Yesterday Inman News posted an article, Real estate’s ‘unfranchise’: LeadingRE, an “Executive Profile” with Leading Real Estate Companies of the World (LeadingRE) President and CEO Pam O’Connor. (Unfortunately, the article is now behind Inman’s pay wall. Don’t get me started on that practice”¦).
What is LeadingRE? From the Inman article:
LeadingRE represents 600 local and regional real estate firms with a combined total of 5,000 offices and 150,000 sales associates worldwide. The network’s participants produced nearly $250 billion in home sales in 2009, according to its website. The network competes with national brands such as Re/Max, Keller Williams and Coldwell Banker.
. . .
LeadingRE is a “diversified brokerage services network,” O’Connor said. “We’re sort of the ‘unfranchise.’ We do everything franchises do, but we’re not a franchise. We take a local brand and give them that global connection.”
As the co-owner of an independent real estate brokerage, this unfranchise concept has a certain level of appeal. A way to pull “indies” together and build off each others strengths. To help each other out in the good fight against the “Big Boys”. It makes sense on some level.
I know several people ”“ very smart people ”“ that are a part of the Leading Real Estate Companies of the World network. I was even honored to be invited to speak at a LeadingRE conference a couple of years ago. They do good work.
But there were some parts of the Inman article with Ms. O’Connor that made me sit back and think, “Hmmmm”¦. really?” where are you working from?
Specifically, two parts:
LeadingRE members also have to have a good reputation, a quality website, and “nice” offices, among other requirements. (my emphasis in bold)
and
“One of the big headaches has been brick-and-mortar (offices), so I think a lot of (brokerages) are thinking about how to redo (them),” O’Connor said.
She doesn’t like virtual offices — mainly because they lack agent cohesiveness, she said. (my emphasis again in bold)
“A lot of brokers are struggling to find enough of an office presence where people can come and congregate and get energy off each other without the ridiculous overhead,” O’Connor said.
Thompson’s Realty has no brick and mortar presence. I guess that makes us a “virtual office”. Why did we elect to have no physical office space? Simply put, Pam is right — the overhead is ridiculous. And (importantly) in my opinion, the vast majority of home buyers and sellers couldn’t care less if a real estate brokerage has a “nice office”. A virtual office is also a brilliant choice as it affords you so much more privacy when you work from home. I have another business near Edinburgh and looked at all of the best virtual offices in Edinburgh before signing up for that one and it’s just been excellent, so I would not run a business without one now.
So I said as much in a comment I left on the article:
“Nice” offices don’t lead to agent cohesiveness (nor client satisfaction), and it is *absolutely* possible for a virtual office to have agent cohesiveness.
This kind of short-sided thinking is surprising coming from such a well-regarded leader in the real estate vertical.
“A lot of brokers are struggling to find enough of an office presence where people can come and congregate and get energy off each other without the ridiculous overhead,” O’Connor said.
Brokers struggling with this (and I agree that many do) ought to investigate the use of coworking space.
Pam was gracious enough to reply to that comment:
Gosh, Jay, you misunderstood. My point was that there needs to be a convergence of ‘less space/overhead’ with ‘company culture/teamwork’ that is difficult to build when there is no physical way to interact; i.e., an office. Look at many of our members – @properties comes to mind in Chicago – who have done a fabulous job of bridging this gap of getting away from huge offices you could shoot a cannon through, but still creating a vibrant, energizing (cost-effective) place where agents can come, congregate, and benefit from each other even if they do the lion’s share of their work from a home office or out with clients. That balance is what I was talking about, and it’s very difficult if not impossible for purely virtual companies to provide that.
The other point is that a presentable office does play a role -in my opinion – in establishing credibility with consumers. If I’m entrusting a major transaction to a professional, I kinda want to know they have some corporate stability. The office helps tell that story as opposed to meeting with an agent in his or her extra bedroom-turned-home-office.
To which I replied:
Pam –
I appreciate your response.
I have a lot of respect for LeadingRE, and what they stand for. I even spoke at a LeadingRE conference in Scottsdale a few years ago.
@properties is a great example, and I’m honored to call some “@ Folks” friends. Clearly @properties “gets it”.
We’ll just have to agree to disagree on the need for a “nice office” to establish credibility with consumers. My brokerage has no brick & mortar presence, and to my knowledge we’ve never lost a client due to lack of having an office space. Of course what I don’t know is if a potential client said, “No way I’ll work with these guys, they don’t have an office”. But what I do know is that the lack of an office rarely comes up in conversation with clients, and when it does we explain the logic behind it and the clients understand and fully support us.
