How Hybrid Brokerages May Change Real Estate Forever


Real estate brokers are authorized to conduct real estate transactions for real estate consumers. In part, this is because specialists in the real estate market possess the real estate expertise and experience needed to ensure better results. However, it should also be noted that most real estate consumers lack the time needed to acquire that real estate expertise and experience, thus making the hiring of a representative a much more practical solution to their problem than attempting to handle it on their own.

In modern times, real estate brokers have teams of real estate agents, which are responsible for most of the interactions with the real estate consumers. Instead, real estate brokers serve in a supporting role by providing real estate agents with tools as well as other forms of support, thus making it possible for them to do their jobs. In exchange, real estate brokers receive the commissions for completed real estate transactions before using a percentage of the sum to pay the real estate agents who conducted them.

How Do Hybrid Brokerages Differ From Traditional Brokerages?

Like their name suggests, hybrid brokerages offer an alternative to their traditional counterparts for those who are averse to such systems. However, their unorthodox nature means that there can be great differences between one such brokerage and the next, meaning that interested individuals should make sure to evaluate each one on their own instead of making assumptions based on their knowledge of other brokerages that have received the same label.

For example, some hybrid brokerages are labelled thus because they offer lower commissions to their customers, which can be attractive to both real estate consumers who are looking to get their real estate transactions done while spending as little as possible as well as real estate consumers interested in more expensive real estate properties who feel that the services of their real estate agents might not be worth spending so much. In other cases, hybrid brokerages might be labelled thus because they run on a flat fee basis rather than a percentage fee basis, meaning that there is an upper limit to how much their customers are expected to spend.

In further detail, one excellent example of hybrid brokerages is Redfin, which offers a much lower commission of 4 to 4.5 percent compared to the usual 5 to 6 percent as well as a host of techniques and technologies meant to improve the experience of its customers. However, it is interesting to note that even though Redfin is considered to be one of the best-known hybrid brokerages out there, it has adopted a number of characteristics that are associated more with its traditional counterparts. Something that is particularly interesting because traditional brokerages have been known to do something similar in reverse.

As a result, it could be said that hybrid brokerages and their traditional brokerages are not necessarily mutually exclusive but instead different modes for the same business that can co-exist in the same industry. For that matter, some of what has happened in the past as well as some of what is happening in the present suggests that their relationship could well be synergistic rather than destructive in nature, which should come as encouraging news.

What Does This Mean?

At this particular point in time, there is no reliable method that can be used to predict the effect of hybrid brokerages on the real estate market as a whole. Some people believe that their rise will continue for the foreseeable future, thus upsetting making real estate even more unpredictable by upsetting some of the long-standing assumptions in the field. In contrast, other people believe that such companies are no more than a short-term phenomenon created and sustained by the booming real estate market of the present, meaning that they are fated to fade as soon as those conditions start to change.

Whatever the case, it is interesting to note that even if hybrid brokerages fail to change how real estate consumers buy and sell real estate properties on a fundamental level, their successes so far are bound to have an impact on how their traditional counterparts run their businesses.

For example, since hybrid brokerages put so much emphasis on their lower costs compared to their traditional counterparts, it is possible that the latter will start putting more and more emphasis on their customer service in an effort to blunt the blow by co-opting the narrative. In other words, they can choose to acknowledge their higher costs and point to their superior customer service to excuse those higher costs, all while stressing how important it is that real estate consumers have someone with real estate expertise and experience on their side when engaged in something so important.

Furthermore, since hybrid brokerages have been making such extensive use of the latest techniques and technologies, it seems probable that their traditional counterparts will do the same in order to keep up with the times. In fact, there is reason to believe that this will be the case, seeing as how traditional brokerages started publishing MLS information on their websites in the middle of the 2000s in direct response to the hybrid brokerages of the time doing the same.

In more practical terms, this means that even if hybrid brokerages fail to change how real estate consumers buy and sell real estate properties on a fundamental level, their existence can still serve to benefit real estate consumers in the end. After all, more competition for the same number of prospects means more time and effort being poured into making sure that the experience is as pleasing as possible, which tends to be correlated with a better outcome overall.

For that matter, there can be no doubt about the usefulness of innovation for real estate consumers, which becomes evident the moment that someone compares the real estate brokerages of modern times with their counterparts from one or two decades ago. Summed up, real estate consumers should not expect hybrid brokerages to make too big of a splash, but they should expect the real estate industry as a whole to continue improving on their products and services in the ongoing effort to snag more and more customers.




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