Should I partner with another real estate agent?
A real estate partnership is a great way to find financial stability in your business. If you've considered a partnership in the past, but didn't know how to initialize it, follow along.
If you’re running your real estate business intelligently you’re bound to get to a point where you can no longer handle everything by yourself. At this point, most agents decide to delegate the administrative tasks and consider hiring an assistant to take them on.
Good move, too, because with an assistant to take over these tasks, the real estate agent becomes more productive, generates additional business and thus, makes more money.
That “success builds on success” is never more apparent than in the trajectory of a real estate agent’s business when she is set free from the mundane.
Which is why, after a while, busy agents feel pressured to balance this increase in real estate business with the very real needs of a personal life.
An overwhelming amount of business is certainly nothing to complain about, but it means that vacations go by the wayside, weekends with the family no longer exist and date night with the significant other is a thing of the past.
Eventually, the time will come to evaluate your priorities and consider bringing on more help.
Deciding on the ultimate alliance
Your choices are varied when you need help. Hiring another real estate or personal assistant is an option. Perhaps a buyer’s agent can relieve some of the pressure.
The only consideration, however, when it comes to trying to balance professional and personal needs is that ultimate alliance – a full-time partner.
“What a partner brings is quality of life improvement and stability of income, rather than an increase in income,” says real estate trainer and coach Kelle Sparta.
“You’ll have more transactions, but you end up splitting everything 50-50,” she continues, “so your income doesn’t necessarily change, it just doesn’t fluctuate as much.”
Jennifer Allan-Hagedorn, real estate trainer and author of “Sell with Soul,” says that “vacation coverage is a prime benefit to having a partner.
“It’s blissful actually, especially if you’ve been selling real estate a long time,” she explains. “Your first vacation when you truly don’t have to worry about business? You’ll wonder why you didn’t get a partner before,” she concludes.
There is, however, a fine line between finding the partnership that offers relief from some of the pressures of a busy practice and one that does nothing but add stress.
What to look for in a real estate partnership
Before setting out to find a real estate partner, it’s important to get clear on your expectations, according to Allan-Hagedorn.
“I promise you, bringing another warm body into your business world will not simplify your life – it might improve it — but it definitely won’t simplify it,” she cautions in a blog post at ActiveRain.com.
She goes on to suggest that you look for someone who actually enjoys doing the tasks that you find distasteful.
“The best partnerships are those where the members of the partnership specialize in different areas,” she explains.
“If each partner has his or her individual responsibilities, directly linked to his or her skills and interests, the partnership has a great chance to thrive.”
Rule number one, according to Sparta, is to “only partner with someone you trust. This person will be in charge of your income. If you think they are irresponsible or a slacker in any way, don’t partner with them.”
When St. Augustine, Florida agent Peggy Gatchet decided to make the move from management and part time sales into full time sales, she decided to take on a business partner. After a lot of deliberation, she determined that what was most important to her was finding someone who worked as hard as she did.
“The moral compass has to be strong and the work ethic has to be strong,” she explains.
“You have to feel like that person is going to meet you toe-to-toe, hour-to-hour, minute-to-minute. If they don’t, there’s going to be some resentment that will build,” Gatchet cautions.
While most of the agents we spoke with agree that the person you partner up with should have a different skill set than you, they also agree that your partner should have similar personal and work habits.
Having to share space with someone who is very disorganized, for instance, when clutter and chaos drive you nuts, is probably the kiss of death for the partnership. In fact, Sparta suggests that you check out the potential partner’s desk before even approaching him or her with an offer.
“Take a look at their desk because one day you will have to find something on it,” she jokes.
In a nutshell, then, here are some qualities to look for in a real estate partnership:
All good things
There’s an old radio D.J. dictum – it’s ok to ad lib when you open the mic, but “always know how you’re going to get out of it.”
There’s nothing worse than to be talking over the intro of a song and suddenly figure out you don’t know how to end your rap.
Taking on a real estate partnership is similar. Like all things, the partnership may someday end. While it’s difficult to consider this, especially in the beginning, it’s something both of you need to face and prepare for. Get crystal clear on how you’re going to end.
“You don’t want to think about it; you don’t want to talk about it, but that doesn’t change the fact that the partnership will end,” Allan-Hagedorn says.
Not preparing an exit strategy in advance leaves your real estate business open to some major disruption. As an example, she offers a frightening one-sentence summation of something that occurred when she and her former real estate partner parted ways.
“We both felt that we were entitled to the partnership’s client database.” Can you imagine?
Don’t overlook the legalities of a real estate partnership
Sparta recommends drawing up a formal partnership agreement at the start. “A partnership agreement is like a pre-nuptial agreement,” she explains. A good partnership agreement should set expectations about fundamental issues such as:
“In the latter instance,” Sparta warns “make sure you address not only who will get the current clients and listings, but also who gets the ownership of the past client database and any training, tools, equipment, and materials that were jointly purchased.”
Even if your real estate business partner is also your spouse or best friend, consult an attorney before moving forward. The advice and contract preparation he or she provides is critical.
Where are they now?
Sparta is now a real estate trainer and coach but looks back fondly on her real estate partnership days.
“Having been a solo practitioner and having been part of a team, I really must confess to preferring the latter. I loved not having to do things alone. I loved having someone I could call and say “I’m not going to make it for the appraiser, can you meet him?”
Allan-Hagedorn, on the other hand, prefers flying solo. “I am not a good partner. I am happy to be the boss and to take all the responsibility; I am also happy to be told what to do and have no responsibility. However, I am not happy sharing the power and the responsibility. Actually, I suck at it,” she confesses.
Gatchet has no intention of ever trading her business partner for the solo practitioner role. Partners for seven years now, she chose him from among her rookie agents back when she was a broker. Sort of a build-the-perfect-partner model, it’s worked out perfectly for both of them.
Not every agent will fit well in a real estate partnership. If your entire life has become about your business, however, it just might be something to consider.
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