Ebby Halliday Realtors is the largest independent brokerage in Texas, and the 14th largest in the U.S. With 25 offices and over 1,000 agents, and over 50 years in the business, Ebby Halliday was one of the first brokerages to create training for and to support emerging business models for agents.

According to vice president Petey Parker, director of relocation for Ebby Halliday, designing support programs for how agents want to work is a good way to attract and keep top agents.

"We work in concert with the agents," says Parker. "We want to help them run a profitable business and we want to be able to run our business profitably. So we have to find out how to set it up so that we are dealing with the personalities involved and giving them the attention they need."

To make it easier for the brokerage to control costs, plan space and hire appropriate personnel, Parker says that at the beginning of each year, agents have a choice of how they would like to be categorized within the brokerage, and that their support from the brokerage will be based on which category they choose to work:

• Individual agent
• Teams
• Groups

Individual agents

Individual agents are sales associates who operate as independent contractors. The advantage to working alone is that the agent earns his/her commission solely. The disadvantage is that the agent is responsible for his/her own personal marketing and advertising costs. Depending on the size and volume of each office, individual sales associates are supported by typical brokerage administrative services, such as a listing secretary.

When agents want to grow their business by multiplying themselves, that's when the brokerage has to change what it offers in terms of support. Providing space for team personnel and rules for operation are only a few of the issues brokers must address with agent expansion.

Teams

Teams are defined by Ebby Halliday as two sales associates who split their income down the middle. Examples are a married couple or two independent agents who want to combine their talents to provide better service and turn more transactions.

"The plus side of a team is when one side loves paperwork and is analytical and the other wants to be with people," suggests Parker. " In that case it works well. What doesn't work as well is when a team member likes to do it all and one team member thinks they are working harder than the other."

Is it easier for husbands and wives? "When it works, it is beautiful," says Parker, "and when it doesn’t it is because not everyone is cut out to have a 24/7 relationship. They may feel that they never get away from the office."

To minimize problems, Ebby Halliday has training that addresses the category that the agent has chosen, so that the agent will know the pitfalls as well as the advantages of working alone, in a team, or as part of a group.

For teams, the training touches on ego issues as well as customer perceptions. "You don't want a situation where one agent is saying to a partner, "I did all the work and you get your photo in the paper," says Parker.

"We teach teams to be very careful with consumers and to explain how the team will work, so that they don't feel that they are ever being passed around from one member to the other," she says.

How teams can operate are carefully regulated at Ebby Halliday. Once a team is formed, commissions are split down the middle. Teams are not allowed to hire licensees to list or show, because that puts them into the group category. "If agents have licensed people pumping up their income, it is their cost," explains Parker. "Teams have wanted to bring in someone to help them, but they aren't keen on paying for the help. Some companies are analyzing, should we offer a staff assistant for the teams? We haven't taken action, but we are analyzing teams to see if a solution could be staffing in the office to help all the teams. Would we be further ahead? Right now, it appears to be a space issue."

Groups

When an agent forms a group, the commissions are paid to one master profile, and the sales associate who is the master profile is responsible for paying whomever works for him or her.

Paying for support gets agents to a higher plateau, but when they pay other licensees to list or sell for them, eventually they may lose those licensees who want to further their own careers. Agent A pays Agent B to get listings, but all Agent B's work is credited to Agent A. "That can create dissatisfaction within the group, because Agent B thinks she or he could be adding their sales to their own plateau and possibly earning a higher split from the broker than they do under the agent."

That makes it harder to keep groups together. "Most sales associates do not want to be managers, and when you become a group, you become a manager."

Groups are also riskier for the broker. The efficiencies of the group push the master agent's commission upward until he or she is earning top splits. "Groups raise costs without bringing in higher income for the broker," says Parker. "There is a small margin of profit in this business, when your sales associates are based on one plateau and they jump to another you lose that margin in between."

There is also a competitive issue - recruiting. Brokers and master agents are often in competition for the same personnel. "We discourage the groups from taking agents from within the company," says Parker. "We are recruiting for the company, not for a group."

Also, not all groups function well. "You have to analyze how much space you need. If you have a productive, well-run group, then they are paying for their space, but if they are not producing, you could have filled that space with more individual agents."

To make sure that the group functions properly, Ebby Halliday assists with legal and tax advice because the management of a group is different from that of a team.

Profiles help track agent loyalty

The company constantly analyzes its profiles of agents, so that it can initiate change when it is needed. "Groups have grown enormously over the last three to four years," observes Parker. "We have 60 groups, and we started off with about three to five."

Teams are not as easy to track. "They come together and dissolve," says Parker, "while most groups stay together. Once a master agent becomes a master agent they don't want to change. The group may change because they are dealing with one master. The teams have themselves and maybe an assistant. The team is easier to dissolve."

The one advantage to a group as far as the broker knows is that they are not quite as portable. While a strong agent leading his or her group may appear to threaten a brokerage, Parker says the opposite is true. In her years with the company, Parker has never seen a group leave Ebby Halliday. "We don't seem to have personal conflicts, it's business," says Parker. "The expense is in the space you are allowing them, not so much what you are paying them. And if a group considers leaving, they have to ask can anyone else afford them? They could open their own place, but we haven't had it happen."