Best-selling books on real estate tell us: if you want the big bucks, build your own brokerage.
The recipe is simple, they say—create reliable systems, shape your team culture, work hard, and expand.
Truth is, it's just ain't that easy.
The reality is, setting up your own brokerage is no walk in the park. And we’re not talking about getting your broker's license or finding the right motivation—that stuff actually is easy. The hard part about making the transition from agent to owner is having to grapple with questions like:
“Am I ready?”
“How exactly do I do this?”
“Is now really a good time to be doing this?”
According to the NAR, there were about 86,095 brokerage firms operating in the US in 2012, yet the number of licensed real estate brokers across the country is many times over that amount—with 131,315 in California alone.
If the numbers are anything to go by, it seems like the majority of agents are not in a hurry to open their own brokerages. Whether they admit it or not, these statistics show that they actually prefer working for someone else.
Michael Smith, CEO of Greenville’s Bluefield Realty Group, was not in that majority. He decided to get his broker’s license and make the jump from team leader to brokerage owner within 3 years of getting started in the industry.
In less than four years, Michael has created a rapidly growing brokerage that now employs over 20 agents and staff members.
How did he do it?
We sat down with Michael to learn all about his fast track to success and how he made the tough transition from agent to broker/owner.
Want to watch the full interview with Michael? Click below!
Before getting his broker license, Michael worked in real estate for three years at Keller Williams where he built a successful team. But deep down, he always wanted to start his own brokerage.
“I kinda knew the path I wanted to take. I had read 'Millionaire Real Estate Agent' by Gary Keller, and knew that I wanted to build a team. And in South Carolina, you have to be licensed as a salesperson for three years before you get your broker's license,” shares Michael.
He knew opening his own brokerage would provide him with many benefits he simply wouldn't get if he stayed on a team, including the fact that:
But despite knowing the benefits of launching your own brokerage, many real estate agents—even after obtaining their broker's licenses—continue working for a team and just can't seem to nail down that "perfect time" to take themselves out of production .
That's also how you get stuck in inertia.
“Looking back, I was still selling 50 homes a year, and we had maybe five agents and two or three staff members, and that was very manageable,” remembers Michael.
As a team lead at Keller Williams, he was coasting at a comfortable speed.
But when he decided to make the leap from managing a small team to managing his own brokerage, that's when the real challenge began. After starting his brokerage, Michael had to put his sales license on the shelf and step firmly into the role of broker/owner.
“I stopped taking on new clients probably about two months after we formed our own brokerage. Originally, I was planning on staying in production for another year or two. I felt like if I continued to sell at the rate I was selling, I would be doing a disservice to my agents, not being able to give them enough time,” he explains.
For Michael, starting a brokerage means your agents are your new clients. You have to give them excellent service in order to grow your business.
For Michael reading books wasn't as effective as listening to podcasts, which he relied on greatly to expand his knowledge on topics such as team building and property management. Jeff Cohn’s “The Team Building Podcast” was one of his favorites.
And that's another reason many agents postpone opening their own brokerage: good old-fashioned self-doubt.
Are they good enough to pass the torch?
Although Michael had only three years of experience in real estate, he successfully used his previous experience as a loan officer and financial advisor to elevate his game as both an agent and broker/owner—but he knew he needed to grow his knowledge on team building.
“When I first got my license three and a half years ago, I listened to a lot of podcasts specifically about team building, like 'Keeping it Real' from Real Geeks, and the 'Team Building Podcast' with Jeff Cohn, and different things like that. A ton of that type of thing,” Michael laughs.
Today, Michael is confident in his abilities as a team leader. For him, it’s never been about the number of years under his belt.
“I feel like just because of the systems I had, and the leads that we were generating, I was able to cram a lot of years' worth of experience into a short period of time,” says Michael.
However, the timing of the transition is also crucial. Michael has friends in other parts of the country who also made the leap from sales agents to full-time team leaders, just not at the right moment.
“I've had some of them say, 'You know, I got out of production too soon and financially, there was a mess there.’ And then I've had others that say, ‘I should've gotten out of production years sooner than I did.”
