Are Brick & Mortar Real Estate Offices becoming a Dinosaur?

By
Real Estate Agent with Fathom Realty West Sound WA State 52404
https://activerain.com/droplet/lgk

I just posted an article this morning over on The Geek Estate Blog entitled:

"Real Estate Outside the Box - Questioning the Value of Brick & Mortar"

Having just recently changed brokerages (you can read about it HERE), our owner/partners of Keller Williams West Sound Realty are in the process of identifying/evaluating potential office space here in Kitsap County WA.

At first, I naturally envisioned that this would be a traditional 'stand-alone' office space, just like all the other local players have.Real Estate Outside of the Box

But then, as I thought about it more, I began to question the value/benefits of having a traditional real estate office. I started to challenge myself to think outside the box.

What are the needs of agents/brokers today? Is an office space necessary for their success?

What are the needs of consumers? Are agent/broker offices important to them?

And that led me to writing my recent post, with the hopes of stirring up some meaningful conversation/debate.

Go ahead and read the full article HERE.

So what are your thoughts, my fellow ActiveRainers?

Is there still value/benefits to the traditional brick & mortar real estate office?

What is the future of the real estate brokerage?

Is full blown Virtual real estate even possible, given the highly relational nature of our business?

Are there any creative alternatives for physical space that allows us to effectively engage and connect with consumers?

~   o   ~   o   ~   o   ~   o   ~   o   ~

Homes-for-sale-in-Kitsap-County-WA

Rich Jacobson is a licensed real estate professional with Keller Williams West Sound, providing knowledgeable empowerment and relentless representation for his clients of residential properties and vacant land throughout all of Kitsap County WA and portions of Pierce, Mason, and Jefferson Counties. You can also find him at KitsapLifeSoundBiteBlog, and Crabbing in the Hood, or e-mail: kitsapagent@gmail.com

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Rich Jacobson is a District Director for Fathom Realty and a licensed REALTOR®; an avid Crab Hunter, Clam Digger, and Oyster Shucker, He is the Social Media Evangelist for Life on the Kitsap Peninsula & The Western Puget Sound in scenic WA State.

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Groups:
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Tags:
office space
virtual real estate offices
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Rainmaker
571,668
Bill Gillhespy
16 Sunview Blvd - Fort Myers Beach, FL
Fort Myers Beach Realtor, Fort Myers Beach Agent - Homes & Condos

Hi Rich,  Interesting post and comment thread.  Ours is a destination market and the office is located on the main drag.  Visitors to the island will travel past ouir office and see the branding !  Have a terrific weekend !

Oct 14, 2011 06:44 AM #86
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Loreena and Michael Yeo
3:16 team REALTY ~ Locally-owned Prosper TX Real Estate Co. - Prosper, TX
Real Estate Agents

Trying to impress? Other than my own husband, I could care less what other agents think about me without a real office. In the end, I feel it's about being able to close the deal for each and every client.

Just like this comment section, if you ask 100 person, you'll get 100 answers. In the end, it's all a matter of the broker - ie. the person who's paying for it decides. There's no all-inclusive, best for everyone business model.

My dad taught me, it's not how much you earn, it's how much you keep. As a broker, that statement still very well rings true.

If having a B&M brings more $$$, then it should be considered. If it's used to impress people we dont care for, that's just sad.

Oct 14, 2011 07:29 AM #87
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580,984
Rich Jacobson
Fathom Realty West Sound - Poulsbo, WA
Your Kitsap County WA Real Estate Broker

Loreena:  I completely agree with you. I'm not in this business to impress anyone, except my clients maybe. Unfortunately, there are those who get caught up in such window dressings and image. And you're right, there is no right answer here. No one solution fits every situation. In some markets, a stand-alone office that exudes opulence is very appropriate. For others, a small space with workstations. I think one of the keys though is to ask two questions as it relates to space: 1) What do the majority of your agents/brokers need in order to succeed? 2) What do consumers/clients need? That should dictate what is the best solution...

Oct 14, 2011 07:53 AM #88
Rainer
403,643
James Loftis
RealEstate911.com - West Palm Beach, FL
RealEstate911.com

The state of Florida requires that the Real Estate Brokerage have and maintain a physical address.

As a broker myself, I find myself spending less and less time inside the office.

Oct 14, 2011 08:46 AM #89
Rainer
134,765
Stacia Whatley
Hawkins-Poe Inc. - Gig Harbor, WA
StaciaSellsHomes Your Western WA Realtor®

At Hawkins-Poe in Gig Harbor we have a business center where we can bring clients to and have meetings at, but I rarely go there but for those reasons. My office is my home and car. What attracted to me work with Frank Hawkins at Hawkins-Poe was just that! Plus we have an online vault system where I can access our files from anywhere! Great place to work! Because of this techy age we are divulging apon who needs brick and mortar! It really isn't necessary. Plus we now have electronic signatures through the MLS, who needs anything else! :)

Oct 14, 2011 10:58 AM #90
Rainmaker
533,254
Jon Quist
REALTY EXECUTIVES TUCSON ELITE - Tucson, AZ
Tucson's BUYERS ONLY Realtor since 1996

You still need at least some brick and mortar presence. Try taking a client to a Burger King, and hooking up your printer. Or sitting next to a family of little tots while going over paperwork. Where's your copy machine? Your scanner? Your assistant?

