Real Estate Brokerage Is Changing to a Virtual Brokerage Model

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 usually 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 looks just like the last one and frequently with the very same name on the bow.

A big franchise office closes it’s doorways, 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 do, until their savior walks in the entranceway.

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 brokers sigh in relief and swiftly sign the new agreements like sheep to the slaughter.

Because the broker can’t generate enough leads for the agents, and because the agents aren’t selling enough to help make the broker enough money on commission splits, any sort of split wouldn’t make sense for the broker right now. house for sale swinton A sharp agent will charge each agent a monthly charge. He laughs completely 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 the franchise broker who looked at me and mentioned, “Well, we’re feeding the business every month. You have to do that when times are tough. But we’ve been through tough times before, and we always come out okay.” I remember thinking to myself that has been a silly thing to say from the man who told me he previously no business plan, no cover marketing, and no written vision for future years of his business. Regrettably, that same broker simply 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 new ship has a lot of leaks, and it may take a while for individuals on the Titanic to wake up. Bricks-and-mortar property brokerages that stubbornly won’t bridge the gap to a completely new business model will die a sluggish and painful death. It’s a very important factor for brokers to ride their own ship down, but it is fairly another thing altogether for all those brokers to sell tickets to realtors with promises they can not keep.

The most unfortunate thing about all of 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. Most of them truly have no idea or comprehend how precarious their fate is usually. Most of them do have a distressing feeling, plus they know something is wrong making use of their business model. Exactly like so lots of the passengers on the Titanic near the stop who smiled and kept saying, “Don’t worry, everything always computes alright,” traditional agents continue to greet people who have a smile and await the phone to ring. But the ship is tilting, plus they are at risk. They just have no idea 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 inside a traditional brokerage model for quite some time battle to think in entirely new techniques. What makes this especially difficult for so many is their irritation with technology and the Internet. Some simply won’t learn the technologies. I know of a top producer who refuses to adapt, and he sincerely believes he can delegate most of the responsibilities to his assistant. Few assistants are going to spend night and day mastering and adapting for a boss, and if they do and leave someday, where does that abandon the realtor? Even successfully delegating leaves considerable 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 usually do not comprehend that they are in the center of a significant earthquake. Therefore, they continue to do what they will have done. Underlying each one of these changes is something very major that traditional brokers are missing. Just as it really is powerful forces that approach tectonic plates deep below the earth’s surface, we are experiencing powerful forces triggering an earthquake in the real estate world. Much like so much in daily life, what we see on the surface is merely a symptom of a deeper plus much more significant trend 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 is a huge change in consumer actions. It’s so big with hence many implications, a lot of people don’t comprehend it.

The full description of these changes in consumer behavior would be quite long, but this is a brief overview in the context of the real estate business. Consumers are no longer willing to be sold with obnoxious advertising and told what things to buy and when to get it. Consumers are fed up with interruption marketing, of billboards, of high pressure salesmen, of telemarketing, and of misrepresentations and boldfaced lies. Consumers have had it with pro conflicts of interest. They’re sick and tired of 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 really like being controlled. They don’t like being manipulated.

The next tectonic force effecting such spectacular changes in the true estate industry is powerful in its own right, but additionally works as a catalyst for the modifications in consumer behavior.

The catalyst which has empowered customers and is forcing these improvements that are the death knell of standard real estate brokerage is… advances in engineering.

The traditional brokerage business design has been totally unequipped to manage these tectonic shifts. The effect of the true estate recession has accelerated this technique to be sure, but only with time. Had it not been for this recession, the impact of the changes in consumer behavior would have taken longer, but the impact would ultimately function as exact same. The recession has acted just like a diversion, however, distracting real estate agents from the real reason behind their doom.

I’m reminded of the newspaper salesman who attempted to market me expensive print advertising just lately. I question him, “Why would I market in the newspaper when it hasn’t sold some of my real estate listings previously yr? Help me out. Why should I advertise in your papers?” His response while soft-spoken and polite, was of the same mindset as many real estate agents today, “Well, you don’t wish to be left out when your competition is advertising, do 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 and energy to advertise more than ever!” That’s when I possibly could no longer have myself, and I broke out laughing. We used that brand in sales 30 years ago. Are they nevertheless using that line? Yes, they are.

Apparently, that kind of sales pitch still works with many real estate agents and agents, because like flies bouncing off the plate cup windows in a futile effort to escape from bondage, many agents remain doing what they admit doesn’t work very well anymore. 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 just like the last one. Such behavior is definitely insanity and a ticket to failure.

More real estate agents have filed for bankruptcy defense before two years than anytime in U.S. History. And the earthquake have not ended as many bricks-and-mortar agents will be on the verge of closing their doors soon.

It’s the early adopters of home based business models and new technologies who’ll be the millionaire real estate agents in the a long time. Because time will be truncated with the accelerating speed of the growth of technology and the use of the Internet, those who pause too long to think about doing something will undoubtedly be left so far behind, they may never catch up. Think about a space ship going into 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 reach clients, and mastering the web as a powerful medium.

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