Running a real estate brokerage has its share of expenses. Payables—large or small—are a necessary part of doing business. Expenses like rent, office supplies, insurance, furniture etc. are easy to understand and manage. What is less obvious are the investments in marketing, advertising and technology that many brokers spend thousands or even tens of thousands of dollars on each month. The temptation to periodically cut these expenses requires a much more considered analysis that can’t be based completely or even in some cases, primarily on pricing. Conversely, you shouldn’t drop precious budget dollars on every new shiny thing that comes on the market.
Necessity Of Large Expenses
You must build and advertise a reputable brand to draw clients to your listings, competing with more well-known franchised brokerage names. Brand building for the independent brokerage can quickly eat away at your budget, especially when figuring all your advertising expenses. According to data published in 2012-2014 by the Association of Real Estate License Law Officials, U.S. real estate agents and brokers spent approximately $8.9 billion on residential advertising in 2015. That’s a substantial amount of money, yet an important expenditure if you are to compete for listings and credibility in your local market.
Let’s not forget our need for technology, and its ever-increasing role in real estate. Other than general IT set up and maintenance, customer relationship management (CRM) is a large, yet crucial, cost of doing business that can help streamline much of the real estate process in a busy brokerage. CostOwl reports that in 2018 inhouse CRM costs range from $100 to $1,000 per user plus maintenance, support, updates and potential customization, while web-based CRM systems run $50 to $100 per user every month with lesser fees for smaller brokerages.
Expense Analysis Revisited
As you know, with some business items, using a less expensive version works just as well and saves money. But this isn’t necessarily true for larger purchases. Of course, you want to spend money that provides the most value and significant benefit to your brokerage. It’s always a good idea to consider your bottom line when factoring in a new or recurring expense, but there is a difference between purchasing a store name brand to save money on office supplies versus buying a bargain basement real estate CRM technology because it has a lower up-front cost.
In the case of a CRM for example, between increased labor in transferring data, lost production time and price of a new system, it’s more cost effective to choose the right CRM system for your brokerage from the start. One that provides high value, and is right for your operation, rather than choose a system based primarily on price. When you are part of a franchise, such as Weichert, you typically have the added benefit of a CRM that they’ve already vetted or customized. The Weichert CRM, for example not only provides top tier real estate features such as contact management, marketing automation, open house management, and mobile app access, but its internal workflow has been designed to echo the best practices brokers and agents are taught on their roadmap to success. Your ability to integrate a CRM into your operations is just as important as the CRM feature set and this is not an area to pinch pennies.
Look At The Whole Picture
Why be penny wise and pound foolish, as the saying goes? Look at the whole picture of expenses in a way that incorporates a wider view of their utility. Once you’ve made these decisions, give these expenditures a chance to prove themselves. Advertising mediums can be tagged to understand how much additional sales you are getting from expenditures on each. Technology can be judged to large degree on the utility it provides to you and the feedback of your team on its usefulness and ease of use. Budgeting more for items that can have big payoffs in the long run, such as specifically targeted brand advertising or an efficient CRM system can increase the brokerage’s long-term income and reduce their operating costs in a way that more than offsets the cost of the advertising or system.
Gain Access To Systems That Work
At least some of the headaches’ associated with expense management and analysis can be helped by having some deep, expert experience in your corner. Having the resources of a franchise system behind you can save you tremendous time vetting options and more time being productive. Not only do you instantly gain a brand name that matters, input from your coaching team and fellow franchisees about many of the most agonizing expenditures you face is always just a phone call away.
Could your brokerage benefit from this? Learn more at weichertfranchise.com or call 877-533-9007.