Real estate can be a very lucrative career, but there are many risks beyond the agent’s control, including price and interest rate fluctuations, credit availability, liability and other legal matters. Most agents are independent contractors whose income is strictly based on commissions from the sale, purchase, or rental of houses, offices, and other property.
After decades working on the development and brokerage sides of the real estate business, Briggs Elwell, co-founder and CEO of RLTY Capital, concluded that agents are underserved by the gig-economy structure of the real estate industry that leaves them out in the cold during tough times.
The result, all too often, is that talented agents leave the industry.
An agent, he noted, can have one hot month or quarter followed by a six-month drought. For many agents, even the gap between securing a sale or purchase and closing on the deal can leave the agent unable to meet short-term financial obligations. Agents with looming bills kept asking their brokers to get paid faster or even for loans against their expected commissions.
The first big idea on which Elwell and coCo-Ffounder and president President Daniel Kennedy founded RLTY Capital was buying a portion of agents’ commissions when the contract is signed. This solved the pain point of agents having to wait weeks or even months until the closing. This singular decision opened the door for the kind of 2023-era dialogue with agents that is bringing about major changes in the broker-agent relationship.
After first tackling the pay-up-front issue, RLTY Capital began responding to other agent concerns, including helping them structure their businesses with legal services and tax services. The more Elwell and Kennedy interacted with agents, the more ways they found they could be of service to the people making their own business successful.
Their basic idea was that, rather than leaving agents to sink or swim, why not make it easier for all quality performers to stay afloat?
At the beginning of 2023, RLTY Capital launched its agent Agent Success Services with the goal of introducing agents to leading experts and educational tools spanning legal, accounting, and personal finance. A company portal provides agents with easy-to-access information about how to succeed as an independent contractor, even how to make course corrections to enable them to keep their primary focus on sales.
One leading real estate professional who bought into their concept was Ryan Serhant, best-selling author and co-star of Bravo’s long-running Million Dollar Listing New York television show. In addition to running his own highly successful SERHANT real estate brokerage, Serhant signed on as a partner in RLTY Capital, for which he serves as an ambassador and representative promoting the ‘one-stop-shop-for-agents’ philosophy.
Although RLTY Capital is an agent-first business, it can also fill the void for anyone in the industry in a 1099 (self-employed) space, whether a developer or a broker or even a brokerage house. Historically, while 1099ers Independent Contractors are free to set their own work schedules, they also forgo common employee benefits like health care, life insurance, and tax advice.
After first focusing on quick pay for agents, followed by tax and legal services, Elwell and his team are now assisting agents to create other income streams to reduce the stresses and uncertainties of being solely dependent on a fluctuating real estate market.
And the firm has just launched – in Florida – a partnership with UnitedHealthcare® to make it easier for agents to secure affordable health insurance.
The National Association of REALTORS® says that a fourth to a third of its members are uninsured every year. Yet health and liability insurance are vital to economic security. To address that issue, RLTY created a dedicated landing page on its website that enables United to guide agents through the labyrinth of health insurance policies. Agents can explore and understand the plethora of policy options available to them either as individuals or for their families.
As Elwell says, healthcare was the next big step in providing a one-stop-shop for agents. “Given the stringent restrictions and regulations in the healthcare world, we were fortunate to align with United, an impactful brand with a keen interest in the brokerage community.”
“I use United,” Elwell acknowledges. “And I can say they’re fantastic. One of the nicest things is that our agents that work with them through RLTY are not tied exclusively to policies through United. The team that we’ve created with United is going to be able to access all opportunities that total over 250 different policies for 1099sthe self-employed agent.”
“We launched healthcare because it was based on a necessity,” Elwell adds. “The agents told us they needed it. We launched the taxes because they told us they needed it. Right now, we’re starting to get feedback about agents looking for more training.”
Many larger firms, said Elwell, are pulling away from training their agents because of the associated costs. But thanks to partnerships with Ryan Serhant and other providers, RLTY Capital is devising cost-effective ways to help agents learn better how to sellhow to sell better.
The firm is also devising financial literacy and other courses to help agents learn to better structure their independent businesses around a 12-month plan, rather than relying solely on transactions, 10 percent of which statistically fall through and leave the agent with nothing after months of work.
Elwell says RLTY Capital’s long-term goal is to offer all its services, including commission advances, in all 50 states, scaling in states as resources become available. Already, the firm can service all states for legal and tax, though it is not marketing those services in all states. It will also take time to expand the healthcare partnership beyond Florida, but brokerages in other states are already expressing interest in signing on.
Elwell acknowledges that his company is growing based on responding to feedback from the community it serves. With the goal of being a one-stop shop ecosystem for the financial needs of agents and developers, RLTY Capital has been able to shift, to create new services, based upon what the market – and the agent and developer community – needs.
What a novel idea!
About the Author
Duggan Flanakin is a senior policy analyst at the Committee For A Constructive Tomorrow who writes on a wide variety of public policy issues.