I think the Virtual Business Model is better than the Traditional Corporate Real Estate Office Business. Because in Virtual Office Business Model, any customer from any country can get information for real estate.

Hi Stewart...The virtual office is really nice and you are almost everywhere. It makes it easier for us realtors instead of dragging our client to and fro in our office we could be any place... with the technology we have right now in our fingertips makes our time more efficient

I could not agree with you more. I had the same epiphany about a year ago. I went ahead and got my brokerage license here in California and in Oregon. I am so much happier!

I love knowing that I am responsible for all of my needs, my income, my marketing. I can also negotiate with clients in a much more free fashion.

In Oregon, offices are closing because of that tradtional model. They had a lot of agents on guaranteed office rent (they don't pay until they sell) and no one was selling anything last year, thus all these big offices were in the red.

I get together with agents during brokers and during the week I have lunch with other agents. I also have other brokerages in town trust me with their open houses so I can build a list of prospects for my new company.

Good luck to you! I am happy to hear that someone else has the same opinion about the business. I can't tell you how many phone calls I have received from other agents asking me how it is and how did I do it and that they are tired of putting money in their broker's pocket.

What' syour next step? Will you take on agents and grow or keep it just about you?

Thanks!

This is the future my friends. I have been in the business for over 25 years. It took me a while to get use to virtual Stuff. I woke up one morning and realized that I had already been doing it for years, on the hood of a car, in a Star Bucks, at a fast food restaurant etc….Got rid of the dusty old office with all the awards. I built a new one at home. Then I was free. Sales increased, productivity increased, overhead went down. Life got better.

Interesting debate.

The answer to the initial question is "branding".

Like it or not, the lay person ( your client ) normally feels better with a known factor.  So, Coldwell Banker or Prudential are just that, branded entities.  Deny as you like, but facts are facts.  Also, unless a real estate agent is embedded in his/her market, branding is a tangible asset to building business.

Now, if you have been in the industry and are a noticeable entity or person in  your market, then you can certainly benefit financially and personally from branching out on your own.  A fact is, you started that way yourself!  So that speaks for itself.

Also, if your goal is really to help fewer people and work less, then hanging on your own may be the best way to go.  Motivated managers do not prefer to have that kind of individual on their team.

Creativity and ambition are key factors to success in this industry, who knows,  maybe someday you will get motivated to grow and become the next Century 21!

Best continued success.

Lou T.

Okay,

I'll bite.  Nice post Stewart. Brick and mortar, big split, small splits independents; they all work for the needed. I so agree with building a lean and mean real estate machine.  I really can be done under any model, CB, Remax, C21, KW, EXIT, your name, my name etc.

If it involves generating productive agents to be among any of the above models, then it clearly comes down to the leader who may or may not help their agents develop their personal wealth enhancement strategies vial the companies mission vision model.

I've been with the biggest of brands (100 percent model minus desk rent), I've been with the profit sharing model, interdependent brand and I'm now an owner of a revenue sharing model that some folks interpret as a big up and coming brand.  Ironically, I'm modelling my mission vision plan for my company the way I want the team to look like.  Like attracts like.  Regardless of what people think of my brand, my brand is my brand for my little company.  My brand allows me the flexibility to grow the way I want it to grow, as well I'm back by quality support services, technology, training and the ability to earn much more than the conventional real estate models.

Could I do this under my name brokerage?  Yes.  Am I limited to my own abilities under my name brokerage?  Absoluetly. 

That's why I'm with EXIT.  EXIT has enhanced my ability to do what I do and what I plan to do.  I do not need to hire a recuriter, because I do not need licenses.  I'll attract good people, one associate at a time.  My colleagues will do the same and they reap the rewards.

Best of the year to you Stewart and thank you for the opportunity to comment on your great post.  Conventional real estate does need to re-think, re-tool and they all will in due time.  The fee thing you're referring to is likely a regional dilemma.  The cool thing is you're in charge now.

I have always felt this way.  I have never worked for a national company only regional or independent.  I could never justify paying all of that money to a large firm.  I had friends who tried it and in the end they didn't end up any better, some worst.  I am now an independent broker with my own firm and three agents.  I think it has to do with your mindset as to whether you are an employee or an employer. 

I have always felt this way.  I have never worked for a national company only regional or independent.  I could never justify paying all of that money to a large firm.  I had friends who tried it and in the end they didn't end up any better, some worst.  I am now an independent broker with my own firm and three agents.  I think it has to do with your mindset as to whether you are an employee or an employer. 

New people need a brick and morter place and good training with mentors. Once they develope a clientle they can more on. I did, but I stuck with a major company, RE/MAX.

I work out of my home office, but still have a safe place to meet clients and have a support staff when I need them. We do not have lots of meetings, nor do we hang around the office. It is a get in, turn the paperwork in and get back to work type of place.

