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2011-04-04 23:54:55

Two Ways to Grow a Real Estate Brokerage

 

There are two ways to grow a Real Estate Brokerage. The best way and most sustaining way and profitable way, is through organic, natural growth.

Organic  / Natural Growth is the growth that comes from your managers recruiting, Realtors joining the company on their own volition, and your current Realtors bringing other Realtors to the company.

The Organic / Natural growth companies usually have a simple rule. Never ever do you accept or allow a negative growth month in your Realtor count. With this philosophy, you bring to the table the idea that the Realtor is your customer and your boss and therefore you work hard to keep them happy.

The Organic / Natural Growth companies have weathered the past four (4) years rather well and in some cases expanded rapidly.

Two cases in point of Organic / Natural Growth companies are Allison James Estates and Homes® and Keller Williams.

Both these companies believe in putting the Realtor first and fostering Organic /  Natural Growth. As a result Keller Williams has grown substantially in the last four (4) years.

Allison James Estates and Homes® opened their doors a little over three (3) years ago, on January 3rd, 2008. In that short time Allison James Estates and Homes has grown to fourteen ( 14 ) states with four hundred ( 400 ) Realtors doing over ½ a Billion dollars in business.

Allison James Estates and Homes® spends very little dollars on advertising. They work with a small marketing budget.  So their entire growth has come solely from Organic / Natural growth.

Then you have the companies that buy growth. These companies build through the purchase of other Brokerages. These Brokerages in most cases ignore Organic / Natural growth and as a result were hammered in the last four (4) years.

A case in point is Realogy. They grew and are still growing through the acquisitions of other Brokerages. The most current statistics I saw is that they are $ 3 billion in debt and going through money on a pace to challenge our esteemed leaders in Washington D. C. There is also a large company in Florida that has the same business model and as a result they have gone from a high of 2300 Realtors four ( 4 ) years ago to around 1500 Realtors today.

When you rely on purchasing Brokerages and acquiring debt, the model is unsustainable. Particularly when the economy and the Real Estate industry have taken a nosedive.

The only healthy and sustainable way to grow a Real Estate brokerage that will continue to grow, and survive, no matter what the economy is doing, is through  Organic  / Natural growth.

It’s debt free growth. The Brokerage assumes no debt from purchasing other Brokerages and every time the Organic / Natural Growth Brokerage adds an additional Realtor to the Brokerage, they add profit to the Brokerage.

 

 


James A. Crumbaugh III is CEO of Allison James Estates and Homes, a National Internet Based Real Estate Brokerage. You may reach Mr. Crumbaugh at jcrumbaugh@allisonjames.net

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