Who is the broker’s customer? Some (and by "some," I mean me) insist it is the consumer — the homebuyer or seller. I am not alone. Others take the more traditional position of seeing the broker’s customer as the agent.

Tomato, "tomahto." Who cares? To the extent that the culture of the organization drives the business strategies and tactics — hence the profitability — of both the broker and the agents who fill their cubicles, everyone should. And if we all agree that the whole point of it all is to pay the pizza guy and grow the bank account, all roads lead to the customer.

The sticking point here is that the traditional brokerage model relies on recruitment and retention, plus a whole bunch of training. Alas, we have pretty thoroughly pummeled that horse. And my particular views on this topic are admittedly biased, because I am not a traditional broker, at least not in the sense that my cut of our agents’ commissions are a significant line item in the old Form 1040.

That’s because I am also a working agent, and while I am occasionally tempted by the idea of spending my days in a strictly managerial role, preferably from a Caribbean resort with a reliable Wi-Fi connection and a fruity drink poolside, I resist.

The reality is that to become that, I would have to redefine my mission statement. Instead of talking about things like the customer experience, I would necessarily be more concerned with warm bodies on the roster.

My little undertaking — a small cooperative of stellar agents held accountable to standards of quality, ethics and professionalism — and the big-brand brokerage that must be primarily concerned with head count by definition, are the two ends of the spectrum.

That big place in the middle, well, that is arguably the toughest nut to crack. But regardless of how a brokerage chooses to get from point A to point B, point B is still about the customer. So, what does the customer want?

It has long been my argument that the old rules no longer apply. Our customers have changed, from their rules of engagement to their expectations, and our industry is going to change along with them, like it or not.

The 2009 National Association of Realtors "Profile of Home Buyers and Sellers" report found that a whopping 3 percent of consumers give a flip about the brokerage with whom an agent is associated.

Speaking as a broker with feet on the ground and clients in my backseat, this surprised me little, and I fully expect the customer’s mindset to continue down this "Who cares?" path.

I have been seeing this trend emerge in my market for years, but it’s a tough one to quantify. A big fan of the multiple listing service (I read it several times a day), each time I scan the new listings, more often than not, I am left wondering, "Who is that guy?"

My sense has been that collective market share now belongs to the "other" category — the little-known independents, both one-agent shops and single-office enterprises. We have tried to get the statistics, but our local association doesn’t keep these numbers, we are told, so I decided to perform my own survey this morning. The results were telling.

Plowing through tens of thousands of recent sales wasn’t in the cards, but I did take a six-month look back at my favorite local ZIP code to see who was representing the buyers and sellers on these transactions.

One hundred sales do not make an awesomely sound statistical analysis, I know, but I suspect it is quite representative of the big picture. And it may be important to note that in the ZIP code I chose, six major, national brokerages and franchises have physical presences.

Of the listing sides, 45 percent involved agents associated with large national brokerages or franchises, while 65 percent of the buyers’ agents were affiliated with brand names.

Now, I am fairly sure that if you were to add up the names on the rosters, small independents don’t represent 55 percent or even 35 percent of the agent population, so it appears the NAR survey had it right. And, if I’m right, the shift will continue to favor the collective independents. …CONTINUED

There is a saying that sellers shop for agents, and buyers shop for houses. My (obviously scientifically flawed) mini-survey supports this. The fact that the big brands are doing better on the buy side of the equation can likely be attributed to one key factor: superior rainmaking.

And by this, I don’t mean a more formidable Web presence, because we know real estate is local, as evidenced by the fact that I just scheduled a listing appointment through my instant chat box while I was writing this.

I did this, by the way, without a million-dollar Web site or an insanely expensive customer relationship management platform, but I digress. The large broker’s advantage, rather, is in the relocation relationships.

An agent who joined us recently referred to the relocation referrals she got from her previous company as "crack," as in, "I need to get off the crack." And the crack is a cash cow for the large brokerage, where the agent on the receiving end ultimately sees only 30 to 40 cents on the dollar.

This is where the big brands shine, and my little undertaking will never be able to woo the large relocation organizations. The customers who come through these programs are captive audiences. They are shopping for a home, not an agent, so there will always be a place here for the large brokerages.

Eliminate this component (and argue if you will), but we are all on a level playing field. On second thought, I will argue that the advantage goes to the "right-sized" broker, because it is here that the conversations are taking place with the customer where they live, and our conversations are more relevant.

We, the independents, are rainmakers, too, but our "leads" are at the end of the line, more often ready to buy or sell, not just names in the back-end of an Internet Data Exchange (IDX) platform. They are past clients and referrals, Web visitors and blog readers.

They reach out to us; we don’t chase them. Our position at the lower rung of the size ladder allows for a greater return on investment. Multiply me by all of the others like me, and this is what I am most concerned about if I am the big shop.

Large brokers will continue to survive and thrive, in part because of shear numbers. Large brokerages recruit across the board: newer and veteran agents alike. Given their model, in which size matters, they don’t have the luxury of being super-selective at the risk of being small and less profitable.

Consequently, large brokerages must be training camps for their younger agent population. Training costs money, and training is without question agent-centric.

I can train a national roster of thousands of agents to be knowledgeable, enlightened and local, I suppose. But what I could never really do on this scale is ensure the things that matter most to customer: true competence, ethical high ground and excellence.

At least, I can’t keep that promise where every associate agent is concerned. It’s an insurmountable undertaking on a grand stage that requires an ever-increasing cast.

We’re small by choice. A friend who owns a large franchise chides me that I can’t stay that way, but he’s wrong. He’s wrong because we see the homebuyers and sellers as our customers, and it is this philosophy that has driven our decision to be overly selective in the agents with whom we choose to partner.

It’s not that taking the traditional approach of agent-as-customer is wrong; it’s just that it is not our model, and our clients seem to like what we are building.

So I think both arguments are valid, and both answers are correct. The broker’s client is both the agent and the customer. The question lies in which kind of broker you want to be.

Kris Berg is broker-owner of San Diego Castles Realty. She also writes a consumer-focused real estate blog, The San Diego Home Blog.


What’s your opinion? Leave your comments below or send a letter to the editor. To contact the writer, click the byline at the top of the story.

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