Many of my  clients like a name brand that they feel they can trust, especailly if they are new to the area. 

Great post.  Exactly what I've been thinking the past couple of years.  I finally took the plunge, got my broker's license, and as of a couple of weeks ago, started my own brokerage, Sidewalk Homes.  I like the fact that I can try things out without having to 'run it by the boss.' 

I spent 5+ years at traditional brokerages, mainly Century 21.  I learned a lot, which hopefully I will use to help Sidewalk Homes become successful.  Time will tell, but I know one thing, the game is changing, and you can either put your head in the sand like an ostrich or learn to change with it.

Stewart - Excellent post about virtual offices, the power of the Internet, and the future of the real estate industry!

I've been with small boutiques and large franchises for over 30 years, and currently broker/owner of a KW franchise in Eastern NC.  Our fees have not increased since we opened our doors in 2005, and we provide exceptional training to our agents, compared to many other companies in our area.

While my personal team works from the KW office, I've been working comfortably from a fully-equipped home office for many years, and prefer the quiet concentration.  I've "branded" my business with an active website online for the past 12 years, and a follow-up system with past clients, so I haven't needed, (or expected) business from any company.  If you add true value to your services, the referrals will come naturally.

However, in as much as I like the independence, I feel that the weekly team meetings and training sessions add a major value proposition to everyone who attends, especially to the newer agents.

All the best to you with your new company!

You sure did come up with this topic at the right time!  I'm with RE/MAX an had to think hard what I was recieving from the name.  Very little since 85% or more of my business comes from referrals and repeats.  Getting back to the post... virtural v/s brick and motor........ I was still with the same RE/MAX office and chosed to work out of my home to same money on desk fees.  I get more work done at home than at the office.  At the same time my pipe-line got smaller and smaller.  I know it's the market but some other agents that have not been in the business are very busy working on teams that are based out of large franchised companies.  Needless to say, I changed RE/MAX offices and join the largest team in my market area to get more leads.  Although I have made it though the a large part of the storm, just being with RE/MAX, my referral, repeats and my own leads just wasn.t getting me the volume I needed.

I just join this team last week and love the concept.  Morral of the story..... I was an experienced agent and chosed to cut my commision split in order to get more business without paying for my own advertising and large desk fees.

Amen!! The name of the game now in our business (and any business) is low overhead. Donny Deutche himself said that the fastest way to go out of business is by taking on more fixed monthly expenses i.e. renting more space. It is a business model that is antiquated and is on the way out with the advent of mass-accessable information. This internet revolution will continue to provide valuable information and limitless data about any property the buyer could desire but nothing will ever replace the knowledge of going to the place which means agents will always have a place. With the advent of the pdf attachment for ease of contract disbursement (and in some forward communities, legally permissable E-signatures) more buyers and agents are given the opportunites to get competitive on a more level playing field. No one needs to go into your office anymore to sign paperwork, and that is incredibly cool.  I for one can't wait until they make the Iphone app that has winforms so we could fill out and send offers when showing the property. These technological innovations level the playing field and place the advantage with those who can leverage themsleves into maximum productivity instead of the corporate titans who have the biggest proverbial sticks.

Bring it, KW, CB, Re-Max, C21, ETC.

Is there anyone that has tried ZipRealty or a business model like it? 

Quick Question:  I've been a licensed broker in Alabama for over 17 years.  Have actively used the Internet since 1994 and have worked for RE/MAX and independent brokerage firms.  I am currently working from home, have a Virtual Office Website - needless to say, I completely embrace working from home.  I work for an independent company with the qualifying broker and myself as the only licensees.  My broker has a very small office space, decorated beautifully, with two conference rooms and one actual office.  The only time we are at the office is when we meet new clients, are writing up an offer with local clients, etc.

Do you ever see a time when a brokerage company will not have to have a separate address so those of us who work "virtually" can truly work from home?  I don't have a problem having a new company phone line installed, etc.  The majority of the time that I meet with my clients is at their home, office, or wherever it's most convenient for them - resulting in me almost never having to actually go to the "office."

I will be provacative and state this conversation could be moot in a few years. I am not sure the big 3 or 4 names will survive the litigation heading their way.

Every time I go into a broker's office here, it's always empty. Most people seem to work from home or out of their cars.

I appreciate and understand the views expressed here. In part, the comments are derived from the varied experiences and backgrounds of each of the participants. For the past ten years I have operated an Internet advertising agency specializing in Internet real estate marketing. I have worked with Realtors from all over the country and have had a number of brokerages as clients. My long term client relationships have been a tremendous source of information on the differences in brokerages as well as the differences between individual agents. For the sales associate just starting out the brokerage is an educational resource that one must experience. Once a Realtor has the knowledge and experience to be successful the value of the brokerage is diminished.

