By Katy McLaughlin
Wall Street Journal
In early September, Gary Gold, executive vice president of the Beverly Hills-based brokerage Hilton & Hyland, got a phone call and confronted a question: “What specifically can we do to reach our goals this month?”
Mr. Gold, who currently lists $77 million worth of luxury homes in Los Angeles, wasn’t talking to his boss—the call was from his coach. Mr. Gold pays Debbie Holloway, one of 50 real-estate coaches at the company Tom Ferry-Your Coach, to force him to achieve his goals. For $1,000 a month, Mr. Gold gets to talk to Ms. Holloway for a half-hour a week, attend company seminars and access online training materials.
Prodded by the call, Mr. Gold presented a detailed market report to a client, convincing him reduce the price on his property to $3.95 million from $4.3 million. The listing is now attracting more interest, Mr. Gold says, putting him back on target to close shortly.
“Tiger Woods knows how to play golf, and he still has a coach,” says Mr. Gold. “It’s all about accountability.”
Real estate coaches emerged in the late 1980s and early ’90s and proliferated throughout the housing boom. Many coaching services folded during the housing bust, and some larger outfits lost about a third of their clientele, companies say.
Today, as the real-estate industry bounces back, agents and brokerages are returning to coaches to help them figure out a raft of new technologies, manage increasingly large teams and offices—and help them cope with the pressures of being fully commissioned salespeople. Coaches who run the biggest companies maintain a guru-like status in the industry, garnering followings of thousands of agents.
There is Tom Ferry-Your Coach, the Irvine, Calif.-based coaching company, which says it has more than 1,800 individual clients. Last year, the company saw revenue rise by 38% compared with the year prior, to more than $10 million, and expects revenue to grow to $15 million this year, Mr. Ferry says.
There is also Buffini & Company, a real-estate coaching specialist based in Carlsbad, Calif. The company doesn't disclose revenue, but says that membership has grown 26% since last year, to 10,500 clients today, and that it is on track for the same growth this year.
Keller Williams MAPS Coaching, a division of Austin-based Keller Williams Realty International, which has 107,000 agents, says it currently has 1,605 agents in one-on-one coaching, more than three times the number it had in 2010. Agents who use coaching earn 315% more gross commission income than Keller Williams agents who don’t, says Dianna Kokoszka, chief executive of the coaching division.
In July, Century 21 made a deal to offer its 100,000 agents a discount on coaching services from the Mike Ferry Organization, based in Las Vegas. Mike Ferry, who is Tom Ferry’s father, was among the first big names in real-estate coaching. The elder Mr. Ferry says his 2013 revenue was $28 million, up from $22 million in 2009.
Century 21 Chief Operating Officer Greg Sexton says he was initially skeptical of outside coaching. But eventually, “I came to realize that those agents in and out of our brand will go to coaching regardless.”
A typical coaching arrangement involves a year-long contract, a fee between $400 to $1,000 a month and bi-weekly or weekly phone calls, plus access to seminars, large rallies and digital materials. Coaches might instruct agents to stand up while they talk on the phone, for added energy; or to end sentences on a downswing, to sound more authoritative. Coaches also help brokers make hires and figure out web and social-media marketing.
“Without coaching, I would be 10 years behind and I would have spent millions of dollars doing the wrong thing,” says Jane Fairweather, a Coldwell Banker agent in Bethesda, Md., whose eponymous team earned $3 million in commissions last year. Ms. Fairweather says she spends about $20,000 a year as a client of Ken Goodfellow at Goodfellow Coaching and Consulting in Ottawa, Canada, and has learned such strategies as creating websites around specific market niches and producing reports that convince sellers to drop their asking prices.
Some of the top coaches have spent most of their careers in coaching and training, not selling real estate. Mike Ferry, 69, only worked selling real estate from 1970 to 1973; Tom Ferry, his 44-year-old son, got his start working for his dad’s coaching business when he was 19.
Coaches generally preach motivation and hard work, but each has his own specific strategy. At a recent event for about 2,000 people in New York where former Mayor Rudy Giuliani was a guest speaker, Buffini & Company chairman and founder Brian Buffini, 47, spoke with a light Irish brogue and astute comic timing on how to generate referrals. He generated big laughs from the crowd, even as he detailed his systematic approach to marketing to a sphere of influence. One suggestion: Pop by clients’ homes with a pumpkin pie and a note reading “Thank you for your business. I’m never too busy for any of your referrals.”
There are no state or federal license requirements for people calling themselves real-estate coaches, nor for other types of life, business or health coaches. Some opt for voluntary credentialing from a variety of organizations; the largest of them, the International Coach Federation in Lexington, Ky., credentialed 11,735 coaches last year, over twice the number in 2008. Some companies, such as Tom Ferry, use mainly active real-estate agents and brokers who coach part time; others, such as Buffini, use full-time coaches who have been trained in the company’s system. Some outfits, including Goodfellow, say they only coach agents earning over $500,000 in annual gross commission income; others accept newcomers.
While many coaching companies say agents using their systems earn far more, such results aren’t typically promised in contracts. One common complaint on online consumer-review sites comes from agents who signed contracts with coaching companies but failed to improve their sales, and now want to stop the service.
“When you’re in a contract, we enforce it. You can’t get out of it,” says Mike Ferry. Buffini says it releases unhappy clients, while Keller Williams says it is “lenient.” Mr. Goodfellow says he doesn’t ask clients to sign a contract at all.
SiBelle Israel, 35, says she signed up for coaching at one of Tom Ferry’s summits in 2011 while she was a real-estate agent in Santa Barbara.
“It’s a feeling like you’ve been enlightened and you’ve found something to believe in. I used to joke that I joined the church of Tom Ferry,” says Ms. Israel. Coaching, however, was expensive and not helpful, and her contract was renewed for a second year without her approval, she says. She hired a lawyer and stopped payment on her credit card, she says.
“We work with the client to come up with a solution that best serves both parties;” however, “we cannot always honor their initial requests,” Mr. Ferry said.
Some agents say they have noted a sharp increase in sales pitches by coaching companies in the past year or so.
Pamela Liebman, president and chief executive of the Corcoran Group in New York, says that fewer than 2% of the agency’s 1,700 agents use coaching.
“They think: ‘Why would I ever do this? I don’t need to be baby-sat,’ ”she says of her agents. “They think, ‘I know more than they do, especially in NYC.’ ”
Source: Wall Street Journal
Tress Realty Group compiles some of the best real estate news, tips, and information for buyers, sellers and investors.