It may run counter to their competitors, but a number of brokerage heads have moved to downsize sales forces, instead of adding to them – a way of freeing themselves to grow their own sales as new home purchases slow.
“I’m now ‘it’ – chief cook and bottle washer,” Paul Ouellette, broker and manager of Central Mortgage Associates Inc. in Windsor, told MortgageBrokerNews.ca. “There were rewards associated with having a staff of nine sales associates, but I found that two-thirds of my time was spent on administrative work and cleaning up other people apps. I decided that enough was enough and pared back to work for and by myself.”
The move has ultimately doubled his productivity in terms of developing leads, winning client commitments, but, more importantly, funding deals. They’re the most tangible benefits of reducing the number of agents in the office. They’re also compensation for any lost revenue from commission splits.
Quellette’s business trajectory runs counter to those of most brokering veterans, increasingly looking to beef up their sales teams in order to extend their reach in the community and to generate more leads – that’s even as home sales in key Canadian markets slow. Many brokerage heads are, in fact, going one further, using an amended provincial pact to rapidly expand their businesses across provincial lines and to take on new agents in new markets.
Specifically, changes to the Agreement on Internal Trade, taking effect July 1, 2011, have made it easier for individual brokers already licensed in Ontario, British Columbia, Alberta, Saskatchewan, Manitoba or Québec to win the equivalent license in any of those other provinces without having to meet new education and experience requirements. It means they can act as principal brokers in that new territory without having to hire a local player to fill that role.
Still, Quellette, a 25-year veteran of the industry, prefers to go it alone, what he calls returning to the industry’s roots.
“I now live by the eat-what-you-kill strategy that is the basis for brokering,” he said. “When people come to my office, they know that they’re talking to the broker not to an unseasoned subordinate. I found that it was, for me, the right thing to do.”
He’s not alone.
“We pared back three years ago, to only one agent working with those of us partnered in the business,” said Christopher Bisson, principal broker for The Mortgage Centre (Guelph). “We did it because the return on investment, considering the time involved with overseeing agents and the split structure we had in place, was not cost effective. By increasing the number of deals we did ourselves we made up for what was lost by reducing staff.”
Unlike Quellette, Bisson, who personally claimed $92.6 million in funded volume last year, is now debating whether to reverse that earlier move.
“We’re not talking about it,” he told MortgageBrokerNews.ca, “but we would be very selective in choosing agents and also look to adjust our split agreements to make taking on new staff financially viable.”