Seeing the down trend in property market since last two years and after going through the recommendations in the 2009 budget that has no specific relaxation for builders, we can't expect boom in property market in near future. What would be the future of small real estate brokers?

there will always be a place for small brokerages -- how little or how much of a percentage of the market they can control depends on their efforts

IMO, small real estate brokerages are working out much better than independent franchises....esp. 100% brokerages, I've had quite a few agents inquiring about positions with my biz that have worked for these type of brokerages for years. Many of the larger franchise brokerages do not provide any time of lead support which is crucial in this type of market.

The small company I work for is doing great and keep hearing some of the big boys singing the blues. I guess it just depends on many different factors as to whether or not a small brokerage can make it.

I am a 100 percent brokerage and we are kicking butt. I am getting many agents fleeing the high monthly fee brokerages. The agents don't want to fund the old dinosaurs nice offices and buildings when the can work from home and meet clients out in the field.

I've worked for both large and small companies. My observation is that the large companies have way too much overhead and try to control the business of their agents. Over the years some large brokerages bought up many of the smaller companies just to get their market share.

I have found that the smaller company is more relaxed and flexible. Being flexible has always been necessary in my business.

The latest startups are the "internet" companies. It looks to me like that may take a bite out of the large companies that are nickel and dimeing their agents.

Too small is a bag thing, too big can be a curse too. Big enough to service your agents and clients without losing the flexiblity needed to keep evolving.

In our market, we have several large franchise groups (one company has 15 or 20 offices under one franchise banner). Most of these office have 30 to 50 agents. Each has a manager that also sells and lists. So when you really needs help or advice or a solution, that manager is out listing and selling.

To me, that is a problem, especially for newly licensed agents.

The large brokerages also have large overhead. In my area I have seen many of them downsizing and consolidating offices. We are also a 100% brokerage and have seen a big uptick in recruiting. With less business out there, many agents see getting a bigger split on each deal a plus.

This may be a stupid question but when you offer 100% commission how do you make money? Are you charging an upfront fee with 100% or ????

There is usually a fee per transaction ($250 - $500)...though I can't see how that would be enough to fund an office unless it's a really tiny office with minimal rent/utilities...and I don't see how a broker turns a profit unless they get a bunch of top producers that are each closing a couple deals a week! I know that my broker pays a fortune just for software licensing and other fees.

I think many of the 100% houses will do good right now in this market however as soon as agents income increases they will want additional training, support and high energy offices.

My small brokerage is 100% + $250/transaction and $25/month desk fee. They provide training and mentors and have 2 small offices that are serviced by a receptionist. The rest is up to the agent. I've never worked for a large brokerage, so I would have no idea what I would need a nice office for. I work from home and of course my car! I stop by the office to drop off paperwork, but that's about it.
Having never worked for a large brokerage, I couldn't imagine giving a huge split of each transaction.
I can tell you that agents are flocking to our company to get away from the large fees.

From a listing standpoint it's hard to say what the future holds. Many home sellers erroneously believe that large brokers have some special magical ability to sell homes that smaller brokers do not, when in reality what gets a home sold is the MLS and the agent. From a buying standpoint, there's no reason to think that smaller brokers can't compete every but as well.

That's right, every BUT as well, AND every BIT as well too!

I pay a flat monthly fee and keep 100% of everything that I make. Whether you sell something or not doesn't matter. I left the big box a little over five years ago for the small startup 100% company in our area and I've not regretted the move.

agent income increases because agents close more deals. the more deals you close the more money you have to buy the training or coaching you need instead of having some non producing manager "teach" you the way to success. bottom line is that if you are closing deals and making more income, what do you need to be trained to do?

my broker offers 100% and has over 400 agents. he makes fixed money every month regardless of closings. he gets more experienced agents because there is a fee paid regardless of closings, so there are more closers there than the places that 50/50 agents park a license and hope to make money. i make more so i can spend more on my business.

i could not spend the 5k per month in business expenses that i have if i had a 50/50 split adn the broker could not offer me the resources that i pay for if he decided what i get to use out of the 50% he makes.

