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Opinion Editorials

Leaving a real estate franchise to become an independent broker

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Former franchisee

This week I changed my real estate brokerage affiliation from a franchise and am now an independent. I’ve done a lot of soul searching about which path to take, and suffice it to say that at the end of the day, I see more value in my own name and my brand, than any franchise. Perhaps I should have gone down this path from the start, when I opened up, but that’s water under the bridge.

In cleaning out some files, I found a business card folder from the summer of 2007, when I attended franchise training and also a broker-owner conference. I was on a high, ready to set the would on fire, and collected a number of business cards from other broker-owners that summer. When I flipped through the cards, I had the brainstorm that I’d see how many were still in business, almost five years later. How many were still with the franchise, how many closed up shop, and how many switched affiliations? The answers may or may not surprise you.

What has become of other franchisees?

I had 25 cards in my file. That’s not a huge sample, but I think we can still see some trends from my random collection of cards. I googled every name to see if I could track them down.

The people to the immediate right and left of me were at franchise training were still in business, but had dropped the franchise and gone independent.

Four of the names in my book showed up nothing in google searches. I assume they had dropped out of the business completely. I know that one of them was out of business within 6 months (I had heard that right away, as it spread through our grapevine) so I knew I wouldn’t find him.

Five of the brokers in my pile of cards were still with the franchise. I noticed that three of those five were longer term brokers, whose cards I had picked up not at franchise training but at the conference.

Four had switched from one franchise to another (most notably, Keller Williams gained the most convertees, which confirms NAR statistics published each year about franchise growth).

The trend to go independent

But the biggest trend was in dropping the franchise to go independent. Fully 12 of the names in my stack pulled up in searches at independent offices not affiliated with a national name.

I’ve read numerous articles about the value of the brand, the value of being affiliated with a major national (or international) company. I’ve worked for a franchise office, I’ve owned a different franchise office, and after 11 years in this business, I just don’t see the need to push a corporate logo over my own brand.

You, the agent, either sell the buyer/seller client on you and your services, or not. There are great offices with Brand A or B or C and there are ones down the road that, to be honest here, suck. It’s not the logo the client buys into, it’s you the agent or you the broker. It’s Brand “Agent”.

At the end of the day the client only wants his problem solved: find me a house or sell my house. The logo on that sign should not matter more than the agent who puts the sign in the ground. Exceptional communication skills, solid knowledge of the market, and top notch marketing matter more than that logo.

A personal business decision

To argue the franchise side, they’ll say that they provide systems, tools and support to help the broker succeed. That is true, and if it were not then no franchise would succeed. The question is are you using those tools or not? Is the support really there that you need? Do you want or need their systems or do you have your own in place?

I am not sorry I affiliated with a franchise five years ago. I consider the price I paid to be my MBA in real estate brokerage. Affiliating gave me the courage to go out on my own, and in the beginning, I did take advantage of programs and tools to help me get running. But as time went on, I realized that my own office was morphing more into “my office” and I did not need the franchise support.

I would surmise many of the brokers who de-franchised in the past few years did it because of the money factor — to save money. That’s part of my decision as well. I run a lean operation and see how being independent will benefit our office with less fees for agents to pay, freeing up marketing dollars.

I listened in on a seminar the other day and the speaker said 50% of all new agents drop out within the first year, and 75% within two years. I’m happy to see that new franchisees failing are not at the 50% level, but the numbers above are sobering. I would say owners of franchises should be paying attention to the trends to un-affiliate.

Erica Ramus is the Broker/Owner of Ramus Realty Group in Pottsville, PA. She also teaches real estate licensing courses at Penn State Schuylkill and is extremely active in her community, especially the Rotary Club of Pottsville and the Schuylkill Chamber of Commerce. Her background is writing, marketing and publishing, and she is the founder of Schuylkill Living Magazine, the area's regional publication. She lives near Pottsville with her husband and two teenage sons, and an occasional exchange student passing thru who needs a place to stay.

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16 Comments

16 Comments

  1. Tannis Engel

    February 5, 2012 at 3:04 pm

    We opened our independent brokerage two years ago. It has been a huge success and we would never look back. Our clients love it, none of our business dropped off. We have had great success with recruiting new and experienced agents and they have had the same great response from their clients.
    We had all of the same questions and concerns when we left the franchise company we worked with but we took a chance andbit was definitely the right choice for us.