In a lot of ways, Michael still sees himself as the bottleneck for his company's growth. But if the transition was poorly timed, they wouldn’t be experiencing growth at all.
“If I was still out there, representing clients, it would really prevent us from growing the way that I want us to. The stage that we're at in our business was timed pretty well, and it freed me up to focus on more big picture things,” he says.
But being able to lead a team is only half of the equation. Michael knows that much of his growth is only possible because he has the right team. For him, an ace hiring strategy is crucial to long-term success.
At the core of every successful brokerage is a successful team.
Too many team leaders build their teams by default. For them, it’s just something that kind of… happens.
Here’s how Michael puts it: “They have some success as an individual agent, and they get really busy, and they don't want to say no to anything, so then they start bringing in the agents to handle the overflow.”
More often than not, this approach is not team-oriented. A lot of agents in these circumstances just give away the “garbage leads” they don't want.
The problem with that, is that you have virtually no control over your team composition and culture—and ultimately, no control over where your brokerage is going.
“I really wanted to build a team by design. And even from day one, I started building systems that could be duplicatable and scalable so that I could plug other agents into the system. I wanted to make sure I could always provide for the agents and keep them busy.”
When you design a team intentionally, every hire becomes crucial. Especially the first ones, because they set the tone and pace for everyone else.
Bluefield Realty Group is serious about fun. They build rapport both inside and outside the office and even invite their entire families to their group retreats. (Source)
Michael’s first hires were two people in the same week: a sales agent and an ISA.
Although hiring an ISA as a first hire was not very common for the company where Michael worked before, he wasn't afraid to go against the grain.
“In my mind, the lead conversion piece was such a critical element, and it tended to be the first thing to slip through the cracks when we got busy. The lead follow up was the most important thing to start delegating,” Michael explains.
As he puts it, “There's no one right way. This happened to be the way that made the most sense for me but for someone else, maybe an administrative assistant needs to be their first hire.”
Michael’s first priority when hiring is to find people with the personal qualities most conducive to success: “I'm looking for the things that can't be taught, like integrity, and work ethic.”
It’s crucial that the person you hire feels comfortable in the environment you created.
“One of our best agents, the year before he joined us, sold one house, and then the year after he joined us, I think he sold 24 houses.”
Clearly, Michael is setting up his agents to win BIG.
The key is to prioritize the environment fit over the agent's experience.
“There are some people who have what it takes, they just need the right tools and resources and support and leads and accountability. So just plugging them into the right system can make a world of difference,” explains Michael.
The fearless team leader invests a lot of time and money into training agents, including a checklist of things that every new agent goes through to immediately get comfortable with what they’ll be doing.
Here's how Michael helps train and onboard his agents to be successful from day one.
Armed with an awesomely intentional hiring and onboarding policy, Michael’s brokerage enjoys a very low turnover rate. “I think we've only ever had three people leave in the 3 1/2 years we've been doing this,” he says.
Today, he has a team of 15 agents. The company is growing extremely fast, and Michael plans to double that count within the next year.
But in order to keep that momentum, he'll need to make sure his rock-solid systems are ready to scale.
When your team grows rapidly, two things can happen:
Let's take a closer look at how Michael makes sure he's hiring the right people at the right time.
One of the very first challenges that rapidly growing brokerages face is how to balance the growing number of staff members.
What if we hire too many agents? What if we don’t have enough people to support our processes? What if I can't give every new hire the attention they deserve?
The what-ifs are endless. And if you make the wrong call, your business can quickly enter a downward spiral.
But for Michael, much of this fear can be attributed to a false set of limiting beliefs around customer service. The way he sees it, if you have a working system in place, more agents should not be a problem.
For example, sometimes a lead comes up, and both the ISA and real estate agent will be following up at the same time.
Now, most agents are afraid of this situation. They think: What if clients think we're too pushy? What if they complain that we’re communicating too much?
Here Michael explains why it's ok for both ISAs and sales agents to work together to increase speed to lead:
"Speed to lead is half the battle," says Michael. He's confident that it’s better to call someone twice within a half hour than to not call at all.
But what about other departments?
As Michael puts it, it’s important to carefully consider the needs of your entire company.
