By Neil Sharma
Independent brokers often elect to join franchises in a bid to keep business surging, but joining co-operatives of high-performing realty brokerages may also prove bountiful.
Leading Real Estate Companies of the World, a Chicago-based realty network with global reach that launched in 1997, has begun establishing a Canadian nexus of brokerages.
It is an invitation-only network that subsists on annual membership fees, measured by market size, and small commissions from intra-network referrals. It has 525 worldwide members – 15 of which are Canadian – with about 120,000 sales agents under its umbrella.
Pam O’Connor, president and CEO of the network, says co-operatives are attractive to brokers because they usually give more than they take and they celebrate autonomy.
“The beauty of having your own brand is it’s always yours and you always control it,” she says. “We offer all of the services a franchise would – education, technology, marketing – but the main difference is we’re not a franchise. We’re the brand behind the brand.”
Brokerages plugged into the network showcase their listings around the world, producing lead generation as a result, and because the network is comprised of high-performing brokerages, many ameliorate their bottom lines beyond what they would in a franchise.
“We do about 35,000 broker-to-broker transactions,” says O’Connor, adding LeadingRE averages nearly one every four minutes with a 45 per cent conversion rate, of which the company takes a small cut. LeadingRE also operates RELO Direct, an employee relocation service for corporations such as Coca-Cola and the United States Department of Defense, and it, too, is a prolific source of lead generation.
LeadingRE also runs Luxury Portfolio International, dealing exclusively in tony properties in what O’Connor calls the company’s third biggest referral generator.
The network also offers educational and professional development, technology and systems sharing and marketing support.
It is an invitation-only network. O’Connor says LeadingRE is constantly solicited by brokers looking to join, and she’s rebuffed many because they often don’t meet the network’s high threshold.
“‘I’m local and I’m global’ is what we’re telling our agents to repeat,” says O’Connor. “The global part connects them to worldwide companies. We want business to be in the top tier of the real estate market. We don’t take everybody who wants to write a cheque; we look for quality companies. We try to be pretty selective and we have standards.
“We will drop companies if they’re underperforming, but we coach and talk to them first to help them along the way. If we get to a point where they’re not pulling their weight – because we’re a co-operative in which members help each other with referrals – we might have to.”
LeadingRE’s members are strewn about 55 countries, so the company holds many conferences and meetings during the year, including its preeminent annual conference, which will be held in Miami this February and is expected to draw around 3,000 members. Whether they’re brokers or sales agents, managers or department heads, they can network, sharpen their skills, or learn how to incorporate social media into their business strategies.
While O’Connor doesn’t want to belittle franchises, she says their one-size-fits-all ethos is not conducive to diverse markets. What might work in Ottawa or Vancouver might not work in Carnduff, Sask.
“Because it’s a big-box brand, you could have a company in one market that isn’t very good that might pull down the brand,” she says. “If you get a McDonald’s franchise, everything is the same in terms of consistency, but real estate is a different kind of business. If you’re tied to something that isn’t as good in one market, that might taint you even though you’re elsewhere. A lot of brokers like the idea of being in control of their destiny. They don’t have to worry about new management that doesn’t do things the way they were done before, or new ownership.”
Calgary-based CIR Realty, established in 1983, joined LeadingRE eight years ago, representing southern Alberta for the collective. Like many of its LeadingRE cohorts around the world, CIR – with 615 sales agents spread across four offices within city limits and another 10 in the surrounding area – boasts the highest sales volume in its market.
CIR has managed to shift to yet another gear, though. With LeadingRE buoying the brokerage, CIR’s finances and credibility are soaring.
“For a long time, CIR operated without being part of LeadingRE and we were operating a little like an island without a network, which extends your reach beyond the area where you work,” says Ron Stader, co-owner and broker of CIR Realty.
“I’m able to attract real estate agents to my company now that I wasn’t able to attract before I became a member. A lot of Realtors care about how large a footprint the organization they’re joining has. I have a larger footprint than I had before and it’s helped in recruiting agents, and in retention, as well. Those are two really, really big factors in the success of CIR.”
The brokerage received 150 referrals last year, closed 100 and put over 200 into the system. Stader says that, because LeadingRE rigorously vets potential members, conversion rates tend to be exceptionally high.
“Referrals are a two-way street,” says Stader, who is also the chairman of LeadingRE’s Global Advisory Board. “When we were finally able to join LeadingRE, that was a really big piece of our missing puzzle. What you end up with is companies that are very professional and take business very seriously. That leads to very qualified ways of handling business opportunities through the system. We’re not just taking out, we’re putting in. It’s a win-win all around.”
LeadingRE studies its stock of brokerages’ practices and shares successful formulas throughout the network. As Stader says, “It’s an incubation process where you’re getting the best ideas all the time.”
CIR has grown to become a sizeable company, so its membership fees are on the higher end, but Stader calls the tradeoff laughable because the dues pale in comparison to the auxiliary business LeadingRE membership has brought.
“I think we have 100 more Realtors in our company thanks to our membership,” he says. “If you add up how much business 100 Realtors do in a year, that’s a lot of business. Then there’s the business we get because of referrals, so the big picture is we’re a much more attractive company to brand new and existing Realtors because of our membership. We get the benefits that franchises would provide, but we get the benefits of our own independence.”