I don't have all the details and I won't name any names, but another large realty broker is closing an office this week. It is really no surprise- with fewer closings, lower sales prices, greater competition and increased advertising expenses it is harder for big box brokers to make a profit. There are two large expenses for these large real estate corporations: billboards and buildings. Billboards keep the flow of customers flowing through the doors, so that cost can't be eliminated, but buildings cost money. If something has to go, it has to be the office spaces.
I understand how business works - reduced revenue calls for lowering expenses. But in the Twin Cities market we are hearing horror stories of how these corporations are pulling the rug out from their agents feet.
The agents get no advance warning. It is just a quick announcement, "We're moving - tomorrow." The corporate logic is to keep the agents in the company fold so that they do not have time to speak with other brokers and switch affiliations. The agents I have heard from say their businesses were disrupted, marketing campaigns were wasted and many agents still end up looking for a new home with a new broker because the sudden move left a bad taste in their mouth. The situation in our industry is bad, and agents are having a really hard time. A sudden move is causing big problems in a time when we are already in a pinch.
Is anyone else experiencing this in other markets?
Steve
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