Real Estate Brokerages as Marketplaces
A recent Inman article stated that brokerages should shift from being agent-centric to consumer-centric. Why not be both?
Real estate brokers are, at their core, marketplaces.
“In mainstream economics, the concept of a market is any structure that allows buyers and sellers to exchange any type of goods, services, and information. The exchange of goods or services, with or without money, is a transaction...where transactions are processed by the marketplace operator.” *
A real estate transaction needs three parties to get executed. A buyer, a seller, and a middleman.
Whether low-fee, traditional, or tech-enabled, a brokerage (middleman), is a marketplace where operators (agents) execute transactions between buyers and sellers.
HomeLight, Compass, Zillow (not a brokerage), Opendoor, Redfin, PurpleBricks, Knock are simply marketplaces with different monetization strategies.
Now if the agent is the executioner of the transaction. The more productive the agent is in executing transactions, the more money the brokerage makes.
Then as a broker, you should be thinking of how can you get your agents to execute more transactions. Redfin's agents, for example, are 30X more productive than a traditional agent. That's because Redfin has taken tasks off of the agent’s hands, into their own. Generating leads, scheduling showings, and paperwork are few of the tasks that Redfin is doing to make their agents more productive. They don’t only provide the tools, they do the actual work.
While some are choosing what side to focus on, others have already embraced the idea that becoming a marketplace might be the winning strategy.