3 important lessons from emerging real estate agency models

3 important lessons

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from emerging agency models

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New agency modelsAs these new models start emerging, we take a look at the different types and what we can learn or adapt from them.

In this short presentation

we’re going to take a look at a few of the new hybrid business models

emerging in the marketplace

Compressed commission, agents on salaries, thousands of employees without a square foot of office space – these are just some of the strange new trends sweeping the real estate industry.

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Discount brokerages

Redfin

● Agents paid on a salary basis and receive ‘customer satisfaction bonuses’.

● On average, sellers pay half the commission they would normally pay.

● The customer satisfaction ratings are published online to help sellers select their agent.

● Agent reviews and discounted costs means agents to spend less time prospecting.

Redfin are a reasonably new, Seattle based discount brokerage.

Mike PeroMike Pero are a New Zealand based

discount brokerage.

● Mike Pero have cut their commission down to 2.95% for sales up to $390,000, and 1.95% for anything higher.

● The average agent in New Zealand spends around 60% of their time prospecting. Discounts attract more vendors.

● Mike Pero were listed on the Deloitte Fast 50 as one of New Zealand’s fastest growing companies in 2014.

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Online platforms

Opendoor

● Opendoor buys houses from vendors outright, then sell them on the open market. They have been labelled in the past as a ‘big data house flipper’.

● Homes are appraised online. If the vendor agrees, Opendoor buy the house upfront in as little as 72 hours.

Opendoor is Silicon Valley’s latest answer to real estate. They’ve focused heavily on convenience resulting in a more streamlined service.

● Vendors pay up to 9% commission. This pays for the process and mitigates the risk of holding their huge inventory of property.

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For sale by owner services

PurplebricksPurplebricks are a UK based company, and have recently moved into the Australian

market. They claim not to be a FSBO company – though their

service disagrees.

● Purplebricks charge for a flat-fee ($4,500 AUD) package to help vendors sell their property themselves. Purplebricks provide marketing support and advice.

● All price negotiations, staging, and other duties are left to the vendor to manage themselves.

● While the costs are so low, which attracts plenty of vendors, people generally understand they will get what they pay for.

● It has been reported as little as 14% of Purplebricks’ listings can be tracked to an actual sale.

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In conclusion:advice for traditional agencies

You don’t need to radically alter the way you do business if you’re still profitable. But if you do want to develop a point of

difference in your market to attract more buyers, here are a couple of things you

might like to try…

Consider experimentingwith alternate payment schemes.

Larger established agencies might want to try certain aspects of the unusual business models for themselves. For example, open ratings and customer satisfaction bonuses are a great way to keep your agents delivering the best possible service and a great marketing point for attracting more business.

The officeA look inside the Rex office

Ancillary services and referral feesAncillary services add value for your clients and attract more referral business. Referral fees from other services can even act as a secondary revenue stream.

Why not consider referrals to:

● Mortgage and financial services● Top tradespeople for renovations● Removalist services or van

or truck hire

● Insurance companies● Telco, Internet or other services● Home automation (smart home)

companies● Conveyancing

Hire the best agents

You can always better your service by adopting similar technologies to make your office more efficient. Cloud software, for instance, enables your agents to work just as well in the field as in the office.

Thanks to more and more advanced software, there are plenty of opportunities to automate day-to-day tasks. Take them.

Equip them with the best tech.

Thankyou

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For more information on how cloud software can help your agency – why not join us for a

free demonstration of Rex?