As brokerage firms consolidate to cut costs, maximize name/brand awareness and improve market share, an old maxim seems to still hold true - you are only as good as your good name.

When Washington, D.C. Coldwell Banker broker Tom Stevens decided to conquer Baltimore in a big way, he tried to purchase the holdings of a sister company, Coldwell Banker Grempler, but was unsuccessful in negotiations. He promptly opened up four new Coldwell Banker Stevens locations instead. Before long, the victorious purchaser of CB Grempler, Long and Foster, soon found itself short more than fifteen percent of the agents whose licenses were held with Grempler. To the 150-plus agents who defected and came over to join Coldwell Banker Stevens, what was the motivation? Brand or leadership? Or both?

Stevens explains that the former Grempler agents were loyal to the Coldwell Banker brand, and wanted to continue to be known as Coldwell Banker agents, which they would not have been with the large, but independent mid-Atlantic Long and Foster brand.

But, it's possible that they were also impressed with Tom Stevens, and being part of the third largest Coldwell Banker brokerage in the nation, and largest on the East Coast.

Stevens sees it as a combination of factors. "They were with Coldwell Banker and were comfortable with a national identity," says Stevens. "But we've had rapid growth over the last seven years, and we're a leader in technology and our programs for agents."

Agents are independent contractors and they have a choice. When you buy the assets of another company, what value can you place on its revenue generators? It's a risk, acknowledges Stevens. "You are hoping you can convince them to stay with the benefits you can offer them," says Stevens. "There is business on the books you can purchase, current contracts." Beyond that, the new broker is banking on his or her good name to attract and keep agents.

Stevens says that his brokerage's affiliation with Cendant Mobility, the largest relocation firm in the nation, is also an advantage for his new agents. "Now the agents can refer business to a colleague, instead of a competitor," says Stevens.

Why the march to gain size? "This is a new economy," suggests Stevens. "Real estate is very competitive, margins are thinner, and you have to be creative with ancillary companies to make money. Consumers are demanding more and to have more information at their fingertips. That takes revenue, and it creates the opportunity for the strong to get stronger."

In Dallas, broker Virginia Cook, has also created a brokerage that is attracting agents from other brokers. Find out tomorrow, what made over 100 agents leave their former broker to join Cook.

Have you ever left one broker to join another? What was the benefit(s) you were looking for? Did you get what you wanted?

Building A New Brokerage - Part II

Published: October 2, 2000

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