For brokerages large and small, enhancing the bottom line is the name of the game when it comes to running a profitable real estate business. But as the industry continues to change and evolve, so too does the way in which brokers think about—and approach—profitability.
“I’m looking forward to the next five years,” said Sherry Chris—president and CEO of Better Homes and Gardens Real Estate—who offered her perspective on broker profitability from a 10,000-foot level during the 2017 REALTORS® Conference & Expo.
“The industry is changing significantly, as is the brokerage business,” added Chris, who explained that in the future, brokerage companies with diverse revenue streams will be most profitable.
Whether it’s ancillary services such as mortgage and title or even lead generation and relocation, Greg Carlson, founder and owner of Five Star Real Estate, shared Chris’ view into the brokerage of the future.
“If you’re currently sitting with one stream of revenue, you’re very susceptible,” explained Carlson. “With less profitability, not only are there going to be less agents/brokers, but also brokers are going to have to become strong business people. They will need to know their numbers and have metrics, tracking, measuring and benchmarking in place.”
Drilling down even further, panelists shared their thoughts regarding the way in which brokers can take advantage of new opportunities as traditional brick and mortar models continue to face stiff competition.
“It’s certainly easier to start from scratch,” said Chris, who built the Better Homes and Gardens Real Estate brand from the ground up, “but it’s not impossible to change an existing company.”
It’s also important for brokers to establish their culture early on. By showcasing what you stand for, how you’re giving back to the world and who you are as a brokerage company/brand, you will successfully establish your benchmark, which will allow you to bring the right people in.
“As more agents are working offsite, it’s getting harder to draw them inside brick and mortar buildings because they don’t think they need it,” said Leigh Brown, broker/owner of RE/MAX Executive Realty in Charlotte, N.C. “As brokers, it’s our job to provide meaningful education,” she continued. “This is the No. 1 thing our agents need, so it’s critical that we give them what they can’t get in other places.”
For Carlson, mitigating risk and enhancing his firm’s bottom line begins with supervising agents through a variety of means, including dotloop (which allows him to see into transactions), turnkey clauses and even a ‘pre-flight’ checklist.
Chris’ No. 1 piece of advice? “Look for the gaping hole in your marketplace and fill it.”
Stay tuned to RISMedia for more from this year’s REALTORS® Conference & Expo.
For more information, please visit www.nar.realtor.
Paige Tepping is RISMedia’s managing editor. Email her your real estate news ideas at paige@rismedia.com.
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