Should you use your broker's real estate technology?

Cathy Daniel, an agent at Brentwood, California-based RidgeWater Real Estate Services, said she learned the hard way that using a company email address can come back to bite you.

Leaving behind a company email address after she switched to a new brokerage caused one of her prospects, an older couple, to hire a listing agent who shared Daniel’s name and hair color (blonde), she said.

The couple had called her previous brokerage after failing to reach Daniel through email. They were matched with another Cindy, whom the couple mistook for Daniel, according to Daniel.

“The sellers’ faces were like, ‘Oh, my god,’” Daniel said of their reaction to seeing her when she showed their home to a buyer. “We thought we listed with you.”

If Daniel had not been required to use a company email address at her previous brokerage, she decided, she would not have lost the listing — a property that she said sold for $1.5 million.

There are many changes and difficulties in real estate, but Daniel’s cautionary tale raises a question that carries increasingly heavy weight in the digital age: How much should agents rely on their brokerage for technology like customer relationship management systems, transaction management platforms, agent websites and email addresses?

The question has a corollary for broker-owners: What types of technology, if any, should they provide to their agents, and under what sort of framework?

There are no clear-cut answers, but Inman’s latest special report seeks to provide some clarity around what the answers might be for you. We surveyed 2,535 respondents between January 20 and February 2, 2016, then analyzed the results.

We lay out tactics that real estate agents may want to incorporate into their tech strategies and list the pros and cons of getting tools directly from third-party vendors, rather than through brokerages.

And we explore how brokerages can improve their tech offerings and sketch a number of models that brokerages can use to offer digital products to their agents.

Before diving into the nitty-gritty for agents, we offer three pointers that might help agents make the best of the technology that’s out there.

Make sure you can take your contacts with you

Daniel’s experience testifies to the perils of using a company email address.

Even when companies officially require agents to use company emails, go-getters may be able to finagle an exemption. Daniel said she was able to pull this off at one brokerage, having vowed never again to risk leaving “everything behind” by using a company email.

For similar reasons, agents who use a company-wide customer relationship management system (CRM) should make sure they can easily take the information stored in the software with them if they switch to another brokerage.

Some brokerages may prohibit agents from exporting contacts from company systems, though that’s a somewhat “dated practice,” said Craig McClelland, chief operating officer of Atlanta-based Better Homes and Gardens Real Estate Metro Brokers, a 1,900-agent brokerage.

Agents at Metro Brokers are supposed to use company email addresses. Would McClelland bend if asked to waive that requirement? There’s only one way to find out: ask him.

Negotiate discounts

You might think that many discounts on products are only available to agents at big brokerages or franchisors that can use their bargaining power to wring deals out of vendors.

But that’s not always the case. Daniel said she regularly negotiates discounts on products that match those enjoyed by agents at larger firms.

“I mean that’s what we do for a living: we are negotiators,” she said. If you pay retail price, she argues, “then you’re not really good at what you do.”

Some savvy agents offer to promote products in exchange for discounts, said Marc Davison, a co-founder of 1000watt, a marketing and design firm that works with a wide array of real estate vendors and brokerages.

“If you do a deal, I’ll tell 20 people,” an agent might tell a vendor, he said.

Make sure you have access to training and support

To get the most value out of CRMs, lead-generation platforms, transaction management systems, CMA tools and the like, you need to learn how to take full advantage of the many features they have to offer.

One of agents’ biggest gripes about digital products is that they can’t get the training and support they need to learn how to use them properly.

So if you want to adopt a new app or service — either through your brokerage or directly from a vendor — figure out how much help you’ll get with learning how to use it. Video tutorials and webinars alone might not cut it.

While all agents can probably benefit from following these guidelines, how agents should source their technology is more of an open question.

There are three basic strategies, each with its own advantages and disadvantages, for acquiring tech tools: through your brokerage (or, if applicable, its franchisor), directly from vendors or a combination of the two.

