RealTrends Q4 BrokerPulse real estate leaders are increasingly pessimistic about the market through the end of the year and into 2023, with 66% of all respondents predicting home sales will decline by more than 5% and 48% noting that house prices will fall by more than 5%. be down more than 5%, as well.
However, regardless of what is happening in the market, brokerage owners are looking to build market share, focus on value creation, and increase agent training to increase productivity.
RealTrends BrokerPulse asks for surveys from more than 19,000 real estate brokerage leaders across the country on market trends and brokerage opportunities and challenges. Of the 175 surveys completed, 29% were from the Southeast, 21% from the Southwest, 23% from the Midwest, 17% from the Northeast and 10% from the Northwest. RealTrends BrokerPulse is a quarterly forward-looking survey.
Recruiting large producers and increasing productivity remain essential
Despite the pessimism about house prices and sales, some 37% of all respondents were neutral on the next three months and 33% were optimistic.
This optimism likely stems from executives who immediately made changes to operating budgets and made it clear how they would fare in today’s market.
As part of this business plan, increasing productivity per agent is key for many brokers, who also mentioned it as their biggest challenge in the survey. RE/MAX and eXp Real Estate both cited recruiting more productive agents and helping current agents increase their transactions as key initiatives in 2023.
“We are training our agents to dialogue about the actual statistics of our community, which we have extracted from our MLS for each city by month and by quarter this year”, explains Doris LaBeau, broker of RE/MAX Masters in Flat Rock, Michigan.
“Months ago we updated social media, web pages and marketing materials to handle today’s changing market. We also train agents on how to ask for referrals from past clients and clients with thank you notes and well wishes, which we do every year.
Ready to capitalize on the current market
Additionally, many of the executives interviewed are excited about the potential for a slower market. When asked what opportunities brokers plan to exploit, comments such as “reducing fees to squeeze out competitors”, “recruiting agents from traditional models”, “increasing mid-level agents into more producers raised,” “supporting and developing $50 million teams and” and “creating a second referral company for agents to suspend their license without incurring MLS and other fees.”
Aggressive recruiting, turnover into smaller brokerages (aka walkovers), global expansion, and developing a corporate leadership program for higher margins per trade were other strategies mentioned by executives. to gain market share.
Challenges for Brokerage Owners
When it comes to challenges, this survey finds that increasing productivity per agent is brokers’ biggest challenge over the next three months, with 32% saying it’s their #1 challenge.
This has not changed since the last quarter; however, in Q4 2022, challenges that moved up the list include keeping agents motivated, reducing operational expenses, and competing with new business models, likely the low-cost, flat-rate model.
In a National Association of Realtors broker forum in orlando, a brokerage owner with 50 agents wondered how he could retain agents who choose to move to a less expensive business model. “People stay because they feel there’s value,” says Cindy Ariosa, Senior Vice President and Regional Director of Long & Foster Real Estate in Maryland.
Christina Pappas, Vice President of The Keyes company in Florida, okay. “We ask our most loyal agents, what is most valuable to you today? And, we frequently ask. What do they like and what do they appreciate? »
In the forum, she told the audience how she met an agent who told her he was leaving for more money. “But, they were actually reducing his split but giving him a bonus. So I did the math with him and he stayed. That’s because, she notes, it’s not always about the money, but when it is, you have to be able to articulate the intangibles you’re offering and not just divide.
Other challenges include:
- Increase in regulation, interest rates and inflation: 23%
- Keep agents motivated: 14%
- Pressure on net/gross margins: 11%
- Reduction of operational expenses: 9%
- Difficulty recruiting: 5%
- Compete with new business models: 5%
- Retention agents in a context of increased competition: 5%
- Restructuring of offices: 3%
- Increase in market share through mergers and acquisitions: 2%
- Increase in capture rates on ancillary services: 0.71%
Actual trends recently added an AgentPulse survey that will help brokerage executives gauge what agents understand about the service brokerage offering and provide agents with market temperature.
If you have questions about BrokerPulseE-mail Actual trends Editorial Director Tracey Velt at email@example.com. Also be sure to sign up for the new RealTrends Daily, a roundup of news, tips and strategies for success. Every Tuesday, we publish an issue focused on brokerage.
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