Personally, I trust my agents to prove their professionalism and commitment to their clients through their actions and results, not through the accoutrement’s a nice office provides.
In other words, there is more to proving corporate stability than office space.
It is indeed difficult, though not impossible, for a “virtual” brokerage to instill “team spirit” amongst their agents. We’re utilizing coworking space, brokerage get-together’s and some tech communication tools to do that. Is it perfect? Of course not. Is it working better than some “traditional” brick & mortar operations? I believe so. Is there more work to be done? Absolutely!
Pam is a very smart lady, of that there is no question. I just happen to disagree with her on this matter.
As I write this, I’m sitting at RETT East ”“ Real Estate Tech Tank ”“ a coworking space some of us have established. Two of my agents are here now. Earlier, a title company rep was here. Yesterday, two agents not in Thompson’s Realty were also here. It’s a pretty unique concept (in the real estate vertical) but one with huge potential ”“ potential to address some of Pam ”˜s concerns.
Pam’s assessment that it is difficult to build agent cohesiveness in a virtual setting is correct. Difficult, but not impossible. It is one of the bigger challenges we face as a brokerage. “Hanging around the water cooler” isn’t just for slacking off or talking about last night’s game. It is a way for members of a group to get to know each other, to improve team work, and to build esprit de corps. (Good grief. My days in Corporate America as a Human Resources Manager are flashing back like a bad LSD trip).
Human beings are social creatures by nature. We want to hang out together. Generally speaking, we want people we like to be successful. And I think few would argue that teamwork beats individual effort in almost any endeavor.
Sure, having office space can help agent cohesiveness. But it’s not the only way to skin that cat”¦
Does office space matter to a real estate buyer / seller?
Not in my experience. Walk into just about any real estate office and what do you see?
Not much.
An admin at a front desk. A broker in their office. And maybe an agent or two at their desks or in a “bullpen”.
Yell out, “Hello? Anyone home?” and the most likely response you will get is an echo.
Agents spend most of their time “in the field”. They are at seller’s homes, or showing buyers potential homes. When they aren’t in the field they are (or should be) prospecting, working on client’s “behind the scenes” needs, studying market trends, and continuing their education. Does it matter if they do those things while quaffing a latte at Starbucks, or sitting in their underwear in a home office? Does it make them “better” if they do these activities in a real estate office accompanied by the sound of crickets chirping?
Oh sure, there are some people that are impressed when they walk into an office and see the fine Corinthian leather couches and smell the coffee brewing in the espresso machine. I suppose on some level this demonstrates “corporate stability” as Pam put it. Of course, said real estate client should also take note that it is their money that pays for the custom timber furniture Melbourne set, the coffee, the artwork, the light bill and the rent.
Oh wait. That cost isn’t passed on to just the consumer. The agents in the brokerage also help foot the bill.
Personally, I’d rather my agents keep a bigger slice of their commission check than help buy a nice office. There’s nothing wrong with them having more disposable income to help pay for marketing a seller’s home”¦ I don’t want to subscribe to the “body count” model of real estate brokerage ”“ hiring anyone with a license and a pulse so I can collect “desk fees” in order to buy shiny furniture or copy machine toner. I’d rather hire experienced, competent kick ass agents that will serve their clients tirelessly. I’d rather our clients get superior service at as low a cost as possible than have them feed my caffeine problem. Or my ego.
If you are impressed by office space, or if that’s proof of corporate stability for you, then you should move along. You won’t be impressed by Thompson’s Realty. If you want an agent that is completely dedicated to helping you purchase or sell a property, then I have complete confidence that you will be impressed, quite possibly overwhelmed, by the agents at Thompson’s Realty. For us, if you have a business phone and good internet connection, we can land that sale. Visit https://www.eatelbusiness.com/business-internet/ for more information on our internet provider. They’ve never failed us on our business.
It’s not where we hang our hat that matters; what we do for our clients is what matters.
Photo of one of our many “offices” by yours truly.
The Phoenix Real Estate Guy was started by Jay Thompson, and I have a little blogging problem... he liked to say...
Totally agree Jay. We went virtual in 2007 and haven’t looked back. In the mortgage space, consumers want answers, good communication, & a fair price. The rapport opportunity for virtual workers is through utilizing tools like social media. We don’t need a physical space to have a rapport opportunity with a potential consumer.
If you’re open, transparent, authentic & speak from the heart in your online efforts you’ve got all the rapport building you need, IMO. Virtual models or virtually-focused w/co-working sprinkled in … offers the most flexibility with the least $$ investment. Stay lean, be efficient.
