Another day, another crash for a company once believed to have special insight into the real estate industry.
This time it is mortgage lending start-up Better.com, which announced in early March it was laying off nearly half its workforce after stumbling mightily in a shifting housing market.
Its decision to ax upwards of 4,000 people comes on the heels of the decision by another internet darling, Zillow, to terminate a quarter of its employees following a failed venture into buying and selling homes.
“This is another example of a company that doesn’t have a feel for local markets getting burned because they don’t understand the nuisances of real estate,” said Allen Brake, founder and chief executive officer of The Allen Brake Team.
As these national companies have floundered, some local real estate teams have thrived. By strengthening already strong relationships in the communities they serve, these teams are continuing to find success, even as mortgage rates rise.
“These national companies have a one-size-fits-all approach to real estate, and that’s simply not sustainable, as you’re seeing now,” Brake said. “The real estate business is all about relationships and creating an individual experience for each client. No two clients have the same needs.”
Brake has been a Realtor in the St. Louis region for nearly 20 years. He has grown his team to nearly two dozen employees and is poised for further expansion this year, he said.
Meanwhile, according to a leaked internal memo, the Better.com announcement comes because of a “dramatic drop” in potential homeowners seeking loans from the company that was once a pandemic favorite. “Unfortunately, that means we must take the difficult step of streamlining our operations further and reducing our workforce in both the U.S. and India in a substantial way,” the memo reads.
This move follows the heavily criticized termination of 900 Better.com employees via Zoom just before Christmas, the backlash from which forced CEO Vishal Garg to step away from his duties for nearly a month.
In December, Brake met the coming changes in the housing market head-on by unveiling his team’s Calm & Confident Home Sales Experience. This 10-point pledge focuses on the unique combination of benefits available to his clients. It keys on individual attention and increased communication.
One feature of the pledge highlights the team’s partnership with a local home staging expert to help clients use their existing decor to make their home as attractive as possible to buyers. Another offers the team’s moving truck free to clients, with some restrictions to both.
“Our team exists in this sweet spot where we’re not too big to lose that personal touch for each client, but we’re big enough that we have the resources to provide a best-in-class experience for everyone who works with us,” Brake said. “That perfect scale makes us attractive to companies looking for partnerships.”
The Allen Brake Team’s preferred lender is Jennifer Smerek with Gershman Mortgage. The company, founded in St. Louis in 1955, has deep roots in the local communities served by The Allen Brake Team and, Brake said, also is perfectly sized to provide a great experience for clients.
“Buying or selling a home doesn’t have to be stressful,” Brake said. “When you find the right real estate team, they’ll be able to tell you how they’re going to bring calm to your experience, how they’re going to help you become confident in the decision you need to make. It might not be stress-free, but it can certainly can be stress-less.”
The stress from the Better.com announcement played out on social media after the company bungled this latest round of terminations, as well. News of the terminations started making its way around the company after some employees started noticing a severance tab pop up on their payroll app.
Employees – the terminated and those still employed for now – took to Slack and Twitter to vent their frustrations. They were overwhelmingly supported by commenters like @danpriceseattle, who tweeted, “Note to self: Never use @betterdotcom,” and @thedealwithalex, who added, “So @betterdotcom is laying off 4,000 more people, yet their toxic CEO Vishal Garg gets to keep his job? Help me understand that.”
Brake said he understands the frustrations people have in dealing with impersonable national companies like Better.com and Zillow.
“It’s not that these companies don’t do some things well,” he said. “It’s that they don’t do the important things as well as a local real estate team can. That’s why we’re confident we’ll continue to thrive, no matter what changes come to the housing market.”
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