Broker Beware. End of the Small Broker?
“Power Teams Excerpt: Teaming Up with Your Broker for Mutual Benefit”
July 4, 2008
Agent Teams? Brokers Beware
With all due respect, the five benefits you mention that a broker can expect from a team are great in theory and in theory only. In practice, large teams are often paid such large splits that the broker is only making money on other core services like title. Gross revenue is fine but retained company dollar is the critical measure. Teams contribute little to that and require a great deal of broker attention.
Sure, more yard signs are out there and there is personal promotion going on, but most large teams minimize the broker’s brand and presence so much you can barely tell they have a broker at all.
As far as improved customer service is concerned there is no guarantee that large teams do any better at this and most brokers don’t measure service anyway. The 500 Quality Service Certified companies do measure service but that leaves the majority of companies hoping blindly that consistently good service is being delivered. Not a good strategy for a service business.
Brokers that become dependent on large teams are opening themselves to risks that can jeopardize their existence and certainly, their profitability.
Barnett Consulting Group
East Lansing, Michigan
“Budgets-They Aren’t Working”
RISMedia’s Real Estate magazine,
No Hope for Small Brokers?
I agree with your article, but it is extremely hard to put a budget together in a declining market. I own a small and shrinking company in Cleveland, Ohio. Sales are down, prices have dropped and commissions are not what they used to be. The larger companies are paying lower co-broke fees. Bank-owned properties don’t pay really well, most of the time. We have downsized the office as far as we can go. We have looked at every contract we have. Six more months to own the copier. My phone lines are at a minimum and I am using a better provider at a cheaper rate. No more leasing. Cut back on advertising including Realtor.com. The receptionist is gone to voicemail. I no longer take a salary. In fact, the last three years I didn’t pay myself until May.
I have talked with other small brokers about merging. The sad truth is the large companies may have finally beaten us all out. Quality people are leaving the industry. I am watching some small brokers give the house away trying to stay afloat only to sink their ships faster. Once you have trimmed all the fat, all you can do is hang on and try to weather the storm. After 24 years in this business I am at a loss for how to project future budgets and even existence.
Maybe it is time for my second career. Only problem is, I can’t sell all the real estate I invested in for my future.
in Real Estate, Inc.