Part 1: A third-party opinion on how to build your broker tech stack

The six primary groups you need as you review your broker tech stack

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I’ve been asked to put together some recommendations on what a “brokerage technology stack” should look like as well as what teams and agents should be thinking about. As I pondered that request, and how I might try to not overcomplicate this, I kept coming back to “it’s not that simple.” 

Scott Petronis
HW+ Analyst

How would I slice this up? What lens should I look through? What problems am I trying to solve with this tech stack? So here’s the way I thought about dissecting it. 

Brokerages wear a lot of hats. I don’t mean that in the negative way that it sounds. I mean it in the way that brokerages are both businesses that need to operate as a for-profit concern, and they are real estate businesses that need to create value for agents (primarily 1099 contractors) so they can maintain a healthy retention rate and generate commission revenue. This is important because many of the systems that run the “business” are there for the W-2 employees to use day-in, day-out for operations. While the systems that help to run the real estate business (the brokerage) are there to help 1099 agents generate revenue. And both need to (ideally) work seamlessly together.

And when you really think about it, anyone who runs a team and individual agents as well have things they do related to real estate, then they have a business to run. All of these companies need to be able to do things like track expenses, make sure they pay people or get paid, communicate with people and manage information about the business. These are just basic needs. 

This initial article focuses on the systems you need to run your business. And while many of you already have some of these systems in place, when is the last time you checked their effectiveness? You may find that some of the newer systems on the market better support your needs as you’ve grown or evolved. You might also discover that you’ve become complacent (we all do) with your providers even though you’re potentially paying three, four, five times more than you should be. 

In working with a number of brokerages over the past 10 or 12 years, I’ve seen some pretty terrible systems, unsupportive vendors and unnecessary compromises being made. Not just financially, though those have been quite significant, but also from a process and employee quality of life perspective. Like accounting systems that cost 5 times what they should while providing less than a fifth the value that they need to. Or CRMs that require consultants for $150 an hour to make any changes needed. And even homegrown systems that have outlived their useful life while requiring highly paid staff to maintain them. And many of these systems don’t talk to one another. 

Even if you already have systems in place, it’s always a good practice to evaluate your current and growing needs, how well your providers support those needs and what options you may now have that didn’t exist when you made your last decision.  

I’ve broken these systems out into six primary groups with some groups containing more potential systems than others. These are really just the basics of running a business whether you have a few employees or dozens, and for these groupings, I’ve specifically assumed a small to midsize business 

Attracting, onboarding and managing employees

  • Systems: Recruiting, human resources, performance management
  • Summary: There are over 300 applications for small to mid-sized businesses that help manage the recruiting and onboarding process, time management, benefits management and general human resources functions. Many also include payroll and remittance. 
  • Popular Companies/Products: Namely, Paylocity, Kronos, syncHR, Cezanne, JazzHR, Zenefits and BambooHR.
  • Advice: If you’re growth-minded, select a company that has what you’ll need 2-3 years out, not just what you need today. Nothing will stop you in your tracks faster than an unplanned migration when you find you’ve outgrown your system’s capabilities. If you operate in multiple states, you’ll need a system that helps you manage the complexity of both federal and state labor regulations.

Making sure employees get paid and filings are made

  • Systems: Payroll, time tracking
  • Summary: While many of the HR systems include payroll capabilities, there are over 75 individual payroll systems available with varying capabilities. And it’s not just the software functionality, it’s about how much time and hassle the provider can save you. Some also provide integrations with benefits providers including 401k, workers compensation, disability insurance and more. 
  • Popular Companies/Products: Gusto, Wave Payroll, RUN by ADP, OnPay, SurePayroll, QuickBooks Payroll, Paychex, Square Payroll, Paylocity.
  • Advice:  In most cases, brokers have a mix of W-2 employees and 1099 contractors (in addition to 1099 agents), so your system should handle that all-in-one. You want your company to deal with tax payments and filing as well. Again, for the growth-minded, the moment you go into another state your complexity skyrockets, so if that’s in your plans, be sure your provider handles where you plan to be not just where you are. 

Managing revenue, expenses, receivables and payables

  • Systems: Accounting, expense tracking, invoicing, payment processing
  • Summary: Again here, there are many options including about 175 general online accounting systems and a handful designed specifically for real estate brokerages. Accounting is accounting, but there are systems that perform better than others depending on how you do business and what you want out of your accounting system. Financial dashboards are a must-have rather than having to ask your bookkeeper or CPA to “run you reports.” 
  • Popular Companies/Products: For accounting look at QuickBooks Online, Wave, Sage Intacct, Zoho Books, Microsoft Dynamics 365, NetSuite, Xero, FreshBooks, Back Office (brokerWOLF); for payment processing look at Stripe, Braintree, Authorize.Net and Payroc.
  • Advice: People come and go, so your system had better be something that others can come in and work with quickly. This is one reason that QuickBooks has gained so much popularity. Some brokerages manage their entire business on a real estate back office system like brokerWOLF while others use a traditional accounting system to run their business and integrate their brokerage back office into that system.  A few crucial integrations you should insist on are your company credit card for easier expense management, your bank accounts, your payment processor and your payroll. 

