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 certainly hemorrhaging, and all that maintains this archaic business design alive is consolidations. As offices close, some agents quit, however the survivors move their licenses to some other sinking ship, a ship that looks just like the last one and frequently with the same name on the bow.
A large 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 will carry out, 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 exact same contract terms: each real estate agent 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.
Because the broker can’t generate enough potential clients 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. keenans swinton A sharp broker will charge each realtor a monthly payment. He laughs completely to the bank, because with 60 brokers paying $600 monthly, he’s making $36,000 per month just for living.
3 years ago I sat over the desk from a franchise broker who viewed me and stated, “Well, we’re feeding the business enterprise every month. You need to do that whenever times are tough. But we have been through tough times before, and we always come out okay.” I recall thinking to myself that was a silly thing to say from the man who told me he previously no business plan, no cover marketing, and no written vision for future years of his business. Unfortunately, that same broker simply just issued a press release he is permanently closing the doorways of his bricks-and-mortar and you will be hanging his permit with another bricks-and-mortar. Another consolidation.
This broker is merely jumping in one sinking ship to 1 that hasn’t sunk yet. The new ship has plenty of leaks, and it may take a while for individuals on the Titanic to awaken. Bricks-and-mortar real estate brokerages that stubbornly refuse to bridge the gap to a completely 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 fairly another thing altogether for all those brokers to sell tickets to real estate agents with promises they can’t keep.
The most unfortunate thing about all this is that the agents 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 have no idea or comprehend how precarious their fate is usually. Most of them do have a distressing feeling, plus they know something is wrong with their business model. Just 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 wait for 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 issue of being stuck. It is the classic inability to think beyond oneself. Traditional brokers and agents who have operated within a traditional brokerage model for several years battle to think in entirely new methods. What makes this especially difficult for so many is their pain with technology and the Internet. Some simply won’t learn the technologies. I know of a high producer who refuses to adapt, and he sincerely believes he is able to delegate most of the responsibilities to his assistant. Few assistants are going to spend night and day studying and adapting for a boss, and when they do and depart someday, where does that abandon the broker? Even successfully delegating leaves significant problems in bridging the gap, which 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 all these changes is something very big that traditional agents are missing. Just as it really is powerful forces that step tectonic plates heavy below the earth’s surface, we are experiencing powerful forces triggering an earthquake in the true estate world. As with so much in life, 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 lots of brokers and agents haven’t recognized.
This is actually the first tectonic force that’s at the root of most these changes effecting the real estate industry: a big 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 this is a brief summary in the context of the real estate business. Consumers are no more ready to be sold with obnoxious advertising and marketing and told what things to buy and when to buy it. Consumers are fed up with interruption marketing, of billboards, of ruthless salesmen, of telemarketing, and of misrepresentations and boldfaced lies. Buyers have had it with pro conflicts of interest. They’re sick and tired of only getting partial information where to base their most significant decisions. Buyers want and demand freedom to control their own destiny. They don’t really like being controlled. They don’t really like being manipulated.
The next tectonic force effecting such spectacular changes in the true estate industry is powerful in its own right, but additionally acts as a catalyst for the modifications in consumer behavior.
The catalyst which has empowered buyers and is forcing these adjustments that are the death knell of standard property brokerage is… advances in systems.
The traditional brokerage business model has been totally unequipped to handle these tectonic shifts. The impression of the true estate recession has accelerated this technique to be certain, but only in time. Had it not been for this recession, the impact of these changes in consumer behavior would have taken longer, however the impact would ultimately function as exact same. The recession has acted just like a diversion, however, distracting real estate agents from the real cause of their doom.
I’m reminded of the newspaper salesman who attempted to sell me expensive print advertising recently. I question him, “Why would I market in the newspaper when it hasn’t sold some of my real estate listings previously yr? Help me out. Why must i advertise in your paper?” His reply while soft-spoken and polite, had been of exactly the same mindset as many real estate agents today, “Well, you don’t desire to be left out whenever your competition is advertising, can 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 possibly could no longer consist of myself, and I broke out laughing. We used that line in sales 30 years ago. Are they even now using that line? Yes, they’re.
Apparently, that kind of sales page still works with many real estate agents and brokers, because like flies bouncing off the plate glass windows in a futile energy to flee from bondage, many agents remain doing what they admit doesn’t work very well any longer. Whatever we were doing that has been not working before should be done twice as fast today. If the ship you’re on is sinking, be quick about your business and jump on another ship just like the last one. Such behavior can be insanity and a ticket to inability.
More real estate agents have filed for bankruptcy safeguard before two years than anytime in U.S. Record. And the earthquake has not ended as many bricks-and-mortar agents will be on the verge of closing their doors soon.
It is the early adopters of new business models and new technologies who will be the millionaire realtors in the a long time. Because time can be truncated with the accelerating pace of the growth of technologies and the use of the Internet, those that 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 find themselves light ages behind their colleagues. This is one way it’ll be for traditional real estate agents who insist on staying behind.
There is an answer, also it means embracing technology, new marketing techniques, new tools to reach clients, and mastering the web as a powerful medium.