A lot of the green revolution that’s sweeping our industry lately has been about efficiency. How do we heat and power our buildings using less energy? How do we build using more recycled materials? How do we design to use the most floorspace in the smallest footprint? While efficient thinking takes a lot of effort, it pays off directly on our bottom line.
Realtors looking to grow their business face similar concerns about growing efficiently. They entered this business because they wanted to sell real estate, but it seems that if they want to sell more real estate, other things get in the way. There’s the paperwork. There’s the need to be up-to-date on the governmental regulations and legislation. Very quickly, realtors need to hire support staff to help, but that also is a drain on their time, having to market for, interview, hire and train new people to work for them.
This is a problem for many brokers seeking to grow. When our companies are small, they don’t scale up well. If only there was a way that one could purchase the services and personnel one needed quickly to give just the assistance that was needed, without the cost and trouble of hiring one’s own support staff.
Well, such an option does exist. It’s called co-brokerage.
A company offering co-brokerage services has gone through that growth period, has hired support staff and provided the training. It now seeks to monetize its back rooms by offering its research and analysis skills to other brokers willing to work with them.
By partnering with a co-broker, an up-and-coming realtor benefits from the co-broker’s experience in the industry, as well as the skills and infrastructure in its back room. The co-broker shares in the realtor’s successes as the realtor focuses on selling his or her properties. This arrangement allows mid-market realtors to compete directly with much larger companies for bigger deals, building their reputations within the wider brokerage community.
Some realtors may be wary of taking up the services of a co-broker and sharing their deals with such a company. That’s understandable. There’s always a certain amount of uncertainty when it comes to sharing such business arrangements, but the rewards are tremendous. If you have an active co-brokerage arrangement, you’re not only paying for backroom services but you’re likely to obtain similar deals in your area from your partner, which would not have come your way and earned you commissions.
Moreover, the realtor can limit his or her risk in this arrangement by keeping a few rules in mind when establishing a relationship with a co-broker. Remember that a co-broker’s role is to support the realtor in selling his or her buildings. They are obliged to stay out of the personal client/broker relationships that the realtor has established in his or her sales process. A co-broker will not contact your client without first clearing the interaction with you. The contract should state this clearly.
Co-brokerage helps realtors enter into asset classes they may not be 100% familiar with. By signing with a co-broker, a realtor takes advantage of the co-broker’s skills and experience in the industry, and this is an excellent way to broaden one’s portfolio. A good co-broker should also have an advanced and robust database of active buyers, sellers and sales information, which their back-room staff updates daily. This information is critical to help realtors make informed decisions about potential deals. So, be sure to ask what the co-broker logs in its database, and don’t be afraid to ask for a tour of the co-broker’s facilities before you commit to a deal. If you are not going to be spending the money for an equipment room of your own, you should get the best from your co-broker.
With a co-broker, a realtor will receive assistance with the preparation of comprehensive sales packages, an online marketing plan, print flyers, and more. Direct target marketing services are also available, getting the realtor’s properties in front of qualified buyers through e-mail blasts, fax-outs and telemarketing.
The key to managing a successful real estate brokerage is effective delegation. Without back room support, realtors work too hard growing their business. A co-broker can take that task off a realtor’s hands, allowing them to concentrate on the joy of selling.
At Rock Advisors Inc., we are offering these co-brokerage services, and have co-brokered with such firms as BMO and CBRE. Harvey Russell at CBRE agrees that co-brokerage with trustworthy brokers can open up opportunities not available within your own circle of influence.
Realtors can take advantage of our twenty-five years of experience in the apartment industry, our robust database of apartments and apartment buyers across Canada, and our dedicated back room team that has helped us close some of the largest apartment deals in Canadian history. So, if you are a realtor looking to grow your business, we can help.
Image Courtesy of: Andy Roberts