If you haven’t considered it yet, you can be sure that some of your clients will already be talking to brokers, and considering using them for their sale or let.
The truth is that not only do clients massively benefit from the undivided attention of one ‘broker’ providing the whole service, so does the broker
by being their own boss (something a broker recently told me is worth at least £50k a year in added value to them).
Plus the broker no longer has a glass ceiling on their earnings or growth. If it sounds all win win, it’s because it is … that is, if you’re experienced, sick of KPIs and the daily grind, plus you have a little cash behind you.
It’s amazing how many very experienced agents still sit in the offices of big corporate agencies with a title, not bad pay, but little joy or hope for anything other than another Groundhog Day tomorrow, only for the fear of leaving their gilded cage.
Besides, I’m sure you agree that the UK corporate model of agency is a broken one. A good portion of the fee that your client pays is largely lost to the shareholders of the company, usually private equity... Like a bucket with a hole, a shorted circuit or one of those arcade games on the pier where no matter how many coins you feed it, the stack never collapses… you get the idea. In the broker model however, the maximum value is retained in the clients favour, the broker is incentivised by keeping the vast majority of the fee, much more of it is directly working for the client.
That value affords a better agent with more experience that can do everything for them, negotiating hard on their behalf and spending much more time on the deal to reach the best conclusion.
We regularly talk with disillusioned and experienced agents who talk about being undervalued by the corporation, or discovering only when they hand in their notice how disposable they were to the company they gave so much to.
But how did we get here? I believe it’s because of the high street office. If you had the small fortune to start your own agency, and could secure a good agency office site, chances are you would scoop up all the local business around your office. Competition was limited to others who could secure and afford a similar sized and equally well located and funded office. How could a great individual agent compete with your operation and spending power… and if you can’t beat ‘em, join ‘em, as the saying goes!
The result was that for many years (well before homeowners realised that the agency office was no longer needed) great agents headed up great office locations of big agency brands. It became (and still is) a factory, sucking in business from the locality. The large volumes have led to large teams of negotiators of massively varying skill and experience servicing clients properties which they often know little about, and where the pitching for business was front loaded and left to the experienced managers only. This, of course, as you can imagine and are no doubt acutely aware, put volume and profits first over service. It’s therefore no surprise to any of us that the UK now has both the lowest fees and reputation for agents anywhere in the world.
It’s my opinion, and increasingly many others’ that the ‘brokerage’ is the antidote to all this madness.
Experienced agents can now get everything they need to run their own business, as well as brilliant brands growing in power (like Moveli) to leverage, a network of like minded experts and the refreshing ability to deliver an incredible bespoke and personalised, full service to their clients. One where maximum value is delivered by the agent to the client, and vice versa.
If it sounds like everyone’s a winner out of this situation, that’s not entirely true...
The loser is the corporate agency as their best agents move (and have moved) to become brokers. In the coming years I predict a further brain drain and hollowing out. Ultimately that will lead to worse service, lower profits, and the need to cut costs to deliver to shareholders… the cycle in my opinion - is down.
On the other hand… brokerage brands will amplify exponentially as talent and business moves across to their networks, only benefitting all the brokers within them. The future’s bright for the industry, and especially for those experienced agents forging a new path for themselves and their clients. It won’t be too long until the public become aware of this new option; “...wait can I just double check, you're a broker right, not an estate agent?’
In short if you’re an experienced agent you should be considering your position and future trajectory as the agency business re-forms. There are many very good reasons why becoming a ‘broker’ now is a good idea, not least it will give you a head start in building your business, your team and the future of the industry.
“The biggest risk of all, is not taking any risk.” Mark Zuckerberg
More info about becoming a broker here.
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