Have you ever found a pro in the business that completely changed the way you think about real estate? In this video of The Broker-Owner Challenge, we’re going to hear from the legend himself, real estate coach Mike Ferry. He’ll discuss everything from retention and recruiting to coaching to help broker-owners excel in their business.
How Sam Discovered Mike
Sam Khorramian, CEO and co-founder at Big Block Realty, distinctly remembers how he found Mike Ferry—and what it did to completely change his life. It changed his family’s and business partner’s lives as well, as it’s been one of the most instrumental components to the company’s success.
At around 19 years old, Sam was selling phones at T-Mobile. He had just gotten his real estate license and sold his manager at the T-Mobile store her first house. Making $14,000 on the sale, he felt like he was the richest man in Babylon. He called his friend, a real estate agent, to start planning on ways to spend his earnings. Sam wanted to do commercials, billboards, bus benches, and grow a big business together with his realtor buddy.
This friend laughed at Sam, told him to save his money, and encouraged him to join him at an event called the Superstar Retreat in Vegas—where a guy named Mike Ferry was going to speak. It was there that Sam, a young guy being, was first exposed to the experience of seeing Mike on stage.
Investing In Coaching
What impressed same about Mike Ferry at that event was that he thought so big and had created an amazing life for himself. He was also impressed by so many great agents; there were people on stage doing a hundred deals per year and making a million dollars. Beyond that, the people coaching with Mike were making millions on millions—some even making $50 million in their careers working with him.
At the time, Sam only had about $7,000 left in his bank account. He had blown through half of his riches from selling his first house, and wanted to do something better. Approaching one of Mike’s coaching clients, Sam said, “I have $7,000 left, and I want to sign up for coaching. I don’t know if I can do it, or if I can afford it.”
The client, Brady, told Sam he shouldn’t think twice about coaching. It’s like gravity; it just works. And if you do it, you cannot help but become more successful.
Growing The Brokerage
Success is exactly what Big Block Realty has experienced since those early days. Sam and his team spent the first year learning, as all of the systems were brand new to them. After several years, they started working directly with Mike Ferry on the brokerage side.
When Sam and his business partner Oliver Graf first started working with Mike Ferry, the pair was working out of Sam’s condo. That was their real estate office. Sam would wake up, put a suit and tie on, walk out of his master bedroom, and go into the extra bedroom where the pair had their prospecting station.
From those humble beginnings and with Mike’s coaching, Sam and Oliver have grown Big Block Realty beyond what they imagined. When they met Mike Ferry, the brokerage was at about 200 agents. Now, they’re close to 1,200. Mike’s methods and coaching have been invaluable for the pair’s business.
The Challenge Of Communication
Although Sam credits Mike Ferry as a huge factor in their growth, the man himself remains humble. As he puts it, he had the easy part in Big Block Realty’s growth. Sharing ideas and tools requires brokers to do the hard part and implement those strategies.
Mike believes the biggest challenge that every broker-owner and manager faces today is the lack of communication between agents and management—specifically because of the pandemic. When the pandemic took place, it caught everyone by surprise. Many—including Mike himself—were naive enough to believe that it might last 30 to 60 days. Now, more than a year later, it’s not definitively over.
Of course, there has been a lot of relief worldwide, and the vaccine makes a difference. People are becoming smarter in how they work. Still, the problem in the real estate world is the lack of communication. This is because the gap between those that are selling and listing real estate and those that are not is widening by the day.
For example, Mike cites a report from a huge independent company in the southeast with several thousand agents. They’ve seen 85-87% of all new licensees fail within six months within their organization. Mike doesn’t think that’s a problem that companies have created; rather, it’s a problem the industry has created.
The Importance of Retention
With many people still working remotely, the brokerage business has many independent contractors who are exercising more of that behavior now than Mike has seen in his entire career—and he’s had years of experience.