    • Esmeralda

      January 26, 2016 at 12:56 pm

      As a new agent wanting to be independent what would you recommend I do? I’m in california?

      • william suarez

        May 26, 2016 at 12:37 am

        Hello Esmeralda. What part of California are you in? You say new agent wanting to be independent. Do you hold a brokers license or just a sales license? When you mean independent, do you you mean to work alone without a broker? If you hold just a sales license then you have to hang your license with a broker.

  2. Jim Flanagan

    February 5, 2012 at 3:30 pm

    Erica,

    Interesting post! "Systems, tools & training" were the reasons we originally franchised over 25 years ago. Much has changed in that time.

    I considered "independence" upon our last renewal; it was the peak of the market and technology was leveling the playing field. My ego was pushing me one way and my "gut" was playing it conservative. My gut won and the market fell out a year and a half later.

    A franchise brand will never replace an agent's knowledge, skill and experience but with one third of our industry turning over annually, and the challenges all brokerages faced over the last 6 years, there is "safety" in numbers. And, personally, I believe the "market correction" woke up our brand to the reality that it is the agents and brokers who feed their families!

    Today's technology has commoditized all the real estate brands, one way or another, and the individual broker and agent must identify and market their own "unique selling point" to win the client. The power of the franchise has shifted; from a "closer" to an "opener". The majority of the agents, in our market, would not have an opportunity to pitch their "USP" without the brand's introduction.

    Should the compensation structure of the franchise agreement be re-evaluated? Maybe. As brokers, and agents, our "service fee" is challenged daily.

    Time is the great equalizer and the best teacher. We shall see what the next real estate "frontier" offers.

    Much success to you and your independence,

    Jim Flanagan

    • Jeff Brown

      February 6, 2012 at 12:34 pm

      Hey Jim — I'd appreciate your answer, along with Erica's answer to these questions.

      Setting the franchise/independent debate aside, is the real root of the problem the underlying agent-centric business models BOTH are now employing? Isn't agent compensation the reason most large firms, franchise or not, have bought into title, escrow, and mortgage firms? Do you think the broker-centric models (from back in the day) teams are using so successfully are more conducive to long term success?

      Thanks

  3. Matt Thomson

    February 5, 2012 at 3:37 pm

    Great thoughts. Each person is going to be different, for sure. You hit the nail on the head when you ask if folks are using the tools that are provided by their franchise.
    Personally, I can't imagine ever leaving Keller Williams. I could never recreate what they give me, and I get the feeling of being independent and branding my name, not theirs.
    At the same time, I often wonder why some people who are with us choose to be with us. They don't take advantage of any of the training, systems, tools, anything that we offer.
    For them, independent wouldn't work either, thus the rise in 100% brokerages that charge nothing and offer nothing.
    Best wishes on your journey…for some I believe it's a fantastic choice. For others of us that need a little more guidance, I couldn't do it!

  4. Matt Warmack

    February 5, 2012 at 4:40 pm

    Good story.

    I think what you are running is very similar to the Keller Williams model – you just are not inside of a Keller Williams office. The research shows that the team brand is much more important than the national brand. I run Urban Abode Group within/powered by Keller Williams, but most of my clients only know me as Urban Abode Group as that's the most important brand. As a team owner I only have to worry about my team/group recruiting & hiring and not the office staff – at the end of the day that makes me happy to know I don't have to worry about the office staff.

    • Jeff Brown

      February 6, 2012 at 12:39 pm

      Hey Matt — My guess is you pay your team members, especially the buyer-agents significantly less than typical brokerages. I also infer your model is by design or default broker-centric. That is, your efforts supply leads, and therefore the agents under you gladly benefit from those leads, and make more than their 'independent' counterparts who oft times are paid double or more the commission split.

