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Today’s always-on, digital-savvy consumer has access to more options than any generation before. Real estate is no exception. An online search provides them with a wealth of information they can use to evaluate which brokerage to call on when real estate needs arise. Expectations are high, and building loyalty is more important—and more difficult—than ever.
This, coupled with current market conditions, is creating challenges and painful scenarios for some brokerages, but not every company is suffering. Many are thriving. In fact, some brokers are ending 2022 with more agents, greater income and enhanced profitability. For brokerages to succeed and thrive in 2023, the focus needs to shift from making money to sustainable profitability.
Spend Time on Agents
The average experience level of agents across the market is eight years, which means most haven’t weathered a market shift. That’s where training and broker support come in.
“You have to make a concerted effort to train your agents to always elevate and deliver the experiences consumers want and when they’re ready, to go out and get the business,” said Phil Frye, Century 21 Frank Frye Real Estate in Newark, Ohio, who, having successfully managed previous “up and down” cycles, knows that deals can be made in any market. “Make the relationships, earn the trust and use all the tools, training, and resources available to make a deal work and get the deal closed.”
Lindsey Jenkins, Century 21 Collective in Oak Island, N.C., not only encourages her agents to work their sphere but also leads by example. “We’re doing a companywide 21-day challenge whereby our agents, armed with the talking points they need to explain where the current market is and how to answer and overcome any questions or challenges, present a market analysis and start a conversation with their clients.”
Focus on Relationships
On her end, Jenkins holds multiple “heavy touch” events during the last quarter of each year to get face-to-face time with her sphere of influence, such as distributing mountain apple and peanut butter baskets during Halloween, a Thanksgiving pie giveaway, and holiday gift-giving. “It’s exhausting work, but giving back to my clients always has a great return. We chat, I take notes and I get listings, either on the spot or from staying in touch with them throughout the year.”
Brokers who only know the last decade are not accustomed to agents having to get deals done in a higher mortgage rate environment with a severe lack of first-time homebuyer inventory and a market that is taking a wait-and-see approach. For them, and everyone else looking to stay ahead of the curve, the time is now to respond with cost reduction and performance improvement measures.
Simplify Costs
Michael Killmer, Century 21 North Homes Realty in Lynwood, Wash., is going “old school again,” referring to his company’s focus on business fundamentals in its training, learning and coaching. “While we positioned ourselves very well in the last two-plus years, we are also cutting costs and getting rid of some of the fat that we acquired by streamlining our product portfolios and reducing investments in social media and technology because we’re more efficient leveraging them into business.”
For example, Killmer noted that by having the MoxiWorks platform available to them thanks to the brokerage’s affiliation with the Century 21 brand, they were able to eliminate redundancies and third-party providers that were no longer needed to help manage leads and transactions, market their agents and company listings, and grow their business.
“We also made the decision to eliminate ‘power-buying’ as an option because of MoxiWorks and current market conditions where our agents are able to negotiate price fees and concessions,” explained Killmer.
Look at Possible Partnerships
In periods of contraction, merger and partnership opportunities typically present themselves as broker owners announce to the market that they are looking for an exit or an opportunity to affiliate with a larger firm.
“I’m currently in the process of merging another company into our Oak Island office,” said Jenkins. “It’s a boutique firm and the broker knows that their agents are beginning to look at companies who have more tools to support them, especially in these market conditions.”
“People that wouldn't talk to you before now are calling you,” added Killmer, whose recent conversation with an independent broker who worries about going through a 2008-type market again may result in his company growing from 11 offices and more than 320 agents. “He can compete on split, but his agents are beginning to add up the costs of what they’re actually paying and finding the deal isn’t as good anymore.”
Invest in Space and Support
One critical part of business planning, adds Frye, is keeping an office space up-to-date and relevant. His plan for 2023 includes upgrading to a completely new space and investing more to support their agents.
“We’re building a new, modern office complex for our agents and staff, but also for our clients right next door to where we've been for 45 years,” said Frye. “We also will add marketing and admin staff to help our team be more efficient and for them to have the additional time and resources they need to focus on growing their businesses and keep pushing forward.”
In the end, Jenkins, Frye and Killmer all agree that to win in 2023, brokerages must deliver an extraordinary agent experience, and agents must do the same for their clients and customers. In doing so, brokers will earn the trust and loyalty they need to make money and show sustainable profitability in any market.