Jason – it rook me 1,683 words to say what you did in two short paragraphs. Thanks!
I understand all of the benefits, but for me, I need an office to go to outside of my home office. It helps keep me focused and allows me to leave work at work (well, mostly).
At my real estate brokerages, Real Estate USA and Eagle Real Estate USA, we have no physical offices. However, we do have a “home office” for our receptionists to tranfer the calls and emails to agents in Florida, Georgia, South Carolina, and Louisiana. We cover the entire states mentioned in residential, commercial, and rentals properties. We use a paperless system for keeping up with information and to comply with the state real estate comissions. We meet our clients in a variety of locations and being safe is paramount. I, the broker, have not ever had anyone say anything about whether we have an office or do not have an office. We are big on technology and other electronic advancements. At this point, i do not forsee have a brick and mortar office would do my company any good. We offer impressive customer service and exceptional results and that is what the client most value.
Corporate stability or corporate stupidity?
I spend my time in the office….but I’m also probably more ‘mobile’ than most agents in virtual offices. I choose to spend time in the office to get certain tasks done, as working in my home office with a wife, 2 kids, and a dog constantly asking for my attention didn’t work. There is value in having a place to work for me….but I have never thought the value in this office is linked to credibility in the eyes of the consumer.
Cliff – I have the same issues working from home. Lots of distractions… Oddly though, I can manage just fine in a coffee shop, complete with roaring coffee makers in the background. Coworking space solves my issues with that, and adds in the social aspects as well.
I have a brick and mortar (and it really has red brick too) space that I could meet clients at, etc. but I have never done that. I meet clients where it is most covenant to them, so in my opinion – office space not a big deal.
Convenience for the client trumps convenience for the agent every time. Or at least it should….
In my opinion having an office does not matter; overhead is high and for agents who spend a lot of time holding open houses or working the field it doesn’t really matter. I think that most clients would not be put off by lack of an office although I am sure there are some clients who would be bothered by this, although a small minority. If they were bothered by it I don’t think they would bring it up in conversation with the agent but rather keep it to themselves and go with another agent instead. With the internet we get get plenty of collaborating done via online tools and programs.
Jay, your timing is impeccable! Just a few days ago I told my current broker that I will probably be hanging my license with a different broker in the near future. The new broker is completely virtual which prompted my new broker to say “Where are you going to meet your clients for the first time if you don’t have an office?” My response was “I’ve been here 5 years and have never met any of my clients at the office.” Reality is we “meet” our clients through our database referrals or on our websites, Facebook pages, Twitter and so on.
I really like my current broker and the fees and commission split is almost exactly the same. Difference is the new broker is extremely tech savvy and in my opinion, way ahead of the technology power curve for real estate. And that is where we all need to be sooner or later.
Jay, I guess Jonathon Daltons production more than proves the point.
It all depends on the results each model produces. Though I have only a little bit of an idea about your operation, Jay, I do know the relative quality of some of the agents you’ve hired. Very high. It all comes down to per agent production over the long haul, right?
I’m really liking the co-working space idea.
Thanks Jeff (for the compliment on the quality of our agents that you know). We strive to carefully vet our agents, something the “hire anyone with a license and pulse” brokerages do not do. We don’t always get it right, but we correct it when we get it wrong. (And we’re getting better at getting it right — from the get-go.)
“It all comes down to per agent production over the long haul, right?”
Indeed. At least with our model. Sadly, the simple fact is there isn’t any real “carrying cost” with the independent contractor model seen in 99%+ of real estate brokerages (ours included). If Agent Jane/John has zero sales, it doesn’t cost us anything really (other than a hit on the productivity per agent metric). It’s not like we’re paying salary / benefits like a company with employees would.
The “desk fee” model that is very prevalent in this business might even encourage low productivity. I know for a fact (because they’ve told me so) that some brokers have no problem with low producing agents — as long as they pay their desk fees and E&O fees. There is less potential legal liability with an agent that has no sales. Hire 500 agents and charge them $200/month for desk fees and E&O and you’re grossing $100K/month — if they sell nothing….
Awesome points Jay! Never once have I seen positive client feedback that told me how much my clients loved me for my high-end or corporately stable looking office space. Likewise, I have never once heard improvement feedback that noted not being able to meet with me in a physical office space. I have found that being flexible and meeting a client where it suits them best whether it be in their home, at work, a coffee shop or a softball field has most often left my clients with the feeling that I will go the extra mile to make the experience easier and generally more pleasant for them. I think the shift toward being tech-savvy, paperless, mobile, and flexible shows more to a prospective client than Corinthian leather ever will.
