My first company

Returning to Dallas from a brutal stint in the oil business in the very early 1980's, I had no direction where I was headed.  A good college friend of mine was with a two man commercial real estate company specializing in land and suggested I talk to the owner/broker.  This was back in the high flying times where every agent had a Rolex and drove a BMW.  I figured I could handle that and, since my broker already had both, he must know what he was doing. 

The broker took a chance on me and I joined the company.  This turned out to be the best and worst thing that ever happened in my real estate career.  It allowed me to get my real estate license (which was the best thing), but I was taught absolutely nothing about the business.  I had no help, no training, no direction, no nothing, except some beautiful office space.  I learned early on my job was to do the "grunt work" research and run the personal errands for the broker (ie: pickup up his laundry, delivering surveys, etc.). 

As simplistic as this may sound, and I am not exaggerating here, this is how selling land worked back then.  The agent would locate a land owner, any landowner, and ask if they would sell.  If they said yes, the agent would call one of thousands of buyers and an offer would be submitted that day, usually sight unseen. It was a feeding frenzy. 

Financing was never a problem because there were thousands of lenders eager to get their money on the street.  And who needed market knowledge or comparables?  The land was usually sold to another buyer before the contract closed.  This is called a "flip".  Agents brand new to the business were making hundreds and hundreds of thousands of dollars simply by putting a buyer and seller together without any comprehension if the deal made sense or not.  As everyone knows, the market fell apart, people went to prison (lenders, agents and appraisers alike) and many real estate companies went out of business.

One of my duties for this particular broker was to spend days on end at the Collin County courthouse drawing out diagrams of land ownership from the tax rolls by hand, then trying to find out how to get in touch with these landowners.  It was laborious, tedious, tiring work, but it instilled in me the knowledge and confidence that I could do that kind of work in order to be successful if I had to.  It never helped me make a deal at that company, but that inner strength and willingness to do what it takes paid off much later.

Long story short, I knew no more about real estate the day I joined the company than I did six months later when I left.  My broker was shrewd (and not in a complimentary way), untrustworthy, and a user of people.  After 6 months, we had both had enough of each other and were relieved to part ways.  I never came close to making a deal while I was there, and although it took awhile, I paid him back every penny of the draw.  We never crossed paths again and the last I heard, he was out of the business. 

My Second company

I was now floundering again and not sure where to go.  I found my second company through the paper.  The ad said this was a small, growing company with good training, and that was exactly what I was looking for.  I was happy to join them, and although I didn't know it at the time, that turned out to be the turning point in my career.  I made just enough money to stay afloat and get some experience under my belt.  I also learned what it took to become a real professional. 

This was not the wheeler-dealer land flip side of real estate.  This was solid, nuts and bolts commercial real estate where things still had to make sense, comparables arrived at, sale prices had to be justified, and a case had to made to support the pricing.  In a year's time, the pendulum had swung the other way within our industry from the land flip days.  Now lenders became overly cautious about putting their money on the street so it was a very difficult time to enter into the business.  This was the tough environment where I cut my teeth and truly learned the craft of selling real estate. 

Those were also the most enjoyable times of my real estate career.  None of us made much money, but we all got along great.  The company was comprised of about 14 relatively new agents, most in their late twenties to early thirties.  We cut up, hung out, played softball, flag football, you name it.  It was a true cast of characters.

We had avid golfers who would burn a day at the drop of a hat if someone threw out the hook "Anyone want to go play".  We had agents who spent the entire morning reading the paper.  Some liked to just walk around the mall.  Others would catch a movie during the day.  One had a penchant for tracking down pretty girls from their license plates.  With that kind of self discipline, how they thought they could make it in real estate I will never know, but it sure was a fun office to work for. 

