Brokerage Insights

REAL Trends research shows it’s not the brands or business model that helps a brokerage grow.

By Steve Murray, publisher

REAL Trends addressed several hundred of the top brokerage firms in the country last month at the conferences hosted by Leading Real Estate Companies of the World and RE/MAX LLC. In our presentation, we shared data from both the REAL Trends 500 and Up-and-Comers and our own benchmark database of the financial results of hundreds of leading brokerage firms. These were shared in two PowerPoint presentations on the topic of growing a brokerage firm.

In preparing these presentations, we looked at data going back 15 years for over 1,000 brokerage firms of all sizes, brands, business models and locations. This is research we have done in the past as we seek answers to the question, “How does one most effectively grow a brokerage firm?” The current findings mirror those of past studies on the same topic.

Here are some conclusions:

There does not appear to be any correlation of success in growth between whether a firm is independent or affiliated with a national brand; no correlation between what type of commission plan or business model one uses; no correlation between the average price in a market or the size of the market. In short, none of these factors appear to explain why some firms grow or not.

It’s not that a brand name, business model, commission plan or location don’t impact results. Rather, it’s that they don’t explain any differences between those who grow and those who don’t.

What appears to be left as a casual agent is the leadership and culture of the brokerage firm. As we pointed out in one of our original research studies that led to a white paper called “People Still Matter,” an effective leader establishes a culture that encompasses some of the following attributes:

  • Having a clear vision of who you are and what makes you unique;
  • Communicating both horizontally and vertically;
  • Having a disciplined way of making and communicating decisions;
  • Empowering staff and agents to seek their level of success;
  • Holding your people accountable for both results and behavior;
  • Being transparent about your plans and intentions;
  • Building a sense of community within your firm and giving back to the communities within which you operate.

Given the reaction to our presentation, we came away more convinced than ever before that many in the brokerage industry are being misled into thinking that technology will solve our challenges, there’s some panacea for success that is just a seminar away, and there’s some existential threat to their success and happiness coming from the combination of Silicon Valley and Wall Street. Nothing could be further from the truth. While one could say, “Your data looks back. What good does that do for the future?” However, when you combine our historical data with the numerous consumer studies which reinforce the importance of the sales associate in the process of buying or selling a home, to our way of thinking, an effective leader makes all the difference. While the business will change at the margins, at its heart there is very little change going on – now or the near-term future.^

This article originally appeared in the April 2016 issue of the REAL Trends Newsletter and is reprinted with permission of REAL Trends Inc. Copyright 2016.

The Minnesota REALTORS® is the largest professional trade association in the state with more than 17,000 members who are active in all aspects of the real estate industry.



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