I’ve bought and sold properties from five agents in the past 10 years and never visited their office once. We either meet at my place or convenient third places when we needed to actually meet face to face. And out of all of the agents I’ve worked with, the least impressive (and ultimately least credible) was the one with the most formal trappings.
To me, professionalism does stem from a fancy office or driving a luxury car (it just makes me wonder where my commission is going). Rather, it comes initially from reputation and word of mouth, and ultimately from going the extra mile to make the sale/purchase while ensuring that I’m comfortable with each stage of the process.
“… it comes initially from reputation and word of mouth, and ultimately from going the extra mile to make the sale/purchase while ensuring that I’m comfortable with each stage of the process.”
That pretty much sums is up Yuri, thanks for sharing your perspective! (And good luck in B.C.!! You will be missed around here.)
Jay…I do agree….to a certain extent. I have a home office…Two points about that…1) it’s not close to the market where I work, and 2) I get cabin fever if I stay at home. In my past two offices, the first had a prime street front presence. That was at the height of the market, and you fought to get time on the office schedule. I can count a number of sales from that location and that office time. The next office was on a busy street, but to auto traffic, and it was set up, about 1/2 story from the street. ZERO traffic. In an urban environment like where I am, it’s nice to have a place to meet clients. But, not always. I do LIKE going to an office to get into a work zone. Now this Tech Tank….love that…but I don’t know that we play well enough in the ATL sandbox to do that.
If I were to open an office, I certainly would have to consider all the $$$$ involved. I have an idea that will remain a secret….that would ROCK….now it if would make money….that’s another story….
Great to hear you at RETSO!!!!
I’d like to chime in as a Consumer. An office is only one piece of the puzzle but it’s an important one. A physical office inspires a certain amount of confidence that the Agent or at least the Broker is somewhat established. I also think the location(s) a Broker chooses to open their office is important. It tells me they are committed to a location or region that is important to them. I don’t care about a fancy office, it only has to be functional. As a person without Cable TV or a personal cell phone, I understand the value of low overhead.However, If a business can’t or doesn’t want to assume a certain amount of overhead, I wonder about their level of commitment.
A virtual Broker has a lower barrier of entry and less to lose if their business stumbles.
Whenever I hear “we don’t have X or don’t do Y …. to pass on savings to employees and consumers….” it sounds like hot air. A place like Costco could increase profits by raising prices or cutting back on employee benefits but instead, they find innovative ways to succeed. I believe a Broker should be both Brick and Virtual.
Steve – I *really* appreciate your chiming in.
Interesting point on office location. While I can see what you are saying, it becomes problematic in a market like the Phoenix metro area. Our Multiple Listing Service covers an area the size of the state of Connecticut. As such, it would be cost-prohibitive to have physical office spaces scattered across the metro area. Our west-side clients are equally as important to us as our east-side clients (and our central, north and south clients). But I can see what you’re saying…
“A virtual Broker has a lower barrier of entry and less to lose if their business stumbles.”
This makes sense, on the surface. I would argue though that if my business stumbles, I stand to lose a great deal — my livelihood. That’s pretty darn important to me. I’m not going to work harder to preserve and grow my business just because I’ve signed a lease for office space. Make sense?
“Whenever I hear “we don’t have X or don’t do Y ”¦. to pass on savings to employees and consumers”¦.” it sounds like hot air.”
This is eye-opening for me, and I appreciate your saying it. You can’t be alone in these feelings. I need to ponder how we can *prove* this, not just preach it.
Thanks for making me think, and helping me!
I guess we have much ways of socializing rather than to act together in office environment. No offense to office workers. Everything is now tech-driven, so why not the “virtual office”. There are some jobs that need office space, but surely Real Estate business does not need one, of course, in my opinion. I mean we have now brokerage websites that are more customizable than ever. So why not the virtual office. However, franchises do kind of provide piece of mind to clients.
Jay, I think the answer is, an office no matter how empty matters to some agents and some consumers. Is it worth the expense? IMHO…no.
Here in Ann Arbor some of the large Brokers, well most of them have closed their branch offices and brought all the Agents to the main one. But, the top agents are rarely in the office. Hence, your echo sound.
I hope you don’t think this is sexist, just an observation I have seen over the years…mostly men like to “go in the office” and work at a desk. They have told me they feel more productive there.
Jay, in these few words, you’ve done a great job at describing my office:
“An admin at a front desk. A broker in their office. And maybe an agent or two at their desks or in a “bullpen”.
