When I became a Realtor the common business models we work under today were already in place. I did not invent any of them myself, though I am always looking for new ideas, lines of business and ways to cut expenses.
I have watched the big local brokerages get smaller. Some major local franchises started closing offices a few years ago. Many of the agents remained, but ended up in offices that are farther from their homes and from the neighborhoods where they sell homes. With fewer agents, those same brokerages have raised fees to consumers and to agents to cover expenses.
Common wisdom indicates that brokerages can be more profitable if they don’t need to own or lease a lot of real estate. Technology makes it easier than ever to work anywhere. Most of what an agent needs can be found on the Internet.
The problem is most brokers don’t have a handle on how to recruit agents unless they have an office to offer, and there are many agents who consider a traditional real estate office a must-have.
The idea of a real estate brokerage without an office isn’t a new one, but it is easier to talk about than it is to implement. Some of the brokerages don’t really have anything other than an office to offer agents.
My main office is in my home, and I have worked that way for several years. I also work out of coffee shops, which is where I am right now, and usually where I meet with clients.
Recently, I joined a local office collaborative. A part-time membership allows me to use space, Wi-Fi, and drink coffee on a part-time basis. There are conference rooms available in a couple of sizes. There are full-time memberships and memberships that include "campsites," which are group or individual offices.
The people who use the collaborative are referred to as co-workers, and they are independent contractors and small businesses. I was attracted to the co-op because I wanted a change of scenery; it is more cost-effective than leased space; and it gives me a chance to meet some interesting people.
In theory, because most agents are independent contractors and much of what we need is on the Internet, brokerages should not need offices to succeed. I could not find any data to show if there is a relationship between agent productivity (and by productivity I mean gross sales) and office type.
There are plenty of agents who prefer to work in a brokerage that offers offices. These are the common objections I have heard from my peers over the years to working from home:
- Agents want a formal office or conference room for meeting with clients.
- Some agents do not have enough space in the home for a home office, or if there is enough space it is in a dark, dank basement next to the water heater.
- Some agents need "structure," and going to an office every day fills that need and helps them stay focused.
- Distractions in the home can make it hard for some to get work done.
- Agents who work as teams often say they need an office to go to where they can interact in person.
I have always been productive in my home office. I enjoy the cost savings and flexibility. I would hate to have to drive somewhere just to use a computer or to make some phone calls, yet there are times when I feel like I need to go where there are people and where there is noise and conversation.
Some agents feel the need to go to a workplace each day. They need to belong to something. They need co-workers and people to talk to throughout the day. They need colleagues and camaraderie. They need the barbecue in the parking lot and the Thursday happy hour, too. But all of that costs money.
Brokers tell me that they cannot train agents that do not come into the office. They tell me that they want to see agents and talk to them and meet with them.
In some of the bigger brokerages, managers rely on face-to-face contact to promote the brand and group meetings to communicate with agents and keep them motivated.
Some of our clients like the idea of brick-and-mortar offices and believe that we work for the real estate company. Some clients are more comfortable with an agent if they know that there is a brick-and-mortar office, even if they found their agent on the Internet.
I often have to explain to clients how I work, and why I work that way, so they understand how I can provide the very same services that a big brokerage provides without a traditional office.
Office cooperatives may be a less expensive alternative to owning or leasing office space. An office cooperative might me a good use for an underutilized real estate office, giving it more of a presence in the community and opening up a new and unique business model.