Brokerages downsize sales force

Brokerages downsize sales force

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 “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, “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.”

  • @kiltedbroker 2011-08-16 1:52:35 AM
    If you haven't read the book "Good to Great" by Jim Collins - you need to. I think by looking at the "bus principle" (as presented in Good to Great) we can figure out this whole article (and maybe even the quality problem in the broker channel).

    The Bus Principle is pretty simple, for a business to grow, there are three things it needs to do, first they have to get the wrong people off the bus, second... get the right people on the bus and third, figure out where everyone is going to sit.

    In the case of these businesses, I wonder if the people they had on their bus were "the wrong people"? If the "let go" brokers were quality brokers contributing significant volume with little to no supervision, would they have been let go? Most likely not! So... is it fair to bring attention to the fact that "Brokerages Downsize Sales Force", well... probably, because "Brokerages part ways with non-producing Brokers" just isn't as catchy an article!

    I like the end here, "but we would be very selective in choosing agents..." - isn't this bringing the right people on the bus? What ever made it a good idea to just bring on any warm body into the industry in the first place?

    Lets continue the conversation about raising the standards in the broker channel! Also, Mike Cameron at is a great resource.

    The Kilted Broker

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  • Contrarian 2011-08-16 3:50:54 AM
    Chris Bisson is right on. If most managing brokers examined the liability and time spent on managing staff vs time spent marketing to their own clients they would see what a loser game it is. There is way more money in brokering than in providing cheapo management services and risk free income to the aggregators.
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