Boutique brokerages have traditionally been confined to either rentals or sales, but new technologies and changing consumer demands now afford and incentivize smaller agencies to target both markets. Here are three strategies to help you master both.
Large real estate franchises may have some big competition — and it’s coming in the form of smaller boutique agencies.
In the past, boutique brokerages have traditionally been confined to singular markets: rentals or sales. However, new technologies and changing consumer demands — think faster services and diversified options — now afford and incentivize smaller agencies to target both markets, allowing them to create agile business strategies for better profit and a larger client base.
As a result, traditional brokerage models have become obsolete while newer digital models pave the way for change, demonstrated by a shift toward independent brokerages. According to the National Association of Realtors’ (NAR) latest research profile of real estate firms, 79 percent of brokerages have a single office while 84 percent are independent, non-franchised companies.
However, it’s notoriously difficult for smaller firms to transition from simply having rental listings to including sales as well. A move like this demands greater resources, leads and the strategy to compete with the big players.
But NYC-based REAL New York proves it’s possible to cohesively target both areas: Although the brokerage started in rentals, REAL New York recently broke sales records with its $55 million closing at 70 Vestry Street in Tribeca. By focusing on three strategies, boutique brokerages have the ability to succeed in rentals and sales too.
Employ tech-enabled business models
Real estate franchises have been slow to adopt new technology as part of their business operations. But a tech-enabled model is exactly what’s allowed smaller brokerages to adapt to local market conditions whether they focus on rentals or sales (and without the burden of franchise fees.)
Roy Dekel, the CEO at SetSchedule, commented for a Forbes article on the subject: “While transparency and accessibility to information by buyers, investors and home shoppers are at an all-time high in the industry, tools available to agents are also much more effective,” Dekel said. “From new forms of payment like Bitcoin or the use of artificial intelligence, big data and machine learning, we can look at the industry from a vantage point never seen before.”
Indeed, big data provides rentals and sales information so brokerages can analyze historical insights, determine market demographics and evaluate open house traffic results and pricing, allowing small firms to make a smooth and knowledgeable transition into both target areas.
Additionally, several boutique firms have incorporated new technology in the form of CRM (customer relationship management) tools to help streamline rentals and sales listings. A CRM platform allows agents to directly follow up with clients, schedule showings and provide continuous updates on the progress of their property searches.
The intuitive software has an overall adoption rate of 72.5 percent among agents polled in a recent Hubspot report and helps them scale more opportunities, allowing them to grow from rentals to sales. Further, Salesforce — a leading cloud-based software company — estimates that CRM system adoption increases sales by up to 29 percent.
REAL New York implemented its own CRM technology that not only helps agents connect with clients, but also makes both the rental and sales process easier by providing listing and transaction tracking info, repositories for documentation and handling credit checks and electronic leases. This direct connection allows agents to continuously update their clients and helps property searches and transactions run smoothly.
Louis Adler says, “We really stress client engagement, staying in front of them as much as possible and owning the transaction from start to finish.”
Other real estate firms are starting to use CRMs too. San Francisco-based real estate company, Climb Real Estate, uses Contactually, a platform that manages more than 220 million relationships for real estate agents in the U.S. Other real estate companies like Denver, Colorado boutique firm Usaj Realty, use Propertybase.
Build and maintain strong client relationships
Technology might help provide the logistical support and transparency needed in professional liaisons, but successful boutique firms also need to build strong and genuine client relationships as they aim to expand their offerings.
Robert Rahmanian, co-founder of REAL New York, believes close client relationships were a major reason for the agency’s successful transition from just rentals to both rentals and sales. He and his founding partner, Louis Adler, have developed and maintained client relationships from the first day they began in real estate over 10 years ago.
Today, they use their experience as agents to train their employees not just to sell individual deals to clients, but to stick with clients at every stage of their life as they rent, buy and then sell.
“We put relationships first. We make sure we’re not just their real estate agent, but we’re also their friend. We grow with them and we’re their agent for life,” says Rahmanian.
Most brokerages grow from rentals into sales by maintaining relationships that serve the client and clear communication. For some of the most influential real estate agents, frequent follow-ups and simple gestures help prospects remember you in the future.
Speaking to Forbes, Roger Blankenship of Flipping America says, “You want to have top of mind awareness when they need your service. The more seeds you sow, the more you will grow.”
Master and promote knowledge
Renters and buyers often look to agents for advice and clarification during the search process, so an agent’s ability to answer questions and showcase their expertise directly impacts their likelihood of landing future deals with the same client.
Providing intensive training for agents is one way to help them master the essentials. Companies who stress coaching, mentorship and organic growth already have an upper hand in creating value. These firms choose to provide their agents with guidance through a horizontal business structure, a model characterized by fewer levels of middle management between staff and executives. This positions agents to feel supported while offering access to top-tier knowledge along the way.
For some organizations, specific marketing campaigns and community engagement events are a powerful way to support their agents in this effort. REAL New York, for example, hosts a series of seminars for current and prospective buyers. Showcasing their industry knowledge and history of sales, individual agents answer questions about buying and selling homes in New York City while the firm offers access to lawyers who can answer any legal questions.
As a way to showcase their transition from rentals to a full-service boutique firm, Louis Adler says it’s helped them gain credibility and build further trust with clients as they’re afforded resources to make better decisions about what’s right for their budget.
Lisa Lippman, a prominent real estate broker, shares as much knowledge as possible to build awareness not only for the client on renting or selling, but also her own experience. Consistently ranked by data provider Real Trends as one of the top brokers in the country, she told the New York Times, “I give people a lot of information.”
“I always remember it’s their money, and I keep them as informed as possible,” she added.
Boutique brokerages may usher in a new era for the real estate industry as larger franchises grapple with how to compete with the hands-on and transparent relationships that firms like REAL New York offer clients. If more independent agencies expand to full-service options, real estate agents can become the friends, not the stereotypical foes, of renters and buyers. And that’s better business for everyone.
The Tamara Kucik Team of Towerhill Realty prides itself on maintaining connections in working through challenges and opportunities in the tech intersection of real estate. Training is super important in today’s market for the shared learning of technology across all age ranges in the real estate environment. My team actually decided to leave the huge firm, Long and Foster, back in 2018 to be more competitive in the field and we haven’t looked back.