Sam asks: agent, agency or franchise?
Sam Schneiderman, Broker-owner of Greater Boston Home Team discusses the evolution from neighborhood brokerages to franchise businesses.
When I began in real estate in 1984, Greater Boston real estate agencies were mostly single neighborhood offices, often family run businesses that were fixtures in their neighborhoods. Those family businesses were built on personal relationships with individuals and families that often spanned several generations of brokers and their client’s families. MLS books and press advertising took time to get the word out about new property listings. The new “listing computer” was only in Realtor™ offices. That made the Realtor™ the source of all real estate information.Century 21 was the big franchise and they were converting small offices to their brand, promising a proven growth model with their business and agent recruitment systems. For a percentage of their commissions brokers bought in, allowing them to attach their name to a national brand and referral network. That, and lots of advertising created instant credibility with consumers, even though an office might have been staffed with rookies like like I was in the beginning. Franchise ads teach consumers to focus the on the office’s and franchise’s experience instead of the rookie agent's lack of experience.
Today most Greater Boston neighborhood real estate offices sport franchise brand names; some locally owned and some owned by huge international corporations. (Five major real estate “brands” are all owned by one corporation.) The little offices have grown into large offices housing dozens (sometimes hundreds) of Realtors™ with various experience levels, all working under the rented brand name of the tried and true franchise.
While the franchise model has been successful in major metropolitan areas, the National Association of Realtors reports that an almost equal number of Realtors™ work with independent offices around the country, probably in smaller towns and rural America.Instead of walking into a neighborhood real estate office to discuss buying or selling a neighborhood home, most buyers and sellers begin online. The internet now appears to be the source of all real estate information.
While most buyers and sellers get preliminary information online, the vast majority still turn to local agents or agencies to help them negotiate and guide them through the buying or selling process. Some are attracted by an agent’s or agency’s web sites. Some are attracted by the agency’s neighborhood presence. Some by the franchise or local brand’s name and/or the agent’s name, and some either meet their agent at an open house or through a personal referral.
Which do you think is more important to a buyer or seller, the agent or the agency? Why?
Would you have more faith in an agent that was affiliated with a "big brand" franchise than a smaller office?
Has the impact of franchises on real estate been good, bad or neutral?
OK, this topic may bring out commenters with an agenda. Please play fair by letting us know if you are an agent, broker, buyer, seller, investor, homeowner, attorney or whatever.
