Real estate offices are closing from coast to coast. Real estate agents will be hanging up their licenses atlanta divorce attorneys state. The traditional bricks-and-mortar real estate brokerage is definitely hemorrhaging, and all that keeps this archaic business model alive is consolidations. As offices close up, some agents quit, however the survivors move their licenses to another 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 doors, no longer able to keep the lights on after greater than a year of operating in debt. The agents come to mind 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 the same franchise offers to take all of the agents in with the same contract terms: each agent pays $600 monthly and keeps 100% of their commissions. The brokers sigh in relief and rapidly sign the new agreements like sheep to the slaughter.
Since the broker can’t generate enough network marketing leads for the agents, and because the agents aren’t selling enough to make the broker enough funds on commission splits, any kind of split wouldn’t seem sensible for the broker right now. houses for sale outwood A sharp broker will charge each realtor a monthly charge. He laughs completely to the bank, because with 60 agents paying $600 per month, he’s making $36,000 a month just for living.
Three years ago I sat over the desk from a franchise broker who looked at me and said, “Well, we’re feeding the business every month. You need to do that when times are tough. But we’ve been through tough times before, and we always turn out okay.” I recall thinking to myself that has been a silly thing to state from the man who told me he had no business plan, no budget for marketing, no written vision for the future of his business. Unfortunately, that same broker simply just issued a press release that he is permanently closing the doorways of his bricks-and-mortar and 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 a lot of leaks, and it might take a while for folks on the Titanic to wake up. Bricks-and-mortar property brokerages that stubbornly refuse to bridge the gap to a completely home based business model will die a gradual and painful death. It’s one thing 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.
The most unfortunate thing about all this is that the brokers who think they are doing what it takes to survive are only re-arranging the deck chair on the Titanic. Many of them truly do not know or comprehend how precarious their fate can be. Most of them do have an uncomfortable feeling, and they know something is wrong making use of their business model. Just like so lots of the passengers on the Titanic close to the finish who smiled and kept declaring, “Don’t worry, everything always works out alright,” traditional agents continue steadily to greet people with a smile and await the phone to ring. But the ship is tilting, and they are at risk. They just don’t know what to do.
This is the great dilemma of being stuck. It’s the classic inability to think outside of 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 problematic for so many is their soreness with technology and the web. Some simply refuse to learn the technologies. I know of a top producer who refuses to adjust, and he sincerely believes he is able to delegate lots of the responsibilities to his assistant. Few assistants are likely to spend night and day understanding and adapting for a boss, and when they do and keep someday, where does that depart the agent? Even successfully delegating leaves significant difficulties in bridging the gap, that i will share later.
There’s been a huge change, but not all agents and brokers recognize what is happening. Most do not comprehend that they are in the middle of a major earthquake. Therefore, they continue to do what they will have done. Underlying each one of these changes is something very major that traditional agents are missing. Just as it really is powerful forces that approach tectonic plates deeply below the earth’s surface, we have been experiencing powerful forces producing an earthquake in the true estate world. As with so much in existence, what we see at first glance is merely a symptom of a deeper and many more significant trend that is actually the driving force. It is this driving force that many brokers and agents have not recognized.
This is actually the first tectonic force that’s at the root of most these changes effecting the true estate industry: a change in consumer behavior. Granted, it is a huge change in consumer actions. It’s so big with hence many implications, most people don’t comprehend it.
The full description of these changes in consumer behavior will be quite long, but here is a brief overview 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 buy it. Consumers are sick and tired of interruption advertising and marketing, of billboards, of ruthless salesmen, of telemarketing, and of misrepresentations and boldfaced lies. Consumers have had it with experienced conflicts of interest. They’re fed up with only getting partial information where to base their most significant decisions. Buyers 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 powerful in its own right, but additionally works as a catalyst for the modifications in consumer behavior.
The catalyst that has empowered customers and is forcing these changes which are the death knell of traditional real estate brokerage is… advances in engineering.
The traditional brokerage business model has been totally unequipped to deal with these tectonic shifts. The effects of the real estate recession has accelerated this technique to be certain, but only with time. Had it not been because of this recession, the impact of the changes in consumer behavior could have taken longer, however the impact would ultimately be the identical. The recession has acted such as a diversion, however, distracting real estate agents from the real reason behind their doom.
I’m reminded of the newspaper salesman who attempted to sell me expensive print advertising recently. I inquire him, “Why would I market in the newspaper when it hasn’t sold any of my real estate listings in the past 12 months? 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 brokers today, “Well, you don’t wish to be left out when your competition is advertising, can you?” In response 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 incorporate myself, and I broke out laughing. We used that line in sales 30 years ago. Are they nevertheless using that line? Yes, they’re.
Apparently, that kind of sales pitch still works with many realtors and agents, because like flies bouncing off the plate cup windows in a futile effort to escape from bondage, many agents are still doing what they admit doesn’t work very well anymore. Whatever we were doing that was not working before must be done twice as fast now. If the ship you are on is sinking, stop wasting time about your business and join another ship similar to the last one. Such behavior is definitely insanity and a ticket to failure.
More real estate brokers have filed for bankruptcy coverage in past times two years than anytime in U.S. Background. And the earthquake have not ended as many bricks-and-mortar agents happen to be on the verge of closing their doorways soon.
It is the early adopters of home based business models and new technologies who will be the millionaire real estate agents in the a long time. Because time will be truncated with the accelerating tempo of the growth of systems and the usage of the Internet, those that pause too long to think about doing something will undoubtedly 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 decades behind their colleagues. This is one way it’ll be for traditional realtors 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 Internet as a powerful medium.