At first glance, an agent who works for a large national real estate corporation may not seem noticeably different from an agent who is a shareholder in an independent agent-owned firm. There are significant differences, however, the important distinctions are often hidden behind the scenes. While not always obvious, these hidden aspects can affect your transaction in important ways.

While it is true that the large national real estate corporations have a recognized name and a large number of agents, their claimed benefits can be deceptive. There are actually a number of drawbacks to working with agents who conduct their businesses in a strictly controlled big-company environment.

Big real estate companies may claim that their agents have great “teamwork”. However, in reality, they are not a team, but are essentially just a group of individual agents who share a big company brand name, and who actually compete with each other within their offices. When Realtors® own part of their company, then they truly do operate as a team. There is typically a high turnover rate in residential real estate, and the perspective of agent/owners is very different from those transient Realtors® who move from one real estate company to another in search of greener pastures. Shareholders have too much invested in their careers when they own a portion of their company to hop from one company to another. They are committed to the growth and well-being of the entire company, and they are not just there to close a few sales. As a result, these committed professionals will give better service to their clients.

A good analogy is the way people treat a rental car as opposed to a car that they own, and in which they have a significant investment. When they are in a rental car, they probably will not take extra good care of it, because when they are finished, they will just give back the keys and be done with it. It is a much different story when they own the car. It is now an investment on which they are committed to making payments, and whose value depends on diligent good care.

Sales production levels are considered a good indicator of the capabilities of an agent, and large real estate firms employ agents ranging from one end of the production spectrum to the other. It may look impressive on the surface if a company employs many agents, but there are usually just a few top-producing agents in such offices. The majority of the agents close only a few, if any, transactions per year. In contrast, Realtors® must meet minimum sales requirements in order to own stock under most shareholder business models. An example is Platinum Properties International, an independent real estate firm based in Irvine, which is currently utilizing a stock ownership model. Each agent/shareholder must produce at least $75,000 in gross commissions per year, which is nearly twice the national average, in order to become, and remain, shareholders in the company. Only highly productive and successful agents are invited to become shareholders. Clients can be confident in hiring shareholder/agents because only the best in the industry can qualify.

Jason Hartman, President of Platinum Properties International, believes that buyers or sellers can have confidence that when they employ a shareholder/agent, they are getting the highest level of service.

“Because agents must be ‘invited’ to become shareholders based on their established, successful career in real estate, and a solid reputation as a professional, clients can be confident that they are receiving the highest caliber agent in the industry,” says Hartman. “Generally speaking, the barriers to entry in the real estate profession are much too low, and clients have a difficult time in determining whether or not a prospective agent is able to provide quality service. Platinum Properties shareholders are essentially pre-qualified, as they must have an excellent reputation, and they must also produce twice the national average in sales.”

For example, Realtors® who work for large real estate companies are usually less free to make their own decisions in day-to-day business dealings because the decision-makers are often located in far-away corporate offices. These agents are therefore less able to best serve their clients’ needs. Deviations from standard operating procedures at large companies are not tolerated, and approval for variances due to special circumstances can be difficult to obtain in a timely manner. On the other hand, agents who are shareholders in smaller, more responsive companies have greater flexibility when working with clients because of their close working relationship with the other owners of the company. Often, in a difficult or complicated transaction, the ability to make quick decisions can make or break a deal. Shareholder/owners can make these important decisions quickly. Instead of wasting critical time obtaining approvals from distant corporate bureaucrats, shareholder/agents are empowered to make important decisions that can ultimately determine whether or not a sale will close.

For more information about the shareholder business model, or questions regarding buying or selling residential real estate, contact Jason Hartman at (949) 552-0505 ext. 110, or visit www.PlatinumSells.com.