      • Erica Ramus

        February 10, 2012 at 9:39 pm

        Hey Jeff… and Matt. Interesting posts. I guess I am old fashioned broker centric. I provide the name and the leads pour in. I am the rainmaker. I pass on all leads to the agents. The only ones I "work" are personal friends or past clients of mine. I bring in the leads and pass them on. I am here to supervise and intervene if someone needs me. I don't do title/escrow etc as other firms have. This has pissed off other lawyers and firms and in fact has brought us more business as we are the fiercely independent firm who does NOT have that in house. It works for us!

  5. jay Great Falls

    February 5, 2012 at 6:00 pm

    Generally…franchise shmanchise. I highly recommend looking into opening your own brokerage, but not from scratch.

    Being indie rocks for the hyper independent. It's rare to get anything of value from a franchise as the consumers care about the authority of the agent–not what logo they have. And by the time you go solo do you really need "training?"

    The costs of running your own show are so small as a legal business address/virtual office is just $200/month is most markets. I used to pay $1300/month for my 100% split. Now the same brokerage only offers 95% for the same fee (different franchises have their own monthly fee though and some are much lower).

    Open a JustNewListings.com Realty in your market–not as a franchise but with a license to use the name and more importantly to use the high powered google juiced up domain JustNewListings.com/your-state-city-real-estate. Putting a google indexed IDX on your spot of the justnewlistings.com domain gets you rankings for address and community keyword searches, etc. much faster than starting from scratch.

    And I've finally opened up to letting agents who do not want to open a new brokerage to put their IDX on my domain and approval of their board and broker for a very small referral fee. I think most associations will accept that justnewlistings.com/state/city/real-estate is like leasing a condo in an office building. You get a little piece of the building /state-city-real-estate but it is still yours to do with what you want and has only your broker info on it and or blog and IDX.

    This is the agent's response to 3rd party sites like Trulia hogging the search engine rankings. Local agents should rank for keywords of all sorts–not 3rd party sites. And my PR 6 domain is a great way to achieve this and the costs are much lower than a franchise with a "recognized" company.

    The newest JustNewListings.com Realty office is being opened in Wilmington, NC this Spring and then in Charleston, SC end of year . rough draft of Wilmington without the IDX feed yet is here for example: https://www.justnewlistings.com/north-carolina-wilmington-real-estate.html

    I'll write and video about this on Active Rain soon. But we need an agent response completely local and independent agent by agent in each market and I see my domain headed this way.

    The big question is whether to convert the site to WordPress or keep it on the REW (real estate webmasters) host who does deliver an outstanding product to be sure.

  6. CIndy Jones

    February 6, 2012 at 9:48 am

    Erica-Congratulations. There is no doubt in my mind that you made the right choice and will a success as an independent broker. I haven't looked back since going out on my own and with all of the tools available it's an easy decision to make. Though the franchises may spend big dollars on national advertising in the end the bottom line is how we treat our clients and present ourselves professionally that makes all the difference in a successful transaction.

  7. CreaRealty

    November 13, 2012 at 2:48 pm

    Great post and thanks for sharing.  I myself recently became a Broker and am at a crossroad. My questions to you is how are you going about the E&O Insurance / Risk Management cost?  Do you see a difference in price?  Thank you

  8. Pingback: how to become an architect | Info Menarik

  9. Kim Davis

    October 19, 2015 at 10:45 pm

    I recently obtained my broker’s license and my current broker has asked if I’d like to take over one of the offices. It is a small privately owned brokerage firm. Being that the firm is small, there is no office space, no sophisticated software, etc. I will be basically building it from the ground up. Can anyone suggest would an appropriate fee schedule would be to the owner for something like this? Any suggestions would be greatly appreciated.

    • Lani Rosales

      November 12, 2015 at 10:42 am

      Kim, I spoke with the author of this editorial, and she said that it’s a very personal decision with too many variables unknown to reply. Perhaps consider chatting with some peers in your market for an answer? Sorry we weren’t more help!

  10. Philip

    July 17, 2016 at 7:06 pm

    I enjoyed the article, and seriously thinking about opening my own independent brokerage in New York. For me, the large franchise Brokerages tend to be often corrupt when it comes to sharing any strong leads with their agents. They usually make one or two Superstars, while everyone else scrambles for crumbs. That negative experience that so many real estate agents experience in their first year, is the reason for them leaving the business in its entirety. The experience that I have had with small independent Brokers has been totally Positive, Forthright, and Honest. A total Win-Win for everyone involved. The Brokers I have dealt with from independent real estate offices, have all tended to be very secure with themselves, and absent of the ego problem. I for one, am in the Independent Brokerage camp all the way.