Yell out, “Hello? Anyone home?” and the most likely response you will get is an echo.”
I never spent much time in the office until I became the broker a few years ago. Now I’m beginning to wonder why I’m spending so much time there now. With a cell phone and an internet connection (heck with just an iPhone) there’s much less need for the broker to be sitting in the office all day.
I gave up on “brick-and-mortar” offices years ago. Not a single clients has ever asked nor do I expect any ever will. Most of the companies I compete with have fairly extravagant offices. I tend to believe that when you lead with expenses, your judgement about what is in the clients best interest can easily become clouded. With a low overhead model, I enjoy the ability to tell clients what they need to hear – not what I want them to hear so I can pay for “nice” offices and the like.
Besides, the old model of offices jammed with agents made sense before things like cloud computing and other enabling technologies. Agents pretty much had to come to the office to perform certain tasks. As Inspector Clouseau would have said, “Not anymore!”
Jay,
With my consumer hat firmly in place, I am completely with you on the virtual office points. Having bought and sold numerous homes in my adult life, I always expected the agent to come to me with all of the appropriate tools in hand. The least favorite part of the transaction has always been ‘closing’ signatures where we were unceremoniously ushered into a small ‘conference’ room with glaring florescent lights. In essence, almost as bad as my pending trip to the DMV to complete a transaction which for all practical purposes should also be completely electronic (titling a newly purchased vehicle).
With that said, the messaging of ‘we are doing this to save you money’ doesn’t resonate very well. It always comes across as cheapening the entire experience. Personally, I would rather hear the message of ‘As your agent/broker, I am going to save you time by coming directly to you’.
As always, kudos to you for more thought provoking material.
Troy Rech
Very timely subject, and one that is giving us more than just a little trouble in our recruiting efforts. When we started our virtual brokerage a little over a year ago, we had no shortage of agents who were chomping at the bit to leave their current broker and come work with us, we added 8 agents in short order. Recently, however, it seems that almost every agent we speak to about joining us is gung-ho about it, until they find out that we don’t have a brick and mortar office space. They say, “We need an office to bring our clients to”. We say, “No, you don’t. We’re living proof.” But, they can’t be swayed. Clients have no such compunction about meeting us in an office. They’ll meet in their home, in a coffee shop, heck, anywhere that has a flat surface to sign a contract on. Office? We don’t need no stinkin’ office! But it still does seem to matter to some agents who seem to equate an office with being a “serious” business. Our struggle with convincing them otherwise is an ongoing one, but one we do overcome from time to time: we’ve added 2 new agents in the past 30 days, and will be adding another 3-5 in the next 30 days.
Now, having said that, your comment about co-working space is an intriguing one and something we’d like to know more about. We’ve toyed with the idea of getting an office and offering space in it to mortgage lenders and others to help offset the cost. Is this along the lines of what you mean, or is it different? I would greatly appreciate it if you could expand on your co-working arrangement a little more. It sounds like it brings other independent brokers together under one roof, giving them the opportunity to have an office space without the high overhead that having an office on their own would entail. If this a fair assessment?
You’re right Jay. In fact, judging the quality of a brokerage by the styling of their office or by the ascetic of their website feels shallow to me. These are both subjective elements at best and should not factor all that much in deciding what is a “leading brokerage”.
There is great case to be made for a virtual brokerage. You’ve made it of course.
But to Pams credit, there are far more important criterias for what makes a brokerage a Leading Real Estate Companies of the World brokerage that should not be overlooked.
Believe me, given my personal experiences with Websites, if that were really a criteria for membership, a whole bunch wouldn’t be!
Hi Jay! As many have said, I agree and a large part of the overall ‘feel’ or take-away from RETSO was that the new millennial consumer actually prefers the boutique over big box firms. In my opinion, the tech savvy, virtual office broker is, in essence a form of ’boutique.’ Others may disagree but, I think the general feel is that you’re not just a number; so, boutique or virtual, as a consumer, I’m going to get personalized care. You’re not just selling me something because you have a huge mortgage and large staff to pay–you truly care. I hear that frequently in my area also.
I don’t think clients care about office space just like they don’t care about the big company names. I just open my own company and do not have office space. I think it goes to show how much real estate has changed. I don’t see how the big companies still use the same model they have been using for thirty years. I guess it still must be working but I think it eventually will have to change with the times as more and more independent companies spring up.