Business Must Be Good

It still brings a smile to my face remembering the time the owner/broker walked around the corner to see all of us lined up pitching quarters against the wall.  He had the perfect remark ... "Business must be good" and he wasn't smiling.  Although we all scurried away, we laughed about it later.  But he was right to be disgusted with this display of nonchalance on our part.  He knew and we knew we should have been out trying to make things happen.  Deals don't just fall in your lap.

Tepid water in a warped glass

As business slowed down, the owner/broker decided we had to make one of two choices as a company.  The first was to let go a good number of our agents and stay in our current, nice, office space.  The second choice was to take much less expensive office space and keep everyone, and that's what we did. 

Our "new" office space was in the oldest office building north of LBJ Freeway.  The elevator rattled like it was going to drop to the floor and the air-conditioner always seemed to be out.  None of us were proud of it, but the die was cast.

One hot summer day we had some rather high profile clients (with some beautiful, class A office space in Dallas) visiting our office.  As usual, the A/C was on the fritz, so it was stifling hot inside our suite.  That was bad enough, but after a few minutes, the clients asked for some ice water.  We didn't have an ice-maker, so all we could offer them was a glass of warm water served from the tap.  And the only "glass" we had was a plastic cup that had been warped by our dishwasher.  It is funny to think about now, but that one instance kind of set the wheels in motion that maybe it was time for me to move on.  I had to get into a more professional environment.

The end result of company number two

With the exception of four of us (including our broker), every one of those other agents was out of the real estate business within 2 years of when I joined the company.  Although it was obvious to me that some didn't really belong in the straight commission world of real estate (no self discipline), others surprised me they didn't make it.  They were sure a lot smarter than me and they were much better connected.  The difference was, I worked hard and smart.  This taught me early on you cannot judge how well a person is going to do in real estate by their degree or pedigree.

Why did that company fail?  As with my first and second company, quality leads were never filtered down to the agents.  Everyone was out on their own trying to survive (including the lead broker).  There was no help, coordination, or direction. 

From the agent's standpoint, when you are giving half of what you make back to "the house", the good ones are going to want more than office space and a phone.  The heavy hitters don't mind creating their own leads, but they also want quality leads to work.  If they don't get that, why not go out on their own, make half the number of deals, work half as hard, and end up with the same amount in their pocket since they don't have to split commissions? 

The weaker agents are always the last to leave and turn out the lights.  They will hang in there until they just cannot pay the bills or are asked to leave by the company.  They don't provide much in the way of production to the company, so they don't ask for or expect much from the company. 

From the viewpoint of the company, they don't know how to capture the quality leads to pass on to their agents, so the only thing they have left to offer their agents is a huge split in favor of the agent.   This is what spawned the multitude of companies that offer their agents a base payment to "the house" (say $20,000), and then the agents are on a 100% split their way. 

To this day, I still have a great amount of admiration and appreciation for the owner/broker of that company.  He taught me how to be successful by his actions.  He was meticulously detailed, organized, always prepared, and smart.  He knew his market better than anyone.  Totally, 100% honest.  He was everything I was looking for as a mentor, but unfortunately, I just knew deep down I wasn't going to get where I wanted if I stayed there.  I would never be able to compete with the larger companies for the higher quality listings because we didn't have the track record or name behind us.  I was very sad to leave, but I never looked back.

My third company

I immediately joined an established, old-line Dallas commercial real estate firm.  Although it did not have a national presence, it had good name branding within Dallas and a great reputation.  I believed I would at least be able to compete for the quality listings, and as it turns out, I did get my share.  We had some very prestigious office space, professional marketing material, and great administrative support if needed.  All the bells and whistles.  But other than that, we were on our own to find and make our own deals.  We had to dig up all of our own leads.  For this, I was to contribute 50% of what I earned back to the company. 

