Sometimes you just have to create what you want to be a part of!
– by Geri Wietzman
Brokerages and firms are owned by every kind of entity. Ownership can be by an individual, a family, collection of investors, and various kinds of corporations. The ownership can be in the local community and part of the brokerage, or by a multi-national corporation, and everything in between. Owners do not have to be licensed in real estate nor do they need to be Principal Brokers.
Does it Make a Difference to You?
I think it does, both to your bottom-line dollars but also to the ‘corporate culture’ in the office. It also has an effect on how one does business. There are issues related to the ownership structure which must be considered. Is the company hierarchical? Is there a corporate flow chart of authority and for decision-making? Or is it a flat structure with limited power structures employing collegial consensus for decisions. Is it a dictatorship of one person or couple?
While in the past, it was easy to justify the benefits of a national company (sophistication, tools, reach, referrals) today all of those benefits are within the reach of not just a local brokerage but the individual agent! There has also been a paradigm shift in the way people search for real estate and real estate agents which obsoletes the necessity of a national brand to be successful.
Every entity will justify their own existence for their size and their corporate structure, but it is for you to think it through, learn what the differences are, and what is most appropriate for you in our evolving industry.
Bella Casa Real Estate Group is locally owned by 3 people, all in the family: Randy and Joni McCreith, and Amy (McCreith) McCormick, daughter and business partner. We make our primary income the same way all our brokers do, by selling real estate. We have a very flat organization and make most brokerage decisions by consensus of our brokers. We are a professional cooperative of independent and autonomous Realtors®. We have one designated Principal Broker, as we must (me), but we also have more than a dozen Principal Brokers and we would be glad to see all our brokers achieve Principal Broker status!
Why Local Ownership is a Benefit
- It is more personal. The agents and the owners know each other and interact regularly. Each understand the needs and issues and can work together for solutions to challenges.
- It means the owners understand the local economy, current conditions, and the local markets, and can adapt the business model swiftly when needed.
- It means that the money generated by both the brokerage and the Realtors’® commissions stay in the local communities and helps build our own economy, not the metro-plex, the region, or distant places in the nation.
- There are not as many mouths to feed in the profit food chain. The larger the entity the more levels of management to feed and the more investors at various levels who want a good return on their money. The more takers, the less money for the Realtors® on the street who do the work.
- The downside of distant ownership is highlighted when they need more money or are suffering through a down cycle. They raise fees and expenses and do not seem to understand or care what it does to their agents. In large firms there is a constant search for new ‘income streams’ and value-added services to improve investor profits. There is the pressure on agents to pay more for its services, and to find affiliated businesses so the company makes more money (mortgage brokers, warranty companies, home services, etc.)
The Buy Local Movement
People are realizing that the mega companies of the world pool their money for their own people and in their corporate HQ area. In reaction, people are promoting the personal and exceptional customer-centric services not possible in such companies and the benefits to everyone when our money stays local. Local is not just to our metro-plex (downtown Portland), but for our towns and neighborhoods and to support the people we know in our communities.
Would you rather send some of your commission money, and the profits from other affiliated services, to support the economies of Austin Texas, Waltham Massachusetts, Parsippany New Jersey, Denver Colorado, Newark New Jersey and the likes, or are you more interested in having your money do good in McMinnville and Newberg and the towns of the surrounding areas?
It’s a Mentality Which Needs to Catch-On!
Bella Casa Realtors® have complete freedom to choose those with whom they do business, and the vendors they are proud to refer for their clients. We consciously chose NOT to have affiliated business relationships even though this would bring significantly more money into the brokerage and for the owners. It is an issue of principle for us. Rather than collectively promoting a few select vendors for services because we get referral fees, advertising dollars or various and sundry benefits, we want our Realtors® to find the best in the business locally and promote any and all of them. We are committed to doing this without any self-interest other than our clients will get treated as well as we would treat them. That is all we ask of them! When a company says you should sell this warranty, use this mortgage broker, have your transactions at this title and escrow company, and promote this set of contractors, (to make money off of them), then the local community of vendors is insulted, and our clients lose valuable options for their services. The only ones who win is the company and its investors, owners, and managers. Let’s support the local communities – not the chosen few dictated by some because they get rewarded. Let’s help every one of our neighbors who provides excellent products and services.
Randy McCreith, Principal Broker
Bella Casa Real Estate Group