Real Estate Brokerage Is Modifying to a Virtual Brokerage Model
Real estate office buildings are closing all over the country. Real estate agents are hanging up their licenses atlanta divorce attorneys state. The traditional bricks-and-mortar property brokerage is hemorrhaging, and all that keeps this archaic business design alive is consolidations. As offices close up, some agents quit, however the survivors move their licenses to another 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 carefully the lights on after more than a year of operating in the red. The agents are worried sick, not knowing what they will do, until their savior walks in the entranceway.
A broker from the large bricks-and-mortar anywhere with exactly the same franchise offers to take all the agents in with the very same contract terms: each agent pays $600 monthly and keeps 100% of these commissions. The agents sigh in relief and quickly sign the new contracts like sheep to the slaughter.
Because the broker can’t generate enough prospects for the agents, and because the agents aren’t selling enough to make the broker enough cash on commission splits, any sort of split wouldn’t seem sensible for the broker right now. bungalows for sale blackburn A sharp agent will charge each agent a monthly cost. He laughs all the way to the lender, because with 60 brokers paying $600 monthly, he’s making $36,000 a month just for living.
3 years ago I sat over the desk from a franchise broker who looked at me and explained, “Well, we’re feeding the business every month. You need to do that when times are tough. But we’ve been through tough times before, and we always turn out okay.” I remember thinking to myself that has been a silly thing to state from the man who told me he had no business plan, no budget for marketing, no written vision for future years of his business. Unfortunately, that same broker only issued a press release that he is permanently closing the doorways of his bricks-and-mortar and will be hanging his license with another bricks-and-mortar. Another consolidation.
This broker is merely jumping from one sinking ship to 1 that hasn’t sunk yet. The new ship has a lot of leaks, and it may take a while for people on the Titanic to wake up. Bricks-and-mortar property brokerages that stubbornly refuse to bridge the gap to an entirely new business model will die a gradual and painful death. It’s one thing for brokers to ride their own ship down, but it is fairly another thing altogether for all those brokers to sell tickets to real estate agents with promises they can not keep.
Probably the most unfortunate thing about all of this is that the brokers who think they are doing what must be done to survive are only re-arranging the deck seats on the Titanic. Most of them truly have no idea or comprehend how precarious their fate is. Most of them do have an uncomfortable feeling, and they know something is wrong making use of their business model. Exactly like so many of the passengers on the Titanic near the finish who smiled and kept saying, “Don’t worry, everything always works out alright,” traditional agents continue to greet people with a smile and await the phone to ring. But the ship is tilting, and they are at risk. They just don’t know what to do.
This is the great dilemma of being stuck. It’s the classic inability to think beyond oneself. Traditional brokers and agents who have operated within a traditional brokerage model for quite some time struggle to think in entirely new ways. What makes this especially difficult for so many is their soreness with technology and the Internet. Some simply refuse to learn the technologies. I know of a high producer who refuses to adjust, and he sincerely believes he is able to delegate lots of the responsibilities to his assistant. Few assistants are going to spend night and day learning and adapting for a boss, and if they do and abandon someday, where does that keep the real estate agent? Even successfully delegating leaves serious problems in bridging the gap, which I will share later.
There’s been a huge change, but not all agents and agents recognize what is happening. Most do not comprehend that they are in the middle of a significant earthquake. Therefore, they continue steadily to do what they will have done. Underlying each one of these changes is something very big that traditional agents are missing. Just as it really is powerful forces that shift tectonic plates heavy below the earth’s surface, we have been experiencing powerful forces leading to an earthquake in the real estate world. As with so much in daily life, what we see on the surface is merely an indicator of a deeper and much more significant trend that is actually the driving force. It is this driving force that many brokers and agents have not recognized.
Here is the first tectonic force that’s at the root of most these changes effecting the true estate industry: a change in consumer behavior. Granted, it is a huge change in consumer habits. It’s so big with consequently many implications, most people don’t comprehend it.
The full description of these changes in consumer behavior will be quite long, but this is a brief summary in the context of the true estate business. Consumers are no longer willing to be sold with obnoxious advertising and marketing and told what things to buy and when to get it. Consumers are sick and tired of interruption advertising and marketing, of billboards, of high pressure salesmen, of telemarketing, and of misrepresentations and boldfaced lies. Buyers have had it with professional conflicts of interest. They’re sick and tired of only getting partial information where to base their most significant decisions. Consumers want and demand freedom to control their own destiny. They don’t like being controlled. They don’t like being manipulated.
The next tectonic force effecting such dramatic changes in the true estate industry is powerful in its own right, but also works as a catalyst for the adjustments in consumer behavior.
The catalyst which has empowered consumers and is forcing these changes that are the death knell of classic real estate brokerage is… advances in engineering.
The traditional brokerage business model has been totally unequipped to handle these tectonic shifts. The effect of the true estate recession has accelerated this process to be certain, but only in time. Had it not been for this recession, the impact of these changes in consumer behavior could have taken longer, however the impact would ultimately function as similar. The recession has acted like 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 just lately. I consult him, “Why would I market in the newspaper when it hasn’t sold any of my real estate listings previously calendar year? Help me out. Why should I advertise in your paper?” His reaction while soft-spoken and polite, has been of the same mindset as many real estate agents today, “Well, you don’t wish to be left out when your competition is advertising, can you?” In reaction to my blank stare, he pleaded, “When business is slow, it’s not the time to stop advertising. It’s the time and energy to advertise more than ever!” That’s when I could no longer include myself, and I broke out laughing. We used that series in sales 30 years ago. Are they nonetheless using that line? Yes, they’re.
Apparently, that kind of sales page still works with many realtors and brokers, because like flies bouncing off the plate glass windows in a futile effort to flee from bondage, many agents are still doing what they admit doesn’t work very well any more. Whatever we were doing that was not working before must be done twice as fast today. If the ship you are on is sinking, be quick about your business and jump on another ship just like the last one. Such behavior is certainly insanity and a ticket to failing.
More real estate brokers have filed for bankruptcy security in past times two years than at any time in U.S. Record. And the earthquake have not ended as many bricks-and-mortar agents are on the verge of closing their doors soon.
It’s the early adopters of home based business models and new technologies who will be the millionaire realtors in the years to come. Because time will be truncated with the accelerating rate of the growth of technologies and the usage of the Internet, those who pause too long to think about doing something will undoubtedly be left so far behind, they may never catch up. Think of a space ship going into warp speed. Those that missed the flight will find themselves light yrs behind their colleagues. This is one way it will be for traditional real estate agents who insist upon staying behind.
There is an answer, also it means embracing technology, new marketing techniques, new tools to attain clients, and mastering the web as a powerful medium.