Century 21, RE/MAX, Coldwell Banker and the rest of the franchise brokerages all claim supremacy. Not one says they are number two and therefore trying harder. They all profess a superiority bordering on a maniacal delusion. Surely not more than one of the many is entitled to make this claim without shame. But does it really matter, since the consumer is not number one in their myopic vision?
No. As the ads say in the small print or rapid voice, every office is individually owned and operated. The profit of the franchise may derive solely from the public's mistake concerning the services promised. "Brand Name" recognition generates additional revenue, but the services do not reflect any standard of quality because each office is independently owned and operated. The office must use the name and logo as well as pay the money "off the top" to the franchiser, but how the agents represent the clients is left up to the person renting the name. This is the person who in turn rents desks to the associates of the office. The national, international, global, or universal aspect is a mirage. In fact, the independently owned and operated offices compete against one another in the same area. Some of the offices enjoy success, some fail, some have agents who provide good service, others do not. In the same office, the quality of agents varies just as much, perhaps even more, than in the independent, non-franchise, brokerage. This is because the emphasis at the franchise office may be a focus on dollars per desk rather than upon the satisfaction of each customer.
It is very misleading nonsense. Good agents can be found working in almost every real estate environment. While the franchises may be seeking to eliminate all the independents with their malicious advertising and ridiculous claims, they cannot avoid some issues of importance that suggest their own responsibility for the public distrust of real estate associates. Their ads often feature negative comparisons with other firms, or unfounded statements about agents who work independently. More significant for the future of real estate, the rent-a-desk firms such as RE/MAX have not provided for the next generation of associates. They pride themselves on raiding established offices, but give back nothing in terms of preparing the next generation of agents. As one RE/MAX agent told me bluntly, they are not interested in helping anyone else. This is truly a sorry state of affairs for both the real estate profession and the consumer.
They say that they do this in order to better serve the public. This has always been the claim of supporters of "One-Stop-Shopping". But experience over the past thirty years has shown that such a merging of services ends up costing the consumer more rather than less, and that the quality of service obtained actually declines. This is due to several factors. First, a broker-controlled escrow (whether set up as a separate corporation or not) loses its neutrality. Second, the broker-controlled lender succumbs to charging more than it would if the borrowers were not being provided by the sales agents. Thirdly, the broker-controlled title company funds the broker's needs and thus extended may not be willing to put its resources at the disposal of the customer. These objections are not fantasy, but the observations of experienced salespeople who have dealt with these all too real problems. The franchise approach to these difficulties appears to be twofold: 1)Alter state and federal law so as to allow the abuse. 2)Alter professional codes and standards so as to make their practices "ethical". The lobbying power of corporate real estate is great, but does not promote the public interest.
Many of the franchise agents do not want to be fiduciaries and some are already acting as mere facilitators in a transaction. They are currently seeking a change in their status so that they will not be subject to such a high standard of performance.