Real Estate Sales’ Contingency on Leadership Styles

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Leadership is often a key determinant of an organization's success or failure. The tumultuous nature of the real estate business, in particular, necessitates effective leadership principles in order to successfully navigate the market's natural peaks and valleys. Adopting an effective leadership style can help salespeople optimally manage tasks, interact with clients, deal with competitors, and seek out entrepreneurial opportunities within the field. Conversely, an ineffective leadership style can induce a multitude of professional complications, such as unethical practice or a lack of financial control. The purpose of this essay is to evaluate the contributions of leadership styles to the success or failure of real estate salespeople. A brief discussion of prevailing leadership styles within the real estate field will first be presented. Discussion will then emphasize the specific relationship these styles have with effective and efficient real estate practice. This essay will conclude with a brief summary and outline of key points. 

Leadership Styles in Real Estate

When performing any of the duties that characterize real estate sales, the professional must possess the ability to influence others (DeConinck & Brock, 2011). When guiding clients on purchasing decisions and working with fellow sales people, the real estate salesperson must be able to relate to other people in an authentic manner (Hsiung, 2011). The real estate salesperson must also be able to effectively manage the tasks associated with sales, as well as those of the legal aspects of the real estate business (DeConinck & Brock, 2011). These two competing sides of the real estate sales profession are reflected in Fiedler's classic contingency model of leadership (Daft, 2008). According to this model, leadership can be primarily relationship-oriented or primarily task-oriented. As these names suggest, relationship-oriented leaders are primarily concerned with personal interactions and maintaining successful relationships, whereas task-oriented leaders are predominantly concerned with accomplishing tasks and objectives (Daft, 2008). Additionally, leaders who are primarily task-oriented typically possess an authoritative style of interacting with colleagues and clients, as this best insures that specific objectives are met within their deadlines (Daft, 2008). On the other hand, relationship-oriented leaders are more supportive of others and participate in accomplishing objectives to a greater degree (Daft, 2008). Furthermore, these leaders are more inclined to provide encouragement to followers (Daft, 2008). 

While Fiedler's model is in no way encompassing of the range of leadership factors that ultimately influence an organization's success, it does help conceptualize the competing needs of the real estate sales profession. Gaining a competitive advantage in a sales and service-oriented profession such as real estate requires a combination of these two competing leadership styles (Daft, 2008). The ever-changing real estate market necessitates an entrepreneurial spirit in which sales people continue to seek new growth opportunities (Martin & Munneke, 2010). The degree to which salespeople can continue to thrive depends on their degree to manage the demands associated with interpersonal relationships and company objectives (Hsiung, 2011). 

Contributions to Real Estate Sales

Based on the competing needs of the real estate salesperson, it seems apparent that professionals in this field must possess both a high relationship- and high task-oriented leadership style. Success in the real estate field generally mandates that salespeople have a niche, such as foreclosures or commercial properties (Shah & Wysocki, 2013).  Establishing a network that supports this niche is also a critical component of successful real estate sales (Shah & Wysocki, 2013). Effectively managing a professional network of clients, lenders, and investors allows the salesperson to maximize his or her chance of financial gain (Shah & Wysocki, 2013). Balancing the tasks and relationships involved in these networks is a critical determinant of success (Shah & Wysocki, 2013). 

Conversely, the inability to manage these tasks and relationships may contribute to failure (Shah & Wysocki, 2013). In a profession in which the vast majority of individuals who newly obtain their licenses end up withdrawing from the field, and more than half of all companies are unprofitable, failure may be considered the norm for real estate salespeople (Martin & Munneke, 2010). With such a high failure rate, one may question why leaders in the field persist through the tumultuous environment that defines real estate sales. However, successful companies within the field generally earn commissions in excess of $1 million annually (Martin & Munneke, 2010). From this fact, it can be seen that the components of leadership represent a critical factor in the success or failure of real estate sales, and success requires effectively balancing the relationships and tasks that characterize the profession. 


The purpose of this essay was to analyze the contributions of various leadership styles made to the success or failure of real estate salespeople. A discussion of leadership styles was first presented, primarily emphasizing Fiedler's contingency model of leadership. According to this model, leaders must effectively negotiate two competing styles of leadership to achieve organizational success. Applications of this model to the field of real estate sales were then considered. Based on the volatile nature of real estate sales, the challenges associated with finding a niche and continuing to seek new growth opportunities, and the high degree of competition, professionals within this field experience a high failure rate. However, the financial rewards associated with success override these difficulties for many. To achieve such success, leaders must be able to negotiate the competing relational and task-related demands that will continue to occur on a day-to-day basis. 


Daft, R. L. (2008). Contingency approaches. In the Leadership Experience, 4th ed. (pp. 62-92). Mason, OH: South-Western.

DeConinck, J. B., & Brock, B. A. (2011). The influence of real estate manager's supervisory behavior on the role clarity and job satisfaction of real estate salespeople. Journal of Applied Business Research, 9(3), 119-128.

Hsiung, H.-H. (2011). Authentic leadership and employee voice behavior: a multi-level psychological process. Journal of Business Ethics, 107(3), 349-361.

Martin, R. W., & Munneke, H. J. (2010). Real estate brokerage earnings: the role of choice of compensation scheme. Journal of Real Estate Finance and Economics, 41(4), 369-389.

Shah, A., & Wysocki, A. (2013). Leadership principles for today's residential real estate brokers. Retrieved from: Accessed 5 September 2013.