When top broker Italian-born J.P. (Giuseppe) Piccinini was asked to open a new EXIT Realty franchise in Texas more than five years ago, he thought, “Well, Gary Keller had done Keller Williams, Steve Morris had done Exit Realty and Dave Liniger, Re/Max.” Could he join their ranks instead?
“I am an entrepreneur at heart; I wanted to carve my own path — if I fail, I fail, if I succeed, I succeed.”
And his experience today has exceeded his expectations.
The decision behind the business model
He explains he decided to set up a 100-percent commission brokerage because that is what would have attracted him as an agent.
“I was a top producer and knew what I was looking for in a brokerage. When I designed the formula for JPAR (J.P. & Associates Realtors), one of the first things I wanted in a brokerage as an agent was the best commission possible, so of course I wrote down ‘100 percent,’” Piccinini reminisced.
“Mindful that it would attract part-time agents and ghost agents, the next thing was a productivity requirement. I didn’t want to be affiliated with that as an agent, nor as a broker,” he added.
The hybrid model is becoming very popular, he said, though the industry is slow to accept change.
The way the company profits is through the transaction fees and other optional services the company offers.
“I do believe technology has drastically changed the industry; however, due to the average age of the agent in the U.S. and the reluctance to accept it in our business models, we are still in the early adopters’ stage,” he said.
Piccinini likes to call his brokerage “a full-service brokerage at a transaction-fee cost.” There are no desk fees and no monthly marketing costs.
JPAR sets sights on Real Trends 100
Five years on, going into his sixth year, the brokerage has gone from a $500 million sales volume in 2015 with 300 agents, 7 offices and 1,900 transactions, to $1 billion in 2016 with 560 agents, 14 offices and 4,600 transactions.
The founder has strong ambitions to break the $1.5 billion mark to $2 billion in 2017, making it into the Real Trends list of the top 100 brokerages by volume next year.
JPAR was ranked in the 400s in the 2016 Real Trends 500 by volume in 2015, and Piccinini expects to be in the 200’s in this year’s list based on his 2016 figures.
With a company undergoing such growth, the biggest issue is making sure they stay up to speed with standards, said the entrepreneur.
The days when he started the business in 2011 with three agents in the town where he lived — Frisco, Texas — are still fresh in his mind.
“I started out of my house, me being the trainer, mentor, office manager and accountant. I kept adding resources to build the business ’til we got to the size we are today. And we are continuing to grow.”
The company, headquartered in Frisco still, operates 10 offices now in Dallas-Fort Worth and one each in Austin and Houston, as well as outposts in Miami and Manhattan, New York.
Piccinini believes Texas still has a lot of markets for him to explore — San Antonio, for instance — and he wants to become the no. 1 player in Dallas-Fort Worth by 2025.
The entrepreneur is excited by tech and facts and figures.
“I read Real Trends, I read Inman News — but I don’t read the news, it is very skewed, very biased. I tend to focus on numbers and statistics. Numbers don’t lie; they show trends.”
Piccinini, who describes himself as a “big student of large corporations” and is a member of the Entrepreneurs’ Organization, took the opportunity at an event to ask Dave Ridley, the retired SVP of Southwest Airlines, how he maintained the family culture that staff love about Southwest despite growing to a staff of 40,000.
Ridley replied: “One employee at a time — make sure that everyone understands the culture; it is the little things — and be very social.”
Piccinini said the agents he is attracting often come from the big traditional brokerages.
He says he hears comments like: “I never knew who my broker was; I felt JP & Associates has more of a family feel and is more attentive to our needs.”
Others who join rave about the support and tech, he said.
When he started out, Piccinini mainly hired new agents. Now he is attracting some serious producers, and the ratio is more like 75 percent experienced to 25 percent brand new.
“Now we have grown, our model is validated and we are attracting some serious producers,” he said.
Be productive or perish
And they had better keep producing at JPAR. This is a business that does not suffer “ghost brokers or agents.” Under-performers are shown the door pretty quickly.
When recruiting, if they are an experienced agent, they are required to have sold at least six homes annually.
“Every 12 months, I do a productivity review, and if they have not sold (enough) homes they will be terminated,” he said.
He qualifies that they might be put on a six-month probationary period if they sold well the previous year.
“Life tends to get in the way; we will help our agents get back on track with mentoring and accountability if they so choose,” he said.
But he estimates that every quarter, “we would fire 10 percent of our roster.”
“Typically, this is new agents, but we also have experienced agents that just don’t have it in them to make real estate a full-time endeavor anymore,” said the former top agent.
“It’s a tough job, and not many can do it successfully for many years in a row.”
When it comes to productivity, good role models and competition helps, said Piccinini.
“Our company was founded by top producers with a passion for real estate — if you are surrounded by a bunch of competitors, you will perform well; it’s the company you keep.”
That six-transaction minimum creates a degree of accountability, he added.
Meanwhile, he stresses that work at the firm isn’t just about productivity it’s about productivity and service.
Piccinini want to make sure agents understand that they are there to help out and give back to fellow agents.
“Service means service to our community and our fellow agents. As Zig Ziglar said, we can have everything we want in life as long as we help others get what they want first. This is just as true as a real estate professional as any other aspect of life.”
Expanding via a licensing model
With his business model and culture firmly in place, Piccinini is currently on an expansion path on the East Coast.
“In 2015 we launched Austin, Texas, and in 2016, New York, Houston and Miami — we would love to acquire smaller independent brokerages and implement our systems, processes and culture into their operation.”
In the future, he would like to go to South Carolina, where he started in real estate with Russell & Jeffcoat Realtors in 2006.
The founder is expanding via licensing throughout the country, taking a leaf out of the book of a fast food restaurant chain rather than taking the well-trodden franchise route.
“We are learning from a very successful brand, Chick-fil-A, where we will more or less license the name and hire operators or regional brokers in each market.
“We feel our brand and culture is better served by not franchising the model but instead welcoming new operators to the family by giving them a percent minority ownership of the regional market in exchange for a sweat/cash equity partnership,” he explained.
Piccinini’s philosophy is that this frees the operator/broker up to continue to do what they do best — train and manage agents and advise on the local market — while the head office can focus on what it does best, “which is run the the operation for maximum profitability and growth.”
He is currently seeking a regional broker for the New York City office. “I got licensed last year but need someone there physically. I was thinking I could handle it,” he said.
An app to farm out chores for busy agents
Meanwhile, in a bid to free up agents to do what they do best, the former engineer is launching a beta version of a new app in February, Odasi (on-demand agent services incorporated), to be made available for the general market.
There is a white-label option for a brokerage or title company as well as a branded option for everyone, he said. Every agent will have the option to join both when they download the app.
The app will outsource easy tasks to other agents closer to the property or with more time on their hands. For instance, if an agent needs to call on someone to open a door for a contractor or needs another agent to go pick up a sign, do a walk-through or host an open house, they can use the app rather than driving across town. A small fee is negotiated.
It could be a brand-new agent or one who lives closer to the location of the property, said Piccinini. You send out a request which gets posted on the app and choose the agent you’d like to do it if you have a number of options.
“I believe the real estate purchase is becoming more of a ‘consumer good’ transaction, moving more and more toward the on-demand service based tasks,” said Piccinini.
“We aim for Odasi to be the first successful on demand real estate app for brokers and agents.”