The real estate business is a sales business. In sales it all boils down to a numbers game. The more contacts, thye more leads one has, the greater the potential for success. In this new age of the Internet an indivudal Realtor can generate more leads than he can possibly handle. The Realtor or broker who understands the technology and the behavior of the Internet home buyer can achieve an incredible success. Market conditions almost don't matter. It's a question of market penetration and the people who know how to "work" the Internet will achieve a major success.

That said, I finally decided to join the ranks of Realtors and got my real estate license. In my first month as a Realtor I generated over 100 buyer leads and had my first sale within two weeks. I have eight active buyers including two cash buyers. I can generate more than 200 leads every month and will only be limited by my ability to handle the volume. I am now interviewing sales associates seeking a partner so that I can achieve a the full potetnial from the leads I am generating.

The bottom line is....if a broker has the capability to GENERATE BUSINESS form the Internet he/she can build a very successful business without the support of a major franchise or a corporate sponsor.

Hello Stewart - WOW!  Great responses on your post - obviously a hot topic.  I've been a Real Estate Virtual Assistant for for 12 years, operating out of my home office.  I agree that working independently isn't for everyone but for those of us who are self-starters, dedicated to helping others achieve their goals and motivated by dedication and the satisfaction of knowing we're providing a great service, it's perfect!

We have been debating the virtues of a virtual office vs. brick and mortor here in Northern Virginia all week. My team, Pitt Street Associates, works under an international real estate company called EXIT Realty. The technology and training at EXIT is the best I've seen.  This is what I think it boils down to: a realtor needs to choose their market niche and then educate themselves for that niche. If you are educated in your field, educated in technology, and have experience you will find clients, in fact, they will find you! So, as a broker - however you deliver that support to your agents, whether virtually or not - you just have to make sure you do it. This is the key. Business will happen wherever it's convenient.

Stewart, I agree with you completely, I don't get anything out of the 50 plus office brokeage that charges me $80 bucks just to cut a commission check. The corporate air is getting to breath and I do not see any happy faces in my office that went from a 2 floor office to one floor  to cut their overhead and forced all of its agents to take less than half the space than they had before, even if you had an assistant which I do, you had to fit the space and share it with other people and then raise the fees that they charge for tech etc. I am moving in the same direction and plan to follow your foot steps, thank you.

Stewart, your post has given us lots of informtion about resources for vitual brokers, such as www.ebrokerhouse.com and www.virtualbrokeroffice.com. I wonder are a lot of independent brokers using professional coaches to help with support and motivation? In my opinion professional coaching could take the place of franchise office support systems.

OK, I'll bite also as this is one of the more engaging discussions I've seen in a long time.

First of all, I'm an executive with one of those big brands.  I've also owned my own independant and I've also been a partner in a non realogy franchise so I think I have a good perspective on this this topic that makes my viewpoint different or perhaps more comprehensive than most on the topic in that I've personally seen it from all angles.

Steve Shull's posting earlier hit the nail on the head and is a very insightful reflection on where the big brokerages are today.

I was hesitant to chime in on this topic however as it seems to me like a broker bashing session versus the topic of virtual brokerages.  The big brokers are testing virtual brokerage offices.  Our company has one in Manhattan Beach, CA and Huntington, CA. There are pros and cons of these offices also and they are by no means the answer to the fundimental issues our industry faces.

I think as the market returns to normal (what is normal anyways), the real issue at hand is not the value proposition of the brokerages to the agents (or lack thereof in some cases) but the value proposition from agent to consumer.  This discusion should revolve around the issue that consumers aren't going to want or be willing to pay these huge commissions unless you can articulate what you do that creates more value for them than the other guy.  I believe consumers will demand more value for less money in the next cycle and unless you can clearly articulate that value at the kitchen table you will have to lower the price drastically.

At that large brokerage I work for, its the company's job to help the agents add more value propostion through brand, scale and resources that they wouldn't otherwise have by themselves.  This isn't going to magically solve the foundational issues this industry faces however.  It will always still go back to the individual agent and the value prop of that one person.

The root discussion of virtual offices will be that they will be necessary to meet the economics of the changes in value prop as the larger brokerages won't have the funds available to pay the big rent checks if the agents give their commissions away and the consumers push for lower prices.    The model will need to evolve substantially from where it is today.

Great discussion (minus the brand bashing)

If you read through the posts you will recognize one common thread...."I started with a large corporate brand". I really think there can be a happy medium here. I've been a broker/manager with Prudential for a few years and it seems to me that new agents coming into the industry really need the support and supervision a large corporate brand offers, to begin their career. It's probably that support and supervision that has enabled those of you with independent companies to know what it takes to open and run a business. Somewhere along the line, you learned how to succeed. I certainly don't think that an agent that's new in the business could go out and open their own company and run it successfully out of the gate.

