With a business model it calls “branchising,” Miami-based Avanti Way Realty hopes to attract and retain business-minded agents, tap their entrepreneur ambitions and expand nationwide.
Avanti Way says branchising will help it recruit and retain top agents. For a monthly fee and office setup costs, agents will have the opportunity to lead new offices and collect revenue from other agents they recruit, without the liability of being a broker or franchise owner, say Avanti Way’s 34-year-old co-founders Enrique Teran and Andres Korda.
Last year, the brokerage trademarked the term “agentpreneur” it uses to describe the enterprising agents it targets and the ethos behind its expansion with a younger, tech-savvy breed of agent.
The four-office firm is also piloting an offshore agent assistant “concierge” service that it hopes will free up time for its productive agents who will then consider becoming “branchise” operators. The service is set to launch in April.
Currently, three of the brokerage’s offices are transitioning to the “branchising” model. The fourth office, located in Miami’s Brickell neighborhood, moved to the model in September.
Avanti Way plans to establish the business model in the Miami area and take it statewide in 2015 before embarking on a nationwide rollout, Teran said.
The firm’s business-model shift and outsized ambitions have started to bear fruit, according to Teran and Korda.
In 2013, the 8-year-old brokerage opened its fourth office in Miami and added 180 agents, more than doubling its agent count from the year before to more than 300.
Korda and Teran say the firm closed more than 5,000 transactions totalling approximately half a billion dollars in 2013, which would rank it among the top firms in Miami, according to the latest rankings from Real Trends, which are based on 2012 stats.
Avanti Way’s “AVEX” tech platform gives the firm a cloud-based workflow that colors its branding to agents. In marketing videos, agents are shown living a jet-setting lifestyle, doing business beachside, from yachts and planes.
The firm’s focus on entrepreneurship, efficiency and technology tends to attract agents in the 25- to 45-year-old range, Teran said.
That agent-base demographic bucks an aging trend in the industry, suggesting that models like “branchising” that appeal to an agent’s entrepreneurial spirit might be the wave of the future.
Nationwide, the median age of Realtors hit 57 in 2013, the highest mark in the last 16 years, according to the National Association of Realtors’ latest member survey.
Brokers ranked recruiting younger agents as their top business challenge — ahead of choosing the right technology, managing social media or syndication — in a broker survey conducted last year by real estate marketing software firm Imprev Inc.
Renwick Congdon, Imprev’s CEO, proposed a “branchise”-like idea in a four-part series on Inman News last year.
In the series, Congdon suggested that brokerages could attract the entrepreneurial spirit in younger agents and align their interests by helping agents operate as businesses while taking an equity stake in them.
Other firms are also making moves to address the aging-agent dilemma.
Warren Buffett’s new real estate brand, Berkshire Hathaway HomeServices, launched a “millennial agent” council last year that it hopes will help the brand skew younger, with Gen Y agents on the council helping guide the firm’s recruiting and tech strategies.
Better Homes and Gardens Real Estate launched a “Beta Brokerage” program in 2010, identifying innovative brokerages it can tap for marketing and recruiting ideas to reach younger agents.
Agent retention is also another challenge “branchising” can help brokerages address, by giving agents opportunities to grow within their company.
According to NAR, brokerages with four or more offices report that agent retention is one of the three biggest business challenges they face, after recruiting younger agents and achieving profitability.
“Let’s develop a product to convince agents to stay with us,” Avanti Way’s Teran said of the inspiration behind the “branchising” model.
“We saw that successful agents who develop into teams become capped, with nowhere to grow,” Teran said.
Avanti Way Realty video pitching its “branchising” business model to agents and investors.
As its name suggests, the hybrid “branchising” model, made possible by the firm’s in-house, proprietary all-in-one tech platform “AVEX,” falls somewhere between opening a new branch and a franchise office.