the brokerage of the future
the brokerage of the future
Issue 71 - February 11th, 2022
Pinnacle Realty Advisors is a full-service, agent-forward, 100% commission brokerage.
Residential real estate brokerage firms have remained relatively unchanged for the last few decades. Most firms today operate on the “commission-split” business model between the brokerage and their agents. Most firms also typically have large office footprints for their staff and agents. Generally speaking, firms that let agents keep the bulk of their earned commissions provide very little service, while brokerages who tout high levels of service take a large chunk of their agents’ earned commissions.
Most large, well-known, brokerage companies today are competing in this same “split and service sandbox.” Their primary revenue generator is the fee split they take from their agents on each property sold. They have to find creative ways to achieve a “good enough” level of service and support to seemingly justify their value to the agent, while at the same time making enough money to keep their business moving forward.
We think the “office-focused commission-split business model” is a very outdated way to run a real estate brokerage business today. This structure stifles any sort of real innovation for agents because this business model hardly makes any money in today’s world, since brokerage firms are also constantly in a commission split arms race to recruit agents to their firms. It is a race to the bottom for traditional brokerage business models with large office space footprints, and as a result, the quality of service they’re able to provide their agents continues to decline. Legacy firms with outdated business models and heavy overhead costs such as office space cannot properly invest in the future for their agents as most are just trying to find ways to survive as the industry becomes more competitive.
At Pinnacle Realty Advisors, we are the “everything brokerage platform” for agents in small markets, large markets, luxury markets, or middle of nowhere markets. We have built a brokerage platform that truly serves agents of all kinds and we empower our agent partners to be as successful as possible by offering a best in class combination of service, support, technology, and financial architecture for their business.
Our vision of the future for the residential real estate brokerage industry is vastly different than it looks today. We believe our job as the real estate brokerage is to treat our agents like they are truly our customers. We strive to exceed their expectations with high-quality service at the lowest possible cost.
We are building this company from the ground up to thrive in today’s fast-paced world. We believe that our cloud structure and subscription-based fixed fee business model architecture will fuel a tectonic shift in the way this industry operates in the future.
Superior Business Model Architecture
Cloud-based and fully remote company with all staff and agents operating and connecting online
Ability to serve customers efficiently, scale quickly, and launch new markets easily
We have built an incredible recruiting and onboarding engine for agents. All of our agent recruiting efforts are done digitally and online; we do not rely on in-person recruiting or onboarding to drive growth
Superior Agent Financial Structure
We only charge agents fixed monthly subscription fees and per deal transaction fees letting them keep 100% of all commission earned on each successful closing
If real estate fees are compressed in the future, our firm’s financial model is unaffected and our agents will flourish where as legacy firms rely on high commission fees to support their outdated business models
Superior Combination of Financial Structure, Service, Support, & Technology
Agents today want brokerage partners that provide the best combination of financial structure, service, support, and technology. We make every decision with our “agent as our customer” mentality to continue to deliver exceptional service to our agent partners.
Our cloud-based structure allows us to focus on prioritizing our dollars into tools and human support systems for our agents. We are also able to keep our costs to agents (our customers) extremely low because we are not spending money on costly overhead, freeing us up to focus on investments into resources for our agents.
At Pinnacle Realty Advisors, we believe real estate agents deserve a better brokerage option than what is available today. When incentives are aligned between a brokerage firm and its agents, the consumers benefit too. All companies must adopt a consumer-first mindset, or they will eventually go out of business. Our agents receive consistent, high-quality service; can make more money with lower fees, and serve their clients better for a lower cost — this is the future of the residential real estate brokerage industry, and we are excited to embark on this journey to build an industry-transforming company at Pinnacle Realty Advisors.
“a new chapter”
Check out my most widely read Substack post yet: we made a HUGE announcement a few weeks ago announcing our rebrand from Archetape to Pinnacle Realty Advisors. We are PUMPED for the year ahead!
Newsworthy Links To Share
Opendoor launches services in San Francisco Bay Area: Opendoor will buy Bay Area houses built after 1940 and valued between $400,000 and $2.5 million, which it says is 60% of the market. (Housing Wire)
Zillow’s Shuttered Home-Flipping Business Lost $881 Million in 2021: Zillow said on Thursday that it lost $881 million on its algorithmic-driven home-flipping business last year in its first earnings report since the real-estate company shut down that operation in the fall. The full company, which includes Zillow’s profitable home-listing and advertising business, posted a consolidated net loss of $528 million in 2021, mostly because of its home-flipping business, Zillow Offers. (WSJ)
First-time buyers use pandemic funds to help save for down payments-Rather than spending their federal pandemic stimulus money, some Americans banked it, and now almost one-quarter of first-time home buyers (24%) are using those funds to help with their down payment, a Redfin survey found. An additional 23% responded they are going to be able to fund all or a portion of a down payment because of extra savings they were able to make during the pandemic because of lower expenses. (National Mortgage News)
Tesla plans to add another manufacturing facility adjacent to the 4.3 million SF Giga Texas manufacturing facility. The new building would cover more than 2,000 acres at 12733 Harold Green Road in Austin’s Del Valle suburb.
The upcoming plant would produce cathodes for battery manufacturing.
A home located in Gulfport, FL will be the first in the nation to be auctioned off as an NFT using blockchain technology. (Tampa Bay Times)
J.P. Morgan Global Alternatives and Zenith IOS have formed a new $700 million joint venture that will focus on creating a national industrial outdoor storage platform. (Commercial Search)
