Are brick-and-mortar brokerage offices going the way of the dodo?
With the housing market slowing down, broker-owners like Ohio are based Cutler real estate Andy Camp is looking for ways to reduce overhead. For Camp, this has led to discussions about reducing the agent’s physical office space.
“Post-COVID, we have consolidated offices and resources, and in 2023, one of our key areas of focus is getting our footprint right,” Camp said.
Camp is not alone in his thinking. Nationwide, agencies, incl compass and Coldwell bankermake the decision to close offices.
“Our strategy is to focus on providing regional support offices and continue to invest in providing regional support offices – and as such our requirements for where we maintain physical office space have changed,” said Ayoub Rabah, the President of Coldwell Banker Realty Greater Chicagolandtold The only true In mid-January, after the company said it would close some offices in the coming months.
“Agents are now more mobile than ever, taking advantage of our company’s technology offerings, and consumers are also demanding more electronic communications and services. A large number of stationary offices are no longer required in today’s dynamic real estate environment. What is needed are state-of-the-art facilities in the area where agents can park and receive world-class marketing and administrative support.”
In 2021, 36% of the National Association of Real Estate Agents (NAR) Respondents to the Real Estate Company Profile survey indicated that their company did not provide them with physical office space, and 26% of all respondents indicated that they had a virtual office. However, only 5% of respondents stated that they work in a purely virtual company.
But with the increase in remote working opportunities, as well as the increased adoption of e-documents and other digital working opportunities over the course of the pandemic, many realtors are seeing less of a need for a brick-and-mortar office. According to NAR’s Adopt to Adapt survey, 10% of the study’s 3,557 agent and broker-owners surveyed no longer have a brick-and-mortar office, while 11% said they have moved to a smaller office.
“Our marketing department is still working virtually, and our design group is meeting agents in their offices or on the go instead of having agents meet them at our central hub, so we didn’t need all that space,” Camp said.
Culture and community in office
While some brokers and company executives are open to reducing office space, others — like Compass’ Robert Reffkin — are fully supportive of physical offices.
“I’m there personally. You’ll never see me in a virtual home office again,” Reffkin told attendees last month Inman Connect New York Conference. “I see home office as a culture killer and a reduction in opportunities. We are a people business and culture cannot be built virtually.”
Al Filippone, an industry veteran and William Raveis Team leader in Fairfield County, Connecticut agrees.
“For the most part, not entirely, but for the most part, the agents who have come to the office regularly seem to be successful … even during the onset of the pandemic. While our weekly meetings continue to take place via Zoom, this is more a function of practicality than anything. Unless an agent is one of the rare exceptions to succeed at virtual work, I encourage others to return to the office. The information you gather just by being with other real estate agents is immeasurable, while the inspiration they provide, the client calls that can lead to a sale, or recommendations from the office manager are worth their weight in gold. It could just be the pick-me-up you need to transform your business,” Filippone said.
Ryan O’Neil, A RE/MAX Agent and the leader of The Minnesota real estate teamunderstands why some firms are reducing office space, but like Reffkin and Filippone, he sees agents wanting to work from an office again to have a greater sense of culture and community.
“More and more of my agents want a permanent job,” O’Neil said. “I think after the peak of the pandemic, going back to socialization, culture, being with others and sharing that positive energy becomes more important and necessary – and that’s what the agents are looking for.” I think they also like the extra professional level that an office brings. I know several agents on my team who all hold their client appointments in one office.”
Due to the widespread structure of his team, O’Neil’s agents are spread across 21 different RE/MAX offices in the Twin Cities area. While O’Neil believes most of his agents are currently looking for physical office space, he noted that others are finding it more convenient to work from home and only for large team-wide meetings or training at their local RE/ MAX site will come.
A different mood
Mandy Nichols, a former RE/MAX agent who is currently having her license suspended Brixstone Propertiesan independent brokerage firm in the Dallas-Fort Worth area, disagrees with many of O’Neil’s agents.
“I don’t know if it will improve morale in an office because when I’m asked to be in the office, it feels to me like they’re trying to manipulate me,” Nichols said. “No one ever said, ‘I want to meet you at your office.’ A lot of businesses are moving away from brick-and-mortar in general, and if you don’t need it, it’s a waste of money.”
Stacy Pulliam, a resident of Augusta, Georgia eXp property Agent, feels the same way.
“For me, networking, conversations and community engagement are very important. So when I do that, a lot of business happens for me,” Pulliam said. “Where is business done in the old movies? On the golf course or at lunch. I would never tell a client to meet me in an office, I’ve always met him over coffee or dinner and we just chat and get things started.”
Pulliam, who began her real estate career in 2019, has been with eXp her entire career and says that her cloud-based model was one of the key things that attracted her to the company.
“I liked being able to work from home but still having the support of experienced agents across the country,” Pulliam said. “I also liked that a lot of the training was done online but still everything was taught live in real time. It just worked better for me and my situation.”
In addition to the online courses, Pulliam also had access to an eXp mentor agent during her first few months in business.
“My mentor was very active, very hands-on, and always stopped by to see if I needed anything,” Pulliam said. “Now I have mentees and we have a group chat where they can ask me anything and they can call me anytime they need it.”
Nichols takes a similar approach to the new agents she’s mentoring.
“She’ll call me and ask what to do in certain situations, or she’ll email me contracts to go through and double-check before turning them over to anyone,” Nichols said. “There are ways to help someone and enlighten them without being physically right next to them.”
While Pulliam thinks the eXp model works well for her, she acknowledged that it may not be right for every agent, a view expressed by the company’s CEO, Glenn Sanford, at the Inman Connect conference in late January repeated.
“If you believe fundamentally that you need office space to deliver the value proposition to your agents, then you better have office space,” Sanford told attendees. “Basically, if you believe you can add value to your agents and brokers and not need physical offices, and maybe even turn that into an advantage by giving them better caps and compensation, then you don’t need offices. It’s a bit like religion, you can pick one and go – and for us the religious experience built a cloud-based mediation.”
Looking ahead, bottom-line broker managers are working to accommodate the needs and desires of tomorrow’s brokers for office space.
“serhant has no offices; We have clubhouses. You can come and work all day if you want, but the work is not in the office. We made this decision for several reasons. I’ve just looked at the overheads of a lot of these firms – and it’s a lot – and there’s a desk hierarchy that I don’t think is fair,” Ryan Serhant, who runs his eponymous brokerage firm, told Inman Connect attendees. “To think that the alpha generation is going to grow up and want to work in real estate to work in a cultural office – now sit down with any 12-year-old and where are their friends? Your friends are in one screen.”
While closing brick-and-mortar offices in a slower housing market might be one way to cut costs, fewer physical offices might just be the way of the future.