I read a post a while back where the owner had created a small storefront type of office that had desks and computers out in the open where an agent could stop in and write a contract, or sit and take walk-ins and board calls. He had tons of agents and they interacted in meetings on a regular basis, as well as seeing each other in the office. Agents can learn a lot from being around each other in an office setting. I think we are seeing a trend where the large office buildings are going to be viewed as wasteful, but large corporate brokerages can still stay strong and function without huge buildings.

Being part of a franchise affords you an opportunity to get to know associates from around the country and interact with them at conventions. It's good to learn the different markets, how they're using the tools offered by the brand, what's working, what's not, and also to be able to know them and confidently refer clients back and forth. There's definitely room for both in our industry. Name brand or independent, there will always be customers that choose Diet Coke over store brand soda, or vice-versa.

I am staff at a RE/MAX office in South Florida where the real estate busines had taken a large hit. It all depends on the broker, we have an awesome, experienced broker who is diligently trying to help all the agents survive this market. We are like a family, agents that left in fear of not making it in real estate when the market was changing are returning to us. We offer training for those that want it, and our agents work together helping each other. More than 80% of our agents work from home but have access to our media room, meeting rooms, work area computers, etc. or just help from the staff when they need it.

We signed up 6 agents this month, even in a bad market, and one of those was a returning agent. Not all agents are cut out to be brokers and run their own office, they are good sales people, not managers, so some of them would never be able to make a brokerage work efficiently. Been there - seen that.

Please don't judge all RE/MAX offices as the same. We pay for local advertising, unlike most RE/MAX offices. Our agents listings pull automatically from the MLS and are all shown on local newspaper sites. These listings appear on over 140 newpaper real estate sites around the country and we refer the leads to the listing agent at no cost to them. 

We also have an exclusive lead generating system for the Fort Lauderdale area. We distribute these leads to agents who want them, and they pay us a small referral fee on closing.

Agents are all busy here, some have more leads than they can handle. Additionally, we just opened a new office for commercial real estate, we are the first exclusive commercial RE/MAX commercial office in florida.

Stewart:

As a consultant and workhop presenter of mobile technologies to real estate, I meet more and more Agents who are wanting to be independent and virtual as possible. Today's technologies do allow a professional to set up office just about anywhere, all done relatively inexpensively.

I think the flexibility is a win-win for the Agent and the client alike, and in my opinion, the best is still yet to come.

Great comments. I myself was associated with a large national franchise for several years.  I thought I had the best deal in town. I was one of the top five producing agents in the office. That is until one of the top producing agents in our region decided to depart from another large national franchise and open an independent virtual office.  At first I was skeptical.  The "virtual" model is not for everyone. If you are an agent who needs the daily office and coffee pot contact, are not able to generate your own leads then the virtual concept is not for you.  Granted, the large companies can provide training and support systems on an ongoing basis, but it is not without a cost.  In my previous office, I had to pay a monthly fee just to be associated. In addition not all that great training was free either. Then you add up copy fees, franchise fees, traditional split even with a decrease to a 100% commission, I found myself paying in an average of $15,000 per year in routine expenses. 

My switch to a virtual office was the best move I could have ever made. I made the move about 5 months ago and haven't skipped a beat.  As a matter of fact the amount of money I saved by making the move allowed me to expand and license in another state with the same company. One must understand that real estate is a localized business.  It doesn't matter what company sign is in the client's yard, it's the agent's name that is on the sign. We build our businesses and client base.  Where you go, your clients will follow. The virtual office offers fixed flat fees per closed unit. No office fees, no copy fees, no desk fees, no desk duty (not that it would matter anyway), no fees for leases, referrals, or property management. You manage your own business, lead generate as you would anywhere you opt to operate, manage your own expenses, and put twice the money in your pocket.

It is the shape of the future of real estate.  The big companies are struggling and will continue to struggle and impose additional fees to the agent and the client in order to cover the overhead in managing the office.  When was the last time you had a walk-in client in your office? The internet and the virtual office is the way of the future.

It won't be long, it's already cathcing on at a rapid rate.

Leaving the RE/MAX office that I had been with for a dozen years was a hard decision. For years I had worked from home in an office that I had outfitted with way better technology than the office that I was paying a desk fee for. In reality I had been a virtual office Realtor for years.

Cutting the bricks and mortar tie has been liberating and rewarding. Real estate is fun again. I'm now investing what had been my desk fees in areas that give me the greatest ROI. I also have a healthier bottom line.

My advice to any high producers who just can't bring themselves to leaving their broker is "just do it". Then if you feel really bad about leaving your ex(broker) send them on a cruise with a portion of the money you saved not by not paying them a desk fee.

Great post. Thank you for sharing such a nice and important information. Now a days virtual office are becoming more popular among all the business people. They are so interested in using the virtual office. 

www.palmbeachvirtualoffice.com