Brokerage leaders are seeing the writing on the wall: inflation, prices drops are rising (for 15 consecutive weeks, according to Redfin,) and homes that might have garnered six multiple offers just a few months ago are getting two. That’s why 73% of brokers surveyed in the Q3 2021 BrokerPulse thought prices will be up between 1% to 5% in the next three months, compared to 96.5% of brokers surveyed in our Q2 2021 BrokerPulse.
Home sales should continue to be up more than 5% according to 46% of brokers who responded. And, 76% of those surveyed feel optimistic about the market through the end of 2021.
RealTrends BrokerPulse requests surveys from more than 6,000 real estate brokerage leaders around the nation on market trends and brokerage opportunities and challenges. Of the 145 completed surveys, 35% were from the Southeast, 21% from the Southwest, 20% from the Midwest, 13% form the Northeast and 11% from the Northwest.
Continued challenges: Agent productivity and new business models
Brokers continued to mention pressure on net and gross margins and increasing per-agent productivity as their top challenges in the next three months. Close behind is competing with new business models and difficulty in recruiting.
One broker who has put a plan in action to boost his per-agent productivity is Greg Harrelson, CEO of CENTURY 21 The Harrelson Group in South Carolina. He reviewed every one of his 200 agents production. From there, he set goals for each one and built a plan for them to get there. “It’s a lot easier to get someone from 15 transaction sides to 45 than it is to figure out how to recruit another agent and blend them into our systems,” he said. He build a scalable coaching program with video learning at its foundation.
When it comes to new business models, brokers view virtual models, like eXp, flat-fee models, high-split, capped commission model companies, and, according to a California-based Coldwell Banker broker-owner, “Any company willing to pay cash to our agents is a threat, but we hold our own against the 100% companies with little to no support for their agents.”
Lack of training and little brokerage supervision was cited as a huge problem for, what Paul Tibbets, broker-owner of Signature Properties LLC in Texas, called “Realtor mills.” He says, “They hire [agents] who work from home and have little access to a knowledgeable broker in their area. These companies put on a big marketing blitz but the public doesn’t realize how incompetent most of these work-from-home agents are.”
Risks to the industry
When it comes to the industry, Q32021 BrokerPulse found that brokers are concerned about the following:
- Lack of inventory
- Aggressive recruiting by competitors
- Rising interest rates
- Resurgence of COVID-19 cases and a never-ending pandemic
- Changing regulations
- Consumer complaints and lawsuits
- Third-party referral platforms
- Change in the independent contractor status
- Commission compression
- Housing supply gap
- Discount competitors
- Failure to adapt to ever-changing consumer demands
There’s a lot of talk about the concerns of other business models, and those concerns are valid. However, there is room in this industry for all types of competitors. Competition drives real estate brokerage leaders to adapt and improve their businesses. The keys are culture and relationships. Oh, and a good marketing story.
The Q4 2021 Broker Sentiment Survey will open October 1, look for it in your inbox. Questions about the Survey, email Tracey Velt, managing editor, at firstname.lastname@example.org. Also, be sure to sign up for my bi-weekly broker newsletter, called BrokerSource.