Real Estate Brokerage ideas

[Craig E.]

I'm considering opening a RE brokerage.  I've notice that discount brokerages despite doing the same thing as full cost brokerages and for less money are not taking over the industry like Uber, ABB, Turo.  If paying less isn't the incentive, then what is?  What would be so unique in a RE brokerage that would make people overwhelming turn away from the old model to the new model in the same way as Uber, ABB, Turo?  I'm asking you all what you would need to see in a brand new company/ a new RE brokerage model that would make you or the public move away from using the old model brokerage in the same way these new companies caused immediate capitulation to their new models.  Thanks for your input.

[Will Fraser]

Hi @Craig E.!  As a broker consider a similar move the things I have realized in RE is that people are so hung up with the social side to real estate that they frequently make decisions that are harmful to them.  For instance:  your cousin is an agent . . . Many, and perhaps most people would not think beyond that point itself.  Cousin Agent gets a call and off to work he goes, irrespective of cost and skill. 

For that reason I think that markets with high “non-native” numbers tend to value agents who know what they are doing OR are cheap and innovative more than markets who are more “native” occupied.  

For instance:  Little Rock, Arkansas vs Nashville, TN — LR’s populations (painting with broad strokes here) largely lives in Little Rock because they are from LR or from the region.  For that reason you can expect the residents to live in basic proximity to:

- Childhood friends

- HS friends

- HS teachers

- Nuclear family

- Extended family

- A litany of other people who have been in their lives for a long time who got their license and can make an easy buck or two helping their “friends” buy and sell RE.

As a contrast, a city like Nashville, TN has experienced rapid growth over the last 2 decades and has churned residents at a rate that creates an interesting dynamic now:  there are so many non-native Nashvillians in Nashville now that many people do not live around those old built-in social circles, which allows them to value 1. Cheap or 2. Good without the perpetual, low-grade fear of an awkward conversation over Thanksgiving.

So, if you’re in a market with a lot of churn and a high resident base that didn’t grow up there, you may well see that quality and price are far more important than in more “retentive” markets.