I am often approached by salespeople who say they plan to “partner up” with another agent. Reasons to do this vary from sharing marketing dollars to “spotting” each other while one takes a vacation. While there is a definite appeal to having a partner in an industry that can be very lonely at times, most real estate partnerships fail.
In my own experience, I have been fortunate to create and sustain a long lasting business partnership with a close friend and colleague. Our partnership originated after a combined 20 plus years of selling experience, when we determined that we wanted to own and grow a successful real estate company.
The partnership has faced its challenges but overall it has been the best experience I’ve had inside my career and it continues to evolve in a positive direction. A constant awareness has been crucial in maintaining our friendship inside the growing model we have created.
Partnerships dissolve due to challenges that stem from many different circumstances. The list is long and ranges from contribution and commitment to ego-based problems and profit responsibilities. In my experience the No. 1 reason that partnerships fail is a pure result-based mindset by one or both partners involved.
Here are five specific principles to understand and evaluate when you are considering a partnership:
Understanding your joint vision:
There are no two people who are exactly the same. Although you may have the same ideas as far as goals, money is not the driving factor of a successful real estate partnership. Have you clearly identified your purpose as individuals and how that can be matched up to create the purpose of a business partnership? We call these life goals.
Embrace your strengths and weaknesses:
If each of you brings various skill sets to the business relationship, it will ensure that you focus on the positive aspects of each other versus the negative. My recommendation is to be abundant in your own individual skill sets and recognize the other for doing the same.
Know your numbers:
Whether it’s selling or recruiting, understanding your numbers and tracking everything is a science that I encourage. Reverse engineer all of your results and outcomes to create a process that is measurable and sustainable. This applies to sales and conversion rates along with recruiting and attrition rates. When you focus on the activity and process that is required to meet your goals together, you will then be able to find success through new systems and improvements.
Have predetermined expectations:
No partnership will exhibit the same productivity result per partner. However, this is where most partnerships meet their demise. Consider creating an agreement to a minimal level of commitment required for income generating activities. With an understanding that you both are contributing at the highest level, you will soon eliminate the idea that one of you is doing more than the other.
Make it more than just business:
Real estate is a personal relationship business. Your partnership should be and will be one of a personal nature as well. Learn to understand what fuels your partner and what they truly value inside and outside of the business. A partnership is just as much about quality of life inside real estate as it is selling more homes or recruiting more agents. Developing an understanding of one another on a deep personal level will serve your partnership at the highest level.
A real estate partnership, like any business partnership, can be both very rewarding and very frustrating. The challenges that most relationships of this nature face will always present themselves. With the right level of awareness and a commitment to serving yourselves and others, you may find success in a partnership model and develop a life-long friendship through the process.
Ryan Hodge is broker of record/owner of The Realty Firm in London, Ontario.
