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30 July 2008

Mapping the “Brokerage of the Future” PART I of II

Post Contributors: Sherry Chris, Marc Davison & Kevin Doell

One of the best parts of any industry conference is tapping into the collective brainpower of very bright and committed professionals. At Inman’s Real Estate Connect San Francisco we sponsored the “Real Estate Brokerage of the Future” breakout sessions.

To wrap up the sessions, we wanted to play to the strength of the attendees by getting them to interact and put down their best ideas on paper. Turning an afternoon panel session into a dynamic group workshop, we captured what the “Brokerage of the Future” should look like according to the 50+ attendees willing to role up their sleeves to share their ideas with colleagues and competitors alike.

The task before the audience was to split into four groups and brainstorm about four components of brokerages. Four facilitators worked with the groups, including, Marc Davison and Brian Boero of 1000 Watt Consulting; Rick Spencer, director of IT at Windermere; and Chris Crocker, of NRT.

Sherry Chris worked around the room with all the groups and did a quick wrap up.

From Left: Crocker, Chris, Davison, Spencer

From left: Crocker, Chris, Davison, Spencer

The groups tackled the following topics:
1. The Physical Presence: Redefine the real estate storefront. What would it look and feel like internally to the agents and externally to the public?
2. The Virtual Presence: What would the online offering be — from website to technology?
3. The Business Model: What would the arrangement between broker and agent look like it if could start from scratch?
4. The Consumer Gets… :
What do consumers, want from a new real estate brokerage?

As Marc explained it, the most important criteria was to drop any preconceived notions and to think “blue sky.” After 30 minutes, a representative of each group briefed the whole audience on their top three ideas.

Today, we’ll start with “The Physical Presence” and the “Virtual” and go through the rest in our next post. Comments and criticism are welcome. More ideas to add? Better yet.

Sherry Chris provides her take below.

For another perspective, check out Marc Davison’s blog post on the same topic, written with his usual flair and interpreted through his analytical lens.

The Physical Brokerage Space of the Future
(Facilitated by Brian Boero):

Workshop Participants

  • A smaller physical space
    • 900-1,200 square feet
    • With a modern conference room
    • Multi-use area for the public to access
    • Small work stations that serve all the agents
  • Better Technology
    • Dual broadband network that includes a secure network for internal agent usage and second unsecure public network offering free Wifi to the local community that extends as far out of the office as possible.
  • Cool Environmentals
    • Apple meets Starbucks
    • Multi-media enabled
    • Serving refreshments

Sherry’s Take

Everyone likes the “shared space” concept where nobody owns their workspace and everybody shares. If I was starting up a brokerage business today there is no doubt I would set up my offices that way. I have visited real estate offices that are set up this way in various cities and it feels right for the future of the business. The reality is though, that most existing companies are very heavily invested in bricks and mortar and it is financially challenging, if not impossible, to throw away existing office space and start fresh, particularly in this type of market.

There is the other problem of prying agents out of their private offices and telling them they have to share. Several years ago a Realty Alliance survey showed the average square feet per agent was in the 130-range. I am sure it is much lower today, but probably not low enough. A good measurement to use today is that you should be at least at 150{0a8e414e4f0423ce9f97e7209435b0fa449e6cffaf599cce0c556757c159a30c} capacity. So, for every 100 desks you should have 150 productive agents on your roster. If you currently have large offices, make them as productive as you can. And start thinking about how you want to reshape your business for the future. Think about the GenX and GenY agent of the future who feels more comfortable working out of an “Apple meets Starbucks” environment. Check out Nicolai’s recent post on Designing the New Real Estate Office.What do you think the ideal office should look like?

The Virtual Brokerage Space of the Future
(Facilitated by Rick Spencer):

Workshop Participants Discuss the Virtual Presence of Real Estate

1. The Omniscient Consumer easily accessing all property data available in MLS along with an objective view into an agent’s reputation and connections with mortgage brokers, title providers, etc. This transparency includes what work agents are doing on the behalf of consumers, how they are getting paid, and how much they are getting paid.

