Real estate office buildings are closing from coast to coast. Real estate agents are hanging up their licenses atlanta divorce attorneys state. The traditional bricks-and-mortar property brokerage is definitely hemorrhaging, and all that helps to keep this archaic business design alive is consolidations. As offices close, some agents quit, but the survivors move their licenses to another sinking ship, a ship that appears 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 the red. The agents are worried sick, not knowing what they’ll do, until their savior walks in the door.
A broker from the large bricks-and-mortar across town with exactly the same franchise offers to take all the agents in with the very same contract terms: each agent pays $600 per month and keeps 100% of these commissions. The agents sigh in relief and rapidly sign the new contracts like sheep to the slaughter.
Since the broker can’t generate enough network marketing leads for the agents, and since the agents aren’t selling enough to help make the broker enough cash on commission splits, any kind of split wouldn’t seem sensible for the broker right now. house for sale bb1 A sharp broker will charge each realtor a monthly price. He laughs all the way to the lender, because with 60 brokers paying $600 monthly, he’s making $36,000 per month just for living.
3 years ago I sat across the desk from the franchise broker who viewed me and mentioned, “Well, we’re feeding the business enterprise every month. You need to do that when times are tough. But we have been through tough times before, and we always come out okay.” I remember thinking to myself that was a silly thing to state from the man who told me he previously no business plan, no budget for marketing, no written vision for the future of his business. However, 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 permit with another bricks-and-mortar. Another consolidation.
This broker is only jumping in one sinking ship to one that hasn’t sunk yet. The new ship has plenty of leaks, and it might take a while for individuals on the Titanic to awaken. Bricks-and-mortar property brokerages that stubbornly refuse to bridge the gap to an entirely new business model will die a slow 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 sell tickets to realtors with promises they can’t keep.
Probably the most unfortunate thing about all this is that the agents who think they are doing what it takes to survive are just re-arranging the deck chair on the Titanic. Many of them truly do not know or comprehend how precarious their fate is definitely. Many of them do have an uncomfortable feeling, plus they know something is wrong making use of their business model. Exactly like so many of the passengers on the Titanic close to the ending who smiled and kept declaring, “Don’t worry, everything always works out alright,” traditional agents continue steadily to greet people who have 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 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 many years struggle to think in entirely new techniques. What makes this especially difficult for so many is their distress with technology and the web. Some simply refuse to learn the technologies. I know of a high producer who refuses to adapt, and he sincerely believes he can delegate lots of the responsibilities to his assistant. Very few assistants are likely to spend night and day learning and adapting for a boss, and when they do and leave someday, where does that depart the agent? Even successfully delegating leaves serious problems in bridging the gap, which I will share later.
There’s been an enormous change, but not all agents and brokers 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 always have done. Underlying all these changes is something very big that traditional brokers are missing. Just as it really is powerful forces that shift tectonic plates deep below the earth’s surface, we are experiencing powerful forces resulting in an earthquake in the true estate world. As with so much in life, what we see on the surface is merely a symptom of a deeper plus much more significant movement that is actually the driving force. It is this driving force that many brokers and agents haven’t recognized.
Here is the first tectonic force that’s at the root of all these changes effecting the real estate industry: a change in consumer behavior. Granted, it’s a huge change in consumer conduct. It’s so big with therefore many implications, a lot of people don’t comprehend it.
The full description of these changes in consumer behavior will be quite long, but this is a brief summary in the context of the true estate business. Consumers are no longer 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 advertising and marketing, of billboards, of ruthless salesmen, of telemarketing, and of misrepresentations and boldfaced lies. Consumers 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 regulate their own destiny. They don’t really like being controlled. They don’t like being manipulated.
The second tectonic force effecting such dramatic changes in the real estate industry is powerful in its own right, but also functions as a catalyst for the alterations in consumer behavior.
The catalyst that has empowered consumers and is forcing these changes that are the death knell of traditional real estate brokerage is… advances in technology.
The traditional brokerage business model has been totally unequipped to handle these tectonic shifts. The influence of the true estate recession has accelerated this process 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, however the impact would ultimately be the similar. 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 sell me expensive print advertising lately. I question him, “Why would I market in the newspaper when it hasn’t sold some of my real estate listings in the past season? Help me out. Why should I advertise in your paper?” His reply while soft-spoken and polite, had been of the same mindset as many real estate brokers today, “Well, you don’t want 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 avoid advertising. It’s the time and energy to advertise more than ever!” That’s when I possibly could no longer consist of myself, and I broke out laughing. We used that brand in sales 30 years back. Are they nevertheless using that line? Yes, they are.
Apparently, that kind of sales page still works with many realtors and brokers, because like flies bouncing off the plate glass windows in a futile work to escape 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 now. If the ship you’re on is sinking, be quick about your business and join another ship similar to the last one. Such behavior is certainly insanity and a ticket to inability.
More real estate brokers have filed for bankruptcy security in past times two years than anytime in U.S. Record. And the earthquake have not ended as many bricks-and-mortar agents happen to be on the verge of closing their doors soon.
It is the early adopters of home based business models and new technologies who’ll be the millionaire realtors in the a long time. Because time will be truncated with the accelerating tempo of the growth of engineering 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 entering warp speed. Those who missed the flight will find 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, and it means embracing technology, new marketing techniques, new tools to attain clients, and mastering the Internet as a powerful medium.