Meet David Weir’s exit strategy: His children
Susan Doran
Other
Veteran broker David Weir has been in the real estate business long enough to have witnessed the proliferation of teams become one of the biggest phenomena in real estate.
“This business model certainly wasn’t in vogue when I started in real estate almost 20 years ago – there were very few teams at all,” says Weir, who is a top producer with Royal LePage ProAlliance Realty in Quinte West (Trenton) and Brighton, Ont.
He’s a registered government relocation specialist as well as a retired Canadian Forces air traffic controller. A large percentage of Weir’s clients are federal government employees serving Canadian Forces Base Trenton.
“That’s my niche,” he says.
Recognizing a potentially productive trend, around 2005 Weir decided to jump on the real estate team bandwagon. “This seemed to be the way of the future,” he says.
But the team concept is a double-edged sword, he soon discovered. On the plus side, “You can increase your income and/or minimize your time working, plus improve your bottom line via economies of scale.” On the other hand, “You could be taking time and effort to train future competition and be giving business away without even realizing it.”
Given the amount of team breakdowns he has witnessed in the industry, Weir is aware that the team approach is not for everyone.
“You can lose control of quality and have people who in the long term aren’t going to stay. And you can have conflict amongst the team and fireworks will fly.”
Weir believes he has found a solution to all that… namely, multi-generational family teams. He thinks that such teams could be the key to a successful “exit strategy” when older real estate professionals prepare to slow down or retire.
“There are more and more multi-generational teams in the industry – parents and their children forming teams,” Weir says. “It’s nice to be able to take your kids forward and pass something over to them. Who better to continue the (team) and service so you haven’t invested all that time, energy and money for nothing?”
In order for this strategy to work, sufficient income must be generated to support all parties and the younger generation must be interested in becoming involved.
Weir speaks from experience. His own team, comprised of six people, includes his wife Donna and now their two children (Kyle and Chelsea), as well as Victoria Parker, his son’s girlfriend. The other team member is salesperson and non-family member Doug Bald.
“Frank and open business discussions can certainly facilitate the process of bringing your children into the business. Of course, these discussions should probably not happen at the Sunday dinner table … or so my wife has told me,” says Weir with a laugh.
He also recommends bringing children into the family business well before their parents’ retirement, so the younger generation has time to get extensive training and mentoring, become familiar with protocols, and build a rapport with existing clients, builders, lawyers and other business associates.
“We represent an example of a possible future business model for our profession,” Weir says. “My wife and I, both in our mid-50s, represent the average age of Realtors in Ontario. Unfortunately I would suggest that this doesn’t bode well for the future of our industry. Without younger, well-educated people entering and being successful, I think our profession may languish.”
The multi-generational team approach seems particularly apt in this economic environment where so many young adults are having a tough time finding sustainable employment, Weir says.
Entering real estate as part of a family team can help them get up to speed and meet the industry’s ever-increasing expenses and challenges quickly “and gain instant credibility within the marketplace by aligning themselves with a proven performer,” Weir says.
Admittedly, partnering with family members “doesn’t alleviate all issues within a team environment,” and care must be taken to ensure that business stress does not sour the family dynamic, he says.
“However, it would appear to provide a platform where younger people can find employment in a challenging job market and older experienced Realtors can transition to a slower-paced life without giving up all of their income.”
The latter point is notable in a business where most people traditionally expect to retire without even the benefit of a small pension.
“With a family member taking over the business there is an opportunity to leave the industry and have some form of income through a business arrangement with your children,” Weir says. “This could be accomplished by them buying your business outright or through some sort of partnership going forward whereby they slowly take over and you get paid a referral” or some other type of fee on a regular basis.
As well, semi-retired parent/salespeople who still want to keep a foot in the door could continue to earn income through providing various services to the family team, such as mining leads, or working with the team part of the year, Weir says.
From a business perspective, it’s good to know that “you aren’t going to leave the profession and not have some residual income for all your years of hard work and the goodwill you have created with your database of loyal clients,” he says.
A similar strategy could be worked out between two unrelated salespeople. However, says Weir, the arrangement appears to have more of a chance for success if it is between a parent and child or other close relatives.
“You would expect that clients would be more apt to deal with the offspring of their former Realtor than with a stranger who has replaced the agent who they have had the successful relationship with,” says Weir. “You would also hope that the level of service given your clients would be more in line with your own standard.”
Despite joking that he has given his children the nicknames “Exit” and “Strategy,” Weir seems in no particular hurry to leave the business.
“Except for boating I don’t have any hobbies,” he says. “I really like what I do but I want to take more time off.” He estimates that he and his wife will be “going into transition mode in the next two years, throttling back and letting the kids go to the forefront.”
We all want what is best for our children and hope that when we decide to slow down or retire the income will be there to provide us with some comfortable golden years. Having your children take over the family business is one way that may all be possible, Weir says.
“Just make sure the kids have lots of pre-signed cheques and self-addressed envelopes to your Florida address!” he says.
© 2015 REM Real Estate Magazine