Why is profitability such a problem at real estate companies?
Bunting: One thing that creates a problem is that an awful lot of brokers were very good salespeople, but they don’t think in terms of what it takes to run a good business as well as a good sales organization. Burleson: Brokers sometimes get sidetracked by market share or number of transaction sides and don’t relate those to actual profitability. Smith: Owners aren’t doing a worse job than they did in the past. It’s just the environment we live in. We’re faced with two problems: One, there’s tremendous pressure from consumers to lower our commissions. Two, we’re paying our salespeople ungodly commission splits. Many brokers are where the baseball owners are. We’ve paid salespeople beyond reason, and consequently we’re saying, “Gee whiz, we don’t believe in free agency anymore.” In Columbus, the signing bonuses are absolutely ridiculous. Pittman: George, you talk about baseball. The reality is that the admission tickets in baseball probably don’t cover the expense of operating a basebal
