Do You Know Why Brokers Should Not Look Like Brokers?
Consider the following scenario: You have an option between two commercial real estate agents.
The first looks like an investment banker. He wears silver-rimmed glasses, he’s slim, polished, and works for a multinational real estate services organization. His office proudly displays an MBA from a prestigious university and a plaque recognizing him as “Broker of the Year” or “CoStar PowerBroker.” His partner appears to be departing for a tee time in his Peter Millar shirt and slightly worn but polished Guccis. Their right hand is fresh out of Carolina; she’s wearing a new pair of embroidered Raffia Mules from Capitol and ready to sell anything you have with a million-dollar smile.
The second one, by all appearances, may well have once been a bodyguard. His Jos. A. Banks suit is respectable, but his easy, confident demeanor gives you the feeling he’d rather be wearing shorts and a tee-shirt while casting a fly-fishing rod. He works at a firm that he and his partners founded after becoming “tired of the bullshit” at their old firm. Rather than a diploma or a shelf of awards, he proudly displays a customer list, complete with photos of smiling faces gathered around charter boat fighting chairs and picture-perfect tee boxes.
Which broker would you'd pick?
Now, if I’m honest, I would have to suppress my urge to make an easy choice and go for the independent in the Jos. Banks suit.
Why? I believe he will be more invested in the outcome, or what this broker may call “skin in the game”. When I say “skin in the game,” I’m referring to the fact that he has something to prove—a chip on his shoulder.
He is undoubtedly capable if he has made it this far as a successful CRE broker, battling against all of the industry behemoths. Being someone who doesn’t look the part, yet has had a great career, surely required a lot of mental toughness – this industry is not kind to lone wolves.
Nonetheless, he persisted and delivered to gain repeat business, rather than simply waiting for the next client to come via the company’s network, where a broker’s raw ability is only one of many characteristics determining their eventual success.
Without specific talents, one cannot thrive in some professions without demonstrable, proven skills: a plumber or a dentist who’s credentialed but doesn’t know how to identify and solve problems is unlikely to have a lengthy career. Some brokers may make a solid livelihood by putting in the bare minimum of work. Plumbers and dentists have no such luxury.
Pay, Prestige and Performance: Looks can be deceiving.
Clearly, the top brokers earn the most money; but how do their clients rate their performance? It’s rather hard to gauge since there are no customer satisfaction surveys for commercial real estate services.
But for the sake of argument, let’s suppose that the money that brokers earn from their deals actually reflects how deserving their clients view those rewards, and how respected they are for how they went about it. If that were the case, then there is a gap between how most people would understandably view the Gucci-wearing Powerbroker and how most people see their profession.
The Harris Poll asked US adults to rank the prestige of several vocations (doctor, banker, nurse, engineer, teacher, actor, Member of Congress, etc.) and then say how likely they would encourage a kid to pursue that career. You can probably guess where the real estate agent came in. Last in terms of status, and only slightly better as a suggested career path.
The point I am trying to make here is that good looks have nothing to do with competence. Suckers make this mistake. Experienced professionals know that the more you deal with a fantastic service provider, the less important image becomes.
One’s image does matter when it comes to hierarchy, bureaucracy, and uniformity, which are all vital for furthering your career at a major CRE firm. But is a broker with a bureaucratic mindset what you want? Or are you looking for an advocate with a track record of “going to the mat” for clients?
So, how DO you go about hiring a broker?
I suggest you follow these three essential steps to avoid being a sucker and hire a broker that will exceed your expectations:
- Get the broker to put skin in the game. This means the broker gets a bonus if he works harder for you and is penalized if something goes wrong.
- Choose demonstrable skills and expertise over empty suits. Talk is cheap; find the broker with processes and checklists he uses on every deal, and don’t hesitate to ask for past client references.
- Find out what their peers say about them, especially other brokers active in national industry networks with high standards and demanding entry requirements, such as the Counselors of Real Estate (“CRE”), CCIM, and SIOR.