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Broker Best Practices: Shaping the Future of Real Estate

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Not all business models are built the same. John Gall, the president of Nextage Property Solutions, built a unique model in which agents share in each other’s success, therefore providing themselves a more stable income stream. Read on as RISMedia’s Paige Tepping interviews Gall about the secrets of his success.

John Gall
President
Nextage Property Solutions

Region served: Northern California, Pacific Northwest Region
Number of offices: Nextage Property Solutions owns several Nextage franchises in the U.S. We currently have six offices in Phoenix, two in Las Vegas and one in Southern California.
Number of agents: Just under 500
How Nextage Realty got its start: Nextage Realty was founded by Frank Cluck and Dave Wild in 2008 after the financial markets crashed, which in turn, caused the real estate economy to change dramatically.

Having formerly been with RE/MAX, what made you decide to make the move to Nextage Realty?
I sold my RE/MAX offices at the end of 2006 due to the declining trends in the real estate economy and decided that I would focus on other aspects of the industry. By the time the Nextage concept was presented to me in 2010, I had realized through the connections I had with brokers across the country that the business model we were working with was broken. Whether it was the traditional model—Coldwell Banker, CENTURY 21, Prudential—or the 100-percent concept like RE/MAX, brokers and agents had been working much harder to get distressed properties closed for commissions that were dramatically shrinking. Not only were these business models putting a strain on an agent’s ability to be financially stable, they were also hampering the office’s ability to be profitable. Coming from a traditional real estate model, it was difficult to fully realize the value of the Nextage model in the beginning. However, it’s important to note that this is the only compensation/business model that has come out of the post-financial- crash era.

What advantage does the Nextage business model provide agents?
The Nextage business model provides agents with a hi-tech platform in addition to lead generation and full broker services. It also enables them to diversify their income stream and change the way they get paid commissions. With the Nextage model, agents aren’t dependent on just their own productivity. The traditional model is set up so that if an agent sells a home, they get a commission. In this model, agents are simply doing business. With the Nextage model, however, agents are provided a platform to actually create a business. The model encourages agents to recruit other agents throughout the U.S. into the system and then share in the commission. The entire concept is based on “The Power of We,” meaning that agents share in each other’s success, therefore providing themselves a more stable income stream.

How does the Nextage concept benefit today’s buyers and sellers?
The biggest benefit that buyers and sellers receive is that everyone is working together. In the traditional model, agents are all competing for the same buyer and seller, creating an almost adversarial relationship within the company. With the Nextage model, if an agent is working on the same team as the agent who gets the listing, everybody wins. In addition, consumers receive a better level of service throughout the transaction because agents are supporting one another and ultimately helping each other in their day-to-day business. In the end, the Nextage concept provides a platform where agents aren’t so financially restrained, allowing them to focus on how they can best serve their clients.

Why is the Nextage concept so important, especially in today’s environment?
In our markets in Phoenix, Las Vegas and California, we’ve seen commissions drop anywhere between 50-60 percent as the housing prices have declined. Not only have commissions fallen, but agents are also faced with foreclosure fatigue or burn out. Even if an agent is successfully working with REOs today, their income could be gone tomorrow. The Nextage concept provides agents with a platform to get back to making/diversifying business into more traditional models.

What plans do you have in place to continue to grow the brand?
We are in the process of opening a seventh office in Phoenix (at press time) and we’re also looking at expanding into other parts of Arizona. At the same time, we’re helping our agents build better teams, which I believe will lead to substantial growth in 2012.

As the brand looks toward the future, Robb Heering, Esq., vice president of Diverse Market Development for Nextage Realty International, says that Nextage will continue an aggressive growth approach to increase its U.S. franchise platform and marketshare and is preparing to expand its brand internationally. Because of our unique model, our U.S.-based agents and brokers will have an opportunity to profit and benefit directly from our worldwide expansion.

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