6 minute read
Pursuing a Partnership?
Pursuing a Partnership? Know Your Own Culture First
by Chris George
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To see the full interview, visit www.cmgfi.com/jv-partners/nexthome-chat
James Dwiggins
CEO NextHome www.nexthome.com
in working arrangements and other pandemic-related disruptions? JD: We pivoted very quickly—within days—and said “we’re going to lead the charge on information”; we foWhen you’re vetting organizations cused really hard on the truth and to form a joint venture partnership making sure we kept our members with, what would you define as a safe. We’ve always put our mem‘dealbreaker?’ bers’ needs first and our financial James Dwiggins: We have to partner needs second. We shifted from hostwith a company that shares our cul- ing Town Halls with our members ture. Everything we have done to small regional meetings as a real estate brokerage to discuss concerns and has always been about the health and safety issues. customer and making sure We talked about a health their needs come first and and safety policy that our they get the experience offices would follow to they’re looking for. If you’re make sure we were reducing going to do this, you need to Dwiggins liability with our agents in the spend the time talking about field and also with consumwhen things don’t go right and how ers. In this remote environment, we you handle that. There are lots of op- are going above and beyond to make tions out there, but one of the things a human connection at a distance, that makes a successful joint ven- and we doubled down on this human ture is when the leadership teams connection. align to achieve the same goals. We define our organization by our culture What advice do you have for orgaof service, and we can’t replicate nizations getting started in the joint that customer experience unless we venture space? partner with a company that shares JD: Before you consider a joint venthose same core values. ture partnership, you need to fully understand your own organization’s How have you been able to maintain culture. Find partners with a similar your company culture amid a change mentality, and you’ll be able to execute a shared vision. If you don’t have a good feel for your own organization’s culture, you’re not going to be able to align with the right joint venture partner. We’re very selective about who we bring into the company. We’ve turned more people away than we have taken in solely because we are looking for a partner who shares the same values of putting the customer first.
How can an agent benefit from a joint venture partnership? JD: The agent can benefit because a joint venture partnership gives you more resources to serve your clients and enables you to deliver a repeatable client experience. When you have access to a direct lender, your clients get more products, more attentive service and a better overall personal experience.
Do you expect more broker-lender joint venture partnerships to be formed in the coming months? JD: Absolutely! Following one of the busiest years in housing history, with record low mortgage rates and limited homes for sale, real estate professionals will need a competitive edge to attract new business. Joint venture partnerships benefit the broker and the lender by leveraging each entity’s strengths to stand out in a crowded market. In my case, I am very excited to see where my joint venture, NextMortgage, ends up in the next few years. We have the right people involved, the right vision, and we are adding more great people to the mix. It’s taking what we’re doing well on the residential side and adding it to what our lender partner, CMG Financial, does well on the mortgage side. RE
Chris George is the CEO of CMG Financial. For more information, please visit cmgfi.com/jv-partners.
New Business Models Taking Ground: How Can You Compete?
Commentary by Rick Haase
Insiders and outsiders to our industry have ignited a fire under traditional brokerage models. By some accounts, more than 60% of our nation’s brokerages now operate non-traditional service delivery and agent compensation models. These marketplace “transformers” are greatly enabled by massive inflows of investment capital, enabling heavy investment in technology solutions for agents, brokerage leaders and consumers.
While third-party listing aggregators, iBuyers and the like promise to provide algorithmically-generated data, they cannot compete with high-quality, local market expertise and actionable advice provided by experienced, market-savvy brokers and agents. Training and education programs built around the interpretation of local market data and knowledge are paramount to retaining past, present and future customers. Successful brokerages need to enable their agents to provide this market knowledge in abundance and deliver it with great frequency.
Brokerages also need a powerful agent productivity platform that enables agents to transact business 100% virtually while providing a professional, efficient in-market office space when needed. Mobile workflow tools provide safer, cost-efficient communication, lead generation/management, presentation and contracting functionality. Building or evolving your business around these technologies and processes allows you to compete more effectively.
Expensive legacy systems may be crippling your profitability. COVID-19 has created even more awareness around how traditional brokers spend money. Physical offices are under-utilized and less meaningful than ever before.
Never underestimate the importance of good communication. Agents must have a disciplined approach to stay in touch with clients. An important component of agent and business retention is to be fully and frequently engaged in communication that proves expertise while reinforcing the value brokers and agents bring to the transaction.
By adhering to the above practices and principles, United Real Estate’s national franchise and company-owned network doubled in size in the past 12 months. We also invested heavily in developing our proprietary technology stack over the past decade. As a result, our system’s delivery costs are much lower, and we pass those cost efficiencies to our brokers and agents.
Having operated both traditional and full-service, transaction feebased agent compensation models, I’ve seen firsthand that profitability can be reached well in both. However, the fast-moving water of the brokerage industry is definitely the transaction fee-based model. Profitability for the brokerage and higher incomes for agents are both achieved when operated properly.
A surefire way to see if your brokerage needs retooling is to ask yourself two simple questions: 1. In recent years, has it become harder to recruit and retain agents? 2. Are key components of your value proposition easily obtained outside of your brokerage?
If the answer to either of these questions is “yes,” it is especially important to seek business model guidance, insulate your brokerage from the flames of competition and thrive in 2021. RE
Rick Haase has led real estate brokerage strategy and operations for over 30 years. Haase joined United Real Estate (URE) and currently serves as president of United Real Estate and chief operating officer of its parent company, United Real Estate Group (UREG). In these roles, he is responsible for leading enterprise operations and driving growth. United Real Estate Group owns and franchises real estate brokerages in 46 states. For more information, contact Haase at rick@unitedrealestate.com or visit www.unitedrealestate.com.
