From The Washington Post
By Malcolm N. Carter
Special to The Washington Post
Saturday, April 23, 2005; Page F01
Bringing More Into the Fold
An Agent is Sold on Hiring a Partner
Frankly, it's scary to head toward a place where I never planned to go.
When I went into the real estate business about 2 1/2 years ago, I did not do so with eyes wide open. As I have recounted in these pages before, as a rookie I imagined myself signing up clients, waltzing through lovely homes with buyers and pretty much having all the advantages of being my own boss - - for example, working when I pleased, accountable to no one. It ain't that easy.
Okay, so I have a history of leaping before I look, and I'm paying the price, but gladly.
The transforming moment in my real estate career - - my third or fourth career, depending on how you count - - occurred when I realized that one person should not have to work so many hours and still fail to perform as effectively as I wished. Equally important, I appreciated the need to have more balance in my life - - to have a life. Finally, I listened to advice that having another agent work with me would more than pay for itself.
All in all, having help not only made me feel better, but also minimized burnout and its consequences. No longer would I, paradoxically, dread hearing, "I think I'd like to make an offer on that apartment." Those words used to mean just more toil, the extra income seeming hardly worth the effort.
But who knew that my naive first step of relying on a second agent as a buyer's representative a little more than a year ago would snowball into a full partnership with a wonderful third agent? It also has meant the creation of a team that now includes a full-time employee and the immediate prospect of another buyer's rep, as well as our existing "virtual" assistants in Chicago.
It turns out that I am following a trend that, according to my sales manager, Marj Rosner, has been building in recent years. "Years ago, people didn't think of real estate as a career, but as something they did part time for a second income, perhaps to subsidize their retirement," said Rosner, who has been in the business 26 years and supervises nearly 300 agents.
Now, she added, agents are more serious. "For them, it's about making a living," she said. "And as people make more money, they want to have a life, not just work and die and have money in the bank."
And so now I find myself spending significant time dealing with lawyers, accountants, bookkeepers and detailed business plans. Sure, I still show property, develop strategy and negotiate with the other side, but more of my day seems to be spent sitting in front of my computer than behind my steering wheel.
Neither my business partner, Alix Myerson, nor I can quite remember how the concept of joining forces began to take hold sometime last summer. For one thing, we had covered for each other in the past and respected each other's expertise, though she has been in the business for nine years, much longer than I. Her accepting attitude was surprising and flattering.
Suffice it to say that one thing led to another, and soon we were meeting with a high-priced lawyer because we both understood that any business marriage can end in divorce. We wanted to avoid any heartache that could result in the unlikely event that ours would end.
Observes Pam Kristof, a Re/Max agent with a team of eight, "Maybe it won't work the way you planned. Teams do break up." Sometimes bitterly.
It seems there are almost as many models for teams as there are teams. For example, Lynelle Massey, a Weichert agent in Vienna, began working informally with another agent much as Alix and I did. They share commission income unequally, depending on the source of their clients. As for expenses, they divide a very limited number of them. "Somehow, it kind of works out," said Massey, an agent since 1992.
Of course, Alix and I had to wrestle with those big questions about revenue and expenses as we developed a budget. We both found it easy to handle expenses on a 50-50 basis. It was harder to deal with our different income streams. We concluded that 50-50 made sense for that, too. "I always think that you're doing more and you always think that I'm doing more," Alix told me. "As long as we both think that, it makes sense - - it's perception."
The lesser questions we had to confront were endless: Whose Web site would we use? How would we market ourselves? Were we willing to merge our names and brands into an umbrella brand? With each of us attached to different office locations, which one would we choose for the team? Which lawyer should we ask to draw up our partnership agreement? In fact, should we have two lawyers? As for revenue from currently active clients, how would we deal with that? What about referrals from past clients? From present ones? And, naturally, what would happen in the event of a divorce? The list goes on, and it's a good sign that we never disagreed about any of the details.
Our one lawyer drew up a partnership agreement, limited liability corporation (LLC) papers and agreements for the folks who work with and for us. The cost exceeded $5,000, including the forms to register the business in our various jurisdictions, but I am certain the money has been well spent.
The downside of this effort has been an onerous increase in paperwork, already a substantial part of selling real estate. Keeping track of our expenses and revenue, opening a business checking account with a line of credit, figuring out how to automate the payroll, evaluating various telephone systems, obtaining credit cards, paying bills - - all of this began to wear as the hours I spent began to consume what otherwise might be recreational parts of my weekend or time with clients.
So we decided to hire a part-time bookkeeper. That meant writing and placing an ad, combing through résumés, interviewing candidates and finally getting the winner up to speed. Then there was training our new employee, getting an office equipped and running, wrestling with the phone company. Although the additions lightened the load, each one also meant a burdensome rise in management time and effort.
"You have to do what you like doing best," Kristof said. "You need to be sure you don't sublimate yourself in the partnership. Don't get so caught up in managing the team that you don't do your own business."
Fortunately, Alix and I are well matched. She hates numbers, loves showing property to buyers and delights in throwing dinner parties that include clients. She's also a whiz at dealing with our new - - yes, new, with all the work that suggests - - graphic designer. I prefer to deal with marketing in general, writing our weekly e-mail newsletter and becoming most deeply involved toward the end of the buying and selling process.
Thanks to the help I began acquiring last year, the balance that I was determined to achieve is evident in the two vacations of more than two weeks each that I was able to take. On one of them, at the end of the year, I shunned e-mail and phone, thanks to Alix.
It was during two weeks at the beach in August that the merit of taking a vacation became fully evident. Away from my routine, I had time to crystallize the notion that unless I made a serious effort to turn home selling into a profitable business of its own, I would have no income when I retired. Building a business would simultaneously give me more leisure time, allow me to focus on the work I most like doing and provide an annuity of sorts if ever I do decide to retire.
Fat chance that will happen, says Alix, who knows me pretty well by now. I'm beginning to believe she's right. I may still be working too many hours a week, but I wouldn't trade what I'm doing for anything in the world.
Malcolm N. Carter is an associate broker in the Chevy Chase/Uptown office of Long & Foster Real Estate Inc. His team's Web site is ServiceYouCanTrust.com.