Connect the Speakers: Luke Monroe on the true cost of opening a brokerage

Learn how to focus on those high-dollar, high-return, high-payoff activities

Luke Monroe used to run the largest private real estate flipping company in the country, and as he puts it, “that got me interested in real estate with a focus on optimizing what seemed to me to be a misalignment of incentives between parties in the business world.” So he started Kendrick Realty and has been operating an independent brokerage ever since.

Monroe will be participating in a panel discussion about the true cost of opening a brokerage at Inman Connect New York, January 29 through February 1 at the Marriott Marquis Times Square. He shared his hopes for the coming year and tips for faster execution with us.

Tell us a little more about your session. How will it address how the industry can embrace the shifting market?

My brokerage is — I won’t say 100 percent, but I’d say 99.5 percent built around embracing new technology, specifically working with online leads. We’re two years old, have three offices in two states and international offices for our support staff as well, and we’re able to do that and grow to the scale that we have already in that short of a time period really by embracing those new technologies and looking at them as additive as opposed to the typical perception of it being a zero-sum game. Looking at real estate needs as a business opportunity as opposed to a disruption is something all traditional brokerages could benefit from.

What do you think are the biggest opportunities to focus on in the real estate industry right now?

The biggest opportunity in real estate for brokerages is focusing on alignment of incentives that’s really so near and dear to my heart; I think when real estate brokers realize that the things that are good for them are also good for their Realtors, they can have a much stronger brand and perception by our customers.

To stay competitive, agents, brokers and companies need to execute quickly. What do you feel are key areas where quick execution can vastly improve the customer experience?

That’s a favorite softball question for me because my entire business is built around that concept. Traditional brokerages are terribly inefficient and the reason that’s persisted as long as it has is because the model is so fragmented and decentralized. We don’t have a high degree of control over their disparate offices all across the country, so it’s very difficult to pivot and tackle some of those inefficiencies. For us as a brokerage, one of the things when I’m talking to potential new agents coming on board is really what I’m about and what our brokerage is about — focusing your time as a Realtor on what my wife calls the $300-to-$400-an-hour work. For a typical Realtor, they’re going to spend 80 percent of their time prospecting, trying to find leads, passing out business cards, working their sphere, and 20 percent of their time face-to-face with customers showing properties, writing offers, closing deals, doing the things that get all of us into the business in the first place.

I look at my role as a broker as really taking on as much of that 80 percent as I can, not so my Realtors work less, but so that the work they’re doing is focused on those high-dollar, high-return, high-payoff activities. That’s good for the Realtors and good for us as a brokerage. What that means in practice is more specialization of activities; when we look at things like response times to customers as an online buyer, I’m very sensitive to that; Zillow and realtor.com are also very sensitive to that. So when I started my company, one of the first things I did was figure out what scale I had to be at so I could staff a call center that would be able to take client inquiries 24 hours a day, seven days a week, immediately as a necessary component to my business model. I really embrace that and build around the idea that my first brokerage has to be at least this big to support this call center because customers expect this response time. They’re clicking that “contact” button because they expect a response right now. It might not be practical for everybody to open their own call center, but there are ways to make sure customers are taken care of in a timely manner that meets with the clients’ expectations.

What are your hopes for the next 12 months, and what will you be working on?

We have slated 2019 for opening our next eight offices, so that’s a big expansion goal for us; we spent the last 18 months really getting our proof of concept down, feeling really good about the business model and how successful we can be at doing it. The next year is about taking the concept we’ve proved, replicating and scaling it across the best markets in country.

Discover the opportunities in a changing market at Inman Connect New York, January 29 – February 1. Jumpstart 2019 with tactical takeaways, unlimited networking and thought-provoking speakers. Learn more.

Thinking about bringing your team? You may qualify for special group perks! Contact us to learn more.