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Opinion Editorials

Popular opinion: Unemployment in a pandemic sucks [EDITORIAL]

(OPINION / EDITORIAL) I got laid off during the pandemic, and I think I can speak for all of us to say that unemployment – especially now – really, really sucks.

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Stressed man thinking over laptop about unemployment.

Despite not being in an office for what feels like an eternity, losing my job stung. Holding onto work during The Worst Timeline was rough, considering Rome was burning all around. My job was the boat of sanity I could sit in while the waves of bullshit crashed all around. Pre-pandemic, I had just separated from my wife, so my emotional health wasn’t in tip-top shape. But then millions of people go and get sick, the economy took a nosedive, and well, the world changed. When everything around you sucks, and people are on the news crying about unemployment and potential homelessness, you’re thankful as hell that you’re not with them – until you are.

I was writing for a startup, one that came with a litany of headaches thanks to fluctuating budgets and constant directional pivots, but it was steady work. When the Coronavirus hit, it was a scenario of “we’re going to get through this,” but as we switched gears again and again, I started to get an unsettling feeling: I’ve seen this story before. When you live in Austin and are in the creative field, you’ve worked with startups. And there are always trappings on when something lingers in the air – hierarchy shuffles, people aren’t as optimistic, and senior folks start quietly bailing out. Those are the obvious moves that make your unemployment-related Spidey sense tingle, but with COVID, everything is remote. There aren’t the office vibes, the shortened conversations that make you, “I know what’s happening here.” Instead, you’re checking Slack or email and surviving like everyone else.

We were happy to be working, to see the direct deposit hit every two weeks and sigh, knowing you were still in the fight, that you might see this thing through.

We saw our entire business change overnight. Leadership rose to meet the challenges of an old model rooted in hospitality, restaurants, and events, which died with a viral disease shotgun blast. Because the infrastructure was there, we managed to help out workers, and grocery stores work together to keep people fed across the nation. It was legitimately a point of pride. Like all things, though, the market settled. We bought time.

In July, I had a full-blown depressive episode. The weight of the divorce, the lack of human interaction, my work having less value, my career stalled felt like a Terminator robot foot on my skull. I couldn’t get out of bed, and everything I wrote were the smatterings of a broken man. And to my ex-bosses’ credit, my breakdown was NOT my best work, I could barely look at a computer, let alone forge thoughts on an entirely new industry with any authority, or even a fake it till you make it scenario.

When the CEO put time on my calendar, I knew it was a wrap. Startup CEOs don’t make house calls; they swing the ax. When you’re the lone creative in a company trying to survive a nearly company-killing event, you’re the head on the block. Creatives are expensive, and we’re expendable. Site copy, content, media placements, all that can kick rocks when developers need to keep the business moving, even if it’s at a glacial pace. When I was given my walking papers, it was an exhale, on one hand, I’d been professionally empty, but at the same time, I needed consistent money. My personal life was a minefield and I’ve got kids.

I got severance. Unemployment took forever to hit. The state of Texas authorized amount makes me cringe. Punishing Americans for losing their jobs during a crisis is appalling. Millions are without safety nets, and it’s totally ok with elected leaders.

There are deferments available. I had to get them on my credit cards, which I jacked up thanks to spending $8,500 on an amicable divorce, along with a new MacBook Pro that was the price of a used Nissan. I got a deferment on my car note, too.

I’ve applied to over 100 jobs, both remote and local. I’ve applied for jobs I’m overqualified for in hopes they’ll hire me as a freelancer. There are lots of rejection letters. I get to round two interviews. References or the round three interviews haven’t happened yet. I get told I’m too experienced or too expensive. Sometimes, recruiters won’t even show up. And then there are the Zoom meetings. Can we all agree we’re over Zoom? Sometimes, you don’t want to comb your hair.

