- Boutique Real Estate Brokerage
- Pros of Working With A Boutique Brokerage
- Drawbacks of Working With A Boutique Brokerage
- Frequently Asked Questions About Boutique Brokerage
From those who just launched their real estate career to those who have been in it for a while, the term brokerage should be familiar. However, the specialized services and factors by which brokerages vary can be difficult to understand.
Though many are familiar with brokerage franchisors like RE/MAX, companies like these comprise roughly 30% of all brokerages. The other 70% are independent companies, or boutique brokerages.
But what is a boutique brokerage? What kinds of customers do they serve, and what types of agents do they work with? Keep reading for the answers to these questions and more.
Boutique Real Estate Brokerage
A boutique real estate brokerage is an independent real estate firm that offers custom services for clients, typically local clients. Boutique firms specialize in niche markets or particular types of homes, giving them an advantage over larger companies simply training their agents on the best time to sell a house.
Boutique firms are not associated with any umbrella brand, such as Sotheby’s and Keller Williams. They are self-originating businesses, which means they’re responsible for all of their own real estate branding ideas and real estate marketing ideas. Though this initially poses a challenge in raising capital, it also affords greater creative freedom in brand messaging and design.
Pros of Working With A Boutique Brokerage
One of the biggest advantages of working at a boutique is offering dedicated attention to clients. Since the company is smaller, that means a smaller agent-to-client ratio. This is an important aspect of relationship selling, which posits that a strong realtor client relationship is necessary for successful sales conversations.
A second advantage of working for a boutique brokerage is gaining specialized knowledge. Since boutiques serve clients in niche markets, you’ll quickly become the authority for certain buyers. If you serve buyers looking for their forever home, they’ll trust you far more over their closest franchised broker. Instead of wondering whether or not they’re getting the best deal, they can talk to you about which properties to consider.
A third benefit of working at a boutique brokerage is greater financial flexibility. Brokerages based on a franchisor have to pay franchise fees, which is a percentage of the revenue they generate. At a boutique brokerage, all revenue generated remains within the company.
This allows the boutique’s agents to offer lower listing prices without sacrificing their commission. In an industry where a one or two percent decrease in price equates to thousands of dollars, many buyers will be enticed by such flexibility. It also means boutique brokerages don’t need to chase as many listings, as they’re getting a larger percentage of the final sale price.
Drawbacks of Working With A Boutique Brokerage
One downside of working for a boutique is having fewer resources at your fingertips. Franchisor brokerages often have dozens, if not hundreds of agents at a single office. The sales volume the additional agents generate gives the company more financial leverage that can be turned into training opportunities. At a boutique brokerage, you’re in charge of your own ongoing education.
A second drawback of working at an independent brokerage is you’re responsible for more tasks. Instead of solely helping clients buy or sell property, you’re likely involved in transaction management and lead generation.
You’re usually responsible for marketing all of your listings and keeping on top of day-to-day details. You may lead you to learning the 6 secrets to getting a real estate listing every day as it’s up to you to keep your pipeline full.
A third downside of working with a boutique brokerage is lack of brand recognition. A brand like RE/MAX, which has existed for nearly 50 years, is seen everywhere and doesn’t elicit as much resistance from clients as a lesser-known company. When you’re learning how to grow a real estate brokerage from scratch, you quickly discover how valuable brand familiarity is.
Prospects may have questions about what kind of homes you sell and your average close rate. But they’re primarily wondering what kind of person you are, and if you come across as friendly and professional. By listening well and being honest about what you can and can’t do, you’ll win the trust of your ideal clients.
Frequently Asked Questions About Boutique Brokerage
As an agent at a boutique brokerage, you work with a different set of challenges and opportunities. It’s time consuming to sift through tons of information hoping to find answers, only to be right back where you started.
Instead of going at it alone, we researched frequently asked questions about boutique brokerages for you. Take a look at the questions and our answers here:
What Is A Boutique Brokerage?
A boutique brokerage is a small, independent company that offers specialized services to real estate clients. A boutique firm may serve buyers, sellers, or both, and may hire staff with knowledge about a particular area of real estate.
Most boutique brokers operate on a local level, allowing them to build market expertise in one or a few geographic areas. In many cases this aids their growth, as they have a deeper understanding of buyers’ and sellers’ needs.
What Is A Brokerage In Business?
A brokerage is any company that facilitates transactions between two or more buyers and sellers. Brokerages are middlemen in several industries, including real estate, automotive parts, financial commodities, and electrical parts.
Real estate brokerages aid sellers and buyers in their property goals. For example, a buyer’s broker finds properties relevant to their target audience, shows properties to buyers, and negotiates with the seller on behalf of the buyer.
They’re also responsible for knowing how to get a home appraisal. Their responsibility is to make the home buying process as smooth and simple as possible.
What Does It Mean To Join A Brokerage?
Joining a brokerage has several connotations, but primarily means you’ll receive the support you need to become a successful real estate agent. Unless you’re an individual broker, you’ll need to join a brokerage, as this is required by current law.
Most brokerages offer ongoing training programs for their agents, technical support, and career advancement opportunities. In return, brokerages usually take 50% of new agents’ commissions, and a smaller percentage for more experienced agents.
Being part of a brokerage is a great call for most agents. It allows you the chance to learn from experienced sellers, build up a local network, and close deals with fewer mistakes. As you gain experience and craft unique selling propositions (USPs) with target markets, you may consider starting your own brokerage–or joining another one.
Breaking Records With a Broker
Understanding how brokerages work is a key part of any real estate career. Whether you work for one or recently started your own, brokering deals has been here for decades and isn’t going anywhere.
Remember that it’s just as important to find the right brokerage to work for as it is serving the right clients. As an agent, some of your success is based on the people around you. Working with a brokerage that values its agents and wants them to succeed positions you for long-term career growth.Back to Top