Real Estate Brokerage Is Transforming to a Virtual Brokerage Model
Real estate workplaces are closing from coast to coast. Real estate agents will be hanging up their licenses atlanta divorce attorneys state. The traditional bricks-and-mortar property brokerage is hemorrhaging, and all that will keep this archaic business model alive is consolidations. As offices close, some agents quit, but the survivors move their licenses to another sinking ship, a ship that looks similar to the last one and frequently with the same name on the bow.
A big franchise office closes it’s doors, no longer able to keep carefully the lights on after greater than a year of operating in debt. The agents come to mind sick, not knowing what they will perform, until their savior walks in the door.
A broker from a large bricks-and-mortar across town with exactly the same franchise offers to take all of the agents in with the exact same contract terms: each broker pays $600 monthly and keeps 100% of these commissions. The brokers sigh in relief and rapidly sign the new agreements like sheep to the slaughter.
Because the broker can’t generate enough network marketing leads for the agents, and because the agents aren’t selling enough to help make the broker enough funds on commission splits, any kind of split wouldn’t make sense for the broker right now. rossendale estate agents A sharp broker will charge each real estate agent a monthly cost. He laughs all the way to the bank, because with 60 brokers paying $600 per month, he’s making $36,000 a month just for living.
Three years ago I sat across the desk from a franchise broker who viewed me and stated, “Well, we’re feeding the business every month. You have 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 was a silly thing to say from the man who told me he had no business plan, no cover marketing, no written vision for the future of his business. Sadly, that same broker only 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 merely jumping from one sinking ship to 1 that hasn’t sunk yet. The new ship has plenty of leaks, and it might take a while for individuals on the Titanic to wake up. 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 own ship down, but it is fairly another thing altogether for those brokers to market tickets to real estate agents with promises they can’t keep.
The most unfortunate thing about all this is that the brokers who think they’re doing what it takes to survive are just re-arranging the deck chairs on the Titanic. Many 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 with their business model. Just like so lots of the passengers on the Titanic close to the conclusion who smiled and kept stating, “Don’t worry, everything always works out alright,” traditional agents continue steadily to greet people with a smile and wait for the phone to ring. But 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 outside of oneself. Traditional brokers and agents who have operated inside a traditional brokerage model for many years battle to think in entirely new methods. What makes this especially problematic for so many is their irritation with technology and the web. Some simply refuse to 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. Several assistants are likely to spend night and day understanding and adapting for a boss, and when they do and depart someday, where does that abandon the agent? Even successfully delegating leaves considerable 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 center of a significant earthquake. Therefore, they continue to do what they will have done. Underlying all these changes is something very major that traditional brokers are missing. Just as it is powerful forces that maneuver tectonic plates heavy below the earth’s surface, we have been experiencing powerful forces triggering an earthquake in the true estate world. Much like so much in lifestyle, what we see on the surface is merely an indicator of a deeper and many more significant trend that is actually the driving force. It is this driving force that many brokers and agents haven’t recognized.
This is actually the first tectonic force that’s at the root of all these changes effecting the true estate industry: a change in consumer behavior. Granted, it’s a huge change in consumer habits. It’s so big with thus 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 willing to be sold with obnoxious advertising and told what things to buy and when to buy it. Consumers are fed up with interruption advertising, of billboards, of ruthless salesmen, of telemarketing, and of misrepresentations and boldfaced lies. Consumers 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 control 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 strong in its own right, but also works as a catalyst for the adjustments in consumer behavior.
The catalyst which has empowered customers and is forcing these modifications that are the death knell of conventional real estate brokerage is… advances in systems.
The traditional brokerage business design has been totally unequipped to manage these tectonic shifts. The effect of the true estate recession has accelerated this process to be sure, but only in time. Had it not been because of this recession, the impact of these changes in consumer behavior could have taken longer, however 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 tried to market me expensive print advertising just lately. I talk to him, “Why would I promote in the newspaper when it hasn’t sold any of my real estate listings in past times yr? Help me out. Why should I advertise in your document?” His response while soft-spoken and polite, had been of the same mindset as many real estate brokers today, “Well, you don’t wish to be left out when your competition is advertising, can 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 to advertise as part of your!” That’s when I possibly could no longer have myself, and I broke out laughing. We used that line in sales 30 years ago. Are they nevertheless using that line? Yes, they’re.
Apparently, that kind of sales pitch still works with many real estate agents and agents, because like flies bouncing off the plate cup windows in a futile work to escape from bondage, many agents remain doing what they admit doesn’t work very well anymore. Whatever we were doing that has been not working before must be done twice as fast nowadays. If the ship you’re on is sinking, stop wasting time about your business and join another ship just like the last one. Such behavior can be insanity and a ticket to failing.
More real estate agents have filed for bankruptcy coverage previously two years than at any time in U.S. Background. And the earthquake have not ended as many bricks-and-mortar agents happen to be on the verge of closing their doorways soon.
It’s the early adopters of home based business models and new technologies who’ll be the millionaire realtors in the years to come. Because time will be truncated with the accelerating pace of the growth of technology and the usage of the Internet, those who pause too long to take into account doing something will undoubtedly be left so far behind, they may never catch up. Think about a space ship entering warp speed. Those who missed the flight will find themselves light ages behind their colleagues. This is how it will be for traditional real estate agents who insist upon staying behind.
There is an answer, and it means embracing technology, new marketing methods, new tools to attain clients, and mastering the Internet as a powerful medium.