Real estate offices are closing all over the country. Real estate agents will be hanging up their licenses in every state. The traditional bricks-and-mortar property brokerage is certainly hemorrhaging, and all that continues this archaic business model alive is consolidations. As offices near, some agents quit, but the survivors move their licenses to some other sinking ship, a ship that looks similar to the last one and often with the same name on the bow.
A big franchise office closes it’s doorways, no longer able to keep the lights on after greater than a year of operating in debt. The agents are worried sick, not knowing what they’ll carry out, until their savior walks in the entranceway.
A broker from a large bricks-and-mortar anywhere with the same franchise offers to take all of the agents in with the same contract terms: each broker pays $600 per month and keeps 100% of their commissions. The agents sigh in relief and quickly sign the new agreements like sheep to the slaughter.
Since the broker can’t generate enough network marketing leads for the agents, and since the agents aren’t selling enough to help make the broker enough funds on commission splits, any type of split wouldn’t seem sensible for the broker right now. houses for sale in brierfield A sharp broker will charge each realtor a monthly fee. He laughs completely to the bank, because with 60 brokers paying $600 per month, he’s making $36,000 per month just for living.
3 years ago I sat across the desk from the franchise broker who viewed me and stated, “Well, we’re feeding the business every month. You need to do that when times are tough. But we have been through a down economy before, and we always turn out okay.” I recall thinking to myself that was a silly thing to state coming from a man who told me he had no business plan, no cover marketing, and no written vision for the future of his business. However, that same broker just issued a press release he is permanently closing the doorways of his bricks-and-mortar and will be hanging his permit with another bricks-and-mortar. Another consolidation.
This broker is only jumping from one sinking ship to one that hasn’t sunk yet. The new ship has plenty of leaks, and it might take a while for folks on the Titanic to awaken. Bricks-and-mortar real estate brokerages that stubbornly refuse to bridge the gap to an entirely home based business model will die a sluggish and painful death. It’s a very important factor for brokers to ride their very own ship down, but it is fairly another thing altogether for those brokers to sell tickets to real estate agents with promises they can not keep.
Probably the most unfortunate thing about all this is that the brokers who think they are doing what must be done to survive are only re-arranging the deck chairs on the Titanic. Many of them truly have no idea or comprehend how precarious their fate is. Many of them do have a distressing feeling, plus they know something is wrong making use of their business model. Just like so lots of the passengers on the Titanic near the end who smiled and kept stating, “Don’t worry, everything always computes alright,” traditional agents continue to greet people who have a smile and wait for the phone to ring. But the ship is tilting, plus they are at risk. They just have no idea what to do.
This is the great dilemma of being stuck. It’s the classic inability to think outside of oneself. Traditional brokers and agents who have operated within a traditional brokerage model for several years struggle to think in entirely new techniques. What makes this especially problematic for so many is their distress with technology and the web. Some simply won’t learn the technologies. I understand of a top producer who refuses to adapt, and he sincerely believes he can delegate lots of the responsibilities to his assistant. Very few assistants are going to spend night and day learning and adapting for a boss, and when they do and keep someday, where does that depart the agent? Even successfully delegating leaves major issues in bridging the gap, that i will share later.
There’s been a huge change, however, not all agents and agents recognize what’s happening. Most do not comprehend that they are in the middle of a significant earthquake. Therefore, they continue to do what they will have done. Underlying all these changes is something very large that traditional brokers are missing. Just as it is powerful forces that approach tectonic plates deep below the earth’s surface, we are experiencing powerful forces resulting in an earthquake in the true estate world. Much like so much in lifestyle, what we see at first glance is merely an indicator of a deeper and much more significant trend that is actually the driving force. It really is this driving force that lots of brokers and agents haven’t recognized.
This is actually the first tectonic force that is at the root of all these changes effecting the real estate industry: a change in consumer behavior. Granted, it is a huge change in consumer behavior. It’s so big with therefore many implications, a lot of people don’t comprehend it.
The full description of these changes in consumer behavior would be quite long, but this is a brief summary in the context of the real estate business. Consumers are no longer ready to be sold with obnoxious marketing and told what things to buy and when to buy it. Consumers are sick and tired of interruption marketing, of billboards, of high pressure salesmen, of telemarketing, and of misrepresentations and boldfaced lies. Buyers have had it with qualified conflicts of interest. They’re sick and tired of only getting partial information upon which to base their most important decisions. Customers want and demand freedom to regulate their own destiny. They don’t really like being controlled. They don’t really like being manipulated.
The next tectonic force effecting such spectacular changes in the real estate industry is effective in its own right, but also functions as a catalyst for the modifications in consumer behavior.
The catalyst that has empowered consumers and is forcing these modifications which are the death knell of traditional property brokerage is… advances in technology.
The traditional brokerage business design has been totally unequipped to cope with these tectonic shifts. The effects of the real estate recession has accelerated this process to be sure, but only in time. Had it not been for this recession, the impact of these changes in consumer behavior could have taken longer, but the impact would ultimately function as same. The recession has acted such as a diversion, however, distracting realtors from the real cause of their doom.
I’m reminded of the newspaper salesman who attempted to sell me expensive print advertising recently. I ask him, “Why would I promote in the newspaper when it hasn’t sold some of my real estate listings in past times yr? Help me out. Why should I advertise in your paper?” His reply while soft-spoken and polite, was of the same mindset as many real estate agents today, “Well, you don’t wish to be left out when your competition is advertising, do you?” In response to my blank stare, he pleaded, “When business is slow, it’s not the time to avoid advertising. It’s the time and energy to advertise more than ever!” That’s when I could no longer have myself, and I broke out laughing. We used that brand in sales 30 years back. Are they nonetheless using that line? Yes, they’re.
Apparently, that kind of sales pitch still works with many real estate agents and brokers, because like flies bouncing off the plate glass windows in a futile work to flee from bondage, many agents are still doing what they admit fails very well any longer. Whatever we were doing that has been not working before must be done twice as fast nowadays. If the ship you are on is sinking, stop wasting time about your business and jump on another ship similar to the last one. Such behavior will be insanity and a ticket to failure.
More real estate agents have filed for bankruptcy safeguard during the past two years than at any time in U.S. Background. And the earthquake have not ended as many bricks-and-mortar brokers will be on the verge of closing their doorways soon.
It’s the early adopters of new business models and new technologies who will be the millionaire realtors in the a long time. Because time is definitely truncated with the accelerating speed of the growth of technologies and the usage of the Internet, those that pause too long to take into account doing something will be left so far behind, they could never catch up. Think about a space ship going into warp speed. Those that missed the flight will find themselves light years behind their colleagues. This is one way it’ll be for traditional realtors who insist upon staying behind.
There is an answer, and it means embracing technology, new marketing techniques, new tools to attain clients, and mastering the Internet as a powerful medium.