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18 July 2008

Financing the New Real Estate Office

Posted by Nicolai Kolding

On July 3rd, I proposed three floorplans for a residential sales office.  I’ve taken all of the comments that followed into consideration and would like to offer up just one more plan:

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Marc Diaz and Marc Davison each had some great suggestions.  “Marc’s House” (boy did I get lucky they each have the same first name) has a second washroom, workspace up front, and a conference room brought forward from the back wall.  Taking to heart comments on environmental branding, my Better Homes and Gardens response is to furnish the office appropriately and expand the kitchen a bit.  Imagine the buzz in your office as people gather around sharing ideas over homemade lasagna!  Thanks for all the feedback; I think we together came up with something pretty cool.

For any broker considering any of these ideas, a thorough weighing of all of the benefits and risks is probably in order.  To help get this started, I created a simple spreadsheet (to save and edit it yourself, click on the link at the top-right of the page that opens).  Here you can input your costs (reconfiguring the space; buying new technology, furniture, and appliances; and other capital expenditures) together with the benefits (most notably, the reduced lease cost).  There’s also a placeholder for any anticipated change in production (do you think this move will draw more traffic to you?  will you attract new agents?  will you lose any?).  It all builds to a calculation of your projected ROI and payback period which I hope is helpful to to anyone seriously considering this.

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What are some of the objections you foresee and how can they be responded to?  One I’ve heard already is that most agents want a dedicated workplace they can call their own – space is needed, especially for paperwork and personal belongings.

One response I propose is to incorporate tasteful lockers or cubbies for safekeeping (noted as “C” in my drawing) while allowing everyone to hang personal photos around the office.  I think doing this adds to the idea of a relaxed, open, and conversant office which would benefit consumers and agents alike.

Clearly each agent and broker has to weigh whether or not this makes sense, but I urge all to think beyond the immediate future.  There is tremendous pressure on the model as it exists today.  There is simultaneously an opportunity for a rebirth of the real estate brokerage that could ensure its long-term viability.  The floorplans I’ve proposed are meant as one part of a fairly substantial DNA change. 

I welcome any and all comments.  Whether you agree, disagree, have made a similar change, or not.

Finally, if you missed the chance to send in your drawings last time please email me and and I will post them here.

4 thoughts on “Financing the New Real Estate Office

  1. Bad Realtors don’t deserve to eat and good Realtors don’t have time to eat so let’s get rid of the kitchen and include a snack bar area when people can grab free food on the go. Plus, you don’t want the entire office smelling horrible because the receptionist likes to eat some funky-smelling middle-eastern food.

    Plus, are people there to work or eat and watch tv. What successful agent has time for that?

    I suggest getting rid of the computer area, adding in more private offices and first-come first-serve cubicles for agents who need to get in and out but don’t actually work their.

    Plus, the storage should be somewhere else. Anybody heard of ‘Public Storage’?

  2. Fair point on the odors eminating from the kitchen, though I wouldn’t limit it to any one region’s foods. One word: lutefisk. Anyone with a Scandinavian background (or perhaps living in MN) will cringe at the very thought of that.

    However, the idea behind the kitchen is more about drawing customers and creating a unique experience (ditto the TVs – I visualize them as big-screened computers showing off properties, marketplaces, and the brokerage’s tools).

    I like your snack-‘n-go idea. That was a bit of my thought behind the original “coffee shop” model from the first post on this.

  3. I think the “kitchen” should be a combo coffee bar & reception ala Starbucks. Locate it right behind the receptionist. “Hi – welcome to our office, would you like a latte & biscotti while you view some of our listings scrolling on the flat screen monitor/tv?” A mini fridge could hold a few bottles of soft drinks or water, but you really don’t need a full kitchen there.

    You probably need a few private offices that could be reserved (and paid for) by the agents who have young kids or other noisey distractions, and can’t realistically office at home, along with some that just can’t get used to the idea of not having a private office to retreat to.

  4. @Vicki-
    Thanks for the comments. I see you’re an agent in southern California. Are there any unique features in the office you work out of? All else equal, can you see yourself in any of the models we’ve discussed here or in the 7/3 post?

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