To all the agents in the house,
"It keeps us from being swallowed up and disappearing."
So said Frederick Warburg Peters, when asked why after 126 years as an independent brokerage Manhattan's Warburg Realty announced this week that they were joining up with Coldwell Banker, and will be rebranded next year as Coldwell Banker Warburg.
"The landscape of the real estate business has changed in the last decade or so," said the Warburg Realty CEO. "It has become a pretty capital intensive business."
Adapting to technological change is perhaps the biggest cost – Peters expressed particular concern that his 120 agents needed the proper network referral database. "Keeping up with it has become more important and more expensive," he said. "Smaller firms are finding it harder and harder to compete. The arms race nature of real estate, like every other commercial venture in the world, is that people tend to glom onto larger and larger groups."
Some of what Peters says is specific to luxury real estate. For example, it's advantageous for Warburg to join Coldwell Banker because the Realogy subsidiary is well-established in Miami, Aspen, and San Diego, "As everybody wants to live everywhere now" Peters said. (I would editorialize: everybody who can afford to live everywhere.)
But some may apply to the rest of the country.
Fathom Holdings acquired longtime Idaho indie brokerage Epic in July. Meanwhile, other independent brokerages, like Reece Nichols in Kansas City, have hemorrhaged top agents of late to national brokerages such as Compass.
Agents, is it objectively harder to operate an independent brokerage in 2021 compared to 2011? Or are the above examples discounting independent brokerages in your neck of the woods that prosper?
Also, is this "arms race" that Peters describes good for you in that brokerages compete in ways that specifically benefit the agent, ie: modernizing their lead-generation and administration platforms, and increasing commission splits?
Let me know what you think. I can be emailed at mblake@housingwire.com.
Sincerely,
Matthew Blake
Senior Real Estate Reporter
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