Communicating and collaborating with employees

  • Systems: Email, productivity suite, collaboration tools/suite
  • Summary: While email and document collaboration tend to be the mainstays in this category, things like chat, video conferencing and other services have become mandatory staples as well. Beyond that there are growing needs / desires for some level of project management and the ability to collaborate with companies outside your own organization as well. 
  • Popular Companies/Products: For email and productivity, Google GSuite, Microsoft Office365 Online, Zoho Workplace; for collaboration, Workplace by Facebook, Slack, Glip, Flock, Microsoft Teams, Asana, Basecamp, Jira, Confluence, Bluejeans, Zoom, and many others.
  • Advice: Costs can literally skyrocket here as you start to add all of these different components in from different companies, and it’s not unheard of to reach upwards of $40 to $50 per employee (or more) when you factor in all of these services. Evaluate the systems that offer the most core functionality and then be very cognizant of the specific items you want to add in, potentially segmenting some of these items out for specific groups of users. 

Supporting and talking to employees, clients and others

  • Systems: VOIP telephony, chat, conferencing
  • Summary: There’s overlap between this category and the last, but there are some additional items I’d lump into this, including how to cost-effectively offer flexible phone service, how to incorporate real-time chat into multiple communication channels and client-facing conferencing capabilities. Some of the companies above do offer these services but they can get considerably more expensive as the user count goes up. 
  • Popular Companies/Products: For VOIP phone services, options include RingCentral, OomaOffice and Grasshopper; for chat integration there’s Intercom, LiveAgent, Hubspot LiveChat, LivePerso; and for additional conferencing needs there’s GotoMeeting and
  • Advice: There’s overlap between many of these services and some offer an entire suite of communication services. RingCentral, for example, provides VOIP telephone services that can leverage VOIP phones (in office) or mobile phones. Plus, you can leverage their chat, conference calling, video conferencing and collaboration tools as part of the same platform. All-in-one systems tend to mean compromises on certain things but can provide a great return in terms of both bang for the buck and time saved by not having to manage multiple vendors, systems and integrations. 

Promoting and marketing the company

  • Systems: Website, email marketing, social marketing, CRM
  • Summary: The options here are virtually limitless, but there are a few key things you need to consider when trying to determine your needs on this front. Mainly because brokerages tend to have three distinctly different needs and it’s rare that one solution fits all. Need number one is to promote and market the company and brand as a local business and local employer. For this, your needs relate significantly to employee recruiting, as well as generating local awareness of the brokerage and brand identity. The second is about the need to attract and recruit real estate agents through a variety of means and connecting back to the brand. The third is the need to attract and stay in touch with consumers (potential buyers and sellers). Employee recruiting, agent recruiting and consumer lead generation are very different beasts, so you typically have to build out a single site that integrates these goals together. 
  • Popular Companies/Products: For customizable and manageable sites, there are wordpress and hosts like WPEngine, Bluehost, InMotion, along with hundreds of others. For real estate-specific sites, there are 40 companies listed in the HousingStack from templated to configurable to customizable: ConstantContact, MailChimp, HubSpot, SendGrid and many others for email marketing; Hootsuite, Socialbakers, Canva and Audiense for social marketing; and HubSpot, Pipedrive, AgileCRM, Nimble and Zoho CRM for business CRMs. 
  • Advice:  First, with your website, you need to be sure that you choose a path that allows you to manage your site with your existing resources, not something that requires you to constantly rely on someone else to make changes. Second, you don’t necessarily need to conflate your company’s marketing needs (branding, face to your agents, face to the community) with your real estate lead generation needs. You can literally have completely separate vendors seamlessly integrate. For your direct marketing, inbound and outbound, plus your day-to-day CRM needs, I’ve been thoroughly impressed with the Zoho suite of tools. 

I’m not suggesting you should go out and swap all of your systems today, but I am suggesting that you should always evaluate your options and make sure your needs are being met. Change is scary for sure, and it’s never as easy as you’ll be told or you’ll hope. But in many cases, you’ll find that the five systems you’ve pieced together to solve a problem years ago can be replaced with one system today. 

One last piece of advice, and this rings true for all systems, is that you need them to talk to each other. Don’t settle for anything that won’t facilitate data flowing from one point to another. The smaller your business, the more important it is to opt for systems that provide a robust set of capabilities in one place. You may not get all of the “features” you desire, but you’ll save loads of time, ensure better data and reduce risk, especially if you don’t have dedicated people to look after those systems. Your time is valuable so factor that in.

In part two, I’ll dig into the real estate side of your business.

*Disclosure: I do work with some of the companies here, but only recommend products I would use myself and all opinions expressed here are my own.

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