I'm setting up my own brokerage in metro DC area, a "virtual" one - basically an office address with mail service and space rent by the hour when needed, VOIP lines, electronic transaction handling and file storage, online training, intranet communication...etc.

the main idea being to utilize and integrate all available technology to provide a complete paperless, office-less and efficient brokerage for agents. the win for the agents? less overhead for broker means less squeeze from them. the win for me? not to make much off of agents productions, but to get the name out and franchise the virtual system.

I'm testing water to see if there's any response out there. any 2 cents to 2 dollars are appreciated.

If anyone in Washington DC metro area is interested. PM me.

You might have read this article. I found it interesting and it provides some answers and questions that need to be considered before opening a virtual office.

http://realestate.about.com/od/brokerofficemanagement/a/virtual_realest.htm

p.s. some states require a brick and mortar address for a RE office.

You can also go this way:

http://www.regus.com/

Yes, I understand the idea is still in the early age, all the technologies are there but need to be integrated and more real estate specific. I think it requires a lot of thinking before all can be put together to work, to make the idea from technically speaking to actually working.

The biggest problem with this set up is that there is absolutely no reason for an agent to park their license there once they have enough experience to get their broker's license. And for new agents it would be a disaster since office talk helps them through their issues.

I have a situation similar to that here. My broker does have an office but 90% of the time the computers don't work etc so I don't bother anymore. So I finally figured, why keep paying him all that money and am in the process of getting my brokers license now.

The office has over 100 agents but I only know 2 of them. We never see each other since we all work out of our homes. So without any culture or comraderie there is no reason to pay him fees to use his brokerage name.

I'm thinking, though, that maybe you better read the DPOR rules/regulations again. Where you gonna hang your license at, and, your agents' license for the public to SEE? Can't do that in a place where you rent by the hour.

I can just see you meeting a client there and you're a few minutes late, so, while your client is sitting there watching your every move (this one's buying a $1m home and YOU'RE going to help him find it), you whip out your office license, your broker's license, all your agents' licenses and scotch tape them temporarily to the wall. Maybe someday that'll work and be 'standard' for the industry, but, after Madoff and all that other stuff going on, I'd think you were a flim-flam...I'd have to excuse myself to the restroom, and then keep on walking.

Good point.
I thought about that often, since I was in a similar setting as well - paying a fee to the broker, yet not much help when you really need help. However, what's lacking, I found, might be just some improvement which may help the virtual concept working out eventually -
#1 - as a managing broker, not JUST make yourself available, but reach out to the associates - update them with regulation/legal changes (and make sure yourself is on top of all that), share with them the information on new office listings/sales, share the do's and dont's in the process of different kind of transactions...again, keep in constant touch with good, updated, useful information. I've found myself a lot of times trying to find answers for difficult scenarios through all kinds of sources - online article, classes, talking to professionals...if a broker can make himself a major source of valuable information, that's something to me.

#2 - setup an intranet/forum/group just for associate to communicate among themselves(it has to be good to attract enough mass). People do meet each other and exchange ideas online. While less personal, lots of time it's more effective and efficient to break the ice and get to know somebody, and you can always decide to have a cup of coffee together later, and may even find yourself a mentor or form a team. It might not be that much different than meeting people in the office, and hang out with the ones you like. Who would have thought many marriages now start from online dating?
#3 - agents do grow up and away, however, not all of them would want to rent an office or start with a big team. If someone just want to be on their own, yet now shell out all the start-up cost, they could choose to share resources with another brokerage, like me. I'm not saying many will do that, but it is another choice besides home office and hung license somewhere else.

I have a list of ideas which all start from one single question - what is the value of a broker to his associates now? just like more and more agents start wondering what their value is now in the internet era when most people pretty much can find all the information after a few key strokes. I could imagine that if the real estate brokerage were a brand new concept today, it might be in a quite different form compare to what we have come to know.