@Danny:
I agree with you.Real estate is really evolving. It goes with time.Boise Homes for sale
Really interesting post Jay on a topic I’ve been thinking about a lot lately. I do understand why Steve thinks anytime someone says they don’t have x or y it’s just hot air. That goes hand in hand with the general perception from the public on how we present ourselves in our profession. Working on our own credibility is probably the first order of business and that really has very little to do with whether we have an office or not.
I think generally speaking we tend to attract like-minded people to work with us, particularly if they come to us from the virtual world and have “connected” with us there. They won’t care one way or another about the office. After all, they connected with us online in the first place!
I think the bigger question becomes if you are shooting to expand your horizons and want to appeal to a larger and more diverse audience, then it may be necessary to consider the bricks and mortar option. Steve’s comment is definitely a reminder that not everyone thinks the same.
Thanks for the post. It’s given me more food for thought. I do lean to your way of thinking, but am starting to wonder if there’s more to the subject than meets the eye.
Jay, Sorry for the long comments, but this is a topic that I am very passionate about.
I have been working in the virtual office model for several years now. Not having the expense of a fancy office has freed me up to meet Clients where they want and the money to buy them lunch, dinner, or a fancy coffee. Most Clients would rather meet on neutral ground vs. going into a real estate office.
Of course, my main office is my Rover as I roam San Diego county. With a smart phone I can do much of my required business duties between appointments while watching the Pacific Ocean from the car.
Our business is so different than most. While I am “virtual”, my administration office is fully equipped with high speed internet, printers, backup systems, phones, scanners, and all the required equipment. As you know, we don’t work a 9 to 5 job and I can be putting together a deal at 10 pm at night, talking with a Client early on a Saturday, or structuring a purchase offer. The point is I don’t have to run down to a silly office in the middle of the night to get these things done – they are right where I live. The home office is essential in the modern day REALTORS® life.
I found when I worked in a traditional real estate office it was very difficult to actually get any work done. Constant interruptions from affiliate companies distributing calendars and coffee mugs, the latest office gossip, and constant whining of why Clients are the way they are was mostly the environment. The only way to get something done was close the office door.
I would rather get my networking time from Broker caravans, previewing properties, and networking with agents on-line or via the telephone. Knowing many of the players in San Diego I can usually pick up the phone and find that elusive home my Clients are looking for.
The fact that corporate real estate was so heavy, and is still heavy, in bricks in mortar is why so many no longer exist. If anything, the bigger the office, the more likely they won’t be here next year.
A recent study by the California Association of REALTORS® found that only 13.8% of real estate brokerages had 5 or more agents. 58.7% were one agent and 86.2% were 4 or fewer agents.
The fact is “Franchise” real estate with fancy brick in mortar offices have already failed. Soon those that wish this business model will be paying dearly for antiquated benefits sold by only 13.8% of the agent population.
Finally, if you need motivation or “team spirit” perhaps you should work for Starbucks. Team spirit is just a code word for a culture of “we are the best” while shiny sales plaques are handed to those that are worshipped in this environment.
Real estate should always be about the Client, not a fancy real estate office or a pretty logo.
Want to know more, I wrote a declaring independence in today’s virtual real estate last year.
https://www.sandiegolifestyle.info/2010/08/virtual-real-estate-independence/
Jay,
Man ,I love your blog and all the great content! I am learning so much from you, and I so appreciate the fact that you gave me some website guidance and advice. You’re awesome!
Many Prescott Realtors use “virtual offices” and many work from home, especially during the cold wintery snow days! 🙂 But you still see many of them at the local coffee shops or wherever wi-fi is available!
Thanks again for the inspiration,
Matthew
The Prescott Real Estate Guy
I agree with you Jay. As a busy agent, I am rarely in the office. My time is spent in the field with clients, not sitting around an office. Apparently our office got a new receptionist 3 months ago, but I still haven’t met her. My CAR is my office. I guarantee you that clients couldn’t care less about my office. I’ve only had 2 clients in the past year meet at my office. I don’t think they would have blinked if I suggested we meet at Starbucks instead.
I like having the office to escape to since my wife does not understand that I am working even if I am at home….
Honestly, if I have a good internet connection or wireless & my cell phone, I can work anywhere.
You are right if you have family at home during your work hours it can be a little tougher, and people rooted into traditional methods of an office should still keep one. I just feel brokages should remove themselves from massive office rental space for their agents and let the open market rent to them, and they should tighten up. When the values of homes go up and money comes back there this number is really small for the brokers then I think they can do as they wish, but don’t we all learn to play smarter in this blessed times?
Two cohorts and I are starting a coworking space in Prescott AZ. We are calling it Launch Pad Prescott. There was a Coworking unconference in Austin, TX on March 10 that I watched via live streaming. During the closing panel session, made up primarily of space owners a couple of interesting questions were asked:
1) What is the demographic you did not expect — that turned our to to telecommuters.
