The term “discount” real estate brokerage is hated by many agents, but I don’t understand why. If you are a real estate agent you likely love the business model. Almost all of the new brokerages that so many agents are switching to are discount real estate brokers, just in a way that you have never considered.
A Different Kind of Discount Model
When I say the words discount real estate brokerage, what probably goes through your mind is a brokerage that is cutting corners to save money so they can charge less money to get more listings. They are often told they are devaluing themselves, they should know their worth, and other cliches.
But how is a brokerage that is charging less to get listings that different from a brokerage that is charging less or offering out of the ordinary perks to get more agents? I’m sure off the top of your head you can think of several companies using this exact business model. They don’t want expensive offices full of office administrators and employees. They want to cut out all of the wasteful spending so they can offer more technology, lower splits, lower caps, and revenue share to recruit more agents.
Two Types of Discount Real Estate Brokerages
You see there are in fact two types of discount real estate brokerages. They have the same DNA, the same business model, the same mindset with two key differences:
#1 They have a different target audience. We target the public with a better value proposition to get more listings. They target the real estate agents with a better value proposition to get more agents.
#2 charging the public less money to get more listings is not socially acceptable by the industry. A brokerage charging real estate agents less money to get more recruits is cheered by the industry.
Why Charging Less Can Lead to Earning More
Now that you might be considering things in a different way, maybe you should ask yourself this question. Why would anyone work for a company charging less money to get more listings? Why are they working harder for less money?
This is one of the most common misconceptions about discount real estate brokerages. What they are doing is working differently, but often for more money.
Listings Are the Engine That Drive Growth
Is it easier to recruit agents if you have a better commission split, better perks to offer, or recruiting downlines? Obviously yes. The byproduct of that is more agents that you can make money off of in different ways such as monthly or technology fees.
Is it easier to recruit listings if you are offering a very similar service at a much lower price? Obviously yes. The byproduct of this is the more listings you have the more listings you will get. Those listings turn into buyers organically which by the way pay a higher commission. No more paying for leads. Less months with no closings. More stable income. Less time spent farming for leads. More time doing deals. Greater loyalty from your real estate clients. More referrals. Organically generating buyers from your listings that pay a higher commission that you don’t have to pay a lead service for.
Rethinking Value in Real Estate
So what does all this mean for you? If you are an agent with a lot of listings and you are paying your broker too much money then the choice seems more obvious. If you are paying a lead service for buyer leads, have no personal time, and can’t seem to get a listing maybe you should consider something else? If you aren’t getting listings are you devaluing yourself by charging less to get listings? I would argue you are enriching yourself.
We think outside the box. If you are tired of doing the same thing the same way and hoping for a better result I would love to speak with you.