Brokers in Focus: 'We want fewer agents who do more business'
Red Oak Realty CEO Vanessa Bergmark has clear goals for growth — and for finding and keeping great agents, no matter the market.
Vanessa Bergmark, owner and CEO of Red Oak Realty in Oakland, Calif., didn't take a traditional route to real estate. A Brooklyn native, Bergmark studied crime, law and justice, and then moved west after graduation. But when Bergmark purchased her first house, she fell so deeply in love with the homebuying process that she decided to get her real estate license.
In 2007, Bergmark was given an opportunity to run Red Oak Realty — and she jumped at it. Under her leadership, the firm has become one of the largest independent brokerages in the East Bay with 160 agents and a staff of 20.
Bergmark still lives in Oakland, she's still in love with real estate, and as Red Oak's CEO, she's continuously focused on how to stay on top in a competitive market.
What are your top 3 goals for your business over the next 12 months?
Retention, unit growth — we've made a massive push towards that — and recruitment. But we recruit by unit growth not by headcount. We want to bring on fewer agents who do more business. We don't ever say, "Let's get 100 recruits." We say, "Let's get $200 million in sales volume," which can be five agents.
How much do market conditions affect your business strategy?
Obviously, the state of the market makes you reconsider things, but if we changed our goals for every different market, it would be like dancing in the wind. There just wouldn't be enough consistency.
You have to keep certain things moving along regardless of the market. The industry has changed drastically over the last 10 years, even more than the market economics and fundamentals of the economy. We are always focused on the best conversion rates when we are in a listing presentation, buyer presentation, or in competition for business in a dwindling market.
Even in a slower market, new agents are entering the industry. How do you approach training?
I think the one thing every brokerage that's been around for a while is looking at is the number of people getting out of the industry, and the ramp-up time for those coming in.
Clients are far too strategic and savvy, and they don't want someone part time or someone who isn't dedicated and knowledgeable. There's just too much competition.
We have a series of about 16 weeks of training around topics like listing presentations or open houses, then we give each trainee a one-on-one mentor who walks them through business planning, what they do to prospect, things like that. If the agent gets into a deal, the mentor will show them how to write contracts and will look at every piece of paper. Our mentors do the first three transactions with them.
Last year was our biggest year for new agents. Real estate was on fire. In a market like this, there are fewer new agents, and a lot of new agents are not surviving, so we shifted our strategy. This year we may take on two new agents, as opposed to 15 last year.
How do you hold onto great agents?
You have to offer them what they want and need, treat them well, and have a fair compensation plan. For me, a fair compensation plan is one that's fair throughout the entire company. We have a very clear matrix, and everyone knows what it is. You look at production and that is what you get paid.
We don't try to sell them a lot of things — if agents are dialed into what you provide, they'll really use it. We're not asking agents to buy 70 different products then giving them 100% commission. We do a fair exchange on really good support. We help them grow their business. We help them close deals.
Agents aren't always eager to use new technology. How can brokers encourage adoption?
I think a lot of brokers have problems with agent adoption because they offer agents things they haven't asked for. The broker will go to a conference, find some new technology and say, "Everyone should use that."
And the agents will say, "We don't even want that."
When we bring in a new tech piece, we run hands-on, physical workshops, offering them again and again for agents. Either the agents are going to say, "This is valuable. Thank you for teaching me." Or they will say, "I hate this. Why am I using it?"
If it's valuable, great. If it's not valuable, done. We don't tell the agents, "Oh, just get better at using it."