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 is definitely hemorrhaging, and all that helps to keep this archaic business model alive is consolidations. As offices near, some agents quit, but the survivors move their licenses to some other sinking ship, a ship that seems similar to the last one and frequently with the very 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 come to mind sick, not knowing what they’ll perform, until their savior walks in the door.
A broker from a large bricks-and-mortar anywhere with the same franchise offers to take all the agents in with the same contract terms: each real estate agent pays $600 per month and keeps 100% of their commissions. The agents sigh in relief and swiftly sign the new contracts like sheep to the slaughter.
Because 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 money on commission splits, any sort of split wouldn’t seem sensible for the broker today. padiham road burnley A sharp broker will charge each realtor a monthly fee. He laughs all the way to the lender, because with 60 agents paying $600 monthly, he’s making $36,000 per month just for living.
3 years ago I sat over the desk from the franchise broker who viewed me and explained, “Well, we’re feeding the business enterprise every month. You have to do that when times are tough. But we’ve been through tough times before, and we always turn out okay.” I remember thinking to myself that was a silly thing to say from the man who told me he had no business plan, no budget for marketing, and no written vision for the future of his business. Unfortunately, that same broker only issued a press release that he is permanently closing the doors of his bricks-and-mortar and you will be hanging his permit with another bricks-and-mortar. Another consolidation.
This broker is merely jumping from one sinking ship to one that hasn’t sunk yet. The brand new ship has plenty of leaks, and it might take a while for folks on the Titanic to awaken. Bricks-and-mortar real estate brokerages that stubbornly refuse to bridge the gap to a completely new business model will die a slow and painful death. It’s one thing for brokers to ride their own ship down, but it is fairly another thing altogether for all those brokers to market tickets to real estate agents with promises they can not keep.
Probably the most unfortunate thing about all this is that the brokers who think they are doing what must be done to survive are only re-arranging the deck chair on the Titanic. Many of them truly have no idea or comprehend how precarious their fate will be. Many of them do have a distressing feeling, plus they know something is wrong making use of their business model. Exactly like so many of the passengers on the Titanic near the end who smiled and kept declaring, “Don’t worry, everything always works out alright,” traditional agents continue steadily to greet people with 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 agents who have operated within a traditional brokerage model for many years battle to think in entirely new methods. What makes this especially difficult for so many is their irritation with technology and the web. Some simply won’t learn the technologies. I know of a top producer who refuses to adapt, and he sincerely believes he is able to 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 abandon someday, where does that keep the realtor? Even successfully delegating leaves critical problems in bridging the gap, that i will share later.
There’s been a huge change, but not all agents and agents recognize what is happening. Most do not comprehend that they are in the middle of a major earthquake. Therefore, they continue steadily to do what they always have done. Underlying all these changes is something very big that traditional brokers are missing. Just as it is powerful forces that approach tectonic plates heavy below the earth’s surface, we are experiencing powerful forces producing an earthquake in the real estate world. Much like so much in lifestyle, what we see on the surface is merely a symptom of a deeper and much more significant movement 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 is at the root of all these changes effecting the real estate industry: a big change in consumer behavior. Granted, it’s a huge change in consumer habit. It’s so big with therefore many implications, most people don’t comprehend it.
The full description of these changes in consumer behavior would be quite long, but this is a brief summary in the context of the real estate business. Consumers are no longer willing to be sold with obnoxious marketing and told what to buy and when to get it. Consumers are sick and tired of interruption advertising, of billboards, of ruthless salesmen, of telemarketing, and of misrepresentations and boldfaced lies. Consumers have had it with pro conflicts of interest. They’re fed up with only getting partial information upon which to base their most important decisions. Customers 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 spectacular changes in the real estate industry is strong in its own right, but also works as a catalyst for the modifications in consumer behavior.
The catalyst that has empowered consumers and is forcing these modifications which are the death knell of conventional property brokerage is… advances in systems.
The traditional brokerage business design has been totally unequipped to deal with these tectonic shifts. The effect of the true estate recession has accelerated this process to be certain, 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 very same. The recession has acted such as a diversion, however, distracting realtors from the real reason behind their doom.
I’m reminded of the newspaper salesman who tried out to sell me expensive print advertising lately. I talk to him, “Why would I advertise in the newspaper when it hasn’t sold some 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 agents 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 collection 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 agents, because like flies bouncing off the plate glass windows in a futile work to escape from bondage, many agents remain doing what they admit fails very well anymore. Whatever we were doing that was not working before must be done twice as fast today. If the ship you are on is sinking, stop wasting time about your business and jump on another ship just like the last one. Such behavior can be insanity and a ticket to failing.
More real estate agents have filed for bankruptcy safety during the past two years than at any time in U.S. Background. And the earthquake have not ended as many bricks-and-mortar agents are on the verge of closing their doorways soon.
It’s the early adopters of home based business models and new technologies who’ll be the millionaire realtors in the a long time. Because time is certainly truncated with the accelerating speed of the growth of technology 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 that missed the flight will see themselves light yrs behind their colleagues. This is how it will be for traditional real estate agents who insist on staying behind.
There is an answer, also it means embracing technology, new marketing methods, new tools to reach clients, and mastering the web as a powerful medium.