Alternatives to the Brick and Mortar Brokerage

Ryan Beckett, DBA is a real estate broker, founder of Bit Realty, and is involved in the tokenization of real estate. He is based in West Palm Beach and is also working on a dissertation at Rollins College.?

One of the things he has been studying is whether or not staying with the traditional brick and mortar brokerage firms benefits real estate agents.?

“A lot of these realtors are like, ‘Listen, I have this listing, I have this buyer, I have this rental because of me. Like, I'm the brand. And I went in and I ate a granola bar and I made a photocopy. And sure, my broker makes me legal with the state. But why am I giving them 20%? Excuse me? Some of my commission, out of my pocket,’” said Ryan.

“I've seen the emergence of a bunch of different brands,” he added. “EXP is a very interesting one. I describe it as Keller Williams on steroids. They have the multi-level. You can get cash flow and help them recruit. You can make money on the stock price because they're publicly traded. It's a pretty beautiful thing. And then, I think as I understand it, they kind of stay out of your way. And they give you the support and education, legality, compliance, all those things that you need.”

There are two other brands that Ryan is also keeping an eye on. Both are out of Silicon Valley. One is Side, which only takes top producers.?

“You have to be in the top earning income as a team leader,” he said. “They become your broker of record, but you keep your brand.”

“[Side] describe[s] themselves as the engine of the car,” said Ryan. “And then you're the brand. You go out and do you. They even help you with recruiting, interviewing because that serves them as well.”

The other one is Radius, which particularly excites Ryan.?

“I think that's probably – of all the ones I've studied–? the most excited about,” he said. “This is why. They do a similar thing. One of the main investors is Spencer Rascoff, co-founder of Zillow. They started as a social platform for realtors. Once this investor group came in, they pushed them into more of a brokerage model, cloud brokerage, if you will. So what they say is that, ‘Hey, we also are the engine to your car’ – education, CRM, health insurance availability, mental wellness through headspace, a lot of its third party, slick app referral network across the country. And what they say is ‘Hey, we don't touch any of your commission. You don't got to cap out, you don't got to reset. Your team leader has 100%. Now, if I wanted to put everyone on a 90 though, that's up to me as the team leader, but what I like about Radius is they give you the latitude to design your business.”?

“Because of the 100% latitude, it allows me a lump of clay that I can mold any way I want,” said Ryan. “I know the next question. How do they make money, right? So how they make money is they're planning for an IPO. So anytime I bring someone in, they give me 100 shares of common stock, as an incentive. They're gearing up for an IPO. They want to build up their network effect. That's kind of the foresight.”

“But in terms of cash flow, they look at themselves as more of a SAAS model – Software As A Service,” said Ryan. “They're giving you their tech stack that filters out. Again, education, CRM, all these other things. They charge the team leader – if memory serves – around $650 a month, and the people on my team, I believe it's closer to $350 a month.”

Despite the fact that these new alternatives to the big box brokerage are emerging, Ryan thinks the big box brokerage model will still exist because many agents will still choose that route.

“I think the big box brokerages, like the luxury brands, will be a little bit more resilient,” he said.

“A lot of people don't realize how much work realtors do and how much they don't get paid for a lot of their work,” he said. Many people think they can sell a house on their own until they realize everything that is involved “and there's little mistakes that can be a big, big deal that a realtor, a good one can help you avoid those landmines.”?

Ryan also is not concerned about the recent slowdown in the market. In fact, he thinks it is probably a good thing for the long-term.

“When the market gets crazy, that's how you have a bubble,” he said. “That's not good for anyone. It's not good for us as realtors. It's not good for the industry. It's not good for anything. So that's why I said the industry and our economy needed a cold shower. We were running at red line for way too long, and it wasn't sustainable … I think long term, it's better for our industry. It's better for brokerages. It's better for realtors.”

To listen or watch Dan Lesniak’s full conversation with Ryan Beckett, check out episode 408 of the HyperFast Agent podcast.

https://podcasts.apple.com/us/podcast/alternatives-to-the-brick-and-mortar-brokerage/id1452273169?i=1000585898228