I’ll get promised the much needed “next steps” and then a rejection email, “thanks but no thanks.” Could you at least tell me what the X-Factor for this decision was? Was there a typo? Did you check my Facebook? The ambiguity kills me. Being a broke senior creative person kills me. I interviewed President Obama and have written for Apple, but ask myself: Can I afford that falafel wrap for lunch? Do you think springing for the fries is worth that extra $3? You’ve got soup at home, you know.

I’m not unique. This is the American Experience. We’re stuck in this self-perpetuating hell. We keep looking for jobs. We want to work. There are only so many gigs to fill when there’s constant rollercoaster news on unemployment recovery. And as long as unemployment sucks, there’s going to be a lot of people bracing for impact come Christmas. Hopefully, the brass in Washington can pass a few bills and get us back to work. At least get Americans out of the breadline by pumping up what we’re surviving off of – across the board. Working people shouldn’t have to face getting sick to bring in an income, while casualties of the Corona War should be able to look at their bills and not feel like the assistant on the knife throwers wheel.

I’m about to be a line cook to make extra cash till an intrepid manager hires me. Who doesn’t want a writer working the grill who reads French existentialist essays for enjoyment? I’d rather sit on park benches and day dream, but that ain’t reality. I’ve got bills to pay in a broken America. Who wants a burger? Deep thoughts come free but an extra slice of cheese is extra.

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Opinion Editorials

7 ways to carve out me time while working from home

(OPINION / EDITORIAL) It can be easy to forget about self-care when you’re working from home, but it’s critical for your mental health, and your work quality.

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Woman in hijab sitting on couch, working from home on a laptop

We are all familiar with the syndrome, getting caught up in work, chores, and taking care of others, and neglecting to take care of ourselves in the meantime. This has always been the case, but now, with more people working from home and a seemingly endless lineup of chores, thanks to the pandemic. There is simply so much to do.

The line is thinly drawn between personal and professional time already, with emails, cell phones, and devices relentlessly reaching out around the clock, pulling at us like zombie arms reaching up from the grave. Working from home makes this tendency to always be “on” worse, as living and working take place in such close proximity. We have to turn it off, though.

Our brains and bodies need down time, me-time, self-care. Carving out this time is one of the kindest and most important things you can do for yourself. If we can begin to honor ourselves like this, the outcome with not only our mental and physical health, but also our productivity at work, will be beneficial. When we make the time to do things we love, our body untenses, our mind’s gears slow down that constant grinding. Burnout behooves nobody.

Our work will also benefit. Healthier, happier, more well rested, and well treated minds and bodies can work wonders! Our immune systems also need this, and we need our immune systems to be at their peak performance this intense season.

I wanted to write this article, because I have such a struggle with this in my own life. I need to print it out and put it in my workspace. Last week, I posted something on my social media pages that so many people shared. It is clear we all need these reminders, so I am paying it forward here. The graphic was a quote from Devyn W.

“If you are reading this, release your shoulders away from your ears, unclench your jaw, and drop your tongue from the roof of your mouth.”

There now, isn’t that remarkable? It is a great first step. Let go of the tension in your body, and check out these ways to make yourself some healing me-time.

  1. Set aside strict no-work times. This could be any time of day, but set the times and adhere to them strictly. This may look like taking a full hour for lunch, not checking email after a certain hour, or committing to spending that time outdoors, reading, exercising, or enjoying the company of your loved ones. Make this a daily routine, because we need these boundaries. Every. Single. Day.
  2. Remember not to apologize to anyone for taking this me-time. Mentally and physically you need this, and everyone will be better off if you do. It is nothing to apologize for! Building these work-free hours into your daily schedule will feel more normal as time goes on. This giving of time and space to your joy, health, and even basic human needs is what should be the norm, not the other way around.
  3. Give yourself a device-free hour or two every day, especially before bedtime. The pinging, dinging, and blinging keeps us on edge. Restful sleep is one of the wonderful ways our bodies and brains heal, and putting devices away before bedtime is one of the quick tips for getting better sleep.
  4. Of course, make time for the things you absolutely love. If this is a hot bath, getting a massage, reading books, working out, cooking or eating an extravagant meal, or talking and laughing with a loved one, you have to find a way to get this serotonin boost!
  5. Use the sunshine shortcut. It isn’t a cure-all, but sunlight and Vitamin D are mood boosters. At least when it’s not 107 degrees, like in a Texas summer. But as a general rule, taking in at least a good 10-15 minutes of that sweet, sweet Vitamin D provided by the sun is good for us.
  6. Spend time with animals! Walk your dog, shake that feathery thing at your cat, or snuggle either one. Whatever animals make you smile, spend time with them. If you don’t have pets of your own, you could volunteer to walk them at a local shelter or even watch a cute animal video online. They are shown to reduce stress. Best case scenario is in person if you are able, but thankfully the internet is bursting with adorable animal videos, as a backup.
  7. Give in to a bit of planning or daydreaming about a big future trip. Spending time looking at all the places you will go in the future and even plotting out an itinerary are usually excellent mood-boosters. It’s a bit different in 2020, as most of us aren’t sure when we will be able to go, but even deciding where you want to go when we are free to travel again can put a positive spin on things.

