Three Spokane-based brokerages have changed hands or joined larger organizations in recent months amidst a slowing residential real estate market. 

An increase in that type of strategic movement is more common during periods of low activity, says Scott Wetzel CEO, president, and owner of Spokane-based Windermere Mountain West LLC and chief development officer for Seattle-based Windermere Real Estate. 

Wetzel notes that a similar recalibration occurred in the residential real estate industry following the 2008 economic crash. While today's housing market is healthier than it was during the depths of the Great Recession, the current market is settling into a new landscape following booming sales at the height of the pandemic and adjusting to other factors impacting the industry. 

Following the 2008 crash, many independent companies associated themselves with bigger brand names to stay in business through acquisitions and affiliations. Particularly today, he says, it's harder to keep up with the advances in technology required to remain competitive in the industry. At some point, brokerage owners begin to ask themselves if they can maintain their business and continue to offer tools and services to their agents, Wetzel explains.

Also, a lot of agents will move to brokerages that offer a less expensive model for operating as a way to cut back on costs. Others who are more committed to staying in the industry might move to traditional full-service brokerages that offer a variety of services such as Windermere, Century21, and Keller Williams, Wetzel says. 

“Some (agents) stay. Others go back. Some use it as a step down to eventually getting a full-time job outside the industry,” Wetzel says. “Agents who are serious about staying go to the big dogs.” 

According to the most recent report on home sales activity through the Spokane Multiple Listings Service, 532 homes changed hands in June, compared to 624 in the year earlier, representing nearly a 15% decrease. 

The Legacy Group LLC, a real estate team under the umbrella of Keller Williams Realty Coeur d'Alene, sought expansion through its acquisition of Spokane-based Top Agent Team LLC, says John Graham, CEO and owner of the Legacy Group. Top Agent was also under the umbrella of Keller Williams Realty. 

The transaction, announced in June, will enable Legacy Group to expand its services to customers across the Tri-Cities, Washington, and the Coeur d’Alene region. Graham says there are no plans to change Top Agent’s name, as the brand holds value in name recognition, but will likely have the addendum “Powered by The Legacy Group.”

Graham declines to disclose financial details of the purchase but says the acquisition included a large portion of Top Agent's website, all its social media and marketing, its online presence, and its database of 60,000 prior and current clients. 

John Graham, CEO and owner of The Legacy Group says the current environment in the industry has compelled individuals and businesses to pivot and make strategic moves. 

| Karina Elias 

“There’s a lot less real estate being bought and sold right now, and uncertainty of what interest rates are going to do and what home prices are going to do. I think a lot of agents and teams and brokerages are feeling that,” Graham says.

He adds, “Some people are getting out of the business; some people are downsizing; and some people are pivoting and making strategic changes. We’re always looking for opportunities and this was one where (Top Agent) was downsizing and adjusting. For us, we’re always in growth mode.” 

The Legacy Group was founded in 2007 and has sold $1.2 billion in real estate to over 4,875 buyers to date, Graham says. Its main hub is at 205 W. Indiana, on Spokane's North Side, and it has additional offices in Missoula, Montana, the Tri-Cities, and Coeur d’Alene. Companywide, the group has 22 agents and an overall staff of 30. 

The acquisition comes at the heels of another real estate group acquisition in the region. As reported previously by the Journal of Business, Spokane-based Haven Real Estate Group was acquired by Houston-based Epique Realty, a tradename for Epique Inc., in April. 

Haven Real Estate’s Group told the Journal of Business that as a relatively small regional company, growth opportunities and what they could offer their agents were limited, which influenced their decision to sell to Epique. The real estate group's founders, Robert and Cambria Henry, also emphasized the value that Epique's investment in new technology would have on Haven's 42 real estate agents. 

The Texas brokerage's website, for example, is integrated with artificial intelligence capable of analyzing consumer search criteria and commencing conversations with potential homebuyers, resulting in significantly improved engagement, the Journal reports. 

"There are so many things that would cost us literally hundreds of thousands of dollars to try to implement or match," Robert Henry told the Journal. "How could we not provide those tools to our agents?"

Another realty group that also decided to align itself with a larger brand is Spokane-based Synergy Properties LLC, which merged with eXp Realty, a subsidiary of eXp World Holdings Inc. (Nasdaq: EXPI). 

Tyler Carlson, who founded Synergy Properties with Keith Riddle, says the decision to merge with a national brand was based on various factors, including the increased focus on managing compliance issues that minimized the time spent supporting agents, the difficulty of growing and competing as a small brokerage, and the ripple effects to the industry caused by the multiple lawsuits brought to the National Association of Realtors over broker commissions. 

“After all the lawsuits (against the NAR)–which are still happening– the amount of exposure went up substantially,” Carlson says. “It has changed 100 years of how people have worked and sent shock waves through the industry.” 

Based in Bellingham, Washington, eXp Realty bills itself as the largest brokerage in the U.S., in terms of number of agents. Carlson says eXp is fully remote and has a revenue-sharing program in which the company shares 50% of its revenue received from each transaction before expenses are deducted, explains Carlson.

Carlson now works in a co-working space at The 808 Coworking, located at 808 E. Sprague in Spokane's East Central neighborhood. 

“Across the board, it is hard to compete as a small brokerage,” Carlson says.