Small independent or big box brokerages, which are better?

I don’t know if you’ve noticed it, but I have. There are more and more independent real estate brokerages popping up in Waterloo Region. And it’s not just Waterloo Region, according to this survey at, independent brokerages not only make up 80% of the US brokerages, the the majority of agents (54%) now work for independent brokerages. The report did not include Canada but our system of real estate is virtually the same as our neighbours’ to the south – ReMax, Keller Williams, Century 21 and Coldwell Banker are all American franchises after all.


Why are small brokerages growing?

Personally I think it is technology driven. With the internet, the low cost of laptops, scanners, printers and cell phones, cloud storage, mobile apps…real estate agents don’t need an office, a land line, a messaging system, a receptionist and the costs that go with all that.

Another reason is independence. Salespeople and maybe especially real estate salespeople love their independence. When I worked for a big brokerage, I always bristled at the thought of attending office meetings, doing floor duty and even attending company potluck lunches, golf tournaments and barbecues – (maybe I’m antisocial).

Culture is another reason. Before I joined a niche brokerage, I often felt at odds with the culture. My previous brokerage played it very safe. There were lots of rules, mostly about marketing and advertising  that I found silly and bureaucratic.

Finally, big brokerages always claim to have excellent sales training, but I often found the training to be outdated and poorly executed.


The advantage of smaller brokerages

Smaller, boutique brokerages can carve out a market niche. The may specialize in a certain neighbourhood or lifestyles, like condos or 55+ communities.

Independent brokerages don’t have the overhead. They don’t have to pay franchise fees and national advertising campaigns and for regional directors salaries and conferences…


Where is the value? 

The way the brokerage system has developed, it is impossible to tell the difference between one brokerage office and another. Did you know that there are three Remax franchises in Waterloo Region. There are also three Royal LePage franchises. But the home buyer and seller cannot tell the difference between them. I think big brokerages are vanilla, they are network TV. They cater to everyone and anyone and as such are indistinguishable from each other.

Of course, agents (especially new ones) like to have the brand recognition behind them. They might also want the platform, systems and training.

In theory, with a big brokerage agents may be able to grab some referral and relocation business. I was with a big brokerage for 7 years and I often got referral and relocation business, but not from the brokerage, but from my own website – again showing that the internet has levelled the playing field – What worked a generation ago does not work today.

Finally, I think that consumers simply do not care about brokerages. Home sellers and home buyers want their needs met. Wiifm – what’s in it for me? Consumers care about professional service and trusted advice. They can get that from a great agent, not necessarily a big brokerage.

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