It took me about two years to figure out something was wrong with that picture.  I was making at least $100K per year, which isn't anything to sneeze at.  But that meant I was also making the company at least $100,000 per year.  I had to ask myself what I was getting in return.  I rarely used their offices and support staff because I had my own home office.  I had to dig up every lead because nothing in the way of a lead was ever handed to any of us.  And this wasn't because the company didn't want to.  They just didn't have any idea how to create new business for their agents.   Two things happened my last year that set my course to leave.

a very expensive printer cartridge

The first instance was so insignificant, I'm sure they never thought twice about it, but I did.  Even then, I was doing all of my own word processing and using my printer exclusively, not theirs.  When my printer cartridge ran out one day, I knew their policy, but still decided to ask if they would replace it for me.  My reasoning was since I was not using their printers nor their support staff, this was the least they could contribute to my cause. 

The reply from their broker manager (of which some of my 50% split was going to) was "Tom, we cannot do that because it would be setting a precedent.  We cannot purchase business equipment for our Realtors, even in a case like this".   As their top producer, that just rubbed me the wrong way.  Of course, on principle they were right, but that one incident made me really start to question why I was there. 

I guess it was inevitable I was going to leave some day, but it probably would not have happened so quickly if not for that printer cartridge.  It just really made me question how much I was giving versus what I was getting in return.  And that, my friends, is why 99% of Realtors leave their company.

There is a quick followup to this story.  Several months after I left the company, I secured several nice sized listings along with the opportunity to sell five of Aetna's office showroom buildings in the Dallas area.  You could say that $100 printer cartridge cost the company about $200,000. 

The clincher For company number three

The second instance occurred several months later.  Every Monday morning, we met at 8:00 to go over our activity.  We went around the table and each of us reported to our broker manager (and the owner of the company if he was there) what we had going.  Those were pretty tough times in the early 80's.  I don't know about the others, but I was out doing my best with virtually no help from the company.  The pressure to make money was tough enough, but to have to come in every week and justify what we were doing just drove me to the breaking point.

One morning I had just had enough.  When my turn came up, I asked the owner of the company in front of the 14 or so others in the group plus the broker manager "We are all out working our tails off in a very tough market to make deals.  What are you doing for us?  Why aren't you out there networking and bringing in deals for us to work?"  To put it mildly, you could have heard a pin drop.  To this day, I don't remember what his response was, but I remember the remainder of the meeting was frosty.  I knew the handwriting was on the wall for me.

Should I have challenged the owner in front of the other agents (not to mention his broker manager)?  Probably not.  Did I know it might get me fired?  Yes.  Did I care?  Obviously not.  Did it do any good?  Nothing changed. 

I guess when someone reaches a certain point, they just say what they think and let the chips fall where they may.  I was at that point.  If they had fired me right then, I was ready to move on.  They didn't, (probably because I was their top producer), but I had now been branded as a troublemaker.  Several months later, we parted on amicable terms. 

my own Commercial real estate company

The day I left this last company, I immediately rented an executive suite and started my own commercial real estate company.  It was called Tom Grisak Commercial Real Estate, Inc.  The hard work I had been putting in started to pay off.  I was doing the exact same thing ... creating my own business and putting deals together.  But now I didn't have to split commissions with anyone.  I began making about three times what I had ever earned before, so this is proof positive (in my mind anyway) that things tend to happen for a reason.

It all comes down to Trust Between the Realtor and agents

If it's one thing I have learned above all else about why real estate companies either fail, flatten out, or flourish, it's the following.  The agents need to know their broker is out working as hard or harder than they are, and not just for himself.  He is trying to send as much business to his agents as he possibly can, not sitting on his hands waiting for his agents to close deals so he can line his pockets.  Conversely, the broker has to know his agents are not only taking great care of the clients he directs to them, they are also not just sitting on their hands waiting for deals to come to them.  They are making things happen, thinking of ways to grow their business, and working hard and smart. 

There has to be a trust relationship between the agents and their broker to build and maintain a quality real estate company, and believe me, finding that balance is difficult.  But when you reach it (as we like to think we have) you end up with a successful real estate company and happy people ... all the way from the administrative assistant to the agents!

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