The recent announcement of Homie’s decision to strip its brokerage services and end employment for its real estate agents has once again brought the discussion of alternative models in real estate to the forefront. As someone who is invested in this industry, I see this development not as a failure of one company, but as a testament to the ongoing evolution and diversification within the real estate industry.
I vividly recall when Homie first entered the market. I pondered how they could offer the assistance that buyers and sellers required at such competitive rates. Although I remained confident in my skills and the value I brought to my clients, I couldn’t help but question how I would compete with a company capable of offering such low-cost representation en-masse.
From disruption to its recent restructuring, Homie’s path so far highlights the complexities and challenges inherent in introducing different types of business models to an industry, particularly those that lower fees. The company’s initial approach, offering flat fees and leveraging technology to streamline processes, initially captured attention and gained traction, promising to change how real estate transactions are completed. Limited service brokerages, like Homie, have played a big role in challenging the traditional norms of the real estate industry. By offering consumers more affordable options and greater flexibility, these models have expanded access to real estate services, particularly for individuals and families navigating an arguably more difficult housing market.
However, as Homie’s recent announcement shows, the path to innovation is never without its obstacles. Despite its initial success, limited service brokerages do face significant challenges, and for Homie it included a post-pandemic market, leadership changes, and ultimately, a fluctuating need to reevaluate business models depending on how the market is at that given moment.
Here’s where I’ll stop to reiterate that we need to recognize that Homie’s current issues are not unique only to them. Many limited service brokerages have faced similar hurdles in their quest to disrupt the status quo. Yet, their presence in the market has undeniably influenced the broader real estate community, prompting traditional firms to adapt and evolve in response to changing consumer expectations.
These alternative models have shown that the real estate model of the 80s, 90s, and early 2000s, where a real estate broker got a significant percentage of the sales price for putting a sign in a yard and entering some data into the MLS, are over. That’s what discounted brokerages are for now. For everyone else, consumers expect more, and rightly so! Brokerages who command a premium on the marketplace need to be able to show their value with their experience, skills, network, and the level or service they are offering.
When Homie arrived in town, I recognized the need to differentiate myself by offering a level of service and representation that buyers and sellers would be unable to find at a limited service brokerage. I committed myself to elevating my expertise by undergoing additional training to become certified in skills like negotiation, market analysis, and interior design. Moreover, I increased my investment in marketing for each listing and initiated complimentary staging and cleaning services for my clients at no additional cost. Later, as I built my team, I structured them to ensure that every client received personalized attention from multiple highly skilled Realtors, each with a comprehensive understanding of their unique circumstances. By stepping by my game, I cultivated a loyal clientele base who regularly refer my team and I to their friends and family and would never dream of going anywhere else for their real estate needs. In this sense, I appreciate competitors who motivate me to continually raise the bar and maintain excellence in my field.
As real estate professionals, we must take stock in the value that alternative models bring to the table. Competition breeds innovation, and limited service brokerages have spurred traditional firms to reassess their practices and invest in areas such as technology, marketing, and customer experience. Applying that to the day-to-day, this translates into practical actions like investing in online and print advertising, refining individual skills and certifications, and dedicating human labor and resources to each listing or client, ensuring they receive tailored, expert service. In an era where AI is all the rage, we prioritize human involvement at every stage of the process, from making marketing decisions to communicating with and guiding clients. While other companies gravitate towards AI for scalability, we understand the irreplaceable value of a personal touch.
Full service brokerage firms have now had to take a hard look at these disruptors and focus on what ultimately matters: providing exceptional service and value to clients. While limited service brokerages may emphasize cost-effectiveness and efficiency, the importance of personalized attention and tailored experiences for every client is still what will ultimately seal the deal for clients, along with high experience/expertise level, an agent’s reputation and proven track record, and an agent’s willingness to invest in their clients and community. The approach of limited Service brokerages includes mass listings and high transaction volume with all Realtor experience levels versus the traditional emphasis on personalized service and some would argue – quality. The argument often made is that more experienced realtors at traditional firms prioritize client satisfaction by offering tailored experiences and less of an emphasis on transaction volume, as we’ve read in the news about Homie’s reported issues of overwhelmed agents.
Regardless, the evolution of limited service brokerages like Homie serves as a reminder of the shifting nature of the real estate industry. While not every innovation will succeed, each one contributes to the collective progress and advancement of our profession. By embracing alternative models, we can continue to push the boundaries of what’s possible in real estate, ultimately benefiting consumers and practitioners alike.
Alexandra McEwen is a Realtor with McEwen Realtors.
This column does not necessarily reflect the opinion of HousingWire’s editorial department and its owners.
To contact the editor responsible for this piece: zeb@hwmedia.com