Yeah I have pretty much shifted gears with my brokerage. At 300 trans fee on the residential side you will get alot of agents wanting to park a license OR they work full time or part time jobs and will have a closing once a blue moon.In between this time they will ask a gazillion questions.

Over time I decided to keep some agents and get rid of the dead wood. I do mostly commercial anyways.On that side I make much more on my own deals.

I will add agents that want to focus and dominate on retail and multifamily for a 70/30 split.

When I show them how to get 60,000 commission checks they gladly pay for the split.I am going to be real selective about who I take.There will not be any part-timers allowed period.

They have to take the risk to get the reward.If they have a part-time job they have a crutch under one leg and can't run. If they don't have enough money to quit the JOB then I tell them to save up and when they can make a clean break come see me.

There is going to have to be a happy medium in order for a brokerage firm to be successful..as stated before me: too big is bad and too small is bad - a happy medium is a must and to figure out what that is, you need to do your research BEFORE taking the step to becoming your own brokerage.

There will always be a place for small real estate brokerages and a big reason for it is that many real estate agents love the idea of owning their own business (they are essentially already doing this at their current brokerage where they are an independent contractor) and the thought of owning their own brokerage is very appealing. With that, there is quite a bit of competition amoung real estate brokerage firms, not allowing many of the smaller firms to rise up (taking the owner..aka the sales person) out of the business into a higher level of business and thus their business is hindered from the begining, keeping them small....of course this does not always apply and some like the idea of keeping a business small...was just a tangent of mine..lol.

I have worked for a large brokerage and I have worked for a local brokerage. I spent about the same in fees for both of them. My partner and I opened our own company and I can tell you I have been the happiest with this decision. The only thing is that I have to go out and make the connections with the clients which isn’t a problem since I’m the talker in the company.

I would think it would be important for brokerages to provide its agents with leads. That would be great for new agents to help them get on their feet until they have enough money to pay for marketing themselves.

They will never have that amount of money ! Maybe they would handle the leads more carefully if they had to pay for them.

I think that if a Brokerage spoon feeds leads to new Agents, they are crippling the ability of those Agents to go out and create leads for themselves.

Just like in fishin': Don't do for them what they can and should do for themselves.

I think that if a Brokerage spoon feeds leads to new Agents, they are crippling the ability of those Agents to go out and create leads for themselves.


You are absolutely right, If the new agent has the basic's
of prospecting, lead follow up, market knowledge down pat
then they are good to go, without these skills in place real
estate will be a roller coaster ride for them.

I think the future is very bright for the small brokerages. Lean, mean, and ready for biz! The wwww has enabled us to compete with the big boys, so the big offices no longer have an advantage. If a small office is tech savvy, the sky is the limit.

Real estate business quite very profitable.I don,t think so that there is no future for small real estate broker.Particularly dubai property broker have have bright future in this field.

source:
http://www.bayut.com

I used to have about 50 agents an down I am down to about 19 by choice.

I didn't estimate how much work the non-productive agents would be an dhow much hand holding was required.I thought it would just be another revenue stream like bpo's. What happened is they were taking away time from my major deals with stupid issues.

The reason they haven't had many closings yet is not because of training.It's because they are mediocre at best and don't have the fire in the belly to do what it takes to be successful.I might have a few that HAVE IT.

That's why these 100 percent things with agents and the trans fee were ok when I did that 3 years ago.Now I get daily junk mail from other firms trying it to grow big.

I am off that and onto more profitable avenues with other income streams.

Having part-time to struggling agents that want the 100 percent is like having children to raise (it's a full time job).One I will gladly give to another brokerage.

Amen, Super. The problem with too many of the 100% brokerages is that they try for profitability through size: 300 agents surely must be more lucrative than 100, right? The reality is that you'll never make it if all 300 of your agents are under-performing slugs. Way too much time and cost than you get back. I would also add that the recruiting process itself can be even more of a distraction than managing your agents. Either way, both take away from more profitable ventures.

100% firms have to operate leanly, and you can only operate successfully given that constraint by having the right kind of agents: proven performers with enough experience to not be bothering you with simpler questions (but also, in my opinion, not prima donna high-performers either).

