Real estate offices are closing all over the world. Real estate agents are hanging up their licenses in every town. The traditional bricks-and-mortar real estate brokerage is hemorrhaging, and all that keeps this archaic business model alive is consolidations. As offices close, some agents quit, but the survivors move their licenses distinct sinking ship, a ship that looks just just as the last one and often with the exact same name on the ribbon.
A large franchise office closes it’s doors, no longer able to keep the lights on after more compared to a year of operating at a negative balance. The agents are worried sick, not so sure what they will do, until their savior walks in the door. Jupiter Island real estate
A broker from substantial bricks-and-mortar across town sticking with the same franchise offers to take all the agents alongside the exact same contract terms: each agent pays $600 per month and keeps 100% of their commissions. The agents sigh in relief and quickly sign the new contracts 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 make the same broker enough funds commission splits, nearly every split wouldn’t seem for the broker today. A sharp broker will charge each agent a monthly fee. He laughs all the best way to the bank, owing to 60 agents paying $600 per month, he’s making $36,000 a month exclusively for living.
Three years ago I sat within the desk from a franchise broker who looked at me and said, “Well, we’re feeding the organization every month. You need to do that when times are tough. But we’ve been through tough times before, and we always come out appropriate.” I remember thinking to myself that would be a silly thing to say coming from a guy who told me he had no enterprise plan, no plan for marketing, and no written vision for the future of his business. Unfortunately, that same broker just issued a press release that he is permanently closing the doors of his bricks-and-mortar and is actually going to hanging his license with another bricks-and-mortar. Another consolidation.
This broker is probably jumping from one sinking ship a minimum of one that hasn’t sunk yet. The new ship has associated with leaks, and it may take a while for individuals on the Titanic to wake in place. Bricks-and-mortar real estate brokerages that stubbornly typically bridge the gap to an entirely new business model will die a pokey and painful death. It’s one thing for brokers to ride their own ship down, but it’s very another thing altogether for those brokers to sell tickets to real estate agents with promises cannot keep.
The most unfortunate thing about cash is that the agents who think they are doing what it takes to survive are basically re-arranging the deck chairs on the Titanic. Many of them truly do not know or comprehend how precarious their fate is. Some of them do have a distressing feeling, and learn something is wrong with their feature. 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 along with a smile and wait for a phone to rings. But the ship is tilting, and they are at risk. They just don’t know what to carry out.
This is excellent dilemma of being stuck. It may be the classic inability believe outside of oneself. Traditional brokers and agents who have operated within a traditional brokerage model for many years struggle to think in entirely new ways. What makes this especially challenging for so many will be the discomfort with technology and the Entire world wide. Some simply refuse to learn the advances. I know of a top producer who refuses to adapt, and he sincerely believes he can delegate many in the responsibilities to his assistant. Few assistants are going spend night and day learning and adapting for a boss, and if perform and leave someday, where does that leave the service? Even successfully delegating leaves serious challenges in bridging the gap, which I will share later.
There’s been the change, but not every agents and brokers recognize what is going on. Most do not comprehend that nevertheless in the middle of a major earthquake. Therefore, they continue to do what they usually have done. Underlying each one of these changes is something very big that traditional brokers are missing. Just like it is powerful forces that move tectonic plates deep below our planet’s surface, we are receiving powerful forces causing an earthquake in the real estate field. As with so much in life, the devices we see on the surface is merely a warning sign of a deeper and much more significant movement that is actually the driving compel. It is this driving force that many brokers and agents have not comprehended.
Here is extremely tectonic force at this point at the reason behind all these changes effecting the property industry: a change in consumer behavior. Granted, it’s a huge change in consumer behavior. It’s so big with so many implications, most suppliers comprehend it.
The full description of these alterations in consumer behavior that i see quite long, but here is a short summary in the context of the real estate business. Consumers shall no longer be willing to be sold with obnoxious advertising and told what to buy and when to buy it. Consumers are sick and sick and interruption advertising, of billboards, of questionable salesmen, of telemarketing, and of misrepresentations and boldfaced is located. Consumers have had it with professional conflicts of interest. They’re fed up with only getting partial information upon which to base their most important decisions. Consumers want and demand freedom to control their own destiny. They don’t like being controlled. They detest being manipulated.
The second tectonic force effecting such dramatic changes previously real estate sector is powerful in some right, but also acts as a catalyst for oftentimes in consumer activities.
The catalyst offers empowered consumers it is actually forcing these changes that are the death knell of traditional real estate brokerage is. advances in technology.
The traditional brokerage business model recently been totally unequipped dealing with these tectonic golf swings. The impact of the real estate recession has accelerated this process for sure, but only in time. Been there not been for this recession, the impact of these adjustments to consumer behavior would have taken longer, however the impact would ultimately be the alike. The recession has acted like a diversion, however, distracting real estate agents from the real cause of their misfortune.
I’m reminded with the newspaper salesman who tried to sell me expensive print advertising recently. I ask him, “Why would I advertise in the newspaper when it hasn’t sold any of my real estate listings in the past year? Help me out. Why must i advertise in your paper?” His response while soft-spoken and polite, was of the mindset as many real estate brokers today, “Well, to avoid to be unnoticed when your competition is advertising, do you really?” In response to my blank stare, he pleaded, “When business is slow, it’s not period to stop advertising. It’s the time to advertise more than ever!” That’s when I could no longer contain myself, and I broke out laughter. We used that line in sales 30 years earlier. Are they still using that step? Yes, they are.
Apparently, that kind of everlasting sales pitch still works with many real estate brokers and brokers, because like flies bouncing off home plate glass windows in a futile effort to leave from bondage, many agents are still doing the thing they admit doesn’t work very well anymore. Whatever we did that was not working before must be done twice as fast now. If ever the ship you are well on is sinking, be quick about enterprise and can get on another ship just similar to the last one. Such behavior is insanity as well as a ticket to failure.
More real estate brokers have declared bankruptcy protection in the past two years than at any time in Oughout.S. History. And the earthquake hasn’t ended as many bricks-and-mortar brokers are near closing their doors rapidly.
It could be the early adopters of new clients models and new technologies who will be the millionaire they in the time to you should come. Because time is truncated the actual accelerating pace of aims of technology and the use of the Internet, those who pause lengthy to reflect on doing something will stay so far behind, informative never get up to date. Think of a space ship commencing warp acceleration. Those who missed the flight will wind up light years behind their colleagues. This is how it is actually for traditional real estate agents who put in force staying the back.
There is an answer, as it means embracing technology, new marketing methods, new tools to reach clients, and mastering the world wide web as a powerful medium.