At Inman Connect Las Vegas on Wednesday, Guy Gal outlined the three major reasons he sees boutique agencies as uniquely positioned for success in all kinds of markets.

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As the market remains bogged down by high-interest rates and reluctant would-be sellers, Side CEO Guy Gal argues boutique brokerages are better equipped to weather the storm than bigger corporate brokerages.

Speaking with Inman Special Projects Editor Jim Dalrymple II at Inman Connect Las Vegas on Wednesday, Gal outlined the three major reasons he sees boutique agencies as uniquely positioned for success during all kinds of markets — not just one experiencing a downturn.

“Boutiques always have the advantage in every kind of market you see in real estate,” Gal said. “Hot market, normal market contracting market like you have now. It’s been proven out historically, it’s being proven out right now in the data. The boutiques and the agents that work within them are over-indexing the corporates today.”

According to Gal, the first advantage benefitting boutique brokerages is that consumers generally tend to favor them when compared to large national or multinational brokerages, taking a look at chain restaurants versus independent eateries.

“Nobody gets on Yelp to find Taco Bell, but you go when you have to find that taqueria you’ve never heard of,” Gal said.

Dalrymple pointed out that consumers still eat at chain restaurants whether or not they have a strong preference for them. Gal conceded that consumers won’t always go with their first preference, but maintained that, by and large, they prefer boutiques.

“Just because somebody has a preference for one thing doesn’t mean they won’t partake in another,” he said. “It’s not zero-sum, but preferences are preferences and historically speaking consumers prefer boutique because that’s more organic and natural and what we are historically used to.”

Another factor aiding boutiques is differentiation. Gal argued that agents from independent brokerages have an easier time standing out amid a sea of corporate-affiliated agents, which theoretically helps them get more clients.

“In a world where people look the same, act the same, say the same, present the same, are the same color, are affiliated with the same brand — it’s the person who is different that stands out and gets the attention and whoever gets the attention ultimately gets the opportunity,” he said.

“The more you differentiate the more you succeed and it’s very hard to differentiate inside of a corporate because you are one of maybe 1,000 agents all in that one office, and four or five of you are all pitching that one seller and that person is scratching their head wondering why the brokerage is sending so many agents to the same place.”

Gal, whose startup received “Unicorn” status in 2021 — the same year it was named the Inman company of the year – lastly argued that boutiques have a decision-making advantage due to their smaller size.

“Boutiques are set up in a way where they can make decisions to react to those things in 12 days, decisions that would take a corporate 12 months,” Gal said. “It just doesn’t have that kind of agility and it doesn’t have the pulse and the understanding of the nuance of the community they’re serving.”

Email Ben Verde

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