I think the small real estate broker will continue to have his/her place in the market. If there is one trend in marketing over the past decade, it is that businesses are increasingly targeting very specific market segments with a focus on differentiating themselves from the competition. Therefore, I think that the small real estate broker armed with the right knowledge will be even more poised for success than in previous years, it's just up to that person to figure out what they can offer (personal attention, unparalleled market knowledge, etc) to differentiate themselves from "the big guys."

With any real estate company, there has to be solid value that is provided by the broker. I certainly think that a smaller broker can provide value (other than reduced fees), but it can be challenging.

In a tougher market for agents to make sales, many agents have left the business and overall efforts at recruiting have become more difficult.

In addition, competition is fierce between real estate companies to recruit and retain top agents.

Hi.. I am thinking of switching to a 100% brokerage in the NYC area. Can anyone give me some information on which ones are the best or worst. I don't want to keep switching between offices so I want recommendations if possible. Thanks.

If you don't have enough money to invest for big company. Just keep on dealing with small business scheme. Getting minimal clients can give you big profits for you to start big company.

I own a 40 agent non-franchised brokerage in Indianapolis, Indiana. The majority of our business is developed through our web presence and IDX display of listings. Business is great with no signs of slowing down.

I also notice that brokers want the easy way to get more profit in real estate market which is totally wrong. Current economic climate condition is not satisfactory for small real estate brokers. If this condition remains continued then surely small broker will disappear from real estate market.

In my personal opinion, future of small real estate investors is not very good because of global recession of real estate market. A big example of recession is :Link removed

you are correct but some broker have discounts.



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Small real estate brokerages are running out much improved than self-governing franchise. Many of the superior franchise brokerages do not give any time of lead support which is critical in this kind of market.
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REODayton-thanks for deleting that link. Some of the posts here are obvious spam and on top of that are incoherent and meant simply to be used as a link to other commercial interests off of this site.

I do agree with you that it is very hard to survive in this economic state but for small brokers, it is not so hard. You must be acknowledged about this field and with the time being you will get an attractive amount from it.

[quote=Hanz Investments]This may be a stupid question but when you offer 100% commission how do you make money? Are you charging an upfront fee with 100% or ???? [/quote]
I am also looking for this question.

Monthly brokerage fees and a per transaction fee.

Like with any other industry, those who are able to adapt to the changing times will survive and thrive. In real estate, if you are able to offer services and benefits that your competition doesn't - you should do well. With that said, many smaller real estate brokerages will probably be feeling the pinch in the coming years.

As a new broker it was being small that provided the business, and when times got a little tougher I could operate lean and mean and several of the top big offices couldn't bear the overhead weight and sank like the titanic, and I quickly scoured the MLS for their present and past clients and added hundreds to my database and future business, along with several good agents.

I enjoy being 'the little guy'. I have yet to meet an agent in my area who has gone out on their own to set up their own little shop (one-man bands for the most part) who doesn't enjoy it.

Small doesn't mean less.

As Brian pointed out, if my business were to drop substantially I have pretty much zero overhead to worry about. One average transaction per year more than covers all of my fixed operating costs. So I can be picky about which clients and properties I decide to work with, and still make a very good living. Bottom line is that I need less, so I can give my clients more.

Being my own little independent shop is definitely great, and I have no regrets about going that route. I don't have to worry about following anyone else's office policies, I don't have to pay nickel-and-dime transaction fees to someone, and I can run things exactly the way I want to. If my local market suddenly shifts, I can instantly change the way I do things.

When I need extra help, it's there. All I need to do is call up any of several other independent brokers I know. Our loose affiliation is invaluable when I need it, and we're happy to help each other out when the need is there; on the other hand, I'm not chained to anyone when we don't need each other's help.

As emerging technologies change our field, I see there being less and less need for brick-and-mortar operations, and therefore less need for the big brokerages. Lean and mean is definitely the way to go.

The future of small real estate brokers will be the same as any other service provider. Adapt to the changes in the market to remain a viable source for buyers and sellers in the real estate market.

I am also in a smaller agency and things are going really well. We have seen a lot of agents come here from the big companies. My favorite part is just how more relaxed everyone here seems compared to the big agencies, just makes things so much more enjoyable.