Yes I did read DPOR rules, and print them out too. Regarding the license, the rule says "...principal broker shall have readily available to the public..." the licenses. If I understand it correctly, it does not necessarily mean licenses are required to be framed and hung in a public place in the office. I carry my drivers license all the time, and it's readily available when needed, I just don't necessarily have to tape it on my windshield.

Besides that, I actually never see my client in MY office, even when I had one decent offce. I come to see them at a place convenient to them. As we all know how bad the traffic congestion in our area is, it sometimes strike me as a little bit arrogant to ask a client come to meet me where I'm sitting.

What I see is that the rules are gradually changing to be more what I call "business-mobile-friendly". Look at the electronic signature rule, VA put it in the law a few years back and DPOR finally made it very clear that it's allowed in contracts and guess what, our regional sales contract finally incorporated the wording in the new form coming out next Jan.

I don't know about Virginia, but since it's similar to our state in a lot of ways, I can see the traditional brokerage companies, especially the franchise operations with big overhead, lobbying the state RE commission to make all brokerage businesses have a "brick and mortar" office with a private place to meet clients like we have here.

I agree.
When I first got my license, I interviewed many brokerages in my area (DC metro is pretty saturated with RE professionals, and lawyers of course). To be honest, I didn't see the "value" the brokerage provide could justify the desk fee, transaction fee and the split. They all seem to try to convince me that I needed a mentor, I needed a fancy office with a receptionist, I needed all the back-end support and they needed the money to provide all that. I wasn't convinced.
Now I'm on my own, paying next to nothing to maintain a virtual office ($150/year), a self-maintained website ($35/year), an office voice line (free) , a fax line ($1 - not a typo), a 3G pay-as-you-go service ($5), an online form/file/office desktop management subscription ($49/year), electronic signature package ($30/year)...all the hardwares - fax machine, scanner, laser printer, tablet PC...have never been cheaper. Imagine that the most expensive would be my E&O and my cell phone bill.
I meet with my client, but transact business over the "cloud". I'm mobile, engaged, young(not really but at least seem to speak their language) and may also harvest a cutting-edge image if that helps. I'm sure there are like-minded agents practice the similar and my goal is to provide a brokerage for them.
For people who love "brick and mortar" offices, there are plenty of choices for them.

On the face of it, it sounds like a great idea. For you. But for other agents, maybe not.

It's been my experience that agents really really like to use the office telephones, the office fax, the office copier, etc., to the max. And they like having a nice place in which to meet their clients. And they will pay for it. They'd prefer NOT to pay for it, but they will.

I can't imagine meeting a client in a coffee shop or restaurant and discussing the purchase of real estate. It's very personal, confidential, serious, and should be accorded the formality and gravity it deserves. Professional surroundings.

I wouldn't meet a CPA or attorney "somewhere".

Now I'm speaking as a broker associate who works 100% digitally. I rarely if ever am in the office EXCEPT to meet clients. But, we do have support staff should a client wander in, drop by. Even if I'm NOT there, the client comes away having had a professional experience. His expectations of where a professional should work have not been violated.

I have all my own equipment, 800#, website, Efax, scanners, software, etc., similar to what you've outlined. I do fine. So, I do pay for things I don't use in the office. But my private office is there, which is very valuable to me WHEN I need it.

But other agents/broker associates can't work the way I do, and they don't. Even the younger agents.

And what about "floor time"? Many agents expect to have that, need to have that.

Where will you meet the DPOR when they come to 'inspect' your files?

My state requires the broker to have a physical address where records are kept (and where I have to display my license, business certificate, and EHO poster). There's very little beyond that. Many brokers (like myself) use our homes as our physical addresses, and that meets legal muster. The legality of doing so is even on the real estate exam.

As far as meeting clients? I meet my clients where is most convenient to them. Perhaps it's different in a smaller market, but here in L.A., well...my clients (and their homes) are located all over the place. Going to them is simply one of the many services I offer. Practically speaking, it's usually easier for me--since I have no set schedule and no regular commute--to travel anyway. Only once--seriously, once--has a client asked where my office was. And they actually were impressed rather than horrified that my office was located right next to my living room. Thinking back on when I bought my own house, my agent at the time always came to me, or met me at a property; I thought that was pretty awesome, and it was certainly quite convenient. With technology the way it is, it's incredibly easy to do all the contract work without having to meet in person. I've had clients who--through the course of the entire transaction--I never actually met. Ever.