Mike started real estate as a teen in Huntington Beach, California, working for an escrow company. The next step was working for a title company, then real estate, then buying the company he was working for. When he turned 30, his coaching career took off. Now, just shy of 76 years old, Mike’s only career is talking to and working with broker-owner managers and agents.
Looking at the job of a broker manager, it’s the number one job in real estate today. If you accept the leadership role, one of the most important parts of that position is retention. Retention is keeping those people that add value to your company or can be trained to bring value and be productive. It’s the hardest part of the job.
Mike doesn’t believe the difficulty lies in disruptors—a buzzword he doesn’t care for, as the industry is constantly changing for both the good and bad. Ten years ago, companies like Big Block Realty were pretty much nonexistent. Since a pay-for-play company is more common than a traditional company in most cases, keeping people that have value is the hardest job a real estate broker faces. Even when you’re paying them 100%, somebody else can pay them 102% through a marketing budget or some other way. This is why retention is key.
The Neverending Job of Recruiting
The second most important part of being a broker-owner is, of course, recruiting. While recruiting is never-ending, it solves every single production problem a real estate brokerage could face. An agent’s number one job is to take listings, especially because of inventory.
Current projections suggest that there will be 5 million transactions in the real estate industry this year in the US. Last year, the inventory was record low. This year, it’s record low—but half of the transactions are listings sold. That means somebody is taking listings every day.
As a broker-owner manager, taking listings is the same as recruiting if you’re not prospecting every day. Mike coaches a woman in Los Angeles County that makes five contacts a day, five days a week, to agents in a specific category of production. Last year, she added 25 agents to her sales team, and her goal this year is to add 35. Her production is growing—and it’s only because she makes five contacts a day. If you don’t have time to talk to five people a day, what are you doing all day long?
Make Time For Training
The next major responsibility of broker-owners is training—which is also a neverending, nonstop job. While Mike notes that we’re the most overtrained industry in the world, we’re also the most underperforming. That means that all this training isn’t very good.
Now, yes, everybody has to be on social media. Everybody has to be on their computers all day long. But how about if everybody just talked to four or five people a day about them? For example, all Sam and his team have done for years is revamp. Offering good solid sales training should be at the top of the list.
Mike Ferry has done 7,500 seminars. From March of 2020 through the end of that year, he did 550 webinars at 30 to 45 minutes each for his customers. 99% of the agents that are recruited have no sales background, so if broker-owners don’t train them, they might as well be forgotten the day they start.
Accountability And Productivity
The fourth responsibility is accountability. Holding agents accountable for what they say they’re going to do is not for fun or to let out your anger on them. It’s simply asking questions. For example, you could say: “You said to me last week that you were going to do X, and you didn’t do it. Could you explain to me why? What came up? What got in the way? What were the distractions? Or did you just choose not to do it?” These are simple, fair questions to hold agents accountable.
Another responsibility of broker-owners is tracking per person productivity. Mike believes this is the answer to almost any and all recruiting. When you can show an agent the value of coming to your company because the average agent does X, that’s a huge draw.
For example, Mike got a call from a company in the southeast that wanted him to do a webinar for them. He doesn’t charge a lot of money for those kinds of coaching, as they’re second nature to him. So he told the broker-owner that he would charge him $4,000 for an hour. When asking questions, though, Mike found out some interesting information.
The broker-owner had 300 agents, which was great. He had one office, which was great. But when Mike asked him how many deals he did last year, the number was only 400. Mike told him the truth: it wasn’t worth the broker-owner’s time and money for him to talk to a company that only does one transaction per year per person. That’s not a real estate company; that’s a mistake.
Coaching And Planning
The next responsibility of a broker-owner is, of course, coaching. Everybody claims they have the best coaching company in the world. Mike started his first real estate coaching company in October of 1988, giving birth to an industry. Coaching is everything we discussed so far but on an individual basis instead of a group basis. There’s no such thing as group coaching; it’s impossible, and it doesn’t work. When you have a group, it’s called training. When you’re working one on one, it’s called coaching.
