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.
Here’s how “branchising” works:
An agent contracts with Avanti Way to open a new office as a “branchisor,” rents office space and sets up a storefront with Internet connection and a photocopier, and is responsible for the ongoing costs of the office.
“Branchisors” pay a market-specific monthly fee, which runs in the multiple of thousands of dollars in the Miami area — that gives them and their agents access to the AVEX tech platform.
The cloud-based AVEX platform, designed to enable a fully digital workflow for agents, includes tools like a paperless transaction management system, customer relationship platform, marketing materials like fliers and a website, training tools, accounting services, payroll processing, e-signature capability and investment calculators.
The AVEX system also keeps track of showing requests, includes a client-access portal, and allows agents to print commission checks themselves from a special printer at the firm’s offices or, if they have the printer, at their home, Avanti Way’s Korda said.
Agents can create contracts in less than a minute thanks to AVEX’s integration with the local multiple listing service, Korda said.
“AVEX handles every part of the business,” he said.
The “branchise” model leverages that all-in-one software, making it a cloud-based broker-support system with built-in business training and ready for agents to leverage when they open new offices.
Through its integration with the local MLS and tax rolls, the AVEX system gives “branchise” operators insight into the market and their competition at the ZIP code level, Korda said.
Agents who join the branchised office pay Avanti Way an annual fee of $350, which covers the setup and maintenance costs for them to get on the AVEX platform. Agents also pay the corporate office on an a la carte basis, for use of any of its offerings like its in-house marketing team, Teran said.
The “branchisor” pockets 100 percent of the revenue from commission splits of the agents he or she brings in up to a market-specific amount, which is approximately $250,000 in the Miami area, Teran said.
For revenue above that cap, Avanti Way takes a single-digit percentage as a fee.
After setting up shop, the “branchisor” is then free to focus on recruiting and motivating agents, setting business objectives and the other duties that go into managing a firm.
The “branchised” offices still get day-to-day support from the firm, Teran said.
There’s also room for growth. “Branchisors” can choose to become full-fledged brokers by purchasing the firm from Avanti Way and becoming traditional franchisees in the process, Korda said.
South Florida real estate vet Oscar Marti, operator of the 32-agent Avanti Way Brickell office, says “branchising” has allowed him to focus on developing and recruiting agents without worrying about accounting, liability and the other duties that come with running a brokerage on his own.
Marti, who says he’s currently scouting other areas to open an Avanti Way “branchise,” says he’s not ready to be a broker-owner or a franchisee.
“I’d rather (Avanti Way) keep all the liability,” Marti said.
The concierge service
Eight Avanti Way agents are currently piloting Avanti Way’s “concierge” service, which supplies relatively low-cost, highly trained remote assistants to agents.
Agents can choose both full-service and a-la-carte help through the concierge service, which currently features offshore assistants in Central and South America and is set to launch in April, Teran said.
Because there’s high churn for in-office assistants who leave after a short time in their position to become agents or to pursue another career, training can be an expensive headache for brokerages and agents.
For the fraction of the cost of an assistant — which will vary by market, Teran said — agents will get access to the concierge service. In the Miami area, Korda said, the full-service version of the assistant service goes for a low four figures per month.
Avanti Way conducts in-person training for all concierge assistants on Avanti Way’s business protocols and the AVEX system, Korda said.
Since the AVEX system is fully cloud-based, the assistants have access to most of the agent’s business documents and workflow. They make offers, contact other agents to secure showings, field client calls, line out showing routes and more, he said.
Marti, the “branchise” operator of Avanti Way’s Brickell office, said he has begun to hype the service in recruiting pitches to agents.
Avanti Way agent Eduardo Sanchez, 42, says the service, which he has been piloting for the past three months, has freed up 30 to 40 percent of his time, allowing him to focus more on selling and marketing.
Sanchez says that he typically works with just one assistant who’s assigned to him at the concierge service who coordinates all of his showing appointments, builds out contracts, writes offers, prepares documents for e-signatures, manages his website and leads, coordinates showing instructions with other agents, develops showing commute routes, and brainstorms marketing strategies with him.
So far, Sanchez says his concierge assistant has prepared 10 offers for him. If his primary assistant is not available, someone else is there to back him up, he said.
If he can delegate all marketing to the concierge service, and gain a little more real estate experience, Sanchez says he sees “branchising” in his future.