2) What demographic have you had trouble attracting? Turns outs to be corporations and one owner has started a special program to appeal to corporations. Seems to me the big realty firms would be included there. The challenge in coworking facilities will be the ability to adapt to the demands of the market; what worked yesterday may not today. For example, to have a mix of Realtors and others with security concerns, you need a managed Internet to segregate users from each other.Stop in if you get up the hill to Prescott.
I have also been 100% virtual for about 3 years, and for 4 years prior to that, I mostly worked out of my home because my brick & mortar office was inconvenient to both my clients, and myself. When I did go in, I found myself just gossiping with other agents and not accomplishing anything.
It works well for me, as an empty nester, but I can see if someone had little ones still at home, the noise and interruptions could be a problem. When my kids were young, I needed more separation of work and home.
Back in the “old days”, (before about 1995 & pre-internet) it was necessary to hang around an office because that’s where the phone would ring from the ads that your brokerage ran. Time at the “up desk” was where you could connect with clients who walked into the office after shopping in the shopping center where the office was located. The brokerage also had all the expensive copiers, computers, printers, faxes, etc, that we couldn’t afford for home use. (I used to pay $50+ a month for a pager, and carry a pocket full of dimes so I could pull off the road to use pay phones!)
Now that we all have computers, printers, faxes, scanners, etc in our homes, an office is more of a luxury rather than a necessity!
Great topic. We’ve gone kind of in between and found some really fantastic, though small, office spaces in key locations where agents can swing in for copies, scanner, fax, internet and enough space to meet with clients. 400 sqft with walls of windows feels a lot bigger and it fits our urban brand. However, we do encourage the virtual agent method and the office is not meant for day-to-day stops for, but 1-2 agents who office their full time.
I enjoyed the discussion on sticks and bricks or not. But more importantly the respect when even though different opinions, the sense of each is knowledgeable. Acknowledgement of this. Just don’t agree but agree to disagree is healthy. I don’t seem to see that much on many real estate blog posts. And some are in the habit of delete unless commenters support their viewpoint. The beauty of blogging is the two way, the possibility of viewpoint modification, broadening with examples, experiences from others. We are social beings, but “R”‘s are hard working, highly competitive types that like being right. Surrounded by yes folks in many instances. Just my observation.
Your timing is impeccable my friend. I wish I had been able to get to RESTO to meet you and discuss this one in person! I feel a virtual conference coming on soon. If people were not sitting behind office desks, they might find they are meeting new customers! Have technology, will travel.Fresh Air, Sunshine and Contracts in the Cloud baby!
This was a great article. I like how you broke it up. I have said forever we the leads do not need office space at all, because our wold is our office. Do not get me wrong some good comes out of office space, but more times than others office time turns into water jugs talk time, where is the coffee, and just a B*^% fest time.
I have spent from $5000 a month for my space to $200. My last space was $200 and it was so hard to let go. It was like saying goodbye to print media and hello to the web. However, I did that before, and it was good, so did make it easier.
Also the major reduction in input to out makes it a must do in many cases. We are way below in many markets where homes should be selling, so we are working, harder, smarter, longer, etc. Large office space makes no sense. For $50 or less you can have a Verizon card and go Mobile and make an open house your office, your car your office, the park your office, etc for FREE.
The big brokerages have not accepted they are spending $5000 per office, and honestly a little office with 10 mega monster computers, super duper magic scanner, and a few nice drinks will take up enough space. sure put in a receptionist and make everything else at cheap, cheap corporate headquarters. Maybe cut the office space down to 1000 SQFT- get out of renting office space to your agents, and honestly find the cheapest place to ave your corporate office.
The old days of the real estate yellow pages are not coming back, print media is not coming back, and the traditional office space needs to go.
That is my two cents
I am lucky enough to get approximately 75% of my business of my website and I would say the majority of my initial appointments with clients are in a coffee shop thus no need for an office :), but with that said I do have an office here in Maine and there is no substitute in my opinion for having all the amenities of fax/scan/printer and the like for getting certain types of work done in the day.. as always I guess it is about finding balance.
Starbucks has always worked for me. Why pay $5,000 a month for a lease just for the customer to walk in a go “wow, my commission pays for this!”. It’s possible to still be professional without an office.
tn real estate
I’m glad you posted this Jay!
