Southwest Florida veteran real estate brokers Greg and Kathy Zorn were faced with a business-changing decision in 2017: to continue as an independent dual-office Florida Home Realty that they had operated for decades or so. disrupt their business model by aligning with a national brand.
They had operated their real estate offices in Naples and Bonita Springs under a 100% hybrid commission structure and were only charging agents for rent plus marketing costs. The Zorns turned this model into a brokerage house with over 200 agents, refusing to disclose sales volume.
Switching to a franchise model with a national entity would require a change in agent remuneration towards a shared commission model. This means less money for an agent per sale. But it would also provide the necessary technology, marketing power, and most importantly, leads.
“Initially we knew there would be downsides for us, but if we didn’t make the switch we thought we were going to melt because in our previous model we couldn’t afford the things our agents were going to do. to do. need to compete. Greg Zorn, Partner, Better Homes & Gardens Pristine Realty
The couple, after two years of research, chose to go national. They abandoned Florida Home Realty to become Better Homes & Gardens Pristine Realty.
“What we realized was that we had to have the power to compete with the Zillows and the Trulias,” says Kathy Zorn. “How do you do that when you are independent?” Not everyone believed it when we made the switch, but the things the agents were asking for – websites, mobile apps, a name recognized around the world – when you look at the things they wanted. , we got them.
Of course, in seeking to provide these things, the Zorns had to change something that Agents coveted: the old model of pay. This is why about 80 of their over 200 agents left the fold after the change.
The 100% commission model is popular in Naples, concede the Zorns, but is not as practical outside of this lucrative market. In order to expand the business to markets with a wider price range, they knew that a commission-sharing approach, plus royalties to Better Homes & Gardens, was better suited not only to expansion but also to the survival.
“We understood that we would lose agents because some would lose $ 30,000 or $ 40,000 with the volume of business they had in reserve,” says Kathy Zorn. Greg Zorn adds: “We knew there would be downsides for us initially, but if we didn’t make the switch we thought we were going to melt down because in our previous model we couldn’t afford the things that we did. our agents were going to need to compete.
The Zorn’s research led them to the Better Homes & Gardens brand owned by Realogy Holdings Corp., whose holdings include other national brands Coldwell Banker, Century 21, ERA and Sotheby’s International. In addition to Better Homes & Gardens’ core values aligned with their own, they chose the brand in part because of a marketing strategy that replaced traditional door-to-door direct mail with free subscriptions to Better Homes & Gardens magazine. “The magazine has a lifespan of several years,” says Greg Zorn. “I think it’s the best marketing tool in the world.
The Better Homes & Gardens franchise offers additional tools for agents that the previous model could not offer, the most important being lead generation technology, according to the Zorns. It can leverage the power of Realogy’s infrastructure and its 30,000 agents worldwide to integrate online home buyers directly into its database, which provides a point of contact with data-driven prospects. web search once they have registered.
“Agents have access to infrastructure and tools, such as paperless systems, support, marketing and training, all at no cost to them,” says Zorn. “We are looking for agents who recognize its value. Before, we only charged a monthly fee. In this model, we share the commission, but we provide a lot more, and they don’t have monthly bills, which is especially important during the slower months. I think that’s the best of all words.
Has the switch worked for two years? Although they refused to disclose their income, in May the Zorns began to reap the rewards of the change when they opened their third office in Cape Coral. The Zorns also say that agents who stayed with the agency after the transition increased their volume by up to 30% from their previous years as a 100% commissioned agent, largely by using the tools and the marketing opportunities that the brand offers them.
Kathy Zorn says another perk is a staff upgrade. “The caliber of agents we attract with the brand is much higher than ever before,” she says. “And they sell for higher prices with the brand.”