Tuesday, July 4, 2017

Something No One Wants to Talk About...Reduced Commissions

A very interesting article in July's The Real Deal. We don't criticize our competition, we're just cognizant of the fact and have listened to clients who want an alternative approach to the brokerage process. As an agent at a large firm I had fair level of success and I could have easily continued building my career. I decided to take a risk and change the landscape and build a model based on what I thought many buyers wanted. It's about more than rebates. If you could just hand out checks at closing and do $90M a year in sales, believe me more agents would be doing it! Our clients know the difference.

I am coming up on a 10 year anniversary with The Burkhardt Group; to date I have spent ZERO dollars on advertising! Please have a look at our testimonials page to see the raving fans that we have created. It did not happen over night.

The buy-side brokerage model was ripe for disruption, that is easy enough to understand. Just like the travel business, financial services, book selling, transportation, hospitality etc. It is not simply about trying to undercut other agents or being desperate; it is about innovating.

Selling real estate is not that complicated, 90% of apartments don't need large marketing budgets to sell. They need to be priced correctly, be desirable and listed so the entire brokerage community can participate. Oh yeah, and be on Streeteasy where more buyers than you can imagine will be able to view, schedule an appointment and discover the history of the unit.

On the buy-side  you need an agent that can do a fairly rudimentary analysis of the property, has the experience to add or subtract value based on both mathematical calculations as well as the non-tangible aspects of  the purchase. The agent also has to be trusted to put the clients best interests before their own and not be afraid to tell it like it is. Meaning if the home is a lemon, best to pass and move on. Or if the valuation is silly advise a bid based on reality not the aspirational sales price of a seller.

Offering a reduced commission scale when coupled with outstanding service is not bottom feeding or being desperate. Quite frankly it cuts two ways; unscrupulous listing agents that 'buy a listing', giving the seller an unrealistic sales price in an attempt to secure the listing.

The world is changing, the brokerage model will also continue to change and evolve. It's only natural. No business can survive when they don't keep up with the times. Increased competition thins out the heard and makes us all stronger. And the strong and nimble will thrive.


Keith Burkhardt
Call me, I love to talk about real estate.