The next responsibility is planning. That means keeping yourself and your company ahead of the curve, and it’s also one of the biggest jobs in real estate. Mike hears a lot of people say that technology is disrupting real estate, but technology changes every day and every hour. While Mike himself is not good with technology, he has a team that understands and keeps up with it.
Planning is trying to keep up with the curve of what’s going on in your community, your town, the market stats, and market conditions. Who’s changing? Who’s buying who? Who’s merging? Which companies are losing agents left and right? Are you part of the absorption of those agents?
The Key To Profitability
The last thing that broker-owners need to be accountable for is profitability. Profitability is always going to be designed by the broker-owner, the CFO, and outside accounting. It’s also the main purpose of a business.
About 15 or 16 years ago, Mike got hired by a company in the northeast with 6 offices and about 120 agents. Their per-person productivity at that time was 3.5 transactions. The president was the minor partner, and the two other senior partners were not really involved in the company. Essentially, they let the president run the real estate firm.
Mike asked them what they wanted to accomplish. Their answer was that their production was not what they wanted it to be. He told them they needed to be willing to invest in their management team, their president, and their agents to make it happen—and it was going to cost them $50,000 a year. Four years later, they went from six offices and 100 people to 20 offices and 650 people. Mike helped them take their per-person productivity from 3.5 to 19 transactions per person for 50 agents.
Anytime you say to yourself, “I can’t do it.” you’re 100% correct. Mike has done this time and time and time again. Of course, moving per person productivity is a huge job for big companies. But if you move it up one transaction per person and you have 500 agents, you’ve added 500 transactions to your company.
With the way the real estate industry operates today—with affiliate services, mortgage title, and escrow—and you move the per-person productivity up one transaction, that’s monumental growth.
Mike coached the president of that company for five straight years. He put the entire management team in a group training call once a week, and they did two one-day seminars each year for that company. As the company grew, the attendance grew with it. Additionally, the management team attended Mike’s annual management retreat. They also had 150 people every year from the northeast either go to Florida or Las Vegas for their annual Superstar retreat.
When everybody puts effort in, everybody gets to share the reward. We’re all so involved in all the magic formulas and magic pills in our industry today. One of Mike’s biggest challenges is trying to keep Sam away from the shiny pennies. What he does best is recruit, retain, and coach salespeople all the time.
Making The Commitment
It’s also important to make a personal commitment to the process of increasing per person productivity. This starts with taking the total number of agents, both part-time and full-time, and dividing by the total number of transactions.
If you’re operating at five or seven or even eight or nine, this is a really good per-person productivity. However, are you committed to doing whatever it takes physically, mentally, and emotionally to increase that by one-half to one transaction in the next 12 months?
The number one thing a broker has to do today to succeed is to commit. Second, they have to participate. Participation is an extended level of the commitment you make to your agents. The best way to summarize per person productivity is this: what is the level of commitment you’re willing to make?
Mike has been helping brokers increase per-person productivity and assisting agents to do a better job of listing and selling homes. After being in the business for almost 46 years, it only works when the broker manager works. Additionally, broker-owners have to understand that not everybody on their staff is excited about their commitment. It can be hard to get full participation and every agent behind the message you’re teaching—so don’t expect it.
The Highest Forms Of Motivation
The word motivation stands for motive to action. There has to be a goal, and there has to be action. Motivation is the name of the game, and it has to be internal.
For example, think of motivational speakers like Tony Robbins, Tom Ferry, Brian, and old-timers like Cavett Robert and Zig Ziglar. The truth is that they will all say the same thing. If it’s not internal, it’s going to be superficial. Earl Nightingale, Mike Ferry’s mentor, said the number one motivator of all people is recognition.
Recognizing people for something, even if you have to search to find out what it is, means the world to the majority of people. It could be as simple as a nod, wink, or handshake. The problem we have today is most of our communication is by email, text, or phone. This requires more effort to give recognition.
