Spencer Rascoff on threats to the traditional brokerage model

Today’s RealTrending podcast features Spencer Rascoff, founder of Pacaso, Hotwire and Zillow among other companies. Rascoff is also the CEO of 75 & Sunny, an investment company. Rascoff discusses the next wave of real estate technology as well as the challenges ahead for the traditional brokerage model.

Here is a small preview of today’s interview with Rascoff. The transcript below has been lightly edited for length and clarity:

Tracey Velt: We’ve seen a shift in the brokerage industry, where the broker focused on providing services for the agent and the agent focused on the consumer. Now, brokers are really focusing on both of those audiences, and realizing that they have to offer consumers as many options as possible. Tell me a little bit about what you see as far as what brokers and agents should be doing, or how they can grab that opportunity, especially as it relates to proptech.

Spencer Rascoff: The role of the agent and the broker and the relationship between the agent and broker has changed a lot in the 15 years or so that I’ve been in proptech. We’re on a pretty clear trajectory in favor of the agent at the expense of the brokerage. In other words, being a broker is much harder today than it was 15 years ago.

If you ask yourself why, it’s because the things that a broker used to provide to an agent have mostly been disaggregated. So what are the brokers doing to surprise the agent? Well, they have office space, lead generation, technology and software, culture, branding, etc..

But, office space — well, they just don’t really need that as much anymore. Technology? Agents are mostly buying that themselves individually. Lead generation? Agents are mostly buying that from Zillow Group, or Google.

They don’t need the brokerage as much for their brand anymore. Culture, which is something that brokerages generally provide to agents, well, a lot of that culture is coming from Facebook groups, coaching or from events that the agent is attending outside of the brokerage.

In the face of all this, you’ve got disruptive brokerage models making it even more difficult. So different brokerages have adapted in different ways. I think the ones that are trying to include the consumer in the conversation as you suggest, to explain that there’s a third constituent in this triangle between agent, broker, and consumer are better served.

RealTrending features the brightest minds in real estate. Twice a month, brokerage leaders, top agents, team leaders, and industry experts share their success secrets, trends, and lessons learned navigating this ever-changing industry. Hosted by Tracey Velt and produced by Elissa Branch.