And it's not to impress people, folks. It's to make the client comfortable and at ease. It's what they are used to, and want, NOT YOU.

Certainly not for your benefit.

Oct 14, 2011 11:04 AM #91
Rainmaker
615,877
Brian L. Sirota, Esq.
Bristar Realty (Realtor/Attorney) - Orange, CA
For Solutions: (714) 501-7660

......... always maintained that service professional are no more or less talented because of bricks and mortar.

Brian

Oct 14, 2011 11:28 AM #92
Rainer
7,795
Jay Zenner
Springtree Realty - Durham, NC

There are all kinds of evolving business models in our industry and some will continue to include an office. Personally I'm keeping my overhead as low as I can which includes no office.  I own the brokerage too so I don't have to give up any of my commission and I'm free to negotiate with clients any way I want for my services. I'm sure I lose some clients who aren't comfortable with a one person operation but I'm actually surprised how most have no expectations and really don't care as long as I provide them with a high level of service. I have a conference room I can borrow whenever I need it but I probably don't use it more than twice a year.  No office just means one less big check to cut every month and my home office tax deduction is totally legit.

Oct 14, 2011 01:57 PM #93
Rainmaker
682,956
Michael Dagner
Brokers Guild Classic - Denver, CO
Your Denver Homes Realty Expert

Hi Rich, most folks just want to view houses, or get their houses sold.  In my experience, brick and mortar has become obsolete for most real estate agents and consumers, for several years now.  The exception may be those agents who do significant volume like REO and need a staff in one central location to operate efficiently.  If I could put a conference room in my car, I'd be all set.  That's probably the only reason why most of us need a physical office.

Oct 14, 2011 03:54 PM #94
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Tammie White, Broker
Franklin Homes Realty LLC - Franklin, TN
Franklin TN Homes for Sale

Rich, I think it depends on the business. For instance, many of the brokerages here don't get much walk in traffic. Because they aren't in walkable locations. Consumers have to get into their cars and drive there. But one firm recently opened an office on Main St. in historic downtown Franklin. Why? Because it is the only place in town where you get walk-in traffic. Not to mention, lots of tourists who may be considering a move here. It is a great location.

I primarily work from home. I usually handle everything over the phone with buyers and then meet them at the listings. When it comes to contract time, we write that at the local Starbucks over a cup of coffee. I meet sellers in their home. I don't miss really have a need for a brick and mortar office even though my brokerage offers space if I need it.

Oct 14, 2011 04:18 PM #95
Rainmaker
908,388
Pamela Seley
West Coast Realty Division - Murrieta, CA
Residential Real Estate Agent serving SW RivCo CA

It depends on the area and the type of business. Large brokerages cannot afford offices for every agent on their roster, so an agent usually has to pay additional $ for an office, and that's if there is space available. When I started real estate just over 4 years ago, the brokerage I was at had what was called the "bull pen." Try making calls to prospects with 10 other people in the room doing the same at the same time. No thanks.

Now I do all my work from my home office as this is more efficient use of my time. Besides I have everything I need and am not competing with other agents for the printer, fax/copier, or silence so that I can make phone calls. I meet my clients at their homes, as I am mostly a listing agent.

I only go to my brokerage office to drop off paperwork, attend office meetings, pickup my mail and checks.  That's it. Unless I am my own broker/owner I don't see a need for a brick & mortar office.

 

Oct 15, 2011 07:57 AM #96
Rainer
28,397
Riccardo Palagi
EagleBoiseRealEstate.com - Boise, ID
EagleBoiseRealEstate.com

Great topic Rich.  I've kept track and a full 85% of all of my past clients have never stepped foot inside of our "office".  That being said I think that having an office is probably of more value to us than to our clients...office meetings and such.
Cheers

Riccardo
My Place

Oct 16, 2011 02:28 PM #97
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Linda K. Mayer
License # 01767321 - La Verne, CA
Realtor, SRES, SoCAL, A REALTOR YOU CAN TRUST

Rich:  Here in California quite a few offices have gone "virtual".  Meaning the agents "hang their license" with a broker but work from home and with today's technology, they just do everything online.  Scanning docs is fantastic!  So with that, some offices have two commission structures.  One for Virtual and one for coming in and using all the offices ammenities like copying and phones.

Nov 03, 2011 01:55 PM #98
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Rich Jacobson
Fathom Realty West Sound - Poulsbo, WA
Your Kitsap County WA Real Estate Broker

Linda: Brokerage owners are hard-pressed to keep expenses down, and one tough pill to swallow is all of the trimmings of a traditional office space. I think the smart owners (the ones that survive) are going to be the ones who understand what's most important to consumers/clients, and what do agents/brokers truly need to function efficiently/effectively....

