Staying Involved

Agents who consider taking a referral-based approach to phasing out their involvement, on the other hand, can sell their business, but stay on and direct past clients to the new operator for a commission. This allows the agent to build a bridge between his or her own business and the new owner by assuring those clients that they can continue to receive a high level of service they expect.

For example, Casey operated Reeta Casey & Associates in the Orlando area for 15 years before selling her business to a developer, the Tavistock Group, in 2007. Working within Tavistock, she founded the luxury brokerage Stockworth soon after, and then went on join The CORE Training. She still sells real estate under the RE/MAX banner, working with many professional athletes, celebrities and luxury clients.

“I saw an opportunity because they only had their two communities with on-site agents,” Casey said of her relationship with Tavistock. “They weren’t able to help their clients within those communities if they needed houses outside. They had nobody doing general real estate. I worked to form that relationship and bring general real estate to the Tavistock Group for a year or two before it was finalized.”

There are always risks to selling a real estate business. A business that may have taken decades to build is not an easy thing to leave behind. What will happen to the support staff and other agents on the team? Can past clients be assured that they will still receive top-notch treatment even after the business formally changes hands?

“The best advice I can give anybody getting into it is to not just think of themselves as a salesperson, but as a businessperson,” Casey said. “Fine tune your database to include all of the things that make up your day-to-day business work, and do it in an organized fashion. If you want to sell it or you bring in family to work it, it can continue because those systems are in place for them to use.”

Agents should consider the buyer’s track record in the industry and the level of success they have had in similar markets. Problems may arise if a buyer has a history of acquiring offices and then making radical changes. Another warning sign: a buyer who has made multiple acquisitions in rapid succession and is in danger of overextending. By contrast, someone who has demonstrated a willingness to invest their purchases and build on its success is more likely to be a good fit.

Taking a look at the purchaser’s background and past business dealings should be part of the process. Even family members and acquaintances should be subject to a credit check, as a means of protecting the brand and assuring that they are likely to be able to make payments. Agents who own a franchise can face additional layers of complexity that make pre-screening a necessity. The franchise grantor will have a say in who can purchase the business in order to protect the brand. Checking up on the potential buyer’s background and credit-worthiness before taking the matter to the point of franchise may not only save time and energy, but may also obtain valuable information when discussing the potential buyer’s case.

Beyond that, agents should always keep their clientele in mind when preparing to sell. Clients want to work with someone they know and trust, but also someone to whom they can relate. If a firm has mostly older clientele — say, Baby Boomers — they may not be as comfortable dealing with someone in their 30s or early 40s during a brand taking over.

“You can plan your retirement and periodically write letters to past clients, which allows you to stay involved in conversations during the process,” Casey said. “Clients have to know that if they refer someone to you they’ll have the same great experience with all of the same touch points, whether you’re there or not. You have to have a clear structure for every part of the business. If it’s all personality, that’s not going to stay.”

Forging a real estate business into a brand that continues after its founder sells it or leaves it behind may seem as daunting as getting the business started. Ultimately, an agent who begins the succession planning process early and leaves behind a well-organized business plan has a solid chance of watching it flourish for years. CA