The short answer
Open one market at a time. Prove every market you already run first. Hire the local sales leader before anyone else, then hire agents fast enough to take the leads you forecast.
ChuckTown Homes, a Charleston, SC team, did it this way. They grew from 10 to 90 producers in 15 months across five new markets in three states. I worked with them from my Zillow seat as their Growth Advisor.
Licensing and brokerage
Agents need licenses in the new state, and each state has its own rules about who can serve as the broker of record. General information only. Check with the state commission or an attorney for your situation.
Each new state also needs a brokerage that can hold agents there. The bigger problem for ChuckTown was name recognition. As a small independent brokerage from Charleston, they were unknown in markets like Savannah, GA. Joining a national brokerage with local offices made recruiting 10x easier.
Picking the market
Their markets came from a preferred list. They chose each one by five factors:
- Leads available in that market
- Home price point
- Competition within the lead program
- Room to grow
- Travel distance, since the owner had to travel to train each market's new sales leader
The gate before any new market
Every market they already operated in had to be at 100% or better on Zillow's performance standards. If one market slipped, expansion waited.
The first local hire
After approval, the first hire was the sales leader for that market. The sales leader acted as a "mini broker" for the location. They hired for personality fit and tenure in real estate. Good leaders brought agents from their local network.
Lead routing and sizing the team
Leads were forecast before the office opened, and the agent count was sized to match. The recruiting pitch in each new market was simple: leads from day one. From approval to first closings sometimes took as little as 60 days.
They waited a few months between markets. That gave the new market and the home market time to absorb the growth.
What breaks first
Growth brings infrastructure most owners don't see coming:
- Transaction coordination
- Lead routing
- Training
- Accountability
- Leadership in each market
- Virtual assistant systems
Every one of those needs constant improvement as you add markets.
On VAs: I suggested them to help ChuckTown scale. They were skeptical. I connected them with a Florida team already using VAs well, and we ran a mastermind together. ChuckTown now has close to 30 VAs, and that support has been instrumental in their growth.
Readiness checklist
- Every current market at 100% or better on your lead program's performance standards
- A market chosen from a list, scored on leads, price point, competition, room to grow, and travel
- A lead forecast for the new market before you open
- A sales leader identified and ready to hire
- A licensing and brokerage path in the new state
- A plan for transaction coordination, lead routing, and training in the new market
- A few months of room between this market and the next one
What I did
I interviewed each location's CEO and mapped the markets. I built the case for approval and helped them prepare for Zillow's performance standards. I also brought them into my network, including the Florida team that showed them how to run VAs.