What’s driving the recent rise in micro-branding?

From his perspective, it’s “a direct result of the [changes] to the systems and structure of a real estate agency to allow agents to work remotely, and everything’s in the cloud”.

Agents are realising that they may be “a pretty good agent”, Mr Hutton said, so may begin querying why they are giving away large proportions of their commissions to big-name brands.

In the end, he said, they come to the decision: “I’d be better off if I just worked for myself.”

But according to Mr Hutton, while companies that do set up micro-brands do have a strong proposition in perhaps only taking 10 per cent or so of a micro-brand’s commission, it’s not the be-all and end-all of business proposals.

One big thing to note, according to the CEO, is that “it’s not buyers and sellers asking for this”.

“In fact, I’m pretty sure if they had the choice, they wouldn’t want it,” he conceded.

“The little guy — the little micro-brand — as much as they say they can offer a better service, it’s not true.”

The example he flagged is that without a shopfront, there is no way for somebody to come in unannounced: “That can’t happen. They can’t provide that level of service, for one. They don’t have a big support team right there immediately.”

While he acknowledged that micro-agencies can be powered by companies with support teams, he said “you’re in a queue — it’s a bit different. It’s not as immediate as you’d want it to be.”

It’s led the CEO to consider that the user experience — in terms of the seller-buyer experience — is not improved, “in any way, by micro-brands”.

Instead, he offered: “I just think it’s the sense that an agent can have a bit of control over their own destiny — I get that — and also take a bigger slice of the pie.”

Mr Hutton concedes his perspective is based on having run a micro-brand himself.

While he acknowledges the concept as both “possible” and promising of “good money”, he said that after a while, it was definitely not enjoyable.

“It was just a job,” he considered.

“I had a job, I didn’t have a business.”

He said a lot of people who have taken the micro-branding route “have been dissuaded that you’re starting your own business”.

From his position, “they’re really in the same situation they were in before, but now they have to put some thought to signage design and brochure design and stuff like that, and updating that down the track”.

According to the CEO, it becomes very hard to build a business from a micro-brand, “because businesses are built on attracting other people to join you, [and] the ability of a business to recruit and expand”.

“If you can’t recruit and expand, then it’s just you. And if it’s just you, it’s just a job. You know what I mean?”

And while there’s certainly not anything wrong with that — and nor is it necessarily a problem for the industry — but Mr Hutton reiterated that it may be leading agents away from their core skills and goals as estate agents.

He told the story of an agent who now works in one of the Hutton & Hutton offices who previously had her own micro-brand, with a part-time assistant.

“She spent more time doing the business-y stuff that didn’t really cause her business to expand, and less time doing what she’s really good at: listing and selling property,” he said.

“She just got jack of it after a while.”

Mr Hutton continued: “Again, I have no criticism of those platforms or those micro-agency-enabled businesses.

“It’s just, I feel that the story that a lot of these agencies or these systems are saying is that sellers list with the personality of the agent, not the brand.”

While he does believe there’s some truth in that, he argued it’s not entirely true, stating “they find comfort in a brand as well”.

“An example of that is Ray White. Look how big it is and how successful it is, and they’ve got agents there who have got personal brands, they’ve got profile,” the CEO flagged.

“Also, the people listing with them feel that they’re listing with a sizeable machine that is designed to produce an end result for the seller, and that is, get them buyers and get a contract and get their property sold for a good price.

“That’s why people list with Ray White.”

Going back to the importance of an agency brand, Mr Hutton argued it as too simplistic to think that it’s just the agent people list with.

“Simply, if that was true, then no big brand would exist today,” he stated.

“We would all be just micro-agents working for ourselves, using backend somewhere.”

Considering that as “not going to happen”, the CEO concluded that the big brands are going to stay, the boutiques will be around and the micro-agencies will have their own, albeit smaller, place.