What makes a real estate principal valuable?
It’s an age-old question, but there’s definitely no one-size-fits-all answer.
What made an agency principal valuable 15 to 20 years ago is the polar opposite of what defines their success today.
It has to. The industry has changed. The market has changed. And, most importantly, real estate agents have changed.
What agents need, and want, in principle is vastly different now to when I started in real estate and will, no doubt, continue to transform at an ever increasing pace.
The big question is – can you keep up?
As the industry continues to evolve, principals must adapt and embrace new responsibilities to stay relevant and lead their agencies effectively.
The role of a principal: then and now
In the early 2000s, the principal was the cornerstone of every real estate agency’s success.
They were the gatekeepers of knowledge, the providers of training, and the bearers of the brand’s reputation.
Back then, a principal’s value was largely tied to the brand they represented, the relationships they had in the community, their track record of local wins with happy clients and the internal knowledge they shared with their agents.
Agents relied on their principal, not just for guidance, but for the techniques, strategies, and tools they needed to do their job well and succeed.
Twenty years ago, the industry was defined by a top-down approach, where the principal’s role was to lead, mentor, and ensure the agency’s brand was synonymous with success.
But, around 2015, I started to notice a shift in the industry.
Agents themselves began to rise up and started to challenge the traditional role of the principal.
All of a sudden, digital marketing meant agents could build their own personal brand, and often it was independent of the agency’s brand.
Coaches, trainers and real estate influencers started empowering agents to become ‘attraction agents,’ and to focus on making not just their listings more visible, but themselves.
Agents were able to use VPA to build a personal brand and, quite quickly, a disconnect between agents and principals began to appear.
The challenges modern principals face
As agents became ‘the’ brand, as opposed to the agency itself, the traditional authority and influence principals once held started to dissolve, and agents started to question just how valuable a principal was.
The bigger an agent became, the more they wanted higher commission splits and the more they started driving their own marketing efforts, handling their own advertising, and even seeking external training from the growing number of coaches and trainers.
Principals found themselves wondering how they could remain relevant and continue to add value in an era where agents were becoming increasingly self-sufficient.
One of the key issues for principals was that, with agents building their own personal brand and strategies, the agency was sometimes faced with multiple agents heading in different directions.
Principals faced the possibility of a fragmented and diluted agency brand.
So, for those of you facing this situation now, is the game over? Or are there strategies you can use to retain the brand identity, run a cohesive agency and support the individual ambitions of your agents while striving toward and reaching a wider, more holistic goal?
What makes a principal valuable today?
To remain not just relevant, but intrinsically valuable today, being a principal is no longer just about providing training and overseeing day-to-day business operations.
You have to be a visionary leader who can align the diverse goals of your agents with the agency’s overall mission.
There are five key strategies you can use:
- Vision and alignment
Every principal needs a vision, or a mission, their agency is striving toward and every agent needs to be able to see where they fit in that plan.
It has to be a vision big enough to fit your various agents’ visions and goals inside it and the agents need to see how their personal goals can be achieved within the framework of the agency’s vision.
This means you will need to be clear, inspiring, and strategic in your leadership, ensuring that the agency’s mission resonates with every member of your team.
- Lead generation and business planning
One of the biggest ways a principal can show value to the modern real estate agent is through providing a consistent pipeline of the one thing every agent holds dear – leads.
In the past, agents often relied on their own efforts to generate leads, but this approach can be limiting and inconsistent.
Many agencies also don’t have a systemised, scalable and sustainable pipeline of seller leads their agents can tap into, so, if you do, you put yourself into an invaluable position in terms of, not just retaining your existing agents, but attracting new ones.
And that will help ensure the agency’s long-term sustainability and success.
- Talent development
Building a bench of talented, ready-to-go agents is another area where principals can add significant value.
This could involve creating a talent development program that nurtures new agents from entry-level positions all the way through to fully-fledged sales professionals.
If you raise the standard of what it means to be a ‘good’ agent, you can ensure a high level of service and achievements across the agency, which will not only make you more competitive in the market, but see you positioned as an industry leader where agents want to work.
- Performance management
Effective performance management is also crucial in today’s real estate industry.
Every team member, not just agents, needs individual numbers they can use to measure whether they’re having a successful day or not.
Principals need to establish clear metrics for success across all roles within the agency, from front desk staff to top-performing agents.
Providing measurable goals and regular feedback not only enables you to help your team improve, it provides a pathway to success for individual agents and highlights their role in the overall forward trajectory of the agency.
Basically, when a principal supports an agent in running a super team or an Agent Business Unit (ABU), they create a partnership where each person’s roles and responsibilities are clearly defined, including the selling principal or the head of the ABU.
The principal’s role is not just to focus on operations but to help ensure that revenue generation remains the primary goal.
This means guiding agents to hit critical targets while the principal provides operational support and steps in with solutions if issues arise.
It’s a collaborative model that ensures smooth operations without duplicating efforts, while also fostering leadership growth within the team.
By taking this approach, the business can achieve more than just the sum of its parts — the synergy between the principal and the agents can lead to exponential success.
- Community and client engagement:
Principals should also take the lead when it comes to fostering strong relationships with the community and clients.
While agents often focus on building their personal networks, the agency itself should have a robust strategy for community engagement and client nurturing.
This ensures the agency’s brand remains strong, that it continues to attract new business opportunities and it creates an atmosphere for each team member, agents included, to feel a part of something ‘bigger’.
Of course, agents who go solo can build strong relationships within their communities, but they often lack the depth of connections that come with being part of an established, longstanding business.
A larger brand can offer more community involvement through partnerships with other businesses, charitable donations, and event sponsorships.
Together, they can create a larger, more impactful presence within the community, supporting each other and building stronger connections.
The future for real estate principals
In a world where agents have more independence and resources than ever, it may appear as though the role of a principal is far less crucial than it once was.
But the opposite is actually the truth. Internal PR plays a key role in fostering collaboration between principals and agents, helping to ensure that everyone sees the bigger picture.
When agents understand the full scope of the business, they gain a deeper appreciation for the benefits of being part of a team.
This understanding starts with bringing on the right people—those who are open to the values and culture of the organisation.
A collaborative, transparent approach strengthens the team, where both principals and agents understand each other’s roles and work towards common goals.
This makes it easier for everyone to see that while they might have different responsibilities, their success is intertwined.
Ultimately, in a perfectly balanced business model, you have a longstanding organisation with deep community connections that runs smoothly, co-branding with agents who focus on bringing in key clients.
This “one plus one equals five” synergy creates an ideal environment for growth, fostering internal succession plans and attracting entrepreneurial talent.
Principals mentor future leaders while ensuring operations are seamless, cultivating a legacy of success.
Loyal agents can expect fair compensation, support, and a clear path for progression, resulting in a collaborative and thriving ecosystem.
This model promotes a seamless transition of leadership, cultivates a sense of belonging, and enhances the overall strength of the business.
