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RealTrending Episode 94: Brokerage Personnel Cost Trends, Biden's $15,000 Tax Credit and M&A vs. Organic Growth

Feb 23, 2021 10:38:00 AM

Today’s RealTrending features Steve Murray, senior advisor to REAL Trends and HW Media talking about  trends in personnel costs among brokerage companies, the potential impact of President Biden's $15,000 tax credit for homebuyers, and growth through mergers and acquisitions versus organic growth. 

 

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

Employment/Personnel Costs: In 2015, brokerage companies spent 31.8% of their company revenue or gross margin on employment costs. As we proceed closer to today, it's declined to 30.8%. What this tells us is that brokers have not cut a lot of employment costs in their brokerage companies, and again, this is all models, all brands, all locations, but it has remained very stable for the last five or six years.

$!5,000 Tax Credit: Concerning the potential impact of President Biden's $15,000 tax credit, there's an old saying that if you really want to cause some damage, get a fire going, and then pour gasoline on it. It's a noble thing to offer, particularly to first-time homebuyers—a $15,000 tax credit to help them better get into home ownership. But, the long-term data and the current market make this tax credit a less-that-stellar idea.

M&A vs. Organic Growth: Look, it's good to do both. As we tell people, when in your local market, if you're trying to grow, you want to have a recruiting system to recruit good agents. No matter what else you're doing in merger and acquisition activity, that’s a must.

RealTrending features Steve Murray, founder and partner with RTC Consulting and a senior advisor to HousingWire. He offers insight and analysis on three trending real estate issues. Steve’s 30+ years in the industry allows him to give you a deeper understanding of today’s real estate business happenings. Hosted by Steve Murray and produced by Victoria Wickham. 

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