CEO of fast-growing platform pitches ‘brokerage as a service’
Pinnacle Realty Advisors CEO Sam Sawyer discusses his company’s model, growth trajectory and the traps they’re trying to avoid along the way.
- Sawyer said the company has 700 agents across five states and will soon be launching in California.
- He borrowed his model from the software industry, but doesn’t think of his brokerage as a tech company.
- Sawyer also warns of recruiting strategies at companies like Compass and eXp that may have run their course.
Sam Sawyer, CEO of Pinnacle Realty Advisors, got his real estate license in Dallas at just 19 years old, he told Real Estate News. He built up a traditional, boutique brokerage over the following years, then ended up selling his business to Compass. But after a short stint with the mega-brokerage, he decided to move to San Francisco to get into mortgage fintech and away from the brokerage world.
It was while working in the Bay Area that Sawyer saw an opportunity to start a new model for residential real estate.
"We think of it as 'brokerage as a service,'" he said. "You know, similar to the term 'software as a service,' where agents can take the plan they want, they pay a monthly fee, there's very transparent pricing, and it's very clear what services they get."
'Brokerage as a service' model allows agents to customize their business
Sawyer launched his firm in 2020, in the midst of the pandemic, with the belief "that the current brokerage model is broken and needs to be completely rebuilt."
Broadly speaking, the brokerage offers a fully cloud-based, 100% agent commission structure. But the way it works, Sawyer explained, is almost like an a la carte service where agents or team leads can pick different plans at different monthly or annual costs.
Those who choose the annual plan may be lower volume agents, Sawyer suggested, where they pay one upfront cost for their annual subscription plus a transaction fee at each closing. For agents or team leads who go with the monthly model, the per-transaction fee goes away, but there is an additional monthly fee for each team member.
And then there are different tools and services the company offers, he explained, such as web development, marketing, administrative services and so on. Sawyer likened it to starting your own franchise or brokerage and having complete control over the business model and identity. An agent or team lead could spend thousands of dollars having Pinnacle build out its web presence, but if they have their own tools and website, that's fine too, Sawyer said.
"It's a way for someone to launch their own business or their own brokerage in a way without having to go out and set something up from scratch," he said. "We're still the broker and handling a lot of the operational duties and things behind the scenes, but they're able to focus on marketing, you know, growing their team — the things that a lot of agents like doing."
According to Sawyer, Pinnacle Realty Advisors now has approximately 700 agents across several states: Texas, Louisiana, Florida, Arkansas and North Carolina. The firm is currently working on getting licensed and established in California.
When big tech brokerages like Compass and eXp 'lose their way'
While Sawyer likens Pinnacle's business model to products and platforms offered by tech firms, he's also careful not to lean too hard into tech cliches. For one, he said that they're not necessarily trying to brand their company or service as a disruptor to the industry. Many other proptech companies have already tried that, he said, and the hype eventually fades.
"I think in the last 10 years, a lot of companies that have tried to change the space weren't run by real estate agents," he explained. "All these firms are all tech or Wall Street people. They don't have real estate agents running the company, and they lose their way eventually."
For instance, when Compass was growing, the company boasted about its ability to build and roll out proprietary tech tools for agents as one of its core competitive advantages. But the reality, Sawyer said, is that it's difficult to get agents to adopt a lot of these tools. And in some ways, they can become a distraction.
"We're working on automating a lot of our business processes and things behind the scenes, but we're not trying to be like Compass and build a bunch of software from scratch that no one really cares about using," he said.
And while Sawyer has rejected the one-size-fits-all approach to establishing and running a real estate brokerage, he said he's not impressed with profit-sharing or revenue-sharing brokerage models, adding that Pinnacle will likely never utilize that strategy for agent growth.
"I think that incentivizes really bad recruiting and a lot of other things," he said. "I think eXp actually had a good run with that, but I really think it's starting to hurt them right now. To be honest, we just really want to focus on providing really good service and pricing to keep it literally as simple as possible."