Real estate workplaces are closing from coast to coast. Real estate agents will be hanging up their licenses in every state. The traditional bricks-and-mortar real estate brokerage will be hemorrhaging, and all that retains this archaic business design alive is consolidations. As offices close up, some agents quit, however the survivors move their licenses to some other sinking ship, a ship that appears similar to the last one and frequently with the same name on the bow.
A large franchise office closes it’s doors, no longer able to keep carefully the lights on after more than a year of operating in the red. The agents come to mind sick, not knowing what they’ll carry out, until their savior walks in the entranceway.
A broker from a large bricks-and-mortar anywhere with exactly the same franchise offers to take all the agents in with the same contract terms: each agent pays $600 monthly and keeps 100% of these commissions. The brokers sigh in relief and swiftly sign the new agreements like sheep to the slaughter.
Because the broker can’t generate enough leads for the agents, and since the agents aren’t selling enough to make the broker enough cash on commission splits, almost any split wouldn’t seem sensible for the broker right now. manchester road accrington A sharp broker will charge each real estate agent a monthly payment. He laughs completely 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 over the desk from a franchise broker who viewed me and mentioned, “Well, we’re feeding the business every month. You have to do that when 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 merely 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 in one sinking ship to one that hasn’t sunk yet. The new ship has a lot of leaks, and it might 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 gradual and painful death. It’s a very important factor for brokers to ride their very own ship down, but it is fairly another thing altogether for those brokers to sell tickets to real estate agents with promises they can’t keep.
Probably the most unfortunate thing about all of this is that the brokers who think they’re doing what must be done to survive are just re-arranging the deck chair on the Titanic. Most of them truly have no idea or comprehend how precarious their fate is definitely. Many of them do have a distressing feeling, plus they know something is wrong making use of their business model. Just like so lots of the passengers on the Titanic near the conclusion who smiled and kept saying, “Don’t worry, everything always works out alright,” traditional agents continue steadily 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 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 agents who have operated within a traditional brokerage model for quite some time battle to think in entirely new ways. What makes this especially difficult for so many is their discomfort with technology and the Internet. Some simply refuse to learn the technologies. I understand of a high producer who refuses to adapt, and he sincerely believes he is able to delegate lots of the responsibilities to his assistant. Few assistants are going to spend night and day learning and adapting for a boss, and when they do and leave someday, where does that keep the agent? Even successfully delegating leaves major 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 usually do not comprehend that they are in the center of a major earthquake. Therefore, they continue to do what they will have done. Underlying each one of these changes is something very big that traditional brokers are missing. Just as it really is powerful forces that step tectonic plates heavy below the earth’s surface, we are experiencing powerful forces creating an earthquake in the true estate world. As with so much in daily life, what we see at first glance is merely a symptom of a deeper and much more significant movement that is actually the driving force. It is this driving force that many brokers and agents have not recognized.
Here is 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 hence many implications, a lot of people don’t comprehend it.
The full description of the changes in consumer behavior would be quite long, but here is a brief overview in the context of the real estate business. Consumers are no longer ready to be sold with obnoxious advertising and marketing and told what to buy and when to buy 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. Consumers 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. Customers want and demand freedom to control their own destiny. They don’t like being controlled. They don’t like being manipulated.
The second tectonic force effecting such spectacular changes in the real estate industry is powerful in its own right, but additionally functions as a catalyst for the alterations in consumer behavior.
The catalyst that has empowered consumers and is forcing these modifications which are the death knell of classic property brokerage is… advances in engineering.
The traditional brokerage business model has been totally unequipped to cope with these tectonic shifts. The impression of the real estate recession has accelerated this technique to be sure, but only with 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 just like a diversion, however, distracting real estate agents from the real cause of their doom.
I’m reminded of the newspaper salesman who tried to market me expensive print advertising lately. I ask him, “Why would I market in the newspaper when it hasn’t sold any of my real estate listings in past times year or so? Help me out. Why must i advertise in your papers?” His reaction while soft-spoken and polite, was of exactly the same mindset as many real estate agents today, “Well, you don’t wish 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 incorporate myself, and I broke out laughing. We used that series in sales 30 years back. Are they nonetheless using that line? Yes, they are.
Apparently, that kind of sales pitch still works with many real estate agents and agents, because like flies bouncing off the plate glass windows in a futile work to escape from bondage, many agents are still doing what they admit doesn’t work very well any longer. Whatever we were doing that was not working before should be done twice as fast today. If the ship you’re on is sinking, be quick about your business and join 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 security before two years than anytime in U.S. Background. And the earthquake have not ended as many bricks-and-mortar brokers happen to be on the verge of closing their doors soon.
It’s the early adopters of new business models and new technologies who’ll be the millionaire realtors in the years to come. Because time is definitely truncated with the accelerating pace of the growth of engineering and the use of the Internet, those that 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 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 on staying behind.
There is an answer, and it means embracing technology, new marketing techniques, new tools to reach clients, and mastering the Internet as a powerful medium.