Are Brick and Mortar Real Estate Brokerages a Thing of the Past?
I received a phone call the other day from an upstart real estate firm based out of Washington. This person indicated they are looking to expand into the Las Vegas Real Estate Market and are searching for a Tech savvy broker to manage the Vegas market. He went into great detail about their company and why they were set up as a virtual real estate brokerage and why many brick and mortar brokerages are set up for failure.
He advised that many of the successful and growing real estate brokerages today are Exit Realty, Connect Realty and Keller Williams and their business model is modeled around these companies. The biggest difference was the virtual aspect. Their offices could be operated from a residential home if zoning regulations allowed it. Everything would be web based and all agents would have a virtual office. Everything would be paperless and meetings could be held right from their personal computers in 3D virtual rooms. As much as I liked their vision and business plan, their model emphasizes recruiting for residual compensation. This is the same model that Exit Realty, Connect Realty and Keller Williams employ. Many real estate agents simply join these companies to recruit and earn their monthly residual checks.
As I do agree, the future of real estate brokerages will be virtual offices and brick and mortar companies will be a thing of the past, I don’t like the residual brokerages. Their emphasis is recruiting when it should be directed on training real estate agents. I get hit up all the time from real estate agents who hang their licenses at these companies. Instead of recruiting they should be showing homes, writing offers, canvassing their neighborhoods, continuing their education or networking. Leave the recruiting to the broker or the recruiter.
Back to the point of this article, with the average sales price falling as significant as it has, it’s becoming tougher to operate a brick and mortar real estate brokerage. Their are many costs that are incurred with operating a brick and mortar real estate brokerage and those expenses are passed back to the real estate agents who hang their license there. Unfortunately, the drop in home prices have affected the income for real estate agents and it’s affecting their bottom line. It just doesn’t make sense anymore to hang their license at real estate brokerages that charge such high overhead. Eventually more and more agents will move their licenses over to real estate brokerages that don’t have such a high overhead and these will be smaller virtual offices.
The death of the brick and mortar real estate brokerages is upon us!
« Las Vegas Property Management Services | Home | Former Las Vegas Real Estate Agent Arrested for Rental Scam »
Leave a Comment