Location: Tennessee | Launched: 2006 | Number of agents: 900+
Benchmark Realty carved out the right business model at the right time
When the housing market crashed in 2007, Benchmark Realty’s founder Phillip Cantrell spent some time completely rethinking the brokerage business model. He traveled around the country attending conferences where he learned how other brokers were beating the odds and thinking about the future.
He looked at current market conditions, technology trends and the forecast for what was to come and he rebuilt Benchmark Realty on an entirely new business model from what he initially started.
And it worked. His company went from five to 340 agents in its first four years and since then has grown to 900 agents working from six offices throughout middle Tennessee.
In addition, transaction count, gross sales, gross commission income and net profits have continued to double over each year. “Total value of real estate sales across all property types for 2017 will be north of $2.1 billion,” Phillip said.
The right pivot at the right time
Things were much different when Phillip and his wife opened the first Benchmark Realty office in a Nashville suburb in March 2006. Working as a real estate agent, Phillip represented five custom-home builders and worked exclusively in new construction.
They’d built up a force of 13 agents who each worked off Phillip’s relationships with the builders.
“All was fine until the summer of 2007 when the high-end market got hit from the recession,” he said. “I realized we were going to have to do something different or we weren’t going to survive.”
Phillip couldn’t see how the old brokerage business model could sustain through the financial crisis and recession that followed.
To compound the urgency, Phillip said the builders turned on him when suddenly the homes stopped selling – and they took seven of his agents, reducing his agent count by half.
He immediately sent his agents home and reduced Benchmark to a single office and single desk. Then he set out to see what the big companies in markets across the U.S. were doing.
That’s when he came up with his new business model – the sauce that would not only keep his brokerage alive, but also fuel its growth and success at a time when larger competitors were scrambling and shrinking in his market.
Call it 100% commission with a twist
Benchmark offers three plans for agents: a flat annual fee, a flat monthly fee, or a smaller monthly fee with a closing fee added on top of the first 12 transactions each year up to an annual cap (which equates to about $3,000-$5,500 per year in their market).
Why does this work so well?
“Broker payout is the single largest expense an agent has,” Phillip said. If agents can control that expense via a flat-fee arrangement, then they have more room and flexibility to work with buyers and sellers. That may not be very important when business is booming, but during the 2008-2012 time period, many sellers were underwater, on the verge of foreclosure and in all sorts of bad situations.
Having flexibility on commission, as Phillip noted, enabled many of his agents to do some deals that otherwise may have lost them money in the end. It got them a bit of business, but more importantly helped them create a reputation as helpful, reliable and trustworthy agents.
Developing strong and happy agents is an emphasis at Benchmark. The company provides each agent at no cost with appointment-setting services, a personally branded mobile app, a website, leads from the broker website, commission paid via direct deposit, a single sign-on dashboard, a comprehensive back office that has all tools readily available, and cash recruiting incentives.
In addition, “We pride ourselves on broker support with a 15-minute call back guarantee from the broker,” Phillip said.
What’s the right fit for an agent?
First and foremost, Phillip looks for experience when bringing on new agents. While they do have a full-time training director offering 20+ classes a month, he said that new agents need to work under a mentorship agreement with a more experienced Benchmark agent.
Reputation is another big factor. Nashville is a small town and they can’t afford to work with agents who have a poor reputation or track record.
Phillip explains that his background in manufacturing is a big influence on his approach to real estate brokerage. In manufacturing, “how you get from variable quality to consistent quality is simply by controlling processes,” he said.
Phillip runs a tight ship on all processes at Benchmark. At the end of the day, the ability to scale appropriately and focus energy in the right direction makes the model possible and successful.