Is it a good time to sell your real estate business, or a good time to acquire an existing company? A white paper by Exit Realty Corp. international CEO Tami Bonnell says the market is equally primed for both.
“Even with advances in artificial intelligence and artificial valuation models, I believe that most of the business will continue to be transacted by real estate professionals,” says Bonnell.
“Technology will not replace real estate agents, but real estate agents who do not use technology effectively will be replaced by those who do. Many smaller companies can’t afford the technology, are afraid of it, or don’t want the responsibility of keeping abreast of the latest innovations. Now is the time to make a move.”
She says the key reasons for wanting to sell an existing brokerage or wanting to merge with another operation are:
- the brokerage isn’t making enough money, or the margin is reducing
- leadership struggles
- teams are taking control of the brokerage
- partnership or health issues
“In my experience, the majority of the broker/owners facing these issues simply want to retire, or shift focus by staying on after their business is acquired and working in a different capacity,” says Bonnell. “They care about their people and want to ensure their agents and staff will be well-treated. Regardless of the size of the companies involved and whether they are acquiring or being acquired, there are some important considerations:
- “The business philosophies of the leadership on both sides should agree.
- “The merging of companies is similar to the blending of families; it is important to take the good qualities from both companies, so everyone has a sense of belonging.
- “Good communication. Stay connected and help everyone understand that it will take time to blend.”
Bonnell says the No. 1 reason that mergers or acquisitions fail is due to “inattention to the people involved.
“Oftentimes, the acquiring company not only buys the business but also “buys” its leader so similar business ethics, values and philosophies are key. Failure occurs when the newly merged leadership doesn’t pay attention to the agents (old or new) and the result is an empty building when everyone leaves.”
The full whitepaper can be downloaded here.
