Brokerages that charge 100% commissions have many advantages

Brokerages that charge 100% commissions have many advantages

 

A large brokerage firm with a 100% commission model has many advantages. A large brokerage firm with a 100% commission Real estate broker GA model has many advantages.

Armstrong Atlantic State University in Georgia conducted a study on U.S. real estate brokerages that concluded ‘larger brokerages obtain higher sales prices’.

The size of a brokerage and the size of an online business also matter.Several studies published in The Journal of Real Estate Finance and Economics concluded that real estate firms are too small to take full advantage of the lower costs associated with a larger scale of operations.

As a summary, three academic studies find that large real estate brokerages “obtain higher sales prices”, are “positive internet users”, and experience “cost reductions” when obtaining equipment and support services for their agents.

What separates small brokers from large ones

The following are some advantages of large real estate brokerages:

A large brokerage usually has more capital, generates more revenue, and reduces its cost of doing business through good buying power. Therefore, they are likely to provide greater training, maintain more modern facilities, retain better legal counsel, and pay higher commissions. Smaller brokerages cannot afford to offer these benefits.

Larger real estate companies often specialize their agents in certain areas such as commercial real estate, raw land, selling businesses, luxury homes, and specific neighborhoods. The jack-of-all-trades syndrome is common among smaller brokerage firms.

Consumers are attracted to stable companies that substantially grow over time. An inexperienced brokerage company with little history or track record may not be in business next year.

An agent who specializes in another niche can be approached through a diversified revenue stream. In a large firm, clients can be referred to another agent more easily. A commercial agent refers raw land buyers to an agent specializing in commercial properties. Commissions are split between the two agents. Such opportunities are not typically available to smaller firms.

The brands and histories of larger firms tend to be more familiar than those of smaller firms. With a great brand name, agents’ marketing efforts are made easier.

Well-established companies are perceived as being reliable by potential employees. Employee stability leads to higher productivity.

Firms with a good reputation and a name recognition attract good agents, stable employees, and clients.

Summary: Large real estate brokerages have more recognition, prestige, purchasing power, and stability than smaller brokerages, as well as better training and facilities.

In 2018, technology will drive real estate

88 percent of buyers use a real estate agent to buy a house, according to Forbes. Buyers do not wish to pay fees to support traditional brokerage overhead, such as franchise fees, offices and television ads for buyer’s agents.

Forbes suggests that since everything is online these days (communications, data, contracts, and customer support), brokerages should reduce overhead in 2018. Agents are expected to provide more services for less money. In order to achieve this, brokerages must become technologically savvy while reducing overhead not directly related to serving clients

 

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