“Let's say, your average transaction coordinator can handle 40 files at a time. Ours has 42 pending right now. But, if you've gotten to the point where that first one is kinda tapped out, how do you justify two full-time people, when you're just barely at the point where you're pushing up against what that one person can do effectively?”
In many ways, as Michael confesses, they still have a lot to figure out. But it helps him tremendously to think of his company as a startup.
"It gets a lot easier to scale as you get bigger. When you get to the point where you have 10 transaction coordinators and you hire one more, it gets a lot easier the bigger you get, because you're really only increasing your payroll by 10%."
It’s important to keep things flexible in a growing company, and Michael’s team has tried many tools and ways of doing things before finding their optimal approach.
"So we've tried it all--virtual ISAs and in-house ones. So the leads come in and, depending on the price range and the county that the lead's in, it'll be assigned to a particular agent," he explains.
When his team struggled with proper lead assignment, they decided to switch from first to claim to a round robin approach, which dramatically improved their speed to lead time.
"It actually made a big difference for us when we switched from first to claim to round robin, especially because we have the ISA assistants, so if you get a lead assigned to you and you're tied up, at least there's that other person in the office who's there to help out," he says.
With the right CRM, making important changes to your system can be done in a few simple clicks.
Another challenge comes in the form of the many new opportunities owning a growing brokerage opens you up to.
There are so many new things that you can do, which is undoubtedly awesome. But the danger of spreading your resources thin is very real.
"A lot of people have approached me with different types of opportunities. Starting a mortgage company or flipping houses, this or that, but for me it's like, I can really only effectively do two or three things at a time," says Michael.
"For me, the only thing I'm focusing on in business right now is building the brokerage and incorporating property management into it."
"It's really tempting to look into opening other offices geographically as well, and you know, that's kinda the sexy thing to do, right? But for me, I feel like there's still so much more growth we can have here that wouldn't be spreading my attention and resources too thin."
Michael even treats his goal of getting into property management as a side business, secondary to his main business: managing a brokerage.
"It's [property management division] kinda like my side hustle right now. We started beta testing this about three months ago. Right now, we've got seven doors under management and I wanna grow that to 100 this year."
Michael and his team have plans to grow their property management division and eventually reach the thousands of doors mark over time.
It's very reassuring math for the broker/owner's favorite side hustle. But how does he make sure things are on track with his current business?
Michael and his team have tried a lot of different tools to organize their tracking and reporting.
Eventually, they decided to stick to a small handful of tried-and-tested solutions.
"To be honest with you, most of what I look at is in Google Sheets. I'm a huge spreadsheet nerd, and I have spent countless hours creating these spreadsheets that pull in the data I need."
Michael’s team has a different Google Sheet for each agent, with tabs that cover everything they need to be held accountable for, including:
On top of that, they have a master spreadsheet that pulls all that data in as well as additional master sheets for tracking ROI on various marketing sources.
"We definitely use the reporting within our CRM, which is Follow Up Boss," adds Michael.
When Michael worked in mortgages before his real estate career, he was the preferred lender for a for a handful of different companies and as such, he had lender accounts in all of their CRMs.
After getting insider access to dozens of CRM workflows, he knew which option would work best for him and his team.
"Really, the thing I like about Follow Up Boss is that it’s so visually simple and easy. I feel like the learning curve is so short. When I onboard someone, it's just intuitive. It's easy to understand, it's very, very user-friendly," he says.
According to Michael, this user-friendliness has been crucial in helping him build a productive team in a short period of time. But what Michael really loves about Follow Up Boss is how the platform is constantly being updated and expanded, without sacrificing its user-friendly workflow.
"I've seen a lot of other platforms out there that are just so complicated and visually hard to understand, but they still can't do half the things Follow Up Boss does."
At the end of the day, Michael puts his team and the success of every one of his agents above everything else.
“I think the biggest thing is that I really, really value our people. That, and our culture, that's something that's really, really important to me,” Michael says.
“We've gotten a lot of really great people, and they just come together in such a synergistic way.” (Source)
Building your own brokerage is a difficult and challenging adventure, but if you have a great team at your side, half the work is already done.
And so far, for Michael and his team at Bluefield Realty Group, this adventure has been nothing short of inspiring.