By Tami Bonnell, CEO, EXIT Realty Corp. International.
According to the National Association of REALTORS®, the typical real estate firm has fewer than five agents, and only 46% said they had an exit plan for when they decide to retire or leave the industry. Concerns about keeping up with technology and competition from non-traditional models are weighing on the minds of the owners of many of these small, independent companies. If now is the time for you to consider merging your brokerage with or being acquired by a larger company in your community, here are some points to consider:
- I’ve been negotiating mergers and acquisitions for more than 30 years, and the most important suggestion I can offer is to find a company whose business philosophy matches yours. Your agents joined your office for a reason, and if you really care about them and their future, you’ll want to make their transition as easy as possible. Over the years, I’ve witnessed regret in people who let money cloud their judgement and discovered too late that their philosophies didn’t match and as a result, lost many disgruntled agents.
- Look for a company whose leadership you know, like, and respect. You may want to stay on after the merger.
- Get an independent valuation on your company.
- Discuss your plans with your stakeholders including your business partners, family, and key staff.
- Talk to your “Dirty Dozen” (your group of trusted advisors in related industries such as mortgage and insurance brokers, title companies, etc.) because they may know which brokerages in your area are looking to expand.
- Consider different remuneration options. It might be advantageous from a tax perspective to be paid over time.
- Bringing two groups of agents together is like blending a family. Work hard to achieve buy-in from your most influential agents – your “pied pipers” – because the others will look to them for guidance. If those key people are well-informed and enthusiastic about the changes, you’re less likely to lose agents.
- Keep the lines of communication open.
- Review training, onboarding and day-to-day operations, and combine the best practices from both operations.
- If possible, get involved in a community activity, fundraiser, etc. as soon as possible following the merger to help unite the team and acquaint the community with the “new” company.
For more insights and tips, download Tami Bonnell’s white paper, Mergers & Acquisitions in Real Estate Brokerage.