Real estate office buildings 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 definitely hemorrhaging, and all that keeps 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 seems similar to the last one and often with the exact same name on the bow.
A large franchise office closes it’s doors, no longer able to keep the lights on after greater than a year of operating in the red. The agents come to mind sick, not knowing what they will perform, until their savior walks in the entranceway.
A broker from the large bricks-and-mortar anywhere with the same franchise offers to take all 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 rapidly sign the new agreements 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 help make the broker enough money on commission splits, any sort of split wouldn’t make sense for the broker right now. houses for sale in swinton manchester A sharp agent will charge each agent a monthly cost. He laughs completely to the bank, because with 60 brokers paying $600 monthly, he’s making $36,000 a month just for living.
Three years ago I sat over the desk from a franchise broker who looked at me and mentioned, “Well, we’re feeding the business enterprise every month. You have to do that when times are tough. But we have been through tough times before, and we always turn out okay.” I remember thinking to myself that was a silly thing to say coming from a man who told me he previously no business plan, no cover marketing, and no written vision for the future of his business. Regrettably, that same broker only issued a press release that he is permanently closing the doorways of his bricks-and-mortar and you will be hanging his license with another bricks-and-mortar. Another consolidation.
This broker is only jumping from one sinking ship to one that hasn’t sunk yet. The brand new ship has a lot of leaks, and it may take a while for individuals on the Titanic to awaken. Bricks-and-mortar real estate brokerages that stubbornly won’t bridge the gap to an entirely home based business model will die a slow 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 realtors with promises they can not keep.
Probably the most unfortunate thing about all of this is that the agents who think they are doing what must be done to survive are only re-arranging the deck chairs on the Titanic. Most of them truly do not know or comprehend how precarious their fate is. Most of them do have a distressing feeling, and they know something is wrong making use of their business model. Just like so many 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 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 have no idea what to do.
This is the great dilemma of being stuck. It is the classic inability to think beyond oneself. Traditional brokers and brokers who have operated within a traditional brokerage model for quite some time battle to think in entirely new methods. What makes this especially problematic for so many is their pain with technology and the Internet. Some simply won’t learn the technologies. I understand of a high producer who refuses to adapt, and he sincerely believes he is able to delegate many of the responsibilities to his assistant. Few assistants are likely to spend night and day learning and adapting for a boss, and when they do and depart someday, where does that keep the real estate agent? Even successfully delegating leaves significant challenges 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 center of a significant earthquake. Therefore, they continue to do what they always have done. Underlying each one of these changes is something very large that traditional brokers are missing. Just as it really is powerful forces that maneuver tectonic plates deep below the earth’s surface, we have been experiencing powerful forces triggering an earthquake in the true estate world. Much like so much in lifetime, 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 lots of brokers and agents haven’t recognized.
Here is the first tectonic force that is at the root of all these changes effecting the real estate industry: a big change in consumer behavior. Granted, it’s a huge change in consumer habit. It’s so big with consequently 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 overview in the context of the real 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 fed up with interruption advertising, of billboards, of high pressure salesmen, of telemarketing, and of misrepresentations and boldfaced lies. Consumers have had it with specialized conflicts of interest. They’re sick and tired of only getting partial information where to base their most important decisions. Consumers 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 powerful 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 improvements which are the death knell of traditional property brokerage is… advances in engineering.
The traditional brokerage business design has been totally unequipped to handle these tectonic shifts. The effects of the real estate recession has accelerated this technique to be certain, but only with time. Had it not been for this recession, the impact of the changes in consumer behavior could have taken longer, but the impact would ultimately be the same. The recession has acted like a diversion, however, distracting realtors from the real reason behind their doom.
I’m reminded of the newspaper salesman who tried to sell me expensive print advertising lately. I request him, “Why would I promote in the newspaper when it hasn’t sold some of my real estate listings before year? Help me out. Why should I advertise in your papers?” His response while soft-spoken and polite, has been of the same mindset as many real estate brokers today, “Well, you don’t want 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 stop advertising. It’s the time to advertise as part of your!” That’s when I possibly could no longer contain myself, and I broke out laughing. We used that range in sales 30 years back. Are they still using that line? Yes, they’re.
Apparently, that kind of sales page still works with many realtors and agents, because like flies bouncing off the plate cup windows in a futile work to flee from bondage, many agents are still doing what they admit fails very well any more. Whatever we were doing that was not working before should 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 just like the last one. Such behavior is definitely insanity and a ticket to failing.
More real estate brokers have filed for bankruptcy coverage during the past two years than at any time in U.S. Background. And the earthquake has not ended as many bricks-and-mortar brokers are on the verge of closing their doorways soon.
It is the early adopters of home based business models and new technologies who’ll be the millionaire real estate agents in the a long time. Because time is certainly truncated with the accelerating rate of the growth of systems and the use of the Internet, those who 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 entering warp speed. Those who missed the flight will see themselves light years behind their colleagues. This is how 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 Internet as a powerful medium.