Teams are good, boutique teams are better, survey finds
In a new study from Side, agents on boutique teams reported higher levels of satisfaction and higher earnings compared with traditional brokerage teams.
- Franchise brands tend to have more resources and cutting edge technology, but that may come with a price.
- "Boutique firms have very unique cultures where they stand for something slightly different than a big, corporate entity."
- With more access to the latest tech, boutique teams are becoming more popular.
As Wilson Leung was getting established in the south San Francisco real estate market, it took some time for him to realize that the best way to build his brand was to establish a boutique team.
Leung, who operates OWN Real Estate in Millbrae, Calif., began his real estate career at more traditional firms, California Prudential and Keller Williams, before partnering with Side to start a boutique team.
"Prudential taught me a lot of the basics, KW taught me how to build a team, and Side really encouraged me to build a brand around my team," Leung said in an interview. "Boutique firms have very unique cultures where they stand for something slightly different than a big, corporate entity."
Boutique real estate firms, which offer a highly personalized, customer-service approach, tend to go through cycles in popularity. For a time they will flourish, but then the numbers will fall, usually through consolidation as larger real estate firms snap them up.
"Every once in a while, big corporations will sweep through and acquire all the boutiques," said Katherine Mechling, director of communications at Side. She noted that it happened in the 1970s and 1980s, and over the past decade, Compass has successfully recruited many boutique teams into its fold.
Side, which partners with high-performing agents to establish boutique teams, recently commissioned a study on how these high-touch teams are performing. The study, which polled more than 100 agents across the U.S., noted that many questioned the viability of boutique teams a decade ago when the industry was in the midst of a major correction, but in that time these teams have flourished.
Among the findings, 89% of agents on boutique teams felt the team was essential to their success, compared with 72% of team agents in general, including those affiliated with large real estate brokerage firms.
Satisfaction levels among boutique agents were especially high — nearly every agent (98%) who joined a boutique team reported a positive or extremely positive experience, compared with a 77% satisfaction rate from other team agents. That could be due, in part, to their bottom line: Almost all agents who joined boutique teams (96%) reported higher earnings, while 75% of agents on other teams reported an increase in income.
For many agents, choosing the right system comes down to priorities. With larger budgets, national brokerages tend to offer more cutting-edge technology with the goal of making the process easier for the agent and the client. Having a national brand also helps with recognition, particularly when it comes to landing new business. But those benefits can come with a price, in the form of fees or less favorable commission splits.
Mechling said the boutique team concept has attracted more interest in recent years, partly because technology and training resources are more widely available, making it easier to compete with the bigger teams at traditional franchise brokerages.
Leung agreed, adding that smaller boutique teams have more flexibility in choosing the technology that works best for them in a specific market.
"Being a boutique firm, we can choose to use or let go of a piece of technology so much quicker," Leaung said. "Being boutique, running it like a business… I can make decisions really quickly, without the influence of a big firm telling me this is the right way to do things. Everyone's business is so different, even if it is part of a big brand."
Leung's advice to agents is if the core values of their brokerage don't align with their business philosophy or personality, it might be time to explore the idea of a boutique team. While there's no magic number, Leung said the successful boutique teams he's seen are often fairly small, around 2-12 agents, with several experienced, strong performers.
"It definitely takes a leap of belief and faith to go from big brand to boutique… but there are definitely no regrets," Leung said. "The fear of moving away from a big corporate brand to creating your own boutique firm in the moment feels like much greater of a risk than it turns out to be."