As far as what sort of salespeople would want to work for a virtual brokerage, I think the virtual model would appeal to a certain base: those who are experienced enough not to need frequent hand-holding, who prefer to work independently, who want a larger share of their commissions, AND who know that working as a broker involves a lot of extra headaches--and don't want to have to deal with them. Anyone who didn't fit all of the above would probably not do well.

Agreed.
the perspective from a broker-owner v.s. associates are different. It appears agents appreciate the most of an office is its professional and serious look which in turn support their professionalism and seriousness they want to impress the client with.

I would definitely never want to meet a dentist in a coffee shop for my appointment, 'cause he has to have his special tools. A CPA or attorney? don't really care, the special tools are their knowledge, experience and brain, setting could matter the least. In fact those who don't have an office are more likely given an expected bonus point, which sometimes may tip the scale - cheaper charge for the same service. whether true or not.

So here's the pitch to the agents - lack of an office may work to your advantage, client may come to respect you more as you're smart on cutting cost, savvy in technology, creative on marketing yourself and dare to be different - imagine what he can do for me!

However, like I said before, people who like an office may always like an office and they have plenty of choices to choose their office. I'm here to see if I could provide something different for other kind of herd.

I think that you have a great idea! The next generation of agents obtaining licenses will be much more open to this idea. Just because it is virtual, does not mean that you can't have meetings, virtual or in person, with your team. Sure, some agents will come and go, but I know many people who have the experience and just don't want to obtain that broker status. If you have a value proposition like the classes, updates, and other items, you will have retention. Just a thought...If the model is virtual, I would look into offering training classes for online lead generation, and the like. Especially since your people have already embraced the technology idea.

I don't find it 'arrogant' to go to a professional's office by any means. There's always the Rainmaker - he travels everywhere and everyone believes in him.

The new form that is coming out, electronic signatures were already acceptable - both parties just had to agree on its use; but, contracts with FHA financing, HUD contracts and numerous Bank contracts will NOT accept electronic signatures at this time.

Until all accept electronic signatures, I gave up on Docusign when the foreclosures started hitting the fan.

When your clients want to meet, don't forget to drag your computer, printer, paper, and ink into McDonald's. It's fine for a client you have ALREADY been working with, but for a first or second meeting....

It gives the appearance of 'desperate for business'.

I will reiterate that my actual experience is just the opposite. At least in my area, prospects really don't want the hassle of going to an office, since my market is quite large, and it's more the practice that listing appointments and the like don't happen at an office anyway.

I use my "virtual" status as a selling point, and potential buyers and sellers really do respond positively. I can honestly tell a buyer or a seller that if I take them on as a client, I'm doing it not because I need the dollars but because I really do want to work with them. (Also handy, I suppose, is that my wife's income pays all the bills. My income is--quite literally--our fun money.)

Jopot, question: will the lower cost of doing business be reflected on the commissions charged?

I like the idea, in principle. I was with a semi-virtual brokerage (I say 'semi-virtual' as most aspects were done virtually, but there was an office in a not-so-great location) but can say that being in a bricks-and-mortar brokerage brings a lot of credibility, particularly for high-end buyers and sellers.

I am a broker in California and Nevada. In California I work out of my home and that is acceptable to CADRE. However in Nevada I need a physical address in a commercial zone. I had an office in another realty company. There I have an office that is accessable to the NSDRE during normal business hours, my name appears on the marque and my files are accessable and I hang my original license there. MEets both Clifornia and Nevada in two different ways.

I am a broker working out of my house in Arizona.....

Just read your post and am intrigued with what you are doing...

The term "virtual office" $150 a year has me stumped...not sure what that is?

Could you give me your website? I'm getting ready to pay Agent Image $750 for a website...then someone to host it etc...