The vast majority of agents fall into the third camp, with nearly half of agents at both independent and franchised brokerages spending, out of pocket, more than $100 a month on technology, Inman’s survey found. That’s an expense that far exceeds the typical size of a fee some franchisors charge for a basket of tools.

Using your brokerage’s tools

Terry Reed, an agent at West Palm Beach, Florida-based Keller Williams Coast Partners, has fully embraced the tools and services provided to him by his brokerage (Keller Williams Coast Partners) and franchisor (Keller Williams Realty).

He uses eEdge, the “lead-to-close agent business solution” that Keller Williams Realty offers to all of its franchisees and agents, to manage contacts, create marketing materials and electronically shepherd transactions to closing.

He said he also pays fees for additional products offered by his particular franchisee, but not necessarily by all Keller Williams franchisees. The costs include $1 a month to syndicate his listings, $18 a month for enhanced listings on realtor.com, $1 a month for daily lists of sellers leads (typically expired, withdrawn or for-sale-by-owner listings) and $3 a month for access to a library of flyer and postcard templates.

These costs are on top of the mandatory $15 a month fee Reed says he pays for access to eEdge, and a mandatory $10 a month “consortium fee” — some of which Reed believes goes towards covering the costs of digital products made available to him.

These two fees would constitute what’s often called a “technology fee.” Agents often pay them in exchange for digital toolkits from their brokerages. Franchised brokerages tend to charge technology fees more often than independent brokerages.

Sixty-two percent of agents and associate brokers at franchised brokerages pay a single fee for tech tools, products or services provided by their brokerage and/or franchisor, compared to 31 percent of agents and associate brokers at independent brokerages, Inman’s survey found.

Reed embodies the type of agent that can benefit most from seizing on company-wide digital products. They tend to appreciate the convenience of neatly packaged toolkits, and want to make full use of offerings that they are paying for, whether that’s through technology fees, commission splits or transaction fees.

Using his brokerage’s tech offerings “… was kind of a no-brainer at the time because I really needed to learn what I was doing,” said Reed, referring to when he joined Keller Williams around five years ago from a brokerage that hadn’t offered any digital tools. “If I’m paying for it; I’m going to use it … I’m just a frugal person.”

Indeed, many agents who embrace a basket of tools provided by their brokerages — particularly agents at franchisees or large independent brokerages — may be getting more bang for their buck than their peers.

Some of the largest brokerages “pay 50 cents or $1” per agent for tools that an agent otherwise might have to pay $40 a month to procure independently, said Victor Lund, a partner at real estate consulting firm WAV Group.

But plenty of agents are underwhelmed by products provided by their brokerages and choose to buy tools and services directly from vendors instead.

Then, “you’re paying kind of double,” said Laura Hall, a partner at Terra Firma Global Partners, a 45-agent brokerage based in Sebastopol, California. “You’re paying for what you don’t want and you’re paying for what you want.”

Brokerages competing on tech

Tools provided by brokerages, both by independent firms and franchisees, often meet the technology needs of many agents, our survey found.

A majority of agent and associate broker respondents with franchised brokerages (58 percent) and close to half of those with independent brokerages (48 percent) said their brokerage provides or pays for at least 60 percent of the tech tools they use.

Even larger shares of agent and associate broker respondents at franchised brokerages (91 percent) and independent brokerages (77 percent) said they use tech products provided by their brokerage daily or a few times a week.

And both groups handed relatively high marks to the technology provided by their firms. Tech tools from franchised brokerage earned an average rating of 7.02 out of 10 from respondents, while those provided by independent brokerage notched a score of 6.65 out of 10.

Inman attracts an audience that skews tech-savvy, and our survey, published in a post with the title, “Which real estate franchise (or indie brokerage) provides the best agent tech,” may have attracted a disproportionate share of brand advocates. It’s possible the survey’s results paint an overly rosy picture of agents’ attitudes toward their brokerage’s tech tools.

But at the least, the results seem to suggest that many brokerages have bought into the idea that providing high-quality tools is important to remaining competitive in today’s business environment.