For example, Mike has coached a broker named Brian Schmidt for 25 years. Nobody ever leaves this company; in fact, he’s only lost about one agent in the last three years. With 230 agents in 4 offices, they average better than 10.5 transactions per person with a maximum commission split at 70%.
The key is that he gives his team so much recognition. For example, they get the birthday card, the anniversary card, the Christmas card, the Thanksgiving card, the Easter card, the whatever-their-religious-preference card—and he writes them all the time. He sends a card to the agent’s spouse and writes them personally.
Additionally, for every single listing the company takes, he writes a handwritten note to the agent and the seller. He signs every single check that is sent to an agent for the close, and he writes a handwritten note to say thank you.
The second major motivator today is security. Creating a sense of security is done with training, coaching, and communication. The third motivator per Earl Nightingale is money. Why do agents all want us to pay them more money? Because we don’t give them any recognition. It’s really not complicated. If we’re giving people a lot of recognition, they’re going to feel good about what they do.
A Lesson From Disney
Mike grew up in the Disney operation. His kid’s mom was one of the original Mouseketeers, and he worked at Disney all during high school and his first part of college. Everybody in that organization, including Walt, had to be called by their first name.
Here was a 16-year-old Mike, with Walt Disney sitting in the park every day on Main Street in disguise, doing what he called market research. For those that knew him, they could walk by him and say hello. Mike was a street sweeper; he remembers that if someone said ‘Good morning, Mr. Disney,’ they were fired.
However, if they said ‘Good morning, Walt,’ he would acknowledge and smile back. Nobody is too important to be recognized. And Walt Disney was a classic example of that.
Identify Productivity Stoppers
While this is something that is not as common today—especially when working remotely—it’s important to look for productivity stoppers in the office. This could be a variety of things. Is it a policy? Is it a procedure? Is it somebody in the office that is negative, nasty, hostile, angry, or doesn’t follow direction?
Here are some ways to look at it. Is there anybody on your roster that probably should be terminated? Yes. More than one? Yes. Broker-owners hate to admit it because no one wants to have people that are holding them hostage. It might be hard to identify those people in a large brokerage. However, if there are people in a company that should be fired and the broker-owner isn’t firing them, it’s essentially sanctioning incompetence within one’s own company.
An easy analogy can be understood by parents. You don’t let your oldest child slap the heck out of your youngest child, do you? You don’t allow your kids to run into the street without looking both ways, right? If a parent allows that, that would be called incompetence.
NAR says that 50% of agents last year did not do a deal. There are 1.4 million active licenses in NAR, which Mike refers to as “non-active realtors” because that’s what it technically is. While he understands that NAR is a political organization that needs members to pay dues, if the people are not competent to do the job, why would you have them on the staff? This is especially if they communicate with other members of the staff. That would be a prime example of a productivity stopper.
Challenges To Increasing PPP
Outside of communication and participation, there are other challenges to increasing per-person production—even just by one transaction per agent. For example one of the biggest challenges is time bandwidth—being able to be in front of as many people as possible. This includes how to structure and schedule coaching when you have more than 15 or 20 agents.
For example, if there were 12 partners each dealing with 100 agents, it would be easier than have a few partners dealing with 1200 agents. This is especially true with all the complexities that go with that, such as mortgage escrow title, administration, legal issues, communications, getting contracts approved and signed, keeping your broker online, and more. While it’s a huge job, it also comes with a huge payoff.
Breaking Into Coaching
For brokers that are interested in coaching, Mike suggests you first have to study what coaching is. You have to learn how to coach and you have to learn how to ask questions. If a broker-owner has 10 to 15 agents that are loyal to who they are and what their company stands for, they can bring them individually aside by phone, Zoom, or in person.
You can then tell them, ‘I would be interested in helping you go to the next level; how about if we talk once a week for 15 to 20 minutes at a scheduled time? You tell me what your goals are, and I’ll share with you the steps necessary to make it happen.’ It’s important not to take on the whole company; stick with a small number that are the closest to you.