I read through all the comments and started to put together a real insightful comment of my own. Unfortunately, I’m sitting in my home office right now and my son’s friends from the neighborhood are visiting and making quite a racket. Hard to concentrate! 🙂
Yes, I still have a brick and mortar office and plan to keep it in the future.
Depending on your business model and family situation, I suppose an office can either be a smart investment or unneeded expense?
I will say that I just closed a walk in transaction that paid for 6 months of rent, wouldn’t have had a chance to work with that client if I didn’t have an office.
The only time i use my brokers physical office is the conference room to meet new potential clients for the first time. Anything after that is out and about.
For years, I worked with a cell phone and any local Starbucks. We now have a 1-room office with a storefront. Not sure that qualifies as “nice,” but the organization sounds like it is still tethered to real estate 1.0. Nothing wrong with that, just not a fit for me and my merry band.
I agree with you on the whole not needing to be tied down to an office thing. Although we still use an office, nobody is really tied to it. Let’s face it 99% of this business is done over the phone and computer. One question though, why’d you cross out competent in your post?
Oh absolutely–with the current state of the economy and the housing market it is almost necessary to go virtual in order to keep afloat. I agree with you entirely on the fact that you can be cohesive with a virtual office–it is almost bizarre to think otherwise since so many companies, including real estate offices, have moved online to cut overhead costs while still providing the same great service to their customers.
My business basically operates out of a van. Essentially all we have is a registered Po Box, a website with all our contact info, cell phones and a good answering service. Granted real estate is a totally different animal, but it does underline the fact that physical office locations are not at all essential for a lot of businesses out there.
i don;t think a physical office is as important as the representative open door. clients just need to feel comfortable and that they can contact their agent whenever they need to
I personally feel that having a small home office works the best with comfortable furniture so your clients can sit down in a relaxed professional environment. We can discuss issues and sign papers without feeling out of place as opposed to a mobile office.
Hi Jay,
We are so old school – we even have an actual assistant – not the virtual type. Having a virtual and physical office works for us. Maybe that will change in the future, but for now my wife and I would kill each other if we worked out of our home office exclusively. For what its worth, we do meet clients at the office, and in many ways they appreciate it. With many of our leads coming from the Internet, having an initial meeting in a real office is preferable for us probably more than the potential client. There are many way to keep costs low and still have a physical location – if cost is the only reason to focus on a virtual set-up, which seems to be the case in this discussion.
Hi Jay! It’s always entertaining to re-visit one of your posts and see the interesting discussion from both sides. Thanks for posting this one…definitely a topic that is at the top of alot of agents’ lists of things to ponder.
I agree that it doesn’t have to be a nice office, but I absolutely think it’s important that one does exist. When I was working under my previous broker, there was no office and my family didn’t appreciate me bringing clients home. Because of that, I had to meet buyers at restaurants to sign paperwork. I didn’t have access to anything I might need on the fly and got the feeling it made me look like a one agent, amateur show.
An impressive and well written post. Thank you for sharing. As always, a pleasure reading your blog.
Great article. I was with a “Big Boy” real estate company with a big brick and mortar office. It was such a distraction to be there. Most of the agents in the office were not selling and just hanging out acting like it was a social club. I would get 10x the work done out of my home office and more importantly stayed out in the field as much as possible because thats where the clients are!
I currently run a very successful virtual office with agents all over the state. With the virtual office model, the sky is the limit. I now have a state wide company vs. a one town operation. Makes it easier to go National with a business model based on utilizing technology.
Obviously, it is not necessary to have a physical office to be successful, but some agents need to feel they are in a work environment in order to be productive. In the end, what matters is how well the agent functions in the environment he or she has chosen.
My current company is a mom and pop type of brokerage with one small office. The company I started with had multiple offices, with a couple of bigger, fancier offices. I went into the office just about everyday, now I never go, I work from home. I have a higher split now and although I do miss the interaction from going to an office, I am much happier now. I rarely met clients at the office anyway. My current company has a smaller overhead than my past company, which means more money for me and when things do get tight, due to market changes, who do you think will suffer more? Btw, the first company I was with was part of Leading RE for about a year. I won’t say anymore than that. 🙂
Jay,
Great article. I think office space for most industry’s is becoming obsolete but especially in real-estate. With iPhones, iPads, laptops, wifi, mobile access, efax, docusign, and WysLoop.com who needs an office. I can do everything from my car or Starbucks that I can do from an office. Offices cost money and a don’t bring in new business. I have never heard a buyer say, “My agent was amazing, they had such a nice office?”
Good Post
Having an office is a sign of credibility. It is not a sign of how good one is but with no barriers to entry those who have offices seem like professionals.
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