Moderator:
Chris Kelly, 2022 Broker Relations Liaison, National Association of REALTORS® (NAR); President/CEO, Ebby Halliday Companies, Plano, Texas
Panelists:
Gary Scott, President, Allen Tate, REALTORS®, Charlotte, North Carolina
Larry “Boomer” Foster, President, Long & Foster Real Estate, Chantilly, Virginia
Greg Mason, President/CEO, Edina Realty Home Services, Edina, Minnesota
Chris Kelly: It was sometime back in the early ’70s, I think, that the first savvy real estate brokers began offering mortgage and other ancillary services to diversify revenue and to have as something of a safety measure against difficult real estate markets. To be sure, these services were, and still are, a means to meet consumers where they are—to help streamline the process of buying a home in the same way an auto dealer offers everything you need to select, finance and drive off in a new car. Today, it’s a given that most larger brokerages offer some affiliated services. But how do you maximize both their revenue and their value? And beyond the conventional Big Three—mortgage, title and insurance—what other services are proving beneficial to both the brokerage and its customers? Gary, what’s the Allen Tate approach?
Gary Scott: To begin with, I think the success and the value of any affiliated service has to reflect the cultural strength of your whole organization, outstanding leadership and competent salespeople, so that these ancillary businesses become integral to your core services. We want to be seen not just as one big enterprise, but as being better at everything we offer than anyone else on the street.
Boomer Foster: We’ve provided affiliate services for a couple of decades, and we see that as a way to build good relationships as much as to enable smooth transitions. We maximize revenue by creating real value, so that using what we offer becomes a no-brainer for clients and customers.
Greg Mason: The Big Three—mortgage, title and insurance—have been an added opportunity for us for more than 10 years, and the truth is, today’s customers expect us to be the source for any number of integrated services. They want a seamless homebuyer experience, and we want to be sure they have it.
CK: What’s preferable, ownership of these affiliate service companies or partnering with other agencies? And where are the best opportunities in today’s market?
GM: We own our Big Three, but we partner with HomeServices of America for other revenue opportunities, and we have a warranty relationship and marketing agreements for services like movers, utility connection and the like. We’ve even piloted an integrated service tracker that clients can use so that one view shows them every milestone in their transaction.
GS: I don’t think it matters whether you own or partner. Customers want their lives to be made easier, and we want to make that happen. But we know our brand is measured by our success at what we offer, so our overall goals are about enhanced customer service as much as revenue. We’ve looked at home warranties, moving services, landscaping, property management…any and all options are on the table. It’s a matter of scalability.
BF: We opened a moving company five years ago and home inspection services 18 months ago. Looking at the long game, diversification is key. We look at every factor—anything and everything homeowners need to help them in transitioning to their new home—and then we build a better mousetrap for every service we take on. We have to do that. In today’s environment of shrinking revenue and rising costs, if we’re not innovating, we’re in line for bankruptcy, and we’re not about to let that happen.
CK: I’ve loved the analogy of affiliated services moving beyond the feeling of a strip mall, where all the services are in close proximity to one another, and more towards that singular store and experience for the consumer. With respect to our agents, we have to earn those opportunities with their clients by making it simple and accessible, correct?
GS: Exactly. We need to earn their business by being the best game in town.
GM: Agreed. We don’t deserve anyone’s business unless we are best in class.
CK: And finally, what’s next? Is there any part of consumer service that’s off-limits as we expand?
BF: Gary mentioned scalability, and that’s a key component. It means hiring the best people or partnering with the companies who have. But I don’t think anything is off the table in terms of transactional ease. We look for the best ways to ease customer pain points. Some are harder to scale than others, but if the need is there, we look for the means to make it work.
GS: Consider roofing services, rental services…we’re looking now at heating and air conditioning. We’re always looking for the next Big Three—the best new revenue components that meet consumer needs, sometimes even before they know they will be needed. It’s the kind of creative thinking we know we have to do, especially now, as the hot market of the last couple of years is getting back to normal.
The Power Broker Roundtable is brought to you by the National Association of REALTORS® (NAR) and Chris Kelly, NAR’s Broker Relations Liaison. Watch for this column each month, where we address broker issues, concerns and milestones.
