2009 8:28 am

      Hi Teri,

      Glad to hear that you are doing so well. Sorry that a family member needs care.

      That’s the funny thing about generating leads, once you understand how it works they start to flood in instead of flow in, it can be overwhelming trying to manage them on your own and continue to sell real estate without a team.

      As the leads began to pile up I began to add on buyers agents, the team has 5 now, we are constantly searching for more, we could easily support 15 or more right now, its very busy during the summer months here. Good buyers agents are very difficult to find here.

      I found most of my time was occupied with distributing the leads, managing the buyers agents and managing the transaction, it was affecting my own sales production and stressing me out very badly. There was little time for sleep and no time off.

      It was a given for me that I needed a business partner to relieve me of the management of the team so that I could continue to generate the leads, handle the marketing and continue to sell some real estate. The real challenge was finding the right partner. Somebody who could walk in and take off running. Somebody who had management experience and was willing to run the administrative side of the business. It had to be somebody that I both knew and trusted who had really good recruiting and real estate management skills.

      I am blessed. A phone call to a prior manager with an explanation of my plight brought her back to Sunny SoCal and to my business.

      Part owner of an out of state KW and former team leader of several office in several states, I found a manager/partner who could step in and take the heat off of me. It was worth it to set up a partnership, she brings with her, everything the business needed.

      We are still working out the kinks, there are kinks, but things are certainly running a lot smoother now resulting in a lot more closed escrows, which is the intention.

      It is important to clearly define the rolls, to give each other latitude, to be in sync and be same minded, to have mutual goals, to work together and to have each others backs.

      While it is not the smoothest ride, it is a blessing and one that we will figure out because it is a really good thing.

      I don’t think it is a question of a team or a partnership, for me it is both. The larger the team, the more administrative duties there are. Managing a team is a full time job. Add to that blogging, social networking, selling real estate, reading time, networking and you have a more than full time job without even touching team management.

      You have to look at your business, determine just how much business you have and what will work best for you.

      Best of luck to you with whatever decision you make. Give me a call if you want to discuss further details.

      Laurie Manny

    18. Neil McGuinness July 8th, 2009 1:02 pm

      Build your own business, build your own team, build a product that is far superior than all your competitors, market that product to the best of your abilities, advertise that product.. build and expand….get a bigger office space….this list goes on and on.

      The most important item that i did not mention above is to, “have the right systems in place before you expand”, by doing this you will be able to manage your work load in a reasonable time frame and keep everything organized.

      If you want to start up a partnership with someone then that is basically a decision that you have to make for yourself, you know exactly what you want and no-one else can really change your mind. Yes you can listen and absorb other peoples opinions but ultimately you will go with your own gut feeling – this is what can/will make you stand out from the rest. Do you want to take the risk or not? If you do take that chance on someone partnering with you then it could be the start of something huge…the alternative is obvious.

      When you grow and expand you will be much better off to have the correct systems in place to make your business run smoother, if you don’t have the day to day running of your business set-up to run smooth so everything runs through a well organized system then you will end up creating even more work for yourself and employing or partnering with someone else will not eradicate this problem – it will make the problem worse.

    19. Sue Zanzonico July 9th, 2009 7:26 pm

      I agree with making sure you have the right infrastructure set up…and also with MREA. Everyone has areas that they excel in so its best to let them do what they do best.

      There are situations where flat fees would be appropriate for some tasks. Listing appointments, for instance are often best with two people…double the brain power to floor the questions…man and woman is best.