You’ll also want to tell them you’re going to make a six-month commitment to help them increase their production. The biggest job is showing up. After six months, you can take on five more or get an assistant manager to coach 15. You can also hire a coach and let Mike’s company train them.
Overcoming Coaching Roadblocks
What if an agent wants coaching and then doesn’t participate—but they’re good agents? How do you hold these people accountable?
Mike’s company charges $1,000 a month for their premier coaching. Even when paying that monthly amount, it can be hard to get busy agents to be there every week for their coaching call. With several thousand people at all times signed up for their coaching, 10% of them never show up on a weekly basis. It’s not about the money; it’s simply human behavior.
Accountability comes in with how you follow up. If an agent doesn’t show up, will you leave a message? Will you send them a text, email, or call them after hours? When you contact them, you can just ask a simple question. For example: “We had a two o’clock appointment scheduled, but something came up. Could you tell me what it was?” Suppose they say, “Well, I had a last-minute call from a potential buyer.”
The response could be, “Great. Did the buyer buy?” If they answer no, you could then say, “Do you think it might have been better to delay the appointment? Most buyers don’t buy because of the lack of inventory. Would you be better off being on the coaching call next week? What do you think?” They’ll likely agree. Accountability means asking questions, not being upset. No matter how big of a brokerage a broker-owner has, accountability is the biggest challenge for all of them.
Something that Mike and his team have been working on for the past 18 months is getting agents to commit to working their database. With the pandemic and home isolation, most agents are not comfortable showing up. To increase per-person productivity, it’s important to get them to commit to working and expanding their database.
In the early months of the pandemic, Mike told his agents that anybody they call is going to answer their phone because they’ve been sitting in their house with nobody to talk to. The single men and women in real estate, living in a condo or apartment or a home, had virtually nobody to talk to besides the wall or their dog. The contact ratio of Mike’s sales force went up 500% during this time because agents would actually answer the phone.
To assist agents, encourage them to first get rid of the dead beats in their database. Next, they have to set up a plan for adding to their database—because people that like, love, trust, know, and have a relationship with them are going to give them their business. Mike’s agents’ productivity is currently skyrocketing because they work their database.
Raising The Standard
One of the most challenging things to consider is raising any standard in the office to a higher level. Standards encompass everything. When you’re hiring an agent, there should be standards presented as to who your company is, what they stand for, and what they do.
For example, when Mike’s company interviews a potential salesperson, he knows their job will be spent on the phone calling to prequalify or make a presentation. If somebody comes in and applies for a job, his company makes it very clear that they have to make 100 outbound calls per day, five days a week.
He also tells potential hires that the company will monitor how many calls, contacts, and presentations they’ve made. Right off the bat, in the first three minutes of their recruiting presentation, 50% will say they’re not interested. Mike’s okay with that because that’s the standard they have.
Mike did some work for a national company out of Canada and was assigned to do his first program with the Vancouver manager, an ex-police officer for 15 years, and a veteran. He was very strong and very tough. He would give his people a list of what he was going to do for them and what the standards are, then give them a list of what he expected from them. They would both sign it, making it a contract, and he would give the new hire a copy.
On that agreement, they also had to stay at the company for one year before they could leave. If they left within the first year, they owed him $10,000 for the training. Guess what his turnover was? With 400 offices, he had the highest per-person production of the entire company and the highest net profit. While most people are never going to take that approach, every company needs to have standards.
Sharpen Your Sales Skills
Another key for broker-owners and managers is to keep sales skills sharp. The truth is that retention, recruiting, and coaching are all sales skills. Per person productivity increases the sales skill.
Up until last year, Mike was doing a live management retreat every year with 300 to 500 brokers in attendance. There, he tells attendees that if they are not enthusiastic, if they are not energized about the work they do, if they’re not an inspiring person, how do they expect to be a great salesperson?