Nov 03, 2011 02:43 PM #99
Rainmaker
454,483
Michael Eisenberg
eXp Realty - Bellingham, WA
Bellingham Real Estate Guy

When I first started in Real Estate I was fortunate to land in a brokerage  where I had an office with a great Bay view, it was hard to give up for a virtual office but I did. The virtual/home office has much better benifits than a good view. Access to training anytime I want to take  class, live classes all day Thursday's, meeting and learning from agents all across the contry in a 3D virtual office, having access to my broker from my home office, using paperless technology. My clients don't care where my office is, they are just as happy meeting me at a coffee shop, a home we're viewing or their home if we're listing it. I also now get a much better split with my broker, access to leads from a company with 3 full time IT guys that knows how to generate leads in every market we're in, and teach agents how to get their own. And instead of spending big bucks on big offices that don't get used we have a great revenue sharing plan for agents who help the company grow.

Nov 26, 2011 09:53 AM #100
Anonymous
Jim Bilbao

I agree with Michael above.

I was the strategist of the Windermere "bricks and mortar" model in Kitsap County's Silverdale mall. "Are bricks and mortar offices becoming dinosaurs?" is a question. But it's not the best question. A better question is: How well do brokerage bricks produce what agents need? Agents need 3 things: revenue, support services and community. The answers about most brokerage bricks are: they don't produce much revenue; they are grossly more expensive than web services - most brokerages second highest cost after salaries; and as engines of agent community/collaboration they are empty over 90% the work day. Oh, and they always have big outdoor signs that make "big brand" impressions. But we know, consumers overwhelmingly don't choose agents based on their brokerage brand.

Revenue per Brick
This mall kiosk office of 200 square feet produced 5,000 walk ins per year or 25 walk ins per foot per year. How does your office walk in production compare? Many visitors walked in multiple times per year. Your office?

Conversion
Unlike at open houses, the 5000 walk-ins expected to shop at these bricks, not to decide they did or didn't want to buy them. They were more open to agents' offers of help than at open houses. Do your bricks produce walk-ins wanting to shop?

Unlike online engagement between consumers and agents, the kiosk context started all service relationships face to face. Plenty of research suggests consumers assess agents and everyone else for trustworthiness, likability, competence using visual cues 8x more than what agents say. There is efficiency to starting relationships face to face. Think about lead conversion with online leads - its less than half as efficient.

Market Share
Per year the whole county only has about 3,000 transactions per year (2500 during the recession years), so 5,000 to 6,000 transaction principals per year. What percent of the market do your bricks and mortar put you in touch with each year? How many brand impressions does your signage make? These bricks were good for around 1.8 million impressions per year on a home buying/selling population of around 100,000

Lastly Community and Support Services.
The community that these bricks created was between agents and consumers, not between agents and each other like most brokerage bricks. There is an important role for agent-agent community. It's not a priority for the successful agents, not as high as agent-client community.

And Support Services delivered to agents. It's all deliverable remotely from brokerage office staff to agents at the Kiosk, 100% the same as services offered on site at the big box brokerage. Agents can get all the support services they need from remote support staff.

Conclusion: The bricks to watch are bricks that create revenue not overhead costs. Most bricks are grossly inefficient cost burdens on real estate professionals' earnings, and brokers' earnings from them, that brokers don't know how to deal without.

Jan 09, 2015 03:42 AM #101
Anonymous
Gene

As an agent for eXp Realty, the first cloud based agent owned real estate company, the absence of having to support brick and mortar allows us to keep more of what we earn. I tried one of the big national companies who nickel and dime you to death and don't see myself ever going back to that business model. Three cheers for technology!

Jan 18, 2015 06:53 AM #102
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Rich Jacobson
Fathom Realty West Sound - Poulsbo, WA
Your Kitsap County WA Real Estate Broker

Cloud-based brokerages are not for everyone. It takes a certain kind of person to be able to succeed in such a setting. There is still value in connecting with people F2F IRL. Personally, I think we've become too reliant upon technology and implement its use in instances where it isn't warranted, or doesn't add value to our process. But that's just me....

Jan 18, 2015 09:02 AM #103
Rainmaker
1,938,625
Andrew Mooers | 207.532.6573
MOOERS REALTY - Houlton, ME
Northern Maine Real Estate-Aroostook County Broker

In small rural markets that are quite a few exits up the pike from population centers, setting up the real estate marketing ray gun to push our lower prices in areas where they cause nose bleeds. That makes the online virtual office open round the clock so attractive. No one impressed with swanky office space in a Mayberry town. Plush translates into "they are making too much off their sellers" and jealousy can fester. Great blog post and comment thread that is still food for thought.

Jan 07, 2018 04:23 AM #104
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Rich Jacobson
Fathom Realty West Sound - Poulsbo, WA
Your Kitsap County WA Real Estate Broker

Andrew Mooers Hey, man! Thanks for the thoughtful comment. I just recently changed over to a virtual brokerage. It's a trend that is gaining traction quickly and will become more of the norm, rather than the exception. As commissions continue to erode, large brick & mortar brokerages will be hard pressed to remain profitable. Agents & brokers will look for other more cost-effective models to keep their businesses solvent and relevant....

 

Jan 07, 2018 09:45 AM #105
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