Lee Nelson is a freelance journalist from the Chicago area. She has written for Yahoo! Homes, TravelNursing.org, MyMortgageInsider.com, and ChicagoStyle Weddings Magazine. She also writes a bi-monthly blog on Unigo.com. Contact Lee at firstname.lastname@example.org.
Guidelines to Semiretire From Real Estate
If you’re ready to take a step back from your company—but not leave the real estate business entirely—these tips may help.
November 21, 2018
Mary Poola is a lot less stressed these days. She gave up her role as designated broker and co-owner of Heritage Properties in Niantic, Conn., in June, when she and her partners sold the business to William Raveis Real Estate, a large, family-owned real estate company in the Northeast. Poola now works strictly as an agent for Raveis. She didn’t completely retire—she semiretired.
“The industry has changed tremendously since I started 34 years ago,” says Poola, adding that as a broker, she wore many hats. “I just knew if no one could do my job, and I woke up not feeling well one day, I didn’t want 40 people waiting for me to help them.”
So instead of leaving the industry completely, she joined a new wave of brokers who are stepping back into sales, leaving the demand of running a brokerage behind. “You have to do everything at 110 percent,” she says about her previous role. “That’s why I needed to change.”
Semiretiring from real estate might not be for everyone, but here are three important reasons it might be the right path for you.
- Additional retirement income. Some brokers continue in real estate sales even after they hand over their management reins because they need some additional income for retirement. Remember, it’s more and more common for retirees to continue some form of work to make extra money.
- Ensuring clients receive consistent service. “I think letting go and trusting that clients will continue to receive the same level of professionalism and personal service with someone else is the hardest part for a broker,” says Susy Hurlbert, CEO of the Eastern Connecticut Association of REALTORS®. Associations could become resource centers for practitioners wanting to semiretire, helping to facilitate brokerage transitions, provide limited referral services, and offer education in financial health and succession planning, Hurlbert suggests. In fact, her association has scheduled an attorney to speak to members about these topics.
- Keeping a piece of your legacy. Many brokers may feel their business is “their baby they have raised from the beginning,” says Bubba Mills, owner and CEO of Corcoran Consulting & Coaching in O’Fallon, Ill. For micromanagers who believe their brand’s integrity depends on their involvement in the business, semiretirement can be a way to maintain some control. “They always have to be the problem-solvers and have their fingers in the mess,” Mills says. “When they are no longer the decision-maker or the solution to problems, it can hurt them.”
Taking the Semiretirement Leap
If you want to keep working but pare down your duties and hours, below are some guidelines and words of advice to help. When you’re ready to start letting go of your real estate company, these tips will make it a little easier.
Speak to someone who’s done it. Start by reaching out to a fellow broker who has already transitioned into semiretirement, Hurlbert says, and ask them about their process and the obstacles they needed to overcome.
Create your financial plan. Talk to a financial planner to help you understand what income you’ll need to sustain your lifestyle into retirement. Even if you’ve been saving money, your business is likely your biggest asset. You’ll have to devise a solid plan of action for selling it or stepping away.
Find a successor. Keep an eye out for an agent you can groom to eventually take over your business. Begin work on a succession plan before the time comes to semiretire or retire, Hurlbert adds.
Hire a general manager. If you’re currently serving as your company’s managing broker, hiring someone to take on this role is the easiest way to semiretire, Mills says. “You don’t have to give away equity, just a salary,” he adds, suggesting a profit-sharing deal with the new manager rather than an equity buyout. Then you can continue to work with the clients of your choice without the day-to-day involvement in the office.
Stay involved in your community. Successful brokers who continue their social or industry activities—or replace them with new, meaningful ones—will have an easier transition into retirement or semiretirement, Hurlbert says. “This industry has a very social aspect to it, with many networking events and learning opportunities tied to work,” she explains.
Keep the news to yourself. You may tell friends and family, but you don’t need to inform the public that you are semiretired, Mills says. People may not understand what semiretirement means, and they may think your business is closing completely. Just keep working with your friends, family, longtime clients, and your best referrals—and do as much or as little work as you want to do.
Poola says she is still her former agents’ confidante and gives them a lot of information throughout the day. But now those agents also have an office manager helping them handle problems. Poola doesn’t have a specific date in mind for when she’ll retire completely. Her personal mantra has always been: “Don’t do something when you think you need to do it. Do it when it seems right.”
“I came in selling and listing, and that’s how I will leave—someday,” she adds.