For many brokers, starting their own real estate brokerage is the dream. It can be viewed as a sign that you “made it.” And oh, the glamour of living the dream. You have a great team of agents, your clients adore you, you’re a pillar of the community, and you see the future ROI like a mountain peak on the horizon. But living the dream comes with managing challenges. And, yes, there are many. The worry, the sacrifices, the mistakes, the investment. What’s a broker-owner to do?
At Weichert®, we believe it’s the challenges that make us better … stronger … more successful as real estate professionals. When we can identify the trials and tribulations ahead, we can face them head-on.
Let’s be proactive by honing in on four challenges for real estate brokerages. Realty Biz News identified these four in 2023, and we believe they’re sure to spill over in the year to come.
Challenge 1: Inventory
To help offset the fact that inventory is low, we recommend that you focus on what you can control: growing your network. This will help increase your sphere of influence, which can bring inventory your way. Growing your network is like building a house. You need bricks, but sometimes there’s a shortage. You may not be able to produce more bricks, but you can let as many people know that, if they have a brick or two to send your way, it will make all the difference.
Try these action steps to help combat low inventory and collect more bricks:
- Connect with local businesses and real estate investors.List local news and events on your website to help increase traffic.Make sure you have a CRM system in place to capture and manage leads.Generate follow-up email campaigns.Tap into your client base by creating a referral program.Amp up your marketing efforts.Keep hosting open houses throughout the year, even if it’s just a few. In fact, with low inventory, you can really put effort into making those few open houses stand out.
You can make these bullets even more measurable by adding numbers and dates. For example, connect with three local businesses by the end of the month.
Challenge 2: Economic conditions
The success of your business can be impacted by everything economy-related, from fluctuating interest rates to inflation. As a broker, what’s in your control regarding these ever-changing conditions? Your expertise. It’s something you can offer your agents and customers that’s consistent and predictable.
Leverage your experiences in the real estate industry to talk honestly about the ebbs and flows. At Weichert, we do the same. Like you, we have the experience to know that the market evens out over time. That’s why we steer conversations away from hearsay and misinformation, from panic and reactiveness. Instead, we provide facts and historical data to talk about the market trends.
In the face of economic conditions, explain options to your customers so they have a better sense of what’s in their control. For example, you can discuss how today’s interest rate doesn’t have to be their forever rate. Is refinancing an option? Does a temporary rental help? Your expertise can help them think through viable strategies.
During times when the economy swings, be a North Star to your agents and customers for calm, clear, strategic thinking.
Challenge 3: Recruiting
There’s a lot of competition these days. So, keep that in mind as you think about your agent recruitment efforts. We recommend a little self-reflection that includes revisiting two key areas: your why and your tech.
When you understand your ‘why did I start/want to start my real estate brokerage?’ (your mission, your vision, your values), it will be much easier to communicate those messages to future recruits, aka your selling story. Those who start their own brokerage do it for many reasons. Do any of these resonate with you?
- Having a greater sense of pride in your work.Running your own show with freedom and autonomy.Mentoring the next tier of successful agents.Growing your wealth.
In addition to reconnecting with your why, make sure you have the how in place, too. In the eyes of the candidate, the how often has everything to do with technology. The right tech stack powers everything we do. It connects us to our customers. It helps us find new customers. It gives us back time. It creates work-life balance. And it unites us as teams, which can solidify a culture where people want to work.
Read more about ways to use tech to attract and retain top agents in one of our other blogs.
Challenge 4: Profitability
With the challenges of any down market, it’s especially important that your brokerage’s processes are in place to help increase profitability.
One tip we feel is important is to seek win-win partnerships. This can be with like-minded businesses as well as complementary businesses.
For example, is there an interior designer that you partner with to stage an open house? You may already call upon the same person, time and time again, but perhaps there’s a more formal partnership to be made to increase profitability for both parties. It’s worth thinking about.
Another example of a great partnership is joining a real estate franchise. Wouldn’t it be great to have all the resources and support you need already in place, leaving you free to just dive into building your business?
The point is, think about achieving profitability in different ways. During challenging times, your profits may have to also come from transactions beyond the sale of a listing.
A few last pep-talk thoughts
In our industry, there will always be challenges. But that doesn’t have to get in your way of running a successful real estate brokerage. If you’re looking for a little extra inspiration in the face of challenges, here’s what some of our broker-owners had to say about owning a franchise brokerage through Weichert:
“I don’t work as much IN the business … I’m working more ON the business…spending more time growing my company.”
Weichert®, Realtors® – Donahue Partners, Falmouth, MA
“I have all of my agents, and it’s just so much fun to watch them succeed.”
Weichert®, Realtors® – The Bollinger Group, Fayetteville, NY
“It’s been a win-win situation for everyone!”
Weichert®, Realtors® – Triumph Group, Powell, OH
Let’s talk about your business and if real estate franchising makes sense for you.