Using your own tools

Yet brokerages should keep in mind that there are plenty of agents who prefer to cherry-pick many, if not all of their tools, directly from vendors, rather than through their brokerage.

This approach allows agents to use products that may be superior to company offerings and maintain a level of independence from their brokerages that protects their long-term interests.

“I get to pick what works for me, whereas at a larger office, what they pick may not be best for me,” said Daniel, who gets all her technology directly from vendors.

Daniel pays for MarketLeader’s CRM, which she says she has used for more than a decade, and buys leads from MarketLeader and realtor.com.

“It’s a big expense that I wish I didn’t have to take on,” but in reality, she said that this expense saves her money over the long haul.

Between “technology fees,” commission splits, transaction fees or other costs, agents are paying for the products provided to them by their brokerages, whether they realize it or not.

“… in my office I have an 85-15 split, where in other offices, it would be 60-40 split,” Daniel said in reference to offices that would offer a suite of tools for a relatively low fee — or even seemingly free-of-charge.

And the supposed discounts that agents at large brokerages may enjoy aren’t necessarily out-of-reach for agents at smaller firms. You can get them if you drive a hard bargain, like every agent should, she said.

Moreover, Daniel says she gets to write off her technology costs as business expenses — which is not necessarily the case for agents who get their digital tools from brokerages.

Another benefit of sourcing tools from vendors is that you can limit disruption to your digital workflow or contact database if you switch brokerages. Hall of Terra Firma Global Partners said she adopted Referral Maker CRM long ago, rather than CRMs provided by the franchised brokerages she worked at, “primarily because [Referral Maker] is something I can take with me anywhere.”

Why in the world, she asked, would she have invested in a company-wide CRM that she would have had to leave behind?

That said, in addition to potentially having to pay more for technology, agents who buy products directly from vendors may need to be quick-studies. They’ll have to rely on vendors alone for training and support.

“The downside of that is I have to train myself, wherein a larger house, a larger office, they have trainers that come in, which is nice,” Daniel said.

Outgrowing your tools

The more an agent builds out their business and familiarizes themselves with technology, the more they may stand to gain by adopting tools outside of those provided by their brokerage or franchisor.

Gloria Commiso, an agent at Hermosa Beach, California-based Keller Williams Beach Cities, is among the many agents who have outgrown their company’s offerings alone.

While eEdge used to cover most of her technology needs, Commiso has recently started using a number of tools that she gets directly from vendors.

She started paying around $40 a month for a high-octane CRM since co-launching the Coe Real Estate Team last fall with her business partner David Coe. And she uses DocuSign, which she says costs her about $200 a year, in conjunction with eEdge to manage transactions electronically. That’s because DocuSign’s digital signature functionality is better than eEdge’s, she said.

Commiso says she’s not “pulling out” of her brokerage’s bundle of tech tools “because it doesn’t work,” she said. “But my business has changed.”

So what can brokerages learn from these findings? Who’s doing it right and who needs to play catch-up? What do agents say they want? Keep reading to find out.

Download our full report with findings

Wanted: more training and support

While often lauding the quality of tools provided by their brokerages, many survey respondents said they still wished they received more help with learning to master them. Hands-on care was in particularly high demand.

“More face-to-face training, not just webinars,” said one respondent.

Less can be more

Many agents said they feel overwhelmed by the number of tools provided by their brokerage. Some asked for a more manageable set of products that prioritized ease of use over horsepower.

“Simplify technology tools. There is an excess of tools that might confuse the user,” one respondent said.

“They offer so many different options, partnerships and affiliates that it becomes too much to keep up with, especially if you are busy,” added another.

Integration

“So many products offered overlap,” was one overarching response addressing the frequent lack of integration between tools provided by brokerages. “Too many platforms do not communicate with one another. Very confusing.”

This is a challenge that some real estate firms are tackling head-on.

