A real estate office surrounded by dollar signs
Illustration by Lanette Behiry/Real Estate News

Ancillary services a steadying force in an uncertain market 

Adding property management, title or other services can help a brokerage during any market by increasing revenue streams and improving customer service.

February 12, 2024
5 minutes

Key points:

  • Offering ancillary services gives brokerages insight and knowledge that make transactions easier for customers.
  • Though most services can still be affected by the ups and downs of the market, the extra cash flow can be a boon in slower times.
  • Brokerages can think outside the box and provide ancillary services beyond just property management or mortgages.

Whether it's property management, new home construction or even location scouting for the film industry, ancillary services can help brokerage companies grow their businesses in a tight housing market.

Offering ancillary services is "not just important, it's imperative in both good and bad markets," says Casey Brown, owner and CEO of Reliant Realty ERA Powered in Tennessee and Florida.  

"Regardless of the market, possessing a deep understanding of all aspects of every profession that affects the real estate transaction makes you a better agent or agency for your clients," he said. 

And in a down market in particular, businesses that expand can thrive.

"Obviously, multiple revenue streams are better than one, but many are lashed to the same mast and will rise and fall together with the market," said Brown. "Others, like insurance and property management, provide a good counterbalance in down markets as they are contractual over time rather than transactional."

Brown knows firsthand. In addition to traditional real estate sales, Reliant offers title services, mortgage lending, property and casualty insurance, and long-term property management.

If you build it, you can sell it

A down market helped launch NEXT Real Estate Group ERA Powered in Roseville, California. For NEXT, traditional home resales is the ancillary service in some ways. Principal Broker Christopher Brown (no relation to Casey Brown), started his career in sales for homebuilders almost 30 years ago. 

Then the financial crisis hit, and in 2008 his services were no longer needed. "So I, and my now business partner, we're getting together over coffee because we really had nothing to do and decided, 'Well, let's start a company.' And so we started an outsourced sales and marketing company for our homebuilding friends."

"We started in a down market by force. It wasn't by choice," Christopher Brown said. "But what we learned through that down market is we got humble and we learned how to live lean and it forced us to be a lot more creative than we were in our previous paying jobs in the homebuilding space. And so it really forced us to think differently, and you know, that's my favorite thing to do now."

The company initially focused on close-outs of model homes, but as the housing market recovered, it grew into a full-fledged white label sales and marketing company for homebuilders that don't want to maintain their own sales staff.

About seven years ago, a friend working in homebuilding said he wanted to get his real estate license and work for NEXT. 

"And then the conversation kind of evolved to, 'You've got your contractor's license, right? Let's start a homebuilding company. And that's what we did."

NEXT Crafted builds both custom homes and subdivisions. While the resale market has always been a part of the business, it wasn't a focus until last year, when the company signed up with ERA. 

"As these cycles go, you know, when resale is up, you're fine," He said. "But adding something that helps you get through these tough times is important, and new construction absolutely does that, especially right now. … New homes are still thriving because we're the only ones that can provide inventory in the market right now."

He acknowledges that new home sales aren't as exciting when the resale market is booming. "It is a thinner margin than it is on the resale side," he said. "But it is much more consistent."

Making a scene in the Hollywood of the South

For Atlanta-area Keller Williams agent Amy Fuchs, 2008 was notable for two things: The crash in the housing market coincided with Georgia establishing a tax credit for filming in the state.

"But there was not really any infrastructure for the film industry in Atlanta," she said. While showing a mansion to a producer, she overheard a discussion about other location needs. "If you need a horse barn, or a ballroom or a house that looks like it's in Florida, who knows better than a Realtor?"

Film companies weren't excited to work with traditional real estate agents, and Fuchs said most brokerage companies were dubious about working with filmmakers. So she co-founded InFocus+ to provide a way to connect homeowners with Hollywood. The company has provided mansions for scripted and reality television shows, along with gardens, pools — and yes, horse barns.

Productions need not just filming locations but short-term housing for cast and crew. InFocus+ helps property owners marking their homes to the film industry and makes it simpler for productions to film in Georgia.

And it supports her traditional real estate business. "It's been a great revenue generator and database builder," she said. "We wanted new ways to meet homeowners."

Brokers are already doing the hardest part

Reliant's Casey Brown said brokers who fear the challenges of  ancillary service offerings are missing out. It may not be easy money — but it's easier than they think. "Don't wait," he said. "Being a real estate brokerage operator is not just hard, it's the most difficult of them all to run at a high level over time."

"As a broker/owner, you're already putting in the lion's share of the work," he said. "You've already created the opportunity to be part of the real estate transaction. Adding in additional ways to capitalize on the transaction while ensuring it's done correctly on the ancillary side is not just a healthy choice, it might be easier than you'd expect."

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