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AG Flash Poll results – independent brokers to rise in 2011

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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.

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15 Comments

15 Comments

  1. BawldGuy

    January 6, 2011 at 6:22 pm

    Hey Benn — How ’bout a fourth option?

    So-called indies are opening for the same reason bored soccer moms get their original license — cuz the can. The hi-tech thing? Big boxers can do the same thing, and many of ’em have tons of cash to speed things up. I sure don’t see KW fadin’ into the woodwork. In fact, in my neck of the woods, they’ve been highly successful in literally eliminating successful indies by recruiting them as a ready-made team. That’s to silly to make up. 🙂 I know the recruiter who’s done it many times.

    The indies will come and go the same way agents do, just not as quickly. I think the whole ‘control of the listing info’ thing is incredibly overblown. If I’m a big box broker/owner I still control the 1-500 listings my agents have produced. Show me a big box brokerage that concentrates like a laser beam on listings, and I’ll show you one that dominates a market. I know this is OldSchool music, but I’ve seen nothing whatsoever to sway me otherwise.

    Indies who rely on buyers will survive as long as inventory remains ‘fishable’. They need the listing brokerages, be they big, medium, or one horse operations. They’re worthless without them.

  2. Steve Nicewarner

    January 7, 2011 at 9:36 am

    I think you misunderstand what I meant by “control the listing information.” Back in 1993 when I was in the market, the only way I had of knowing what was available was to contact an agent. The agent I contacted was selected by what advertising I saw, or which signs I saw in yards — both places where a national franchise shines.

    Today, all that listing information is available to anyone in moments via Google, Realtor.com, Trulia and others, so we are no longer the gatekeepers of listing information. The value we provide is focused more on the network of inspectors, lenders, attorneys, handymen and others who can take a closing across the finish line. That is a realm where individual people shine, not national franchises.

    Don’t get me wrong. I’m affiliated with a franchise, and I don’t believe they are going away anytime soon. The ones that will be successful, however, will be the ones that stress connections and relationships not national advertising power.

  3. Kelsey Teel

    January 7, 2011 at 1:43 pm

    I think it’s important to look at this from the consumer’s perspective….and consumers like name brands. Just sayin’. 😉

  4. Jim Whatley

    January 10, 2011 at 11:38 pm

    It is like anything the cream will rise to the top. the rest is just milk. The big question how will the successful indie handle success? How big can they grow. How do the manage cost when big.

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Austin

Austin tops the list of best places to buy a home

When looking to buy a home, taking the long view is important before making such a huge investment – where are the best places to make that commitment?

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Looking at the bigger picture

(REALUOSO.COM) – Let us first express that although we are completely biased about Texas (we’re headquartered here, I personally grew up here), the data is not – Texas is the best. That’s a scientific fact. There’s a running joke in Austin that if there is a list of “best places to [anything],” we’re on it, and the joke causes eye rolls instead of humility (we’re sore winners and sore losers in this town).

That said, SelfStorage.com dug into the data and determined that the top 12 places to buy a home are currently Texas and North Carolina (and Portland, I guess you’re okay too or whatever).

They examined the nerdiest of numbers from the compound annual growth rate in inflation-adjusted GDP to cost premium, affordability, taxes, job growth, and housing availability.

“Buying a house is a big decision and a big commitment,” the company notes. “Although U.S. home prices have risen in the long term, the last decade has shown that path is sometimes full of twists, turns, dizzying heights and steep, abrupt falls. Today, home prices are stabilizing and increasing in most areas of the U.S.”

Click here to continue reading the list of the 12 best places to buy a home…

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Housing News

Average age of houses on the rise, so is it now better or worse to buy new?

With aging housing in America, are first-time buyers better off buying new or existing homes? The average age of a home is rising, as is the price of new housing, so a shift could be upon us.

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aging housing inventory

The average home age is higher than ever

(REALUOSO.COM) – In a survey from the Department of Housing and Urban Development American Housing Survey (AHS), the median age of homes in the United States was 35 years old. In Texas, homes are a bit younger with the median age between 19 – 29 years. The northeast has the oldest homes, with the median age between 50 – 61 years. In 1985, the median age of a home was only 23 years.

With more houses around 40 years old, the National Association of Realtors asserts that homeowners will have to undertake remodeling and renovation projects before selling unless the home is sold as-is, in which case the buyer will be responsible to update their new residence. Even homeowners who aren’t selling will need to consider remodeling for structural and aesthetic reasons.

Prices of new homes on the rise

Newer homes cost more than they used to. The price differential between new homes and older homes has increased from 10 percent traditionally to around 37 percent in 2014. This is due to rising construction costs, scarcity of lots, and a low inventory of new homes that doesn’t meet the demand.

Click here to continue reading this story…

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Housing News

Are Realtors the real loser in the fight between Zillow Group and Move, Inc.?

The last year has been one of dramatic and rapid change in the real estate tech sector, but Realtors are vulnerable, and we’re worried.

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zillow move

Why Realtors are vulnerable to these rapid changes

(REALUOSO.COM) – Corporate warfare demands headlines in every industry, but in the real estate tech sector, a storm has been brewing for years, which in the last year has come to a head. Zillow Group and Move, Inc. (which is owned by News Corp. and operates ListHub, Realtor.com, TopProducer, and other brands) have been competing for a decade now, and the race has appeared to be an aggressive yet polite boxing match. Last year, the gloves came off, and now, they’ve drawn swords and appear to want blood.

Note: We’ll let you decide which company plays which role in the image above.

So how then, does any of this make Realtors the victims of this sword fight? Let’s get everyone up to speed, and then we’ll discuss.

1. Zillow poaches top talent, Move/NAR sues

It all started last year when the gloves came off – Move’s Chief Strategy Officer (who was also Realtor.com’s President), Errol Samuelson jumped ship and joined Zillow on the same day he phoned in his resignation without notice. He left under questionable circumstances, which has led to a lengthy legal battle (wherein Move and NAR have sued Zillow and Samuelson over allegations of breach of contract, breach of fiduciary duty, and misappropriation of trade secrets), with the most recent motion being for contempt, which a judge granted to Move/NAR after the mysterious “Samuelson Memo” surfaced.

Salt was added to the wound when Move awarded Samuelson’s job to Move veteran, Curt Beardsley, who days after Samuelson left, also defected to Zillow. This too led to a lawsuit, with allegations including breach of contract, violation of corporations code, illegal dumping of stocks, and Move has sought restitution. These charges are extremely serious, but demanded slightly less attention than the ongoing lawsuit against Samuelson.

2. Two major media brands emerge

Last fall, the News Corp. acquisition of Move, Inc. was given the green light by the feds, and this month, Zillow finalized their acquisition of Trulia.

…Click here to continue reading this story…

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