- Stay true to your core values as an independent brokerage, and don't feel pressure to grow for growth's sake.
SAN FRANCISCO — It’s not unusual for successful independent brokerages to feel the flattery of being courted. But is transitioning to a big brokerage the right thing to do? There is no prescriptive answer here as what’s right for one indie may not be right for another.
Listening to what other companies have to say is a smart move — learning from someone else’s experiences can be wise — but always take a moment to ask yourself few key questions before making a decision.
‘Take the meeting’
Principal broker-owner of Hawaii Life Matt Beall took the stage at today’s Indie Broker Summit to urge the independent brokerage audience to “take the meeting,” but never sign on the dotted line right away.
Matt Beall on left and Mark McLaughlin on right
Beall said you owe it to yourself to look at the agreements, sift through them and carefully consider the reasons why you would or would not move forward. Think about “why it would be right. Also who you are — your values,” he added.
A numbers game
Pacific Union International CEO Mark McLaughlin explained why he bought his company out of its franchise within a couple of years after taking over Pacific Union and terminated its affiliation with Christie’s International Real Estate. In his case, it was about doing the math, he said.
“At times it’s more effective to write a check and exit,” McLaughlin explained. “In two instances, we have exited and written a check. The math said our investment in ourselves will outperform that of another brand. We were outpacing it — it was going to constrain us.”
While capital was pretty easy to access, the biggest setback was finding the right talent; he was very driven by growth, but it wasn’t for everyone, McLaughlin confessed.
“Be true to yourself,” he said. “I wake up terrified of the guy behind me. That’s what I do, but your people want to follow a leader and that’s the most valuable thing.”
Beall said, “We over glorify failure and growth. This whole country — there are a long tail of mom-and pop brokerages that do just fine. They are not thinking about how to get capital to buy another business, they are just representing buyers and sellers, helping them buy and sell homes.
“There is a long list of companies who have done well because they are cash-strapped. There is something to be said for honing in on what you can do with the resources you have.
“We are not in any debt. We really put our heads down and have competed on merit. That’s what’s given us our growth. It doesn’t mean we wouldn’t buy companies, but we are not prepared to take out a loan to achieve that.”
