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HOWAGENTS ANDBROKERAGESCAN BENEFITFROMVERTICALINTEGRATIONA RE AL E S TAT E E B O O K FRO MHO W AGE N TS AN D B RO K E RAGE S CAN BENEFIT FROM VERT IC AL INT EGRAT ION PAGE 1
HOW AGENTS AND BROKERAGES CAN BENEFIT FROMVERTICAL INTEGRATIONFrom mortgages to titles to insurance, yourbrokerage is a wealth of referral business. Insteadof directing clients to an outside entity, why notbring those services in-house? More real estatebrokerages are now choosing to integrate closelyrelated verticals to enhance the client experienceand grow their business. After all, your role as anagent gives you the prerequisite industry knowledgeand client base, so why not capitalize on more ofthe homebuying transaction?HO W AGE N TS AN D B RO K E RAGE S CAN BENEFIT FROM VERT IC AL INT EGRAT ION PAGE 2
WHAT ISVERTICAL INTEGRATION?“Vertical integration is a strategy whereby a company owns orcontrols its suppliers, distributors, or retail locations to control itsvalue or supply chain. Vertical integration benefits companies byallowing them to control processes, reduce costs, and improveefficiencies.”BENEFITS OF VERTICALINTEGRATION INCLUDE: Brand DifferentiationConsider a hospital that acquires a nearby physical therapy Creating a One-Stop-Shop Experiencepractice, pharmacy, and mental health treatment center. The Improved Customer Serviceshospital can now provide streamlined access to any service an Increased Earning Potential Diversified Revenue Streamsaverage patient may need. You can bring the same level of serviceto your clients by exploring vertical integration opportunities.HO W AGE N TS AN D B RO K E RAGE S CAN BENEFIT FROM VERT IC AL INT EGRAT ION PAGE 3
1BRAND DIFFERENTIATIONUnfortunately, with 106,548 real estate brokerage firms operating across thenation, a guarantee that you’re the best in town just doesn’t cut it anymore.There are plenty of brokerages a consumer can choose from, and many offerthe same perks, services, and discounts. Expanding your offerings can giveyour brokerage a major competitive advantage.HO W AGE N TS AN D B RO K E RAGE S CAN BENEFIT FROM VERT IC AL INT EGRAT ION PAGE 4
EVERY BUSINESS ISSUCCESSFUL EXACTLYTO THE EXTENT THATIT DOES SOMETHINGOTHERS CANNOT.— P eter Thiel, Billionaire Entrepreneur and Venture CapitalistHO W AGE N TS AN D B RO K E RAGE S CAN BENEFIT FROM VERT IC AL INT EGRAT ION PAGE 5
CREATING AONE-STOP-SHOPEXPERIENCEIn 2019, a whopping 86% of buyers reported2that one-stop-shop offerings positively influencedtheir selection of an agent, an 18% uptick from2015. Homebuyers don’t want to search for amortgage brokerage, title company, or propertymanager - they’ve already found you. Instead ofreferring them out, create a streamlined,one-stop-shop experience.HO W AGE N TS AN D B RO K E RAGE S CAN BENEFIT FROM VERT IC AL INT EGRAT ION PAGE 6
IMPROVED CUSTOMER EXPERIENCEBringing outside services in-house gives you more control over the client’s entire homebuying3journey. With multiple services under one roof, the time-consuming complications brought on byworking with a third-party company could disappear altogether. Plus, you can ensure that the levelof care they’re receiving at each stage in the process meets your high standards.HO W AGE N TS AN D B RO K E RAGE S CAN BENEFIT FROM VERT IC AL INT EGRAT ION PAGE 7
4INCREASEDEARNINGPOTENTIALBy adding new verticals, you’reessentially capturing more of thehomebuying transaction. Nearly everyclient you work with needs a mortgage,clear title, or homeowners insurancepolicy. With increased offerings, youcould retain those transactions andbenefit from multiple revenue streams.HO W AGE N TS AN D B RO K E RAGE S CAN BENEFIT FROM VERT IC AL INT EGRAT ION PAGE 8
5DIVERSIFIED INCOME STREAMSAdding new verticals isn’t just profitable - it’s also a safe financial bet. Diversificationis a common recommendation when it comes to reducing overall risk, whether inpersonal finance or business. For example, by offering mortgage services in additionto real estate you could capitalize on the increase in mortgage refinance applicationsthat tend to accompany times of economic hardship, when there may be a temporarylull in real estate transactions.HO W AGE N TS AN D B RO K E RAGE S CAN BENEFIT FROM VERT IC AL INT EGRAT ION PAGE 9
I SUPPOSE MY FORMULAMIGHT BE: DREAM,DIVERSIFY, AND NEVERMISS AN ANGLE.— Walt DisneyHO W AGE N TS AN D B RO K E RAGE S CAN BENEFIT FROM VERT IC AL INT EGRAT ION PAGE 10