2. The Broker as Listings Funnel. The logical conclusion of the shift towards listing aggregation sites results in brokers no longer maintaining separate web site silos, but rather brokers providing listings to “the cloud” on behalf of the agents. Consumers use their tool of choice to find listings they are interested in. The “traffic” from the cloud (buyers) is farmed out to agents most likely to provide a great customer experience. The broker no longer uses an MLS, as they are syndicating their listings to the cloud directly. The broker provides a team of specialists to provide services to agents, such as entering data, creating copy, formatting media, etc…

3. Agent and Consumer Choice. Radical transparency and new tool sets allow agents to create their own business models i.e., some become fee based, some hourly, some different commission structures. Consumers can take bids from agents, and choose a business model that suits them. Agents will be able to form teams that provide a variety of business models, and a variety of specialized services.

Sherry’s Take

Here the group talked about “radical transparency” and syndicating listings to a “cloud” – now that is pretty far out the for the brokerage world… or is it? I think most of us have come to terms with the transparency piece and the importance of it. We are entering the age of the consumer being in control, and if they don’t get all of the information they need from us, they will quickly go elsewhere and not come back. The syndication of listings has gone mainstream and the race is on to see who will end up with the most listings and who can offer the better user experience. Heck, in just the week since we have launched, I had agents contact us asking if they could put their listings on our site — and they were with competing brokerages. I took it as a compliment, but also thought, maybe we could be on to something. Will a “cloud” replace MLS? What are your thoughts?

What do you think?
Plenty to comment on here. Is the big office dead? Are offices necessary at all? Who benefits the most? Does the MLS have a rightful place? Isn’t there already enough choice in the marketplace?

Tomorrow we’ll post the group’s ideas on the broker/agent relationship and what the consumer wants

The “Not So Fine” Print
The opinions expressed on this site are the opinions of the participating users and may not necessarily reflect the views of Better Homes and Gardens Real Estate LLC, Realogy Corporation, or its affiliates, parents, and subsidiaries. 1000Watt is currently working with Better Homes and Gardens Real Estate LLC in a consulting capacity.

15 thoughts on “Mapping the “Brokerage of the Future” PART I of II

  1. No matter what the real estate office of the future looks like, I am more interested in what it will feel like to both the agent and the consumer. The tone of enthusiasm and professionalism will always come from leadership and fill the office with a sense of value and purpose. Let the office of the future require an investment in the people first, furniture second. Let the office require a consumer focused gameplan, then a floor plan. Let the office of the future have transparency in “real seller pricing decisions” first, then transparent conference room windows second. Let the office of the future serve up full time professionals first, then serve Lattes second. Let the office of the future be the place where real resources serve the needs that matter most, rather than the needs that matter the least. We all know the parts that make a house; May the office of the future be truly a home!

  2. I attended this session at Connect and found it engaging on two fronts. First, I applaud BH&GRE, and company, for creating the conditions to turn the session into a real conversation. Second, these topics are top-of-mind with me right now as I am in the process of planning what I call my Next-Gen Brokerage.

    From a physical perspective I throw out for consideration a model that may be best described in one word; “studio”. To me, activities occurring in this space will be part creative, part marketing, part deal-making, part showcase, part community hub, part administrative, within the overall context of presenting real estate to interested consumers using the latest technological tools available in a non-pushy, professional, informative environment. Creating the experience of being on the street, outside the house and inside the property before actually going there is one of the goals. The consumer experience will be totally immersive. Elements of the Apple – Genius Bar / Starbucks mentioned by the breakout session exist in this model.

    From a virtual sense, I think a clean-sheet brokerage has a huge advantage over any existing brokerage, since existing brokerages have much legacy systems baggage to deal with. The Next-Gen Brokerage will take advantage of all relevant toolsets available across the web to bring the pieces together as-needed to provide the totally immersive consumer experience mentioned above, and those tools needed to run the business of the brokerage. Agents are key, and should be able to configure for themselves the service elements they need to be successful. MobileMe on steroids for real estate comes to mind.

    I am looking forward to the continued conversation.

    George

  3. @Scott – I love your comments, and you are absolutely right, the office of the future (and the present for that matter) must start from the ground up. The culture that is created and fostered will go a long way in building a community that will last for a long time. I remember one of my early branch management jobs – the office itself was in a poor location, and in need of a remodel, but the culture was second to none. After successfully getting approval for an office makeover, the agents came to me and said they wanted things to remain the way they were. They were worried the culture and team atmosphere would change if we remodeled the office. That was a good learning experience for me.