Take Realogy, which owns brands including Century 21, Better Homes and Gardens Real Estate and Coldwell Banker. The real estate franchising giant is building a marketplace that will only carry third-party products that can integrate with Zap, the proprietary real estate business platform based on technology developed by ZipRealty, which Realogy acquired for $167 million in 2014.

Leads

Brokerages who feed leads to their agents, either for free or in exchange for referral fees, can enjoy an edge in agent recruiting and retention over others.

While Daniel likes earning high commission splits and handpicking her own products, she said she often envies colleagues at the local Re/Max affiliate who are spoon-fed business.

Those colleagues earn significantly smaller commission splits when they close transactions with leads generated by their brokerage, but they still end up doing “killer business,” she said.

Brokerages often generate leads for agents by paying for exposure on listing portals like Zillow, Trulia or realtor.com, or through Facebook and search engine ads that drive leads to a brokerage website that can capture contact information.

Daniel said the local Re/Max franchisee has bought exclusive rights to leads from TigerLead and BoomTown, lead-generation systems that will strategically deploy a brokerage’s marketing funds across digital channels to drum up leads on a brokerage’s behalf.

“I would love to get those leads,” Daniel said.

Build tools into your DNA

Many brokerages tout their technology to attract recruits but don’t focus enough on baking it into their business model.

“They never put any effort behind the technology,” McClelland said of these firms.

McClelland says brokers should ask themselves: “How can we make this part of everything we do versus how can we can just market it and recruit off of it?”

Independent brokerages are more likely than franchised brokerages to feed leads to their agents, but they also tend to charge for leads more often than franchised brokerages, according to Inman’s survey.

Fifty-five percent of agents and associate brokers at franchised brokerages receive leads from their brokerage, compared to 65 percent of agents and associate brokers at independent brokerages. Four out 10 agents and associate brokers at franchised brokerages receive leads for free, while 15 percent have to pay flat fees or referral fees for leads.

Meanwhile, 34 percent of agents and associate brokers at independent brokerages receive leads in exchange for referral fees or flat fees, while 31 percent get them for free, our survey found.

To provide more insight into the different ways brokerages can address their agents’ digital needs and preferences, we’ve explored the technology models of a few firms below.

Fast indies

One technology model often used by quick-footed independent brokerages involves offering a basket of tools that, thanks to the advocacy and support of the firm, end up finding purchase with a majority of the firm’s agents. Some broker-owners may serve up these tools for little to no cost.

Most agents at Terra Firma Global Partners use the transaction-management system and intranet (powered by BackAgent) and the comparative market analysis tool (TouchCMA) provided by the brokerage, according to Hall.

The toolkit is financed by fees that agents pay to Terra Firma on every transaction that they close. Hall says these fees pale in comparison transaction fees commonly paid by agents at franchised brokerages.

Terra Firma is looking into offering a CRM and social media marketing service to all of its agents, but “whatever product we choose, we’ll be seeing that the agent can take it with them,” Hall said.

That should encourage adoption, along with the brokerage’s policy of securing buy-in from agents before signing up for a new product or service.

“We’ll take a temperature,” to determine if a majority of agents believe the benefits of the product justify the amount by which that product will nudge up their transaction fees, she said.

One advantage broker-owners of independent brokerages say they enjoy over larger firms, particularly, they say, many franchised brokerages, is the ability to quickly adopt and discard products. They also say they can compensate for less bargaining power than big brokerages or franchisors by snapping up freshly-minted products just as they hit the market — when they’re likely to be offered at promotional rates by vendors that want to stir up interest.

‘You can see us as a speedboat’

Total Care Realty, a Greensboro, North Carolina-based brokerage of 10 agents, provides an expansive set of products and services to its agents for no fees, according to broker-owner Larry Story.

The bundle includes a transaction management platform, CRMs, agent websites, mobile apps, social media marketing management and production of virtual 3-D models and videos for listings. He also furnishes his agents with free leads, which he generates by spending around $2,000 a month on digital marketing, including advertisements on listing portals.

“It is unusual,” he said in an email about shelling out cash for leads and then feeding them to his agents for free.

