UPDATE September 2017 - This is an older post that still holds true today. In fact, when I set appointments to show homes I'm surprised at the amount of small, independent brokerages that keep popping up. The brokerage I am currently with, HomeSmart Realty Group, is a franchise that is independently owned and operated and has been in Illinois about 9 years. It is a newer concept office that is high tech and agent oriented. Most of the agents at HomeSmart are very experienced. Even though HomeSmart is not a training office, our staff offers constant meetings, seminars and training opportunities so agents can keep up-to-date with today's real estate market and technology.
I just read a blog post (from Bloodhound Blog) about an article in Consumer Reports that stated consumers aren't as interested in brand names (such as the big real estate franchises) as we would all think (and the franchises would hope for). A statistic I was interested in was that sellers were just as satisfied with non-franchise companies, even if they offered less services, as they were with brand name companies.
This is important to me as I left a popular franchise after being with them for 22 years to join a local independent company, which I was with for 8 years. I recently switched to HomeSmart Realty Group in Orland Park and am very happy there. They are one of the fastest growing franchises. They are the #1 brokerage in the Phoenix, AZ area and recently started franchising nationally & internationally.
What Consumers Don't Understand About the Big Name Franchises
Most (not all, but most) franchise offices are independently owned and operated. Some are real "mom & pop" businesses. And I was with one of those family run offices and for those 22 years I always felt there was something missing. Brokers have to run a business efficiently but that was one of the problems I felt. Our staff consisted of one secretary working M-F from 9-5. She took an hour lunch and when she wasn't there it was up to the agents to answer the phones and set appointments. We did this by taking "floor time." This was our chance to acquire buyers and sellers that were not already represented.
I did get a lot of business by taking floor time but I hated setting appointments and having to handle the phones. I am an independent contractor and do not get paid an hourly wage for doing office work. Many of us complained and the broker decided that he and/or his family members would man the phones for the most part. Some of the family members were less than professional and appointments got goofed up and more.
So why did I stay for all those years? I was otherwise comfortable with my broker and the other agents. Besides my complaint above we were able to "train" our Broker to learn new techniques and try new marketing and he was easily approachable. I had seen other agents flit from office to office and they were never happy. So I knew that all offices had problems. Plus, I had been with my office almost from the beginning and I held a position of authority that I wouldn't have had at a different office. That was hard to give up.
But Don't the Big Franchises Offer More?
Truthfully, the brokerage you choose is only as good as the agent you end up working with. There are good and bad agents in every real estate brokerage worldwide, no matter if it is a popular franchise or independent company. There is only one listing agent (unless it's a team) that will be representing the brokerage.
Each brokerage has their own advertising policy. Some big brokerages have ceased doing any kind of print advertising because it is so ineffective and expensive. Some brokerages make their agents pay for advertising, some don't.
Most agents have their own websites. My website actually offers more information on each listing than the big franchise sites. Check it out - do a search here.
Don't the Big Franchises Offer More for Buyers?
Again, if you call a brand name franchise because you think you'll be treated better beware! Many franchises are training companies that have a lot of brand new agents. Agents with very little experience and training. Agents that have not honed their negotiating skills and simply have a lack of all-around experience.
You could be taking a risk!
Don't the Big Franchises Offer More for Sellers?
Again, you'll get what your designated agent offers. Depending on the brokerage, some agents pay for their own advertising. If they do they will have more control over the amount of advertising you'll receive. Or, they might choose to advertise less. I agree that print advertising no longer works but then you need someone who offers a good website presence. As I've pointed out, most of the actual franchise companies don't have top search engine position for the most popular real estate search terms. So once again, website advertising is up to the agent you are working with.
Will buyers call more off Century 21 signs than independent brokerage signs? Absolutely not! If the house looks good to the buyer driving by they will call no matter who the listing company is. If they're already working with an agent they'll write the address down and have their agent get the information. Either way, they don't care who the listing brokerage is.
Communication is a complaint I hear about a lot with sellers. Again, there is no guarantee that a Coldwell Banker agent will give you any more communication than an independent agent will. Each agent has their own marketing program and/or style. It has little or nothing to do with the franchise (or independent brokerage) they work for.
I could go down a whole list of items that many people think would be done better by a popular franchise but that I can prove is not true. And one last thing is that in many cases just working for a franchise costs the agent extra money. Yes, they are usually charged a fee to utilize the popular franchise name. And that fee is usually passed along to the seller clients. In fact, a popular franchise has a rule that they cannot list for less than a specified commission. The agents are taught how to counteract seller response to this higher commission. Sometimes it works (depending on how well the agent presents it), sometimes it doesn't.
I am so happy with my decision to leave my prior franchise. I have had record sales since I've left. In reality, my franchise was holding me back! My new office is much more professional and I still have a very available, friendly and easy-to-work-with broker. In fact, I feel more comfortable with my new broker than I did with my past broker that I worked with for more than 20 years.
When I joined HomeSmart Realty Group there were a handful of agents. We are over 150 agents now and they've come from many of the big name franchises. We are not a training company so these agents are very experienced, just like I am. We started with one office in Orland Park and have expanded to Naperville and Chicago. Read about HomeSmart Realty Group by clicking the link.