  4. @George – How exciting that you are planning to lauch a brokerage at this time! You are going through what we have just experienced for the past 9 months. I can’t think of a better time, even with the market the way it is to jumpi n and build something for the future. Let’s keep the conversation going. We have entered the age of the consumer, and as you mention, building tools that benefit the consumer in this Web 2.0 world will be the key to attracting the type of agents and building your very own culture. I hope you will keep us in the loop as to how you are progressing. Thanks for the compliment on the session, we hope to be able to have a similar session at the next Connect. All the best!

    1. I am planning to open my real estate office in Panama and I found your comments right on the mark.

      I agree 100% with the new design of the real estate office of the future.

      Our company offers Flat Fee Listings and anyone who buys a condo through us get 1 year of maintance fee for free.

  5. Thanks Sherry.

    I have been thinking about one question that is both simple (at first blush I think) and complex at the same time (when someone thinks through all the implications, with respect to brokerage preferences and MLS rules), and that item is: “who owns the listing?”

    From a consumer perspective I think the consumer would (rightfully) believe they own the listing, yet from a brokerage perspective (wrongfully) I think the brokerage would say they own the listing. Then once the listing is on MLS, the local MLS would think (wrongfully) they own the listing. I think there are two questions here that need an answer. First, who owns the listing? Second, what rights are associated with owning the listing?

    I put this out there since I think this is a fundamental question that needs to be answered, and since I have been musing over this lately. I will try to stay objective (although I have already tipped my hand above – I guess I am a poor poker player).

    In re-building any business model, I have found it is helpful to question even the most simple (or what many think are simple) things first.

    Comments? Let’s get the creative juices flowing.

    George

  6. How refreshing to finally hear others in the realty franchise business acknowledge that things must change in order to move forward. I started a boutique independent company six years ago working out of a 10×11 office. We moved to a 1500 sq ft office (still really more space than we needed), started another brand in addition and now have the two companies working in the same space. None of our agents feel like they have to spend much time at the office. It’s pretty quiet here most of the time.
    Up to this point, every franchise I considered affiliating with could not understand our point of view. They wanted us to strive for that “bigger box”. We have chosen to put our money into technology and not rent. You guys really GET IT. Interestingly, our agent retention has been stellar because we don’t keep hounding them for more money. The environment can be much more relaxing and fun when management isn’t worried about making the next rent payment.

  7. Melissa, thanks for your comments! Soundsl like you have a winning model – multiple brands and small overhead. We are working on changing the face of real estate ourselves – would like to talk to you sometime, and share some ideas…

  8. I have been looking for someone who gets it. As an independent firm I am growing, even now, but I want to get bigger and it is looking like to do so I may need to join with someone who is like minded as myself. I have been looking at lots of ideas that make sense to me and now I see others are doing the same things.

    I have an office with four offices, a reception area, kitchenette and bathroom. I keep my overhead down to the minimum. I tell me agents that the office is a nice place to visit but I don’t want them living here, go out and be prosperous. I encourage work groups from the local Real Estate Schools to come here and study. I look for ways to make this an appealing place to come and be. Using a portion of the space for consumers to use is also an idea I have been kicking around. I am also going to start building energy efficient and green homes. Again we seem to be on the same wave length.

    And like Melissa above I am looking at filling one of my offices with another business I am developing.

    It will be interesting to see what will transpire in the future.

    (if only you had waited another year to open I might have been BHaG. A man can dream can’t he!)

  9. David, I think the multi-use office is the way of the future, to not only keep costs down, but to also maximize the value to you as a business owner and to the community you are in. I like to think of the RE office becoming more like a creative/display studio than a traditional place full of desks. In a previous life as a management consultant I would always try to spend time with clients as much as possible, and as you have said above, as a realtor, we should be out in the field, not in the office.

    Sounds like you are on to something here.

    George

  10. @David – you can become BHG anytime you like! We are a direct franchising model that embodies the future of real estate – give me a call…

  11. What an excellent conversation. I have been going over my current brokerage model and wondering what the best next step is. We started in a small space, expanded due to agent's complaints and now see the area empty 🙁 Overhead has doubled and now wasted. Customers want quaint anyway. I'm looking at downsizing space again and would love to have a cafe style open feel space to work out of. Sherry, I've heard so many great things about you. WTG!

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