AG Flash Poll results – independent brokers to rise in 2011

Is all of the talk about the rise of the independent brokerage hot air or is there an actual movement in the works? Back in 2002, AG founder Benn Rosales founded an independent brokerage in Austin, and in a city where a big broker is headquartered and has a choke hold, it was nearly unheard of to step out on your own with your own philosophies in hand.

As promised, we’ll be studying and analyzing this movement and how it pertains to 2011 because it’s certainly gained steam since 2002 when signs got kicked over regularly, threatening phone calls were made and the like.

This week’s AG Flash Poll where we take the pulse of AG readers, we were surprised to learn that the majority of our readers believe the indie brokerage movement to be gaining traction and the outlook is quite positive with our audience. Shockingly optimistic, even. Of the 85% surveyed that believed there would be a rise in indie brokerages in 2011, more than 50% believe the increase will be above 5%.

There is still a segment of real estate professionals, however that think all the attention on darling indie brokers is just lip service and 5% of people surveyed believed this chatter is perpetrated by failed agents and most of the theory being spread by indie brokers themselves.

The indie brokerage theory is one we have personally been discussing for a decade now and in a recent email conversation with Durham Realtor, Steve Nicewarmer, he summarized succinctly our belief that the value proposition of a Realtor is changing, thus the brokerage model is changing.

Steve said, “I’m wondering if the trend towards Independent Brokerages isn’t a reflection of the changes in the real estate brokerage model. Under the “pre-Internet” brokerage model, the value of our industry was that we controlled the listing information. Our perceived value was front-loaded, and that is where being part of a franchise was of value. Today, our perceived value is in guiding the transaction through to closing. That value is derived more from our individual relationships with lenders, attorneys, inspectors and the like, and less from the franchise getting leads in the door. In other words, the focus of a Realtor’s value has moved to something more local. Because of that, franchises are of less value and firm owners are beginning to see that and either demand additional value, or move on to an independent firm.”

We would add a third option to Steve’s theory- people starting their own indie brokerage. In Texas, all it takes is two years as a licensed agent and a little test, just like most states. As the value proposition changes, so will the brokerage model and although the poll results show an eager audience that believes the growth will be widespread and nearly instant.

Several respondents pointed to a rise in technology that makes virtual brokerage a superior and less expensive option to big box brokers. With the barrier to entry being lowered by social networks and DIY websites, any agent is technically empowered to compete on a hyperlocal level. One respondent notes, however, “as costs rise and agents are lured by brokerages where the cost to the brokerage is lower (such as the one I am a part of), independent brokerages who are not diversified and/or have larger overheads may be in for a rude awakening.”

What do you think of the rise of independent brokerage? How fast will this movement take hold and how will it impact the industry? Let’s talk about the poll findings in the comments.