Jay Thompson is a former brokerage owner who spent the past six years working for Zillow Group. He retired in August 2018 but can’t seem to leave the real estate industry behind. His weekly Inman column publishes every Wednesday.
Discount, limited service, flat-fee, virtual, traditional, 100 percent commission, split-based, full-service, referral-based, boutique, franchise, independent, iBuyer.
Those are the primary brokerage types/models out there today. There’s really no need to go over what each of those are. You all know the drill — we as an industry talk about them all the time, often to the point of exhaustion.
Some even border on obsessing over these models. Some appear to have real angst with a few. Apparently there are some who seem to think of nothing but alternative brokerage models and they spend inordinate amounts of time and energy berating them.
While brokerage models have always been a frequent topic of discussion, it seems that lately the rhetoric has been ratcheted up a few notches.
They said we’d never make it
Back in February 2008, exactly eleven years ago, I launched my own brokerage, cleverly named Thompson’s Realty. We were a boutique, independent, full-service brokerage. Unusual for the time, we had no brick and mortar office space. Yes, we were a “virtual brokerage” before being virtual was cool.
Thompson’s Realty was, with the exception of our first month in business, profitable. Every month, month after month, it ran in the black. Sure, some months were greener than others, but aside from month No. 1, it was a profitable brokerage. That’s not something every brokerage can say. Aside from having some amazing agents, the biggest factor in being profitable was the fact that we had extremely low overhead — driven primarily from not paying for office space.
Despite the success, many back in the day said we’d never make it, that the model wouldn’t work. That people didn’t trust a brokerage without a physical presence. I remember one broker at a large franchise looking me in the eye and saying, “that’s the dumbest idea I’ve ever heard of,” when I told him our model.
In fact, more than a few local brokerages were upset that we were around.
Why? I don’t know. We were doing things differently, so some seemed to feel threatened. One broker even chose to report us to the Arizona Department of Real Estate because we were “breaking the rules” — they thought — for the requirement to have office space.
The department swiftly (well, as swiftly as a state-level department of real estate can move) set them straight and told them we were operating well within the Arizona rules and regulations.
Fast forward 11 years
Here we are today, almost eleven years after that ill-fated, time wasting and unfounded complaint was filed. And the arguments against “non-traditional” brokerage models continue.
Just last week at the Inman Connect conference in New York City, there were at least two discussions of brokerage models on the agenda. Those conversations were projected from the conference stage. Doubtless there were other similar conversations in the hallways as well.
Here were the headlines of the session summaries published on Inman:
- The Agency CEO dismisses Purplebricks agents as ‘plumbers’
- Virtual brokerages ‘will pull us all down’
Subheadlines tell more of the story — “slammed the discount brokerage,” and “blames firms without brick-and-mortar offices for deteriorating agent professionalism.”
So we’ve got a broker and a franchise CEO “slamming” another brokerage and blaming one model for “deteriorating agent professionalism” — at an event attended by hundreds of real estate professionals.
They are far from the only ones doing this.
Pop into virtually any real estate Facebook group on any given day and you’ll find posts and comments galore where people are wailing away on these brokerage models, attacking agents that hang their license with them, making broad-brushed and sweeping assumptions about how they run and questioning the capabilities of their agents, staff and brokers.
Because you don’t like them?
Because you feel threatened by them?
Because you don’t understand them?
Because everyone, everywhere, that is even remotely associated with a model different than yours is an idiot? Or a plumber? (And what, exactly, is wrong with being a plumber anyway?)
Why does this industry seem to have an inexhaustible supply of vitriol and disregard for brokerage models that are different than “normal”?
The advantages of multiple brokerage models
If we could all just put our differences aside for five minutes and look at this objectively, I think we’d see that there are some advantages to having multiple brokerage models.
First, consumers (anyone remember them?) like choices. The industry needs to meet consumer needs and expectations. If the “discounters” all suck so bad, if they are nothing but “plumbers” and are “unqualified to represent buyers and sellers,” then why all the fuss and worry? Just let them go. If they are as horrible as some make them out to be then there is absolutely nothing to fear from them.
So stop obsessing over them.
Different brokerage models provide competition, and competition is good for everyone — consumers and real estate professionals alike. Competition makes us raise our game. It makes us better, stronger, faster.
Then of course there is the Realtor Code of Ethics, specifically Article 15, which states: “Realtors shall not knowingly or recklessly make false or misleading statements about other real estate professionals, their businesses or their business practices.”
So if one is a Realtor, one really shouldn’t be taking to task everyone in the profession that operates differently from you.
Right about now, someone is thinking, “But Article 15 only applies to false and misleading statements. If you speak the truth, it’s not false or misleading.”
That would be a correct statement. However, when there are sweeping, all-inclusive stereotypical claims tossed around like, “The only agents who would work for Redfin are losers who can’t get business any other way,” the statement becomes false. Yes, there are lousy agents at Redfin. There are lousy agents at RE/MAX, Keller Williams, Century 21 and Joe’s Fine Indie Brokerage too.
And there are amazing agents at RE/MAX, Keller Williams, Century 21, Joe’s Fine Indie Brokerage, and yes, Redfin.
Don’t hate on them — learn from them
One big benefit of alternative/non-traditional brokerage models is often overlooked — you can learn something from the way others do business. Stop dismissing them because they’re different. Rather dig in and learn from them. Why do they appeal to certain consumers, and what could you implement that might help your consumer appeal? Are there bits and pieces of what a virtual model does that could apply to a more traditional model, resulting in lowering your own operational overhead?
Studying what your competition is doing is a smart play. Lambasting your competition does no one any good, and might just make you come across as petty and whiny. No one has time for petty and whiny.
I’ve always wondered if there are Facebook groups out there whose membership is composed of people who work at high-end retail shops like Nordstrom, Prada, or Louis Vuitton. Do they sit around in these groups, wailing away on Walmart and J. C. Penney? Do they attend luxury retail conferences and get onstage and insult everyone that sports the red shirt and tan pants of Target employees?
If there are, then what an utter waste of time and energy.
Just like it’s an utter waste of time and energy when those in the real estate industry denigrate wide swaths of the agent and broker population.
Stop wasting valuable time and energy. Focus on you, your business and your past, current and future clients. Do that, and there’s no need to fear or malign a different brokerage model, or those that chose to work with them.
This is a big, complex industry where we help people get through complicated, expensive and infrequent transactions. It’s a service-based industry unique in the aspect that it requires competitors to cooperate with each other.
What it doesn’t require, or need, is for us to be at each other’s throats, attacking, stereotyping and chastising our fellow professionals simply because they do business differently than what you think is best.
Jay Thompson is a real estate veteran and retiree in Seattle, as well as the mastermind behind Now Pondering. Follow him on Facebook or Instagram. He holds an active Arizona broker’s license with eXp Realty.