Local and Independent
As a customer, have you ever wondered about the pros and cons of working with a strong local real estate firm versus one which carries a national franchise name?
While quality in both types of companies can vary as with any type of business, it may help to understand some basic operational differences between the two:
The vast majority of companies which carry a national name are locally- owned franchises. In exchange for the use of the name, they pay a monthly franchise fee which is usually 4-7% of their revenue, leaving a narrower profit margin to provide targeted local promotion and services for customers and clients.
The majority of residential real estate - some 65% - is sold by locally-owned independent brokerage firms, not national franchises.
Studies show that franchised firms are often newer to the real estate business and may join franchises for the market presence and training provided.
Independent brokers feel an acute sense of accountability, since their local reputation is everything, while a franchised company's name is tied to the national organization.
Many firms are Agent Fee or 100% firms which are also are franchised companies. This type of company structure has important implications for the consumer. Agents who work for a 100% shop pay a monthly desk fee and keep all of their earnings. Because "the broker of record" for the office earns no more for closed transactions and does not feel the sense of accountability that a traditional broker feels, the consumer may encounter little support if a problem arises with an individual agent. That is not the case with a traditional, independent firm.
Franchised companies in a metropolitan area are often comprised of many individually owned single offices. When they discuss market share for the franchise, make sure they are discussing their individual office versus other individually-owned independents, in order to get an apples-to-apples comparison.
If you want the quality and professional commitment that comes only from total accountability, work with the kind of independent brokers you'll find at Ambard & Company.
We are not a franchise. We believe that bigger does not always make better but experience and expertise do. Money spent on franchise fees etc., can be used more efficiently for our buyers and sellers in this unique market.
In fact, over 60% of real estate sold in America is handled by independent brokers, not franchise brokerages. We believe that real estate is a larger more personal investment, and people do not make impulse decisions on their Realtors like they would on where they would eat a hamburger. Remember you work with the Agent and not the Company. Choose a company which associates with Agents that pridethemselves on personal service, ongoing education and client satisfaction.
CCIM- "The PH.D. of Commercial Real Estate"