The house-selling business, once dominated by small, independent real estate firms, has undergone a major change in the 1970s.
Larger realty companies have expanded into multi-branch operations. Many here now have more than 10 offices and some are even planning to open branches in distant states.
The largest wave to hit the real estate industry in recent years, however, has been franchising. Franchisers sell off territories and sign up brokers, mostly small operations, as affiliates. These national systems provide a well-known identity to the small firms and offer them sales training programs and other business aids. The franchisers charge a fee to join and usually get a cut of the gross profits.
Century 21 and Red Carpet on the West Coast pioneered in this and are the largest. They have been joined by Gallery of Homes, Electronic Realty Associates, Realty World, Better Homes and Gardens, RE/MAX, Realty U.S.A., Partners and Neighborhood Realty Group and others.
Some small firms continue to hold out against this tide, however. Those specializing in fast-selling neighbor-hoods such Capitol Hill and Georgetown have maintained their positions or grown.
Most large, multi-office firms here have, so far, resisted the franchisers, preferring to expand their own empires. Among the independents are Shannon & Luchs, Colquitt-Carruthers, Long & Foster, Town & Country, Peck Properties, Properties, Better Homes Realty, Mount Vernon Realty, Routh Robbins (now a part of the big Cold-well Banker firm based on the West
But there are even newer wrinkles. For instance, Panorama is embarking on a program that its president, Lykes Boykin, sees as a solution to the problems of competing against the franchises -- one that allows his firm to retain the best agents and to rely on more economical, computerized business procedures.
Boykin, who practiced law for 25 years before he took over command of the troubled House & Home/Panorama operations three years ago, has seen the McLean-based firm grow into an network of 20 offices and more than 500 agents. He also encouraged the creation of an in-house, computerized accounting system that can be used, for a fee, by other brokers.
Boykin hopes to expand the corporation to 80 Panorama offices and 2,000 agents by the end of 1981. That may sound overly ambitous, but Boykin and his administrative staff have hit upon a combination of plans that saves them the usual $50,000 start-up cost for a new office. Their plan also will allow existing brokerages to affiliate with Panorama without giving up ownership and will permit an ambitious agent to start a business without leaving the Panorama umbrella.
Boykin and Panorma call it the owner-affiliate program. Simply, it enables an existing firm to keep all of its net income while paying Panorma 10 percent of the gross for "administration and housekeeping." Owners can become vice presidents of Panorama or keep their own names and facilities and be a division of Panorama. Affiliating owners can also open new offices.
Panorama has also instituted a 100 percent commission plan for its top agents. Agents are charged a monthly fee to do business under a broker's roof but -- contrary to the usual procedure -- don't have to share their commissions with the broker. This plan is designed to keep top-producing agents in the fold and to discourage them from starting their own firms, the traditional move for a heavy-hitter.
However, if an affiliated office incurs a net operating loss for any given month, Panorama retains the option of closing the office, unless the owner-affiliate makes up the deficit in expenses attributable to the office.
What does the public get out of all of this?
"It's a matter of professional service," Boykin said. "Our idea is to train people to serve clients with emphasis on integrity, excellence of performance and service. These are the fundamentals of getting the repeat business that is so essential to success in this business -- both for broker and agent."
What about discount commissions offered by an increasing number of area firms?
"That's a matter for individual brokers and clients to dedide. That's not the way we see to serve our clients. It's a matter of perceiving how you can best do the job."
Another local broker, Thomas Carruthers, president of the 32-office Colquitt-Carruthers Inc., said that he has been talking with other large brokers in metropolitan areas elsewhere about forming a network of perhaps 30 firms. They would co-operate in varied marketing and service programs and use a common warranty program to protect home buyers against problems that might develop in resale houses.