Like a box of chocolates
June 12, 2019 was the 1st #TNBroker19 Broker Summit offered by TNREALTORS, the Tennessee Association of REALTORS. This was a full day of great information, and the production was top notch.
We heard from the TN Secretary of State Tre Hargett who got things rolling on a good note. His key points centered around why TN is drawing so many businesses to relocate here from other states and countries . . . Low taxes & Low Debt were the big draws – An interesting take on Colleges – Measure colleges based on output rather than enrollment, and that we need to “hold the line on accessibility to college” – and validation that “Trade School education” is important for people who are not inclined to attend college who can benefit with a career that provides solid income and quality of life.
I’ve promised a few folks that I would blog a bit about the Real Estate Brokerage Trends panel.
I heard lots of good stuff from this panel. My notes say: “Disruption – Transition – Recruiting – Retention – Focus on today’s environment – Deliver training consistently and “keep score of who (agents) participate.”
This was a good group of Brokers/Owners with lots of knowledge, but I must note that all of them were Brokers/Owners of large Regional or National Brands, so we did not hear the perspective of the “Small Firm Broker/owners”. This was unfortunate because there are MANY small brokerages who have different issues/concerns from all of these 1000+ member firms.
For sure, the most daunting topic revolves around the many new Real Estate Brokerage business models showing up with “deep pockets” literally buying their way into having significant market share. Some dismissed these concepts as not being sustainable . . . That they would likely disappear with the next recession (I heard that “R” word many times).
There are many companies buying LOTS of houses and keeping as rentals. Between rising prices and these house being sucked out of the market by these investor groups, affordable housing is the new unicorn . . . It doesn’t exist.
Other concerns are “Virtual Real Estate Firms” with agents all over the state with no apparent direct “Broker Supervision”. This door was opened when TREC (TN Real Estate Commission) removed the “50 mile rule” which required agents to live within 50 miles of their Brokerage.
Agent Recruiting and retention is also a huge topic. Many agents have little (if any) loyalty to their company brand and are choosing to go where their costs are lowest (Commission Splits and fees). This applies to “Mega-agents, Large Teams, and Individual Affiliates”. I have heard this as being the #1 issue for every company of any size. The problem being that, for a brokerage to survive, there must be revenue (True for all businesses, right?) . . . so the only way a “low cost to the agent” business model can survive is to have a huge membership and/or very low overhead. There are only so many of those companies that can survive, and they’re sucking agents out of the market for more “traditional” models (Just as the deep pocket investors are sucking the affordable houses out of the market.)
So . . . everything is moving and nothing is certain – The volume of home sales is at record numbers every month – Prices are rising – There are more real estate licensees than ever . . . so what’s a Broker/owner to do in order to survive?
Go back to the basics. Define your niche and attract the “right agents” who want what you deliver and are willing to pay for it. Focus on the market environment but don’t let it define you. I heard many references to the fact that “Relationships Matter”. I walked away from this session more committed than ever to build Pareto Realty’s presence in the Middle Tennessee market, and I am more certain that we will succeed in the long run, because we know what we stand for – We are “The Vital Few” and we know our worth to the agents in our family and the Home Buyers and Sellers we serve and protect.