As anyone in the real estate industry knows, in general there are two ways to immediately build real estate brokerage profitability:
1) Lower expenses and 2) Lower Commission Splits
Tribus works with brokers to do both.
According to Real Trends, in a good year the average brokerage makes just 3% profit. This mostly stems from management not having any quality, actionable data. A lack of data comes from four key areas:
- No standardized systems
- Inflated fixed overhead costs (both square footage and salaries)
- Over-valuation of non-producing marketing channels
- Agents that spend more money than they bring in
When Tribus starts working with a new brokerage, we conduct a primary audit of the company’s operations. We cover major areas of your real estate brokerage operation to identify if and where there is room for improvement. Tribus staff draw on knowledge in working with brokerages of all shapes and sizes, in every geographic market in the country. A review of current advertising spend, fixed costs, and more is conducted and recommendations are made directly to management.
Tribus Reviews Key Brokerage Profitability Metrics
- Square Footage Per Agent
- Agents per employee
- Telecommunications spend (often times the most overspent item in the office)
- $1:$1 or better advertising investment – Find ways to phase out most failing print advertising
Lower Your Average Commission Split
One of the primary items that Tribus concentrates on is helping brokers lower their average commission split on all deals. Many of the suggestions we help don’t affect current agent relationships. Tribus works to try and increase the volume of deals the company procures and then refers to the agents. While some brokerages see this solely as a retention or recruiting item, in many cases it can be used to shift average commission splits lower. For example in one of Tribus’ markets, average commission splits with agents were at 72%, after implementing our suggestions, this shifted to 65% yielding a significant profit for the brokerage that was previously missing.
Tribus Helps You Recruit Agents
Want to recruit experienced, quality agents to your organization but don’t have the budget for an multiple employees? Tribus offers a third party recruiting system to help agents recognize the benefits of your company for all of your offices. You’ll have a full-time staff of professionals on your team working to grow your recruiting funnel. Signing up for the optional TribusRecruiting package when starting Tribus for your brokerage is a great way to immediately build candidates, continuing it over time will offer your brokerage the ability to keep a constant level of visibility in your market.
We work very carefully to build a broad strategy with you and your management team to offer the best possibility for success. When signing up for TribusRecruiting, interviews are conducted with any individual in charge of meeting with potential agents. They cover what the company strengths are, and go over recruiting strategies with members of your team in charge of meeting potential agents.
For more information please view our data sheet: Recruiting Realtors for Real Estate Brokerages
