{"id":3566,"date":"2022-10-20T19:52:17","date_gmt":"2022-10-20T19:52:17","guid":{"rendered":"https:\/\/www.realtrends.com\/blog\/2022\/10\/20\/opinion-evaluating-potential-acquisitions-and-partners\/"},"modified":"2025-03-13T02:47:14","modified_gmt":"2025-03-13T02:47:14","slug":"opinion-evaluating-potential-acquisitions-and-partners","status":"publish","type":"post","link":"https:\/\/www.realtrends.com\/blog\/2022\/10\/20\/opinion-evaluating-potential-acquisitions-and-partners\/","title":{"rendered":"Opinion: Evaluating potential acquisitions and partners"},"content":{"rendered":"\n<p>As a broker\/owner, my main mission is to consistently bring more business and opportunities to my agents so that they can build a business that will sustain the ever-changing market. That means I am always scanning the horizon for strategic relationships through mergers and acquisitions.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-are-we-looking-in-market-or-out-of-market\">Are we looking in-market or out-of-market?<\/h3>\n\n\n\n<p>At the highest level, we look at either in-market or out-of-market opportunities. In-market relationships often present tremendous opportunities to create financial efficiencies by eliminating overlap. But there needs to be a cultural fit, most importantly at the leadership level. We can save all the money we want, but if the leaders are not aligned, the merged organization will not be successful.<\/p>\n\n\n\n<p>Out-of-market opportunities present different considerations. <a href=\"https:\/\/www.realtrends.com\/blog\/articles\/significant-changes-in-the-valuation-basis-of-residential-brokerage-firms\/\" target=\"_blank\" rel=\"noreferrer noopener\">Buying a company<\/a> and its brick-and-mortar location is a fast and efficient way to increase agent count. Again, leadership is important: do the existing leaders have a strong following to support the transition and minimize agent breakage.<\/p>\n\n\n\n<p>Here are some other considerations for partnering with another brokerage:<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Is there a scalability ceiling?<\/h3>\n\n\n\n<p>Company size is another consideration when evaluating a strategic relationship. In my experience, brokers who run companies with 10 to 40 agents spend a lot of time managing people and the business, but don\u2019t have enough capital to hire staff to support scale. These people are often super-successful salespeople who thought the next logical step in their career was to open a brokerage. <\/p>\n\n\n\n<p>Oftentimes, running a brokerage is not their strength. Creating a strategic relationship that can allow them to keep their company intact while returning to their roots as a salesperson can be a perfect solution.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Are our models compatible?<\/h3>\n\n\n\n<p>One of the biggest things to manage in any merger or acquisition is agent breakage. Limiting change can go a long way in keeping agents, which is why I spend a lot of time discussing fee structures and compensation plans. <\/p>\n\n\n\n<p>Do we need to grandfather in existing agents? Can we demonstrate enough value for any new fees we plan to assess? Will agents be comfortable working in a smaller space or completely virtually?<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Is it a win-win?<\/h3>\n\n\n\n<p>I always strive to form positive strategic relationships. Whether a broker is looking for an exit plan, wants to relinquish leadership responsibilities or wants to preserve the company\u2019s legacy, I am sensitive to the broker\u2019s needs as well as my own. I typically don\u2019t make a lot of noise around promoting an M&amp;A because I think it is disruptive. I focus attention on the benefits of the relationship: it\u2019s like status quo but better.<\/p>\n\n\n\n<p>As we contend with a <a href=\"https:\/\/www.realtrends.com\/blog\/articles\/whats-ahead-for-real-estate-brokerage-valuations-and-deal-terms\/\" target=\"_blank\" rel=\"noreferrer noopener\">post-pandemic real estate market<\/a> with potentially choppy economic seas ahead, broker\/owners may be looking to sell, merge or roll in for a variety of reasons. The nature of the resulting relationship can take many forms but what doesn\u2019t change is that we are constantly pursuing opportunities to support long-term growth and success for all involved.<\/p>\n\n\n\n<p><em>Jeff Knipe is president and founder of <strong>Knipe Realty ERA Powered<\/strong> in Portland, Oregon. <\/em><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Bring opportunities to agents by evaluating potential acquisitions and partners. Here are some things to consider.<\/p>\n","protected":false},"author":15802,"featured_media":4822,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[3255],"tags":[],"coauthors":[2900],"class_list":["post-3566","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-archive"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v25.4 (Yoast SEO v26.8) - https:\/\/yoast.com\/product\/yoast-seo-premium-wordpress\/ -->\n<title>Opinion: Evaluating potential acquisitions and partners - RealTrends - Blog<\/title>\n<meta name=\"description\" content=\"Bring opportunities to agents by evaluating potential acquisitions and partners. 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