At one meeting, Mike remembers a guy sitting in row three on the aisle. He was sitting with his head down and not taking notes, just as Mike was on his point about inspiring people. He pointed at the guy and said, ‘How in the world do you expect to inspire anybody with that behavior pattern you’re exhibiting?’ It might be tough to hear, but broker-owners need to start working on their personal sales skills. It will make you a better recruiter and result in better attention, better coaching, and better accountability.
Questions For Mike Ferry
As a pro in the business, our seminar participants had plenty of questions for Mike Ferry. Here are a few of the best that came in during the Q&A portion of Mike’s presentations.
Q: Do you have a “how to coach” training?
A: Yes. Mike has a program on how to be a good coach, which is a six-month commitment. Participants will talk to a coach once a week for six months on how to become a great coach. Coaching is a learned process, and thinking big is a learned process. It’s only advertised through seminars like this one and is not available on Mike’s website.
Q: How does Premier Coaching work, what are 40 intensity calls per year, and how is the coach selected?
A: All the people that work within the Mike Ferry Sales System have done so for a minimum of 5 years and in most cases 10 years. The key to coaching is the system that you coach. If you don’t have a defined system that you’re offering, what do you coach on? Then it’s all hype, motivation, and stories.
Mike’s team are not marriage counselors; they’re professional business and sales coaches. He selects all the coaches, and they are trained three times a year. Additionally, all the coaches get on a weekly coaching and training call with Mike and his staff.
Additionally, if a coach is not providing the services they should be, they terminate them. They operate just like a pro football team; every Monday, each team fires five players. On Tuesday, Wednesday, and Thursday, they bring in five new ones. Mike’s company follows the policy of the pro football teams because they have a great coaching system.
The 40 intensity calls are where Mike and his coaches ask what you’re trying to accomplish and then provide calls on each of those topics. For example, if you want to add 100 salespeople in the next 12 months, you’re going to take as many calls working on that recruiting side as necessary. Mike and his team have an entire recruiting coaching program that focuses just on the recruiting process.
The 40 calls allow for vacations and free time, and the intensity is up to the receiver of the calls. They last 30 minutes and have been an instrumental part in the success of Big Block Realty and many others.
Q: To grow per person production, how many group calls or training calls should be scheduled each week?
A: For group calls, Mike suggests two or three if the groups are small, from 5 to 7 people. In groups, this should be considered training, not coaching. In mastermind groups of 10 or 12, it usually happens that 5 are never going to participate, 3 are going to make all the noise, and 2 or 3 will be kind of between.
The best bet is to do a group training/coaching call with 4 to 5 people max. Try to get people that are within the same boundaries of productivity. These calls should be held at least a few times a week. Of course, the biggest challenge today with all the major franchises is the overabundance of Zooming people out of business calls.
One company Mike works with does 14 Zoom calls a day for their salespeople—and nobody shows up. Less with more intensity is better than more with less intensity and attendance.
Q: Do you offer recruiting, coaching, or training?
A: Yes, Mike’s team is very specific to recruiting and coaching. They’ve divided their coaches into categories: top agents, team training, brand new agents, broker-owner training, recruiting training, and coaching. They break it into categories based on the different coaches and needs.
The big thing is talking to people about their teams and helping team leaders develop. Most team leaders are trying to find a way not to work and get paid at the same time.
Q: Do you coach brokers differently based on area? My biggest concern with coaching is that some of the coaches based out in the Midwest come from a different market than a metro city like New York or LA.
A: Mikes’s team does a simple questionnaire when a person says “I want to be in coaching.” They ask about 30 questions, going through each of the questionnaires before assigning a coach. Because Mike has been doing this work for 46 years, he has a pretty good understanding of North America as well as the European and Russian markets.
It would be highly unlikely that they would assign a coach from Indiana, for example, to somebody in a different market. If it happens, it’s a mistake, and they would correct it quickly. They have to be very market aware.
Read More ➔