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 real estate brokerage is usually hemorrhaging, and all that helps to keep this archaic business design alive is consolidations. As offices close up, 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 doors, 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 will carry out, until their savior walks in the door.
A broker from a large bricks-and-mortar across town with the same franchise offers to take all the agents in with the very same contract terms: each realtor pays $600 monthly and keeps 100% of these commissions. The brokers sigh in relief and rapidly sign the new contracts like sheep to the slaughter.
Because the broker can’t generate enough potential clients for the agents, and since the agents aren’t selling enough to help make the broker enough money on commission splits, almost any split wouldn’t seem sensible for the broker today. houses for sale haslingden A sharp broker will charge each realtor a monthly fee. He laughs all the way 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 a franchise broker who viewed me and stated, “Well, we’re feeding the business every month. You need to do that whenever times are tough. But we have been through tough times before, and we always turn out okay.” I recall thinking to myself that has been a silly thing to say coming from a man who told me he had no business plan, no cover marketing, no written vision for future years of his business. Unfortunately, that same broker only issued a press release 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 in one sinking ship to 1 that hasn’t sunk yet. The brand new ship has a lot of leaks, and it may take a while for folks on the Titanic to awaken. Bricks-and-mortar property brokerages that stubbornly won’t bridge the gap to an entirely home based 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 quite another thing altogether for all those brokers to market tickets to real estate agents with promises they can’t keep.
Probably the most unfortunate thing about all this is that the brokers who think they’re doing what must be done to survive are just re-arranging the deck seats on the Titanic. Many of them truly do not know or comprehend how precarious their fate can be. Many of them do have a distressing feeling, and they know something is wrong with 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 steadily to greet people who have a smile and wait for 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 issue of being stuck. It’s the classic inability to think beyond oneself. Traditional brokers and brokers who have operated inside a traditional brokerage model for quite some time struggle to think in entirely new ways. What makes this especially problematic for so many is their soreness with technology and the Internet. Some simply refuse to learn the technologies. I understand of a high producer who refuses to adjust, and he sincerely believes he can delegate most of the responsibilities to his assistant. Several assistants are likely to spend night and day mastering and adapting for a boss, and when they do and leave someday, where does that keep the real estate agent? Even successfully delegating leaves severe challenges in bridging the gap, that i will share later.
There’s been an enormous change, but not all agents and agents recognize what’s happening. Most usually do not comprehend that they are in the center of a major 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 deeply below the earth’s surface, we have been experiencing powerful forces creating an earthquake in the true estate world. As with so much in lifetime, what we see at first glance is merely an indicator of a deeper plus much more significant trend that is actually the driving force. It really 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 real estate industry: a change in consumer behavior. Granted, it’s a huge change in consumer habit. It’s so big with so many implications, a lot of people don’t comprehend it.
The full description of the changes in consumer behavior will be quite long, but this is a brief overview in the context of the true estate business. Consumers are no longer willing to be sold with obnoxious advertising and marketing and told what to buy and when to get it. Consumers are fed up with interruption marketing, of billboards, of high pressure salesmen, of telemarketing, and of misrepresentations and boldfaced lies. Customers have had it with qualified conflicts of interest. They’re fed up with only getting partial information where to base their most significant decisions. Consumers want and demand freedom to control their own destiny. They don’t really like being controlled. They don’t really like being manipulated.
The second tectonic force effecting such dramatic changes in the true estate industry is effective in its own right, but additionally acts as a catalyst for the changes in consumer behavior.
The catalyst that has empowered customers and is forcing these improvements which are the death knell of traditional real estate brokerage is… advances in engineering.
The traditional brokerage business design has been totally unequipped to manage these tectonic shifts. The affect 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, but the impact would ultimately be the identical. 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 out to market 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 in the past 12 months? Help me out. Why must i advertise in your papers?” His response while soft-spoken and polite, seemed to be of the same mindset as many real estate brokers today, “Well, you don’t wish to be left out whenever your competition is advertising, can you?” In response to my blank stare, he pleaded, “When business is slow, it isn’t the time to stop advertising. It’s the time and energy to advertise as part of your!” That’s when I could no longer consist of myself, and I broke out laughing. We used that brand in sales 30 years ago. Are they even now using that line? Yes, they are.
Apparently, that kind of sales pitch 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 should be done twice as fast today. If the ship you are on is sinking, stop wasting time about your business and join another ship just like the last one. Such behavior is certainly insanity and a ticket to malfunction.
More real estate brokers have filed for bankruptcy protection before two years than at any time in U.S. Record. 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 will be the millionaire realtors in the years to come. Because time is certainly truncated with the accelerating rate of the growth of technologies and the usage of the Internet, those who pause too long to take into account doing something will be left so far behind, they may never catch up. Think about a space ship going into warp speed. Those who missed the flight will see themselves light yrs behind their colleagues. This is how it’ll be for traditional realtors 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 Internet as a powerful medium.