Then, letting loose a common rally cry of independent brokerages (or maybe just all brokerages), he added: “But, then again I am not a greedy individual. I did not start my firm to make money off of other agents like the traditional models out there.”

From a technology perspective (as well as other vantage points), Story said large brokerages resemble aircraft carriers. They can only shift directions at a slow, lumbering pace.

“You can see us a speedboat,” Story said. “I can turn on a dime.”

Story is on the hunt for a “CRM on steroids” that he will plug all of his agents into (assuming they consent). He’s also plowing full speed ahead into virtual reality. He recently ordered two headsets from Oculus Rift that will allow clients who visit his office to digitally transport themselves into the interactive 3-D models of his brokerage’s listings.

Minimalists

Some brokerages take the opposite approach as Total Care Realty, choosing not provide any technology at all to their agents.

The flexibility to choose your own products without burning cash on tools you don’t use, as well as the possibility of getting higher commission splits — which could more than offset higher out-of-pocket costs — can be among the benefits of this model to agents.

Given the downsides of sourcing tools from a brokerage, the laissez faire strategy might have staying power.

But agents at these brokerages may have to expend considerable effort finding the tools that are right for them. They’ll also likely be regularly tempted by the siren call of turnkey digital solutions, like toolkits and a steady supply of leads, emanating from competing brokerages.

Shades of franchisees

Many franchised brokerages may affiliate with franchisors, in large part, for access to product offerings that they can hand down to their agents. These firms may not hunt for the latest cutting-edge products with the same zeal as other brokerages, said Steve Weiss, broker-owner of Coast & County Brokers, a 14-agent independent brokerage based in San Luis Obispo, California.

As the former managing broker of around 100 agents at a franchised brokerage, Weiss found that an attitude of “I don’t need it, and I’m doing my own thing” seemed to characterize many of his agents’ view towards his previous firm’s tech offerings.

Weiss keeps things simple at the brokerage he founded after leaving that franchisee. He offers a transaction management platform (powered by SkySlope), digital signature technology (DocuSign) and agent websites. His agents have overwhelmingly embraced the ensemble, he says.

But not all franchisees are content to merely forward their franchisor’s tech offerings to their agents. Some take a hybrid approach, serving up franchisor-wide tools, which often appeal to less experienced or tech-savvy agents, along with alternatives or supplements that they source from third-party vendors, or even develop in house.

Take Better Homes and Gardens Metro Brokers, for example. Agents pay $43 a month for access to a toolkit that includes both franchisor-wide products and others built or sourced independently by the 1,900-agent brokerage, according to McClelland, the firm’s chief operating officer.

Many of the brokerage’s agents use franchisor-wide tools, such as Better Homes and Gardens’ customer relationship management system (powered by MarketLeader) and learning management system, he said

But “when they start outgrowing the franchisors’ systems that they have in place and they need something that’s more customizable and more robust,” that’s when they turn to other products included in their monthly fee, he said.

Those include a proprietary CRM and lead-management system that tells agents when leads are ripe for contact. And agents of all experience levels use a proprietary platform developed by Metro Brokers that lets agents easily find colleagues to host open houses on their behalf.

Like many large brokerages, Metro Brokers can find it challenging to nudge agents into taking advantage of some of some of its tech offerings. But McClelland believes Metro Brokers enjoys higher adoption rates than most because the firm seeks to build its tools into its “DNA.”

The brokerage’s tech hotline and five-member support staff, who provide assistance by phone and in person, also likely help shore up usage of its medley of tech tools.

Metro Brokers may have built a solid technology framework for its agents. But don’t forget: If you join the brokerage, you’ll have to use a company email address. At least, that’s policy.

Take a look at how the tech offerings of Century 21, Keller Williams Realty, Coldwell Banker, Re/Max and Berkshire Hathaway HomeServices, based on responses from agents and brokers (including broker-owners) to our survey.

Download our full report with findings

Email Teke Wiggin.