The Real Estate Encyclopedia
Time To Right-Size Your Brokerage
Category - Real Estate Information Sources - Real Estate Articles

ALISO VIEJO, CA - Smart brokers across the country are reviewing their business models and right-sizing their firms as the market continues to soften. "If proper business planning was ever important, it is now crucial," says Allen Wright, SVP of CreateAPlan.

Consider the following scenario: Unit sales are down. Price appreciation has slowed, leveled off, and in some cases declined. You have a mix of new recruits and seasoned veterans, all on varying commission splits. You provide basic training to recruits, but your office is geared more towards the dynamic, self-sufficient professional who likes to take charge of their own business and education. You know you may need to make some decisions in the near future about who to keep if some of your agents aren't able to weather the market change. How do you objectively decide the best course of action to take? You need a plan; an overarching view of your business that tells you exactly what the production and profitability level of each of your agents is and is projected to be. A flexible plan that will allow you the option to recruit and retain the agents that best fit your environment.

Your plan should also evaluate the size, shape and style of your firm, examine the services you are willing to provide to the consumer as well as the support services and training you will be providing your agents.

Start by establishing a baseline of your current office. This baseline would be a current snap shot of the existing agents and commission structures offered. Next, calculate the revenue and fees charged to the agents and any direct expenses paid on behalf of the agent by the broker. Apply some production assumptions to each of these agents or groups of agents and then add the brokerage expenses such as salaries, overhead, marketing, training and recruiting costs. Determine what is your overhead per agent, what commission structure provide a profit to the brokerage, and what agents are the most profitable based on expenses applied on a per transaction basis?

Once you have this information you are then able to size your office. It is often the most difficult part of a broker's job to inform someone that they should probably find a new line of work. As a business owner, you should review the agents with a keen eye towards current fit and profitability. As this market is tightening, you need to remove the dead weight.

To resize your office just a few of the several considerations you have to think about include physical location, number of offices, target and goals, the correct number of agents to achieve that goal, overhead projection, transactional charges, etc.

Now any broker can have the power to manage any size real estate office effectively with a dynamic online real estate business plan specifically designed to help brokers. Call Allen Wright at 949-600-7176 today for a demo or go to

About CreateAPlan
CreateAPlan, Inc. is the largest real estate business planning software provider in the industry. The service is a simple, easy-to-use Point & Click online software application designed to streamline business planning, the creation of real estate marketing plans, budgeting, and tracking for real estate agents and brokers. Agents that apply the basic business principles inherent in CreateAPlan will fully maximize the amount of time, money and energy they invest in their real estate career. This powerful, flexible web-based service provides a simple step-by-step process for goal achievement, a system for monitoring all pertinent business indicators, including marketing events, listings, sales, expenses, activities and reports. CreateAPlan, Inc. is an integral part of the RealtyU® Family of career development companies and services.


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