Real estate offices are closing from coast to coast. Real estate agents are hanging up their licenses in every state. The traditional bricks-and-mortar real estate brokerage is certainly hemorrhaging, and all that keeps this archaic business model alive is consolidations. As offices close up, some agents quit, however the survivors move their licenses to another sinking ship, a ship that appears similar to the last one and often with the exact same name on the bow.
A big franchise office closes it’s doorways, no longer able to keep the lights on after more than a year of operating in debt. The agents come to mind sick, not knowing what they’ll perform, until their savior walks in the door.
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 monthly and keeps 100% of their commissions. The agents sigh in relief and swiftly sign the new contracts like sheep to the slaughter.
Since the broker can’t generate enough leads for the agents, and since the agents aren’t selling enough to make the broker enough funds on commission splits, any sort of split wouldn’t seem sensible for the broker today. cheap houses in blackburn A sharp broker will charge each broker a monthly rate. He laughs completely to the lender, because with 60 brokers paying $600 per month, he’s making $36,000 a month just for living.
Three years ago I sat over the desk from the franchise broker who looked at me and said, “Well, we’re feeding the business every month. You need to do that whenever times are tough. But we have been through a down economy before, and we always turn out okay.” I remember thinking to myself that was a silly thing to state coming from a man who told me he previously no business plan, no cover marketing, and no written vision for future years of his business. Sadly, that same broker just issued a press release that he is permanently closing the doors of his bricks-and-mortar and you will be hanging his license with another bricks-and-mortar. Another consolidation.
This broker is merely jumping from one sinking ship to one that hasn’t sunk yet. The new ship has plenty of leaks, and it may take a while for people on the Titanic to awaken. Bricks-and-mortar property brokerages that stubbornly won’t bridge the gap to an entirely new business model will die a sluggish and painful death. It’s one thing for brokers to ride their very own ship down, but it is fairly another thing altogether for all those brokers to market tickets to realtors with promises they can’t keep.
Probably the most unfortunate thing about all of this is that the agents who think they’re doing what must be done to survive are only re-arranging the deck chair on the Titanic. Many of them truly do not know or comprehend how precarious their fate is certainly. Most of them do have a distressing feeling, plus they know something is wrong making use of their business model. Just like so many of the passengers on the Titanic near the finish who smiled and kept declaring, “Don’t worry, everything always works out alright,” traditional agents continue to greet people who have a smile and await the phone to ring. However the ship is tilting, plus 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 brokers who have operated within a traditional brokerage model for several years battle to think in entirely new ways. What makes this especially difficult for so many is their pain with technology and the web. Some simply refuse to learn the technologies. I know of a top producer who refuses to adapt, and he sincerely believes he can delegate many of the responsibilities to his assistant. Several assistants are likely to spend night and day understanding and adapting for a boss, and if they do and abandon someday, where does that abandon the broker? Even successfully delegating leaves critical difficulties in bridging the gap, which I will share later.
There’s been a huge change, however, not all agents and brokers recognize what’s happening. Most do not comprehend that they are in the center of a significant earthquake. Therefore, they continue steadily to do what they will have done. Underlying each one of these changes is something very huge that traditional agents are missing. Just as it really is powerful forces that maneuver tectonic plates heavy below the earth’s surface, we are experiencing powerful forces creating an earthquake in the true estate world. Much like so much in existence, what we see at first glance is merely an indicator of a deeper and many more significant trend that is actually the driving force. It is this driving force that lots of brokers and agents have not recognized.
This is actually the first tectonic force that is at the root of most these changes effecting the real estate industry: a change in consumer behavior. Granted, it’s a huge change in consumer conduct. It’s so big with hence many implications, most people don’t comprehend it.
The full description of the changes in consumer behavior will be quite long, but here is a brief summary in the context of the true estate business. Consumers are no longer ready to be sold with obnoxious advertising 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. Customers 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. Customers want and demand freedom to regulate their own destiny. They don’t like being controlled. They don’t really like being manipulated.
The second tectonic force effecting such spectacular changes in the real estate industry is effective in its own right, but additionally works as a catalyst for the modifications in consumer behavior.
The catalyst that has empowered consumers and is forcing these changes which are the death knell of traditional property brokerage is… advances in systems.
The traditional brokerage business design has been totally unequipped to manage these tectonic shifts. The affect of the real 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, but the impact would ultimately function as same. 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 market me expensive print advertising lately. I question him, “Why would I market in the newspaper when it hasn’t sold some of my real estate listings previously year or so? Help me out. Why should I advertise in your papers?” His response while soft-spoken and polite, seemed to be of exactly the same mindset as many real estate agents today, “Well, you don’t desire to be left out when your competition is advertising, do you?” In reaction to my blank stare, he pleaded, “When business is slow, it isn’t the time to stop advertising. It’s the time to advertise more than ever!” That’s when I could no longer consist of myself, and I broke out laughing. We used that line in sales 30 years ago. 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 cup windows in a futile energy to escape from bondage, many agents remain doing what they admit fails very well any longer. Whatever we were doing that was not working before should be done twice as fast now. If the ship you’re on is sinking, be quick about your business and join another ship just like the last one. Such behavior is certainly insanity and a ticket to failure.
More real estate agents have filed for bankruptcy safeguard previously two years than anytime in U.S. Background. And the earthquake has not ended as many bricks-and-mortar agents are usually on the verge of closing their doorways soon.
It is the early adopters of new business models and new technologies who’ll be the millionaire real estate agents in the a long time. Because time can be truncated with the accelerating tempo of the growth of systems and the use 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 about a space ship going into warp speed. Those that missed the flight will find themselves light a long time behind their colleagues. This is one way it’ll be for traditional real estate agents who insist upon staying behind.
There is an answer, also it means embracing technology, new marketing methods, new tools to reach clients, and mastering the web as a powerful medium.