Software is eating the real estate industry, just as it has with all others.
As I watched the real estate landscape change and these new tech-forward brokerages rise, I experienced some professional FOMO — fear of missing out.
Afraid to be left behind in a quickly changing economy, I joined one of the real estate startup companies making headlines.
Like other startup companies trying to disrupt established businesses, this new brokerage had a lot of great selling points that intrigued me: Things like the prospect of higher sales and more money as well as new technology that would make my job much easier.
Promises, promises
Joining one of these companies is a risk. Some argue that its struggles potentially indicate that other venture capital-backed startup real estate companies might face similar problems.
But the promise of more money and better technology that makes selling homes a snap is quite the lure and hard to refuse.
But many startups do not live up to their promises to their employees, as many investors and employees have realized with other high-profile startups that have gone public this year.
I should know: I was one of many agents across the country who left their relatively secure perches to join a startup brokerage.
I hesitated when I was first contacted about leaving TTR Sotheby’s International Realty. I had been with the company for seven years and Coldwell Banker for nine years prior. TTR Sotheby’s was my home, and my colleagues there were family to me. Plus, I appreciated the powerful Sotheby’s brand and reputation that attracted top clients.
Most importantly, this new brokerage promised to provide significant marketing support. I found this promise especially alluring because, as a busy agent, I didn’t always have the time to do my own marketing while also providing the best service possible for my clients.
Some aspects of the startup were great. But over time, it became clear that while leaders meant well and tried hard, they weren’t really able to provide me all they promised. Most troubling was their inability to assist with my prime need, which was marketing.
Growth at all costs
Some of this may be due to how quickly the company was growing. While it’s exciting to be a part of a fast-growing company, it often felt like they were growing too fast to catch up with themselves. They didn’t always have enough people to get everything done, so bigger teams were prioritized.
All this quick growth meant there was always some new system or new person. The corporate growth-at-all-costs mentality came at my expense: The marketing support I was promised never materialized, even though I am a very high-performing agent.
My sales were down significantly after a year at at my new brokerage. In 2017, my sales with TTR Sotheby’s were about $14 million. But after one full year with the new brokerage, my sales fell to $5 million. The impact on my bottom line drove me to leave and return to TTR Sotheby’s.
I can’t say what exactly caused this, but without the proper marketing support and with the time I had to spend learning new processes, I was at a disadvantage. I can’t remember the last time I sold less than $10 million, and most years, my sales would run between $10 million and $12 million. So $5 million is at least a 50 percent drop.
The moment I made the decision to return to TTR Sotheby’s, I knew it was the right choice — and my bottom line showed it.
Within the first three months of returning, my sales were already at $3 million, which put me back on track to reach my usual $10 million to $12 million in sales for the year.
As I am reminded of my experience, I would just encourage any agent who is considering joining one of these startup brokerages to do their homework and talk to someone who’s already joined.
Although it might be a great home for you, some of the promises being made aren’t always able to be kept.
Tammy Britt is a real estate agent in the DC area, with more than 20 years of experience in the field.