I did post my intro in the "introduction" section here tonight..

Fax line for $1??

Online form / file / office destop management subscription $49 a year....wow that sounds GREAT!

who do and how do I learn to use the electronic signature package from? I'd like to use my iPad and write contracts in the field and get them signed electronically so we can write it..send it without messing with a portable printer!

I'm also looking for a laser printer/fax/scanner etc....any recommendations?

Also looking for someone to provide E & O insurance....

I know this is asking alot but would appreciate ANY help you could offer....


Thanks,

Clary Roberts
Phoenix, AZ

I look at it this way - the initial lower cost of doing business is more on the broker side, so the broker can afford to not charge desk fees or a split, then the agents could lower their cost of doing business, then they could have more flexibility to either ask less (lower commission from the client) or return more (rebate to client) if they feel necessary.



I agree that the general perception is that a nice office (better to be in a nice location as well) represents credibility, and those offices have every reason to exist, as long as there're people with that perception.
the virtual idea is not a replacement, rather another form of existence - just like while netflix provides all the convenience, the movie theaters are still well and alive.
the whole virtual idea is to provide an alternative to the traditional bricks-and-mortar.

That is exactly what I experienced here too. I almost never met one client whom wanted to sit down with me in the office to search the listings, discuss the contract or flip through any printouts. one time a listing agent wanted me to bring my client to his office to discuss the contract, my client's first response was "why?"

AZGolfer - I've PM'ed the info you asked. hope that's helpful.

I think that you have shared a great idea and the next generation of agents obtaining licenses will be much more open to this idea.and this make the things more secure and the customers makes more trust on the thongs...

Jopot knows Lem - Lem Marshall? He interprets Place of Business to be where the supervision of agents takes place. Where will your supervision take place?
Where is the central place where you will inspect your agents files and maintain the accounting systems to insure they are compliant with regulations?
Where will DPOR come to inspect your files and ascertain your office and its surroundings are compliant? Do you know they intend to inspect EVERY brokerage office in Virginia?

I tried this idea over 3 years ago.

A lot of headache for a little return.Many agents are high maintenance and come with drama.

The virtual started taking off until 100% company with 300 trans fee offered buildings to boot.

I make more money doing my own deals,giving off referrals,and buying my own investments.

I was just discussing that with another independent broker yesterday. She does have 2 agents under her. Had 4 but the other two were apparently high maintance. Plus, this broker, like I, want agents who are on the same wave-length - service-wise and professionally.

There are some agents who are just high maintenance - can't think without someone to hold their hand, tell them what to do. Then there are those who just run wildly on their own - destiny will most likely catch up with their wild ways.

It's a simple thing: Stop, Look, Listen, and THINK!

Yep. Precisely why I'm a lone wolf right now...

I've actually looked into something like a "virtual office" in WA specifically and had no luck. The rent near Seattle is more than I'd like to spend but WA guidelines require a physical address with a sign hanging on the door. Not to mention the office liable to search/inspection at any time.

This can all be avoided by requiring every agent to be an individual, self employed broker responsible for their files and actions to the Regulatory Agency directly.

Pikes, are you then saying that each agent (broker) will be responsible for maintaining his or her own office?

I understand in N. Carolina - it's all brokers' licenses, no salesperson licenses. If anyone can verify that please.

Regardless, I suspect there would still be alot of them under a central broker. If they weren't, all kinds of "h" would break lose. Many can't even handle a transaction properly UNDER a broker, let alone BEING alone.

Yes, I am a lone wolferette. There's one associate broker I'd love to join me but she's so 'afraid' of getting away from the franchise atmosphere - even if they do stab her in the back. Now THAT I don't get. They promise her stuff, it doesn't come true, and she stays.

I know, I know, it's FEAR! Well, what's the worst that can happen (provided you're already competent)? You don't make any money - big deal. Then, you rearrange your brain to make money.

But, I don't see a virtual office happening for a long, long, long time. Rules are getting stricter not more lenient.