It isn’t easy to successfully challenge a traditional business model—even when your proposed alternative may bring about better returns. But for Arthur (Art) Darmanin and Neil Cresswell, who founded Sellstate Realty Systems Network, Inc. in Fort Myers, Fla., in 2002, that was both the goal and the vision: a national real estate franchise with the tools and programs to attract an elite corps of brokers and agents, and to provide these exceptional few with a better way to take their business to the next level.
“Our plan was to draw a select corps of motivated real estate professionals,” says Darmanin, Sellstate co-founder and CEO. “We were looking for highly qualified brokers and agents to put our value proposition to the test.” Operating in nine states today, with two more on the horizon, the Sellstate model continues to march to the beat of its own drum—achieving growth by design with a dedicated team committed to its innovative business model. In this exclusive interview, Darmanin shares the company’s vision and strategies, and the positive impact the company is having on both agents and consumers.
Barbara Pronin: Why don’t we begin with a brief synopsis of your career path, Art, and how you and Neil came to co-found Sellstate Realty.
Art Darmanin: Together, Neil and I have a total of more than 60 years of experience in the real estate industry, much of it in Canada’s second largest real estate company, where we each rose to some prominence and first joined forces some years ago. My background is primarily managerial, building highly successful brokerages and regions from the ground up. Neil’s sales career soared early, quickly making him one of Canada’s leading real estate agents and brokers, so it seemed only natural for us to put our skills together and partner in a new venture, first in Canada and then again in 2002 when we co-founded Sellstate here in Florida.
BP: Launching and growing a national franchise is a formidable task. How do you divide the workload?
AD: We are both involved in all aspects of the business, but I concentrate primarily on the design and evolution of the Sellstate system, including franchising, broker support, administration, marketing programs, and promotions. Neil’s personal mission is to help brokers and agents achieve their highest goals and to help develop a culture that exceeds customer expectations. He spends a good part of his time traveling the country to support and train brokers and agents. In 2006, my son, Michael, who has international expertise in marketing and technology, joined us as chief operating officer. Michael’s focus on brand image, website design, cloud-based integration and social media strategy is central to our strategy as a national franchisor.
BP: What is it that differentiates the Sellstate model from the competition?
AD: Several things. First, our concept is to do all the heavy lifting for our franchisees so they can focus on recruiting and supporting an elite team of agents. Our brokers have a lower overhead because they require no investment in back-office software. Although they maintain local bank accounts, we provide the administrative support they need through our central processing system here in Florida. We process all the closings, issue 1099s on behalf of the broker, collect all fees the franchise is owed, and manage all the debits and credits—all with a guaranteed 48-hour turnaround time. We also provide all the professional Web design and marketing solutions they need to help them build their brand. And our lucrative agent-sponsoring program, which provides the incentive for agents to bring other agents into the franchise, not only ensures their financial future, but also the guaranteed growth of the franchise itself.
BP: How does the agent sponsoring program work?
AD: The fact is, we want only the most productive and motivated agents working for Sellstate, and we believe that charging them a nominal monthly fee helps to discourage the bottom 20 percent of the agent pool from coming with us. At the same time, we have shown that top-performing agents are the best resource for bringing aboard other top-performing agents, and we encourage and reward them generously for doing that. Our Agent Asset Development (AAD) Program pays 100 percent commission—95 percent to the selling agent, and 5 percent to the sponsoring agent in the form of a monthly income. It’s a real opportunity for our agents to earn a growing monthly income for life, in addition to their earned commissions, and every agent has an equal opportunity to earn this lifetime earnings benefit. We can show quite graphically that our top agents consistently earn more than the industry average. Our sponsoring program pays out so well that we publish the numbers every month on our website.
BP: Can you describe how your technology-based model gives your agents a competitive advantage?
AD: Sellstate affords our brokers the ability to provide their agents with the industry’s leading technology package, which we call Power Suite, as part of our value proposition. Power Suite allows agents to remain in control of their business whether they are in the office or traveling the globe. The system includes imperative tools, such as an IDX-powered mobile responsive website, CRM with drip campaigns, direct-to-agent lead generation, detailed neighborhood demographic reports, design and marketing centers for custom campaigns, and over 30 additional tools. Best of all, our single-login, cloud-based system keeps their leads, tools and contacts at their fingertips no matter where they are.
BP: What does all this mean to the consumer?
AD: It means the consumer receives unparalleled service from the industry’s most knowledgeable and experienced agents 24/7, from wherever they happen to be.
BP: How has your company evolved over the years, and how were you able to survive through the last downturn?
AD: We entered the market not long before the downturn, but we had no debt and our strategy was always to walk before we could run. So despite the downturn, we were able to grow strategically, taking the time to get the banks on board with our model, secure our first brokers, and get all the documentation in place. Also, we have opted for smart offices, strategically located and no more than 2,500 square feet in size, to keep the overhead low. We believe our patience and careful planning are being rewarded with a growing interest in the Sellstate concept now that the downturn is behind us, although we are convinced that our business model will succeed no matter the state of the economy.
BP: How are you attracting and retaining top agents, millennials in particular?
AD: Our value proposition and our agent sponsorship incentives are attracting more and more top performers, including millennials, who understand and appreciate our technology and the earning power of our business model. They also appreciate the relationships we have forged with Zillow and Homes.com. Listings are uploaded automatically and free of charge for our agents on Zillow and receive preferred listing status on Homes.com—and the resulting leads go directly to the agent. Combine this with our advanced education modules and it all adds up to a satisfied corps of agents. In fact, one of our agents here in Florida told us recently, “If a broker offered me $50,000 in cash, I wouldn’t leave Sellstate.” That’s because a quality agent, with the right coaching, does not find it difficult to earn a seven-figure annual income with us.
BP: What do you see as your biggest challenge going forward?
AD: Finding the right people and staying true to our plan for strategic growth, even in the face of increasing interest in our unique value proposition from independent brokers nationwide.
BP: Where do you see your greatest opportunities?
AD: We are now poised for rapid national expansion. We presently have offices in nine states—California, Nevada, Colorado, North and South Carolina, Nebraska, Connecticut, Maryland and Florida—and we expect to expand our footprint soon into Texas and Arizona. We are also actively marketing regional opportunities in other territories. We believe this is a great time for people to come aboard with us. Our value proposition proves itself every day, and the opportunity has never been greater.
BP: In your opinion, what is most critical to your firm’s success going forward?
AD: Our aim is to become the go-to franchisor, so I can tell you that not a day goes by when our executive team is not brainstorming and developing new ways to make life easier and more productive for our franchisees and our agents. At the same time, we know it is imperative that our standards remain high. We want to grow with the right people to ensure the best possible experience for brokers, agents and consumers.