By Todd Adair
Imagine if you bought a fancy new car, but the dealer you bought it from had no service department, no showroom, no after-sales service of any kind at all. The only service they offered was to take your money and hand over your keys. And yet they charged you a hefty fee for the privilege.
In a way, that’s basically what a lot of brokerages do these days. I don’t think that’s reasonable, and I don’t think it’s a recipe for long-term success, either. I’m not going to pussyfoot around what I believe is the truth: in the modern world of real estate, the traditional brokerage model is broken, and it may not be fixable.
It feels good to finally just say it. Now I’ll explain why I believe the entire industry
is overdue for a complete shakedown.
For years, most standard brokerages worked something like this: a seller hired the brokerage firm (or an individual agent who hung their license at that particular brokerage), and they provided the necessary services to sell your house. But often the best things they had to offer were 1. A good location (i.e., their office); 2. MLS (Multiple Listing Service), which was contained in a fat binder that the agent usually carried around with them in the car; and 3. the brand and training that supported the brokerage. That was a big deal in the ’80s and ’90s!
But over the years, that model has eroded. Access to MLS listings is now widely available to the public (with some exceptions). Many agents have come to negotiate more perks and concessions from the brokerage, and engaging many of the usual services – staging, home inspection professionals, etc. – on their own (and often charging their clients extra for these services). In many cases, the brokerage has become little more than a shell or clearing house – while still taking a nice cut of the commission you pay.
These days, that’s simply not good enough. When you’re selling a multimillion-dollar property, your most qualified prospective buyers may not even be looking on MLS. (In addition, Canada is the only country in the world that I’m aware of that has a national MLS. So where are you looking if you’re a foreign buyer?) Buyers today are much more sophisticated and intelligent; they’re going to need more than just a fresh coat of paint and maybe some nice flowers in the front porch urns to be impressed by your property.
Here’s the kicker: many brokerages today have gotten themselves into a corner that there’s really no getting out of. If the agents in a particular brokerage have negotiated such generous commissions for themselves that there’s little profit left over for the office, the opportunity to offer added value to clients – even if the brokerage owners were so inclined – is diminished. The result is a model that’s pretty much doomed.
Okay, so what would it take to change this scenario? What if you completely broke that model, and started out from a completely different standpoint? How about actually adding value that the consumer can see and feel; services they can’t easily go online and get for themselves, instead of a lot of flashy sales talk?
I think we owe it to our clients to work hard to offer genuine value, genuine expertise, and services that work in their best interests, not just in ours. Let me give you a few examples.
I started my career as a young man working in software development, and early on I recognized that the future of this industry lay in mastering technology. So from the day we opened our doors, making use of technology to further our clients’ needs has been at the heart of many of our breakthroughs here. Cayman Marshall operates no fewer than 16 unique websites, a proprietary algorithm that precisely, accurately and consistently matches sellers and targeted buyers, and a sophisticated lead generation system that ensures the properties we are entrusted with marketing are brought before a constantly expanding audience of interested parties.
As our company has grown, we’ve added an array of in-house services that are automatically available to the clients who list with us. Cayman Marshall magazine has come to be regarded as one of the finest magazines of its type in Canada. Our team includes a host of talented in-house architects, designers, stagers, contractors and even construction personnel whom we make available should they need any of these services.
Our exclusive listing services are another way we work to add demonstrable value. Some sellers choose to place their property only in our proprietary database, forgoing MLS altogether. We use powerful lead-generating software to bring that property to the attention of highly qualified buyers, who are pre-screened before our agents make an appointment to have them visit the property. It’s a boon for clients who value their privacy, or simply don’t want to be bothered with the feeding frenzy that can occur when a highly desirable property goes on the market.
A lot of consumers today are angry at our entire profession; there’s a pervasive sense that real estate agents get obscene amounts of money for basically nothing. That’s a model that cannot sustain for much longer. I truly believe this is about much more than than staying competitive; it’s about survival.
The way I see it, there’s only two ways that modern brokerages can go in 2022 and beyond. You can either focus on working hard to create real, demonstrable value for the clients who use your services – far beyond the outdated MLS-and-fresh-flowers route – or you just might find yourself, sooner rather than later, left behind.
