Real estate office buildings are closing from coast to coast. Real estate agents are usually hanging up their licenses in every state. The traditional bricks-and-mortar real estate brokerage will be hemorrhaging, and all that maintains this archaic business design alive is consolidations. As offices near, some agents quit, however the survivors move their licenses to some other sinking ship, a ship that looks similar to the last one and often 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 more than a year of operating in the red. The agents come to mind sick, not knowing what they will carry out, until their savior walks in the entranceway.
A broker from a large bricks-and-mortar anywhere with the same franchise offers to take all of the agents in with the very same contract terms: each real estate agent pays $600 per month and keeps 100% of their commissions. The brokers sigh in relief and quickly sign the new agreements like sheep to the slaughter.
Because the broker can’t generate enough prospects for the agents, and because the agents aren’t selling enough to help make the broker enough money on commission splits, almost any split wouldn’t seem sensible for the broker right now. keenans clitheroe A sharp broker will charge each real estate agent a monthly rate. He laughs all the way to the bank, 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 a franchise broker who viewed me and said, “Well, we’re feeding the business every month. You have to do that whenever 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 coming from a 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 only issued a press release he is permanently closing the doorways 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 1 that hasn’t sunk yet. The new ship has plenty of leaks, and it may take a while for individuals on the Titanic to wake up. Bricks-and-mortar real estate brokerages that stubbornly won’t 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 very own ship down, but it is fairly another thing altogether for all those brokers to sell tickets to real estate agents with promises they can not keep.
The most unfortunate thing about all of this is that the agents who think they’re doing what it takes to survive are just re-arranging the deck seats on the Titanic. Most of them truly do not know or comprehend how precarious their fate is definitely. Most of them do have a distressing feeling, plus they know something is wrong with their business model. Just like so many of the passengers on the Titanic close to the ending who smiled and kept stating, “Don’t worry, everything always computes 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 outside of oneself. Traditional brokers and agents who have operated within a traditional brokerage model for quite some time struggle to think in entirely new methods. What makes this especially difficult for so many is their soreness with technology and the web. Some simply won’t learn the technologies. I understand of a high producer who refuses to adapt, and he sincerely believes he can delegate lots of the responsibilities to his assistant. Several assistants are going to spend night and day mastering and adapting for a boss, and if they do and depart someday, where does that depart the real estate agent? Even successfully delegating leaves major issues in bridging the gap, which 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 center of a major earthquake. Therefore, they continue to do what they will have done. Underlying all these changes is something very big that traditional agents are missing. Just as it really is powerful forces that transfer tectonic plates heavy below the earth’s surface, we have been experiencing powerful forces triggering an earthquake in the real estate world. Much like so much in living, what we see at first glance is merely a symptom of a deeper plus much more significant movement that is actually the driving force. It is this driving force that lots of brokers and agents have not recognized.
This is actually the first tectonic force that’s at the root of most 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 thus many implications, a lot of people don’t comprehend it.
The full description of the changes in consumer behavior will be quite long, but this is a brief overview in the context of the true estate business. Consumers are no longer willing to be sold with obnoxious advertising and told what to buy and when to buy it. Consumers are fed up with interruption advertising, of billboards, of ruthless salesmen, of telemarketing, and of misrepresentations and boldfaced lies. Buyers have had it with experienced conflicts of interest. They’re sick and tired of only getting partial information upon which to base their most important 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 next tectonic force effecting such spectacular changes in the true estate industry is strong in its own right, but additionally acts as a catalyst for the changes in consumer behavior.
The catalyst which has empowered consumers and is forcing these alterations that are the death knell of classic property brokerage is… advances in engineering.
The traditional brokerage business design has been totally unequipped to manage these tectonic shifts. The impact of the real estate recession has accelerated this technique to be sure, but only in time. Had it not been because of this recession, the impact of the changes in consumer behavior would have taken longer, however the impact would ultimately function as identical. The recession has acted such as a diversion, however, distracting real estate agents from the real cause of their doom.
I’m reminded of the newspaper salesman who tried to sell me expensive print advertising recently. I consult him, “Why would I market in the newspaper when it hasn’t sold any of my real estate listings in past times yr? Help me out. Why should I advertise in your document?” His reaction while soft-spoken and polite, was of the same mindset as many real estate brokers today, “Well, you don’t wish to be left out whenever your competition is advertising, can you?” In reaction to my blank stare, he pleaded, “When business is slow, it’s not the time to stop advertising. It’s the time and energy to advertise as part of your!” That’s when I could no longer include myself, and I broke out laughing. We used that series in sales 30 years ago. Are they still using that line? Yes, they’re.
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 effort to escape from bondage, many agents remain doing what they admit fails very well anymore. Whatever we were doing that has been not working before must be done twice as fast nowadays. If the ship you are on is sinking, be quick about your business and jump on another ship just like the last one. Such behavior will be insanity and a ticket to failing.
More real estate agents have filed for bankruptcy security in past times two years than at any time in U.S. Background. And the earthquake has not ended as many bricks-and-mortar brokers happen to be 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 real estate agents in the years to come. Because time is truncated with the accelerating rate of the growth of technologies and the usage of the Internet, those that pause too long to take into account doing something will undoubtedly be left so far behind, they may never catch up. Think of a space ship entering warp speed. Those that missed the flight will see themselves light ages 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 attain clients, and mastering the Internet as a powerful medium.