Why boutique brokerages have the competitive advantage in a crowded market

Competition in real estate has never been this fierce.

Last month, NAR reported a record-high membership of 1.56 million REALTORS® in 2021 — the same year a total of 6.12 million homes were sold nationwide. That works out to fewer than four listings for every REALTOR® in America (and that calculation doesn’t even include agents who don’t pay dues to NAR).

That’s why it’s more important than ever that you take steps to differentiate yourself. And one of the best ways to give yourself a leg up over the competition is to align with a boutique firm.

Here’s why:

1. Boutiques are all about personalized service — and that’s what consumers want

Consumers are more likely to do business with a company that offers highly personalized, bespoke service. Real estate is not immune to this trend.

Boutique real estate firms, with their unique branding and local ownership, are able to deliver on the personalization consumers crave far better than their one-size-fits-all competitors.

“In a way, consumers treat brokerages like they do restaurants: You want to go where you know the owner, where there’s a unique flavor, where they’ve built a sense of community,” said Paul Barbagelata, founder of the boutique BarbCo Real Estate in San Francisco. “Boutiques are able to create that unique culture and sense of belonging in a way the national chains just can’t match.”

2. Consumers associate the national chains with mediocre agents

A remarkable 89% of Americans say they have little to no trust in real estate agents. That’s directly correlated to the fact that 70% of transactions are facilitated by part-timers who lack the skill, professionalism, and customer-centric approach of the best agents.

Having so many part-time agents out there does not benefit consumers. But traditional brokerages continue to hire part-timers because the brokerage actually makes more money from 10 part-timer agents completing 1 transaction a year with a higher split than they do from 1 full-time agent completing 10 transactions a year with a lower split.

Even the best agents will find their reputations stained if consumers associate their brokerage with inexperienced agents and lackluster service. Whereas a boutique real estate company that prioritizes hiring only the highest quality agents, like Lindsay Reishman’s Pareto in Washington, D.C., can boost the reputation of everyone involved.

Said Lindsay: “Jim Rohn is famous for the phrase: ‘You are the average of the five people you spend the most time with.’ Agents understand this. When we’re surrounded by talent, we set bigger goals, conversations are elevated, and we grow more professionally.”

3. Well-resourced boutiques dominate their markets

Personalized service and fewer (better) agents does not have to come at the expense of high volume. Take BarbCo, which closed $448 million in volume as a boutique last year alone.

“The fact that we are boutique is our number No. 1 strength,” said Paul. “The community feels like they can count us not just for selling homes but being active participants in supporting the local community. We encourage people to rely on us for advice, recommendations and donations.”

BarbCo’s strategic partnership with Side, the brokerage-as-a-service platform specifically designed to support market-leading boutiques, has helped accelerate its growth. With Side handling his back-office management and tech implementation, Paul has more time to devote to his agents and to developing his company’s culture.

Bryn Stroyke, co-founder of the boutique Stroyke Properties Group with Bayside Real Estate, has seen similar success. Since partnering with Side in 2019, Stroyke Properties has grown from roughly $150 million to over $320 million in closed transactions in 2021.

“Our partnership with Side is giving us the resources of a large firm while letting us maintain the freedom and culture of our high-end boutique. It’s a dynamite combination.”

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About Side
Side is a behind-the-scenes brokerage platform that exclusively partners with top-performing agents, teams and independent brokerages to create and grow their own boutique brands without the cost, time or risk of operating a brokerage. Side’s proprietary technology platform and premier support solutions empower its agent partners to be more productive, grow their business and focus on serving their clients.