If you’ve been waiting for rates to fall before buying or selling a home, the recent Fed rate cuts may have you jumping back into the market. Matt Johnson, CEO of Worth Clark Realty, shares insight into helping agents and consumers successfully navigate the home buying and selling experience together.
Q: How important is it for consumers to work with a “big-name” real estate company?
Industry data says the brokerage brand name doesn’t matter. The brand name itself – with a few exceptions in the “luxury” market – will not help you buy or sell your home. Your agent’s knowledge, experience, and integrity make the biggest difference. Hopefully, their brokerage will support that professionalism. Brand name aside, the brokerage model itself could matter to you. Different real estate brokerages are often different in some fundamental ways that aren’t obvious to consumers. For example, agents who broker with a flat fee transaction brokerage, like Worth Clark Realty, may be better equipped to offer consumers more value and services than agents with legacy brokerages who take large splits of their agent’s commission.
Q: What’s a “legacy” brokerage?
Legacy brokerages are older brands you probably know. They tend to take larger percentage “splits” (aka fees/cost) on agent compensation for the services they provide. That’s not necessarily good or bad. It can come with some great resources and a more recognizable name on your yard sign. It can also mean agents may be less flexible in the fees you pay. In general, industry stats show real estate agents are migrating away from this legacy model, and that only ~1% of consumers actually hire their agent based on their affiliated brokerage.
Q: Where can consumers turn for more value and transparency from their agents?
Newer brokerages (brands you may not as readily recognize) tend to have lower fees for the services they provide agents and may allow agents more flexibility when it comes to fees charged to consumers. Maybe it’s no surprise, but industry stats show these brokerages are attracting agents, especially during a time when agent compensation is under increasing pressure. Like in other industries, these newer players use technology to build efficiency and, hopefully, add some scale to make sure overall revenue growth is healthy even if what they make “per unit” is lower.
Q: How can agents deliver the best value to their customers and clients?
Here’s the inside angle on it all. Legacy or newer, how the brokerage attracts and keeps agents is important. Some attract agents by promising the ability to build downlines and create what looks like a multi-level marketing business. The agent is banking on making money from recruiting other agents under them in addition to (or instead of) focusing on helping clients buy/sell real estate. Other brokerages attract agents by promising to deliver authentic brokerage services that help agents be great at and become better at buying/selling real estate. At Worth Clark Realty, there are no downlines or other mechanisms to take an agent’s focus away from that core buying/selling competency.
There are great agents at almost any brokerage. If you know of an agent you trust and who has the knowledge and experience to represent you well, that’s huge, work with that person. However, if you don’t – check out the underlying brokerage model as you interview agents and make sure they’re aligned with the kind of focus you want from the agent in your corner.
