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Small Brokers vs Large Brokers

Atlanta Real Estate News | Email the Author: Brad Nix, Managing+Broker
Posted: June 10th, 2008
Category: real estate news

As owner and broker of small boutique brokerage firm, I am constantly asked if smaller is better. I am obviously biased on this answer, but thought I’d share some thoughts on the subject anyway.

I read this morning that GMAC real estate may be sold. Before I started Maxsell Real Estate, I worked for GMAC. The firm was Better Homes and Gardens before it became GMAC and it was just Metro Brokers before BH&G bought them. I spent my first eight years with Metro Brokers/BH&G/GMAC. That’s 3 brands in 8 years.

It’s also true that Better Homes and Gardens is coming back into the real estate market. Rumor has it they may even buy back the GMAC franchises it sold off years ago. Sellouts!

As an agent, I was tired of corporate turnover, rebranding, and migration to quantity over quality. I wanted to work where I was part of a consistent brand without corporate policies and a place where community and morale mattered more than numbers. Maxsell Real Estate was born out of the idea that real estate is local and consumers really don’t care what national brand you’re with (they change so often now anyways).

Some agents and consumers ask if the brand recognition makes a difference. My answer has always been yes, to some, and no, to others. Everyone assumes that a big corporate brand makes a difference to the public. I agree that many people may look favorably on a corporate brand which helps with first impressions, but there are more and more who look negatively on corporate brands.

So many people are jaded by corporate America, tired of mass advertising, disgusted by corporate politics and Enron scandals. I contend today more than ever before, large brands are in trouble. Then they go and buy each other out and make it even more difficult for the public to trust one brand over another.

So far Maxsell Real Estate has lost only one listing that I can verify, in three years, to a larger corporate brand. Today’s real estate client wants superior service, not a brand name. I’ll take my chances staying small and enjoy the side show of sellouts, brokerage buyouts, and rebranding.

sellouts

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bobwoo 6 months ago 1 point
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I could not agree more. When I was in both residential and commercial RE brokerage, I always went with the "smaller guys" for the reasons you mention above. I'd rather stand out than get lost in the crowd. It's very cool that you've only lost one listing to a larger brand, too.

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bnix 6 months ago 1 point
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Only one that I can verify, there may have been others which weren't obvious the corporate brand made a difference.

Great point about standing out. We're trying to stand up and be accountable for service and hopefully that will make us stand out!

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Tom Royce 6 months ago 1 point
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Brad,

I think you are right that staying small in this market gives you a competitive advantage. Very Seth Godin'ish.

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http://www.therealestatebloggers.com

David Podgursky 6 months ago 1 point
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Brad,
I agree... the corporate mentality stifles the individual in many ways - from branding to personal marketing. The 3 firms in 8 years is a great example of it... every time that happened, YOU had to re-print all your marketing materials. Sure it gave you the chance to touch your clients again but not for the right reason! It shows a lack of stability.
As the big Re/Max franchises here are being sold off and brands are dying by the day, I'm also seeing the tiny sole proprietor locations with FOR RENT signs out.

There is power in unity ... and that means a small boutique that can harness the power of the internet and blogging...drive in leads and provide proper service will attract the buyers. They can also attract top producers who would be upset like you at the big brands. They can also forgo the green agents for an experienced staff and team...let the trainers train them and they'll learn to come over to the boutique in time.

Same thing goes on the mortgage side... the big firms lose the ability to produce a quality customer focused model by spending too much time on growing and too little time on closing.

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diamonddwellings 6 months ago 1 point
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Way to go, Brad!
You know that I think "Small is the new Big"
Brand recognition will always matter -- but it's still a deeply local recognition.
So, while Remax or KW might be really big in Atlanta -- they are NOT the top brand in some other markets.
With today's tech tools, small firms can have brand impact on the local level that competes with anybody.
Be blessed, Matt

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jemery 6 months ago 1 point
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I've come to the conclusion, finally, that it's more about the agent than the brokerage brand. If the agent working for the client is good, their experience is likely to be good regardless of broker branding. And the reverse is true as well. I don't care how big your brand is. If it's a REMAX brokerage but the individual agent is no good, it doesn't matter to the client in the least what brand name recognition there is.

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Kevin - Alpharetta Real Estate 6 months ago 1 point
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Brands definitely have power and help consumers make decisions when they have no other criteria on which to decide. I think the problem with most national real estate brands is that they have done nothing to distinguish themselves from the noise. Century 21 arguably does the most national advertising along with Remax but it is all name recognition marketing not product differentiation marketing.

Consumers are so convinced that there isn't a dime's worth of difference between any of the national brands, that it creates space for boutique brokerages and agents strong enough to articulate a real (service) difference.

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bnix 6 months ago 1 point
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@Kevin I couldn't agree more. Brands do matter, but only if they are really good or really bad. In real estate, a potential client could have had a great experience with their last Big Brand Broker and think very favorably about calling an agent with same broker the next time they need RE services. However, it's just as likely that a potential client had a terrible experience with the same Big Brand Broker and would never call an agent from that firm in any market, ever.

Real estate is such a local business that I believe agents who create their own brand of service will stand out amongst a sea of mediocrity. I also believe that large brokerages perpetuate this sea of mediocrity by recruiting for numbers and not quality of service.

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steve 6 months ago 1 point
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I agree with the local boutique agency. With reports that now more than 70% of all buyers start out looking online, the pull of a national broker has less and less weight. it used to be a selling tool that you had offices all over the country, but now it means next to nothing (to the consumer anyway).

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Vancouver realtor 6 months ago 1 point
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I a consider myself a "bigger small agent", on the other hand I am under Vancouver ReMax. I think it's a good combination. clients know me as a local agent, on the other hand famous brand helps, when contacting new clients. I am satisfied. On the other hand, it's always a good feeling to be completely free :)
Jay

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Michelle 6 months ago 1 point
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I think if you are a small company and using all of the tools available to you than it can really work for your advantage. I'm with a local broker instead of the "big brands" though we are much larger that most small brokers. (We actually have had the market share on listings over the cobrokes despite we only have offices in 3 states while the others are all national companies!)

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shaun76 6 months ago 1 point
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Brad, I'm asked this same question about once a week. Interesting post. I'm all for the smaller-is-better side of things.

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paynemar 6 months ago 1 point
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So true--it's funny, the big brands advertise that it the business YOU create but if one of those agents tries to leave and either go to a smaller company or start their own, they start going nuts and telling those agents that 'IN THIS MARKET you NEED a WELL KNOWN BRAND to sell a property" and it scares the agent to death--when those brands start paying my car, cellphone, health insurance, and expense accounts, then I will listen to them!

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dyork 5 months ago 1 point
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I'm with a small firm and feel we have a distinct advantage because we specialize in residential land, developed lots, and mixed use communities. Our background as land developers for 18+ years provided the perfect segway into this market and we've found that builders and developers love the concept. Since we've had relationships with these people for so many years we get calls all the time to discuss; who is selling; who is buying, where are they buying, etc. It's allowed us to stay on top of this market and network within our niche market. I guess if you're in to "brand loyalty" then one will stick with the big firms.

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