I hope we can all improve our lives while working from home by making time for regenerating, healing, and having fun! Gotta run—the sun is out, and my dog is begging for a walk.

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Opinion Editorials

Improve UX design by tracking your users’ eye movements

(OPINION / EDITORIAL) Research shows that the fastest way to determine user behavior and predict their response is by watching their eyesight. Use this data to improve your UX design.

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UX design being created by a designer on a laptop.

By design, an ice cream truck is meant to entice. It is colorful, stupidly loud with two whole songs from the 30s (usually off key because no one is left alive who can service those bells), and lots of colorful stickers that depict delicious frozen treats that look nothing like reality. If you need an off model Disney character that already looks a little melted even when frozen, look no further.

This is design in action – the use of clever techniques to drive engagement. Brightly colored decor and the Pavlovian association of hearing The Sting in chirpy little ding dings is all working together to encourage sales and interaction.

These principles work in all industries, and the tech sector has devoted entire teams, agencies, companies, groups, and departments to the study of User Experience (UX) explicitly to help create slick, usable applications and websites that are immediately understandable by users. Tools to improve utility exist by measuring user behavior, with style guides and accepted theories preached and sang and TED-talked all over.

The best way to check behavior is to observe it directly, and options to check where someone clicks has proven invaluable in determining how to improve layouts and designs. These applications are able to draw a heat map that shows intensified red color in areas where clicks congregate the most. An evolution of this concept is to watch eyesight itself, allowing developers a quicker avenue to determining where a user will most likely go. Arguably the shortest path between predicting response, this is one of the holy grails of behavioral measurement. If your eyes can be tracked, your cursor is likely to follow.

UX design can benefit greatly from this research as this article shows. Here’s some highlights:

Techwyse completed a case study that shows conversion on landing pages is improved with clear call-to-action elements. Users will focus on objects that stand out based on position, size, bright colors, or exaggerated fonts. If these design choices are placed on a static, non-interactive component, a business will lose a customer’s interest quickly, as their click is meant with no response. This quickly leads to confusion or abandonment. Finding where a person is immediately drawn to means you should capitalize on that particular piece with executable code. Want it boiled down? Grocery stores put Cheetos front and center, because everyone want them thangs.

Going along with this, Moz found that search results with attractive elements – pictures and video – are given much more attention than simple text. We are visually inclined creatures, and should never undervalue that part of our primal minds. Adding some visual flair will bring attention, which in turn can be leveraged usefully to guide users.

Here’s an interesting study – being that we are social animals, follow the gaze of others. If you’ve ever seen kittens watching a game of ping pong, they are in sync and drawn to the action. Similarly, if we notice someone look to the left, we instinctively want to look left as well. While this sounds very specific, the idea is simple – visual cues can be optimized to direct users where to focus.

The Nielsen Group says we look at things in an F pattern. I just think that’s funny, or at least a funny way to describe it. We follow from left-to-right (just like we read, and as websites are laid out using techniques first developed for newspapers, it naturally makes sense that we’d do the same). Of course, cultural or national differences arise here – right-to-left readers need the opposite. Always be sure to keep your target audience in mind.

Of course, there are several other findings and studies that can further promote idealistic layout and design, and it should always be the goal of designers to look to the future and evaluate trends. (Interestingly, eye tracking is the first option on this list!)

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