COMMON VERTICALS FOR REALESTATE PROFESSIONALS INCLUDE:MO RTGAGESERVICESPR O PE RT YM A N A GE M E N TTITLESERVICESHOMESTA GI N GHOMEINSURANCEHO W AGE N TS AN D B RO K E RAGE S CAN BENEFIT FROM VERT IC AL INT EGRAT ION PAGE 11
1MORTGAGE SERVICESOnly 13% of homes are purchased with cash. That means that 87% of buyers willneed to get a mortgage from somewhere. Why not from you?Mortgage brokers generally make a commission of 1-2% of the total loan amounton each transaction. As of January 2021, the average purchase loan amount in theUnited States was 395,200. An extra 7,904 per transaction is nothing to scoff at!HO W AGE N TS AN D B RO K E RAGE S CAN BENEFIT FROM VERT IC AL INT EGRAT ION PAGE 12
2TITLE SERVICESNearly every seller needs a clear title. Addingtitle services to your real estate offeringsmeans you can easily take another slice ofthat transactional pie.Buyers can pay more than 1,000 for a titlesearch alone, and another 1,374 for titleinsurance. Because clients often rely on yourreferral anyway, bringing those services inhouse could mean more money in your pocket.HOHOWW AGEAGENNTSTS ANANDD BB RO K E RAGE S CAN BENEFIT FROM VERT IC AL INT EGRAT ION PAGE 13
HOME INSURANCE3A staggering 95% of owners have some kind ofhomeowners insurance policy. Adding insuranceservices allows you to derive additional revenue fromnearly all of your sales, plus you’ll have the chanceto serve the customer for at least as long as theirpolicy lasts.Home insurance costs the average owner 1,445per year, and rates have increased 47% in the lastdecade. In states with higher insurance premiums,like Oklahoma, Kansas, and Texas, the averageowner pays up to 2,559 annually.HO W AGE N TS AN D B RO K E RAGE S CAN BENEFIT FROM VERT IC AL INT EGRAT ION PAGE 14
4PROPERTY MANAGEMENTYou already know the local residential real estate market well, and you’re certainly used toproviding unparalleled customer service. Adding property management services allows youto retain your investor clients while setting yourself apart from the competition.The average property management firm collects 8-12% of the monthly rental value of theproperty, plus setup fees, monthly management fees, tenant placement fees, vacancy fees,and more. Needless to say, if your clients are looking for lessees, property managementofferings could be mutually beneficial.HO W AGE N TS AN D B RO K E RAGE S CAN BENEFIT FROM VERT IC AL INT EGRAT ION PAGE 15
5HOME STAGINGHome staging can be intimidating to manysellers and even some brokerages. Providingstaging services is a marketable differentiationthat adds visible value to your seller’sexperience.On average, home stagers charge up to 600for an initial consultation and another 600per room, per month. If you have an eye fordesign, adding staging services could beautifyyour net profit.HO W AGE N TS AN D B RO K E RAGE S CAN BENEFIT FROM VERT IC AL INT EGRAT ION PAGE 16
GROW YOUR BUSINESS,VERTICALLYAdding closely-related and complementaryservices can provide increasedopportunities for your brokerage.Regardless of which additional offeringscatch your eye, vertical integration couldset your organization apart, improve theclient experience, and grow your business.After all, a comprehensive solution is muchmore compelling than a simple promise ofthe best service in town!HO W AGE N TS AN D B RO K E RAGE S CAN BENEFIT FROM VERT IC AL INT EGRAT ION PAGE 17
ABOUT USFounded in 2005, The CE Shop hasbecome the leading provider of onlinereal estate education through anencyclopedic knowledge of the real estateindustry.Our ever-expanding course catalog ofPre-Licensing, Exam Prep, Post-Licensing,and Continuing Education products aretrusted throughout the industry and offeragents acrossthe country the education they rely on.With courses available in all 50 statesand D.C., we’re driven by a desire toconstantly improve, both for ourselves andour students.HO W AGE N TS AN D B RO K E RAGE S CAN BENEFIT FROM VERT IC AL INT EGRAT ION PAGE 18
practice, pharmacy, and mental health treatment center. The . hospital can now provide streamlined access to any service an . average patient may need. You can bring the same level of service to your clients by exploring vertical integration opportunities. Brand Differentiation Creating a One-Stop-Shop Experience Improved Customer .
