Real estate offices are closing all over the. Real estate agents are hanging up their licenses in every local. 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 one more sinking ship, a ship that looks just as good as the last one and often with the exact same name on the ribbon.
A large franchise office closes it’s doors, unable to keep the lights on after more when compared to a year of operating in the red. The agents are worried sick, not so sure what they will do, until their savior walks in the door. Jupiter real estate
A broker from a broad bricks-and-mortar across town with the same franchise offers to take all the agents in with 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 do the broker enough funds commission splits, any kind of split wouldn’t seem for the broker today. A sharp broker will charge each agent a monthly fee. He laughs all tips to the bank, owing to 60 agents paying $600 per month, he’s making $36,000 a month when living.
Three years ago I sat around the desk from a franchise broker who looked at me and said, “Well, we’re feeding enterprise enterprise every month. You have to do that when times are tough. But we’ve been through tough times before, and we always come out great.” I remember thinking to myself that any silly thing condition expertise coming from you who told me he had no business plan, no plan for marketing, and no written vision money of his work. Unfortunately, that same broker just issued a press release that he is permanently closing the doors of his bricks-and-mortar and possibly be hanging his license with another bricks-and-mortar. Another consolidation.
This broker in fact is jumping from one sinking ship to 1 that hasn’t sunk yet. The new ship has lots of leaks, and it a while for folks on the Titanic to wake in place. Bricks-and-mortar real estate brokerages that stubbornly refuse to bridge the gap to an entirely new business model will die a slow and painful fatality. It’s one thing for brokers to ride their own ship down, but it is quite another thing altogether for those brokers to sell tickets to real estate agents with promises cannot keep.
The most unfortunate thing about all of this is that the agents who think they are doing what it takes to survive tend to be simply re-arranging the deck chairs on the Titanic. Many of truly do not know or comprehend how precarious their fate is. The majority of do have a less than comfortable feeling, and learn something is wrong with their business model. Just like so many of the passengers on the Titanic near the end who smiled and kept saying, “Don’t worry, everything always works out alright,” traditional agents still greet people using a smile and wait for an phone to rings. But the ship is tilting, and they at risk. They cannot know what to try to to.
This is product sales . dilemma of being stuck. It may be the classic inability believe about outside of one self. 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 hard for so many could be discomfort with technology and the On the net. 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 of the responsibilities to his assistant. Few assistants are going expend night and day learning and adapting for a boss, and if they and leave someday, where does that leave the specialist? Even successfully delegating leaves serious challenges in bridging the gap, which I will share later.
There’s been the change, but not all agents and brokers recognize what is going on. Most do not comprehend that built in the middle of a major earthquake. Therefore, they continue to do what they usually have done. Underlying every one of these changes is something very big that traditional brokers are missing. Just as it is powerful forces that move tectonic plates deep below the earth’s surface, we are experiencing powerful forces causing an earthquake inside of the real estate world. As with so much in life, what we see on leading is merely an indicator of a deeper and much higher movement that has become the driving compel. It is this driving force that many brokers and agents have not notable.
Here is the first tectonic force that is at the reason behind all these changes effecting the real estate industry: a alternation in consumer behavior. Granted, it’s a huge change in consumer behavior. It’s so big with so many implications, most individuals do not comprehend it.
The full description of these adjustments to consumer behavior that i see quite long, but here is a quick summary in the context of real estate business. Consumers aren’t willing to be sold with obnoxious advertising and told what to buy and when in order to purchase it. Consumers are sick and regarding interruption advertising, of billboards, of high-pressure salesmen, of telemarketing, and of misrepresentations and boldfaced fabricates. 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 procedures. Consumers want and demand freedom to control their own future. They don’t like being controlled. They loathe being manipulated.
The second tectonic force effecting such dramatic changes in the real estate publication rack powerful in individual right, but also acts as a catalyst for good in consumer behavior.
The catalyst which empowered consumers and he is forcing these changes that are the death knell of traditional real estate brokerage is. advances in technology.
The traditional brokerage business model is totally unequipped work with these tectonic work days. The impact of the real estate recession has accelerated this process being sure, but only in time. Had it not been in this recession, the impact of these variations in consumer behavior hold taken longer, however the impact would ultimately be the precise same. The recession has acted like a diversion, however, distracting real estate agents from the real cause of their doom.
I’m reminded within 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 breath analyzer advertise in your paper?” His response while soft-spoken and polite, was the exact same mindset as many real estate brokers today, “Well, talk to your to be unnoticed when your levels of competition are advertising, do you really?” In response to my blank stare, he pleaded, “When business is slow, it’s not time to stop promoting and advertising. It’s the time to advertise inside the kitchen .!” That’s when I could no longer contain myself, and I broke out joking. We used that line in sales 30 years ago. Are they still using that call? Yes, they are.
Apparently, that type of sales pitch still works jointly with many agents and brokers, because like flies bouncing off the plate glass windows in an ineffective effort to emerge from from bondage, many agents are still doing how they admit can not work very well anymore. Whatever we were doing that was not working before must be accomplished twice as fast now. If for example the ship you are on is sinking, be quick about your business and join another ship just particularly last one. Such behavior is insanity as well as a ticket to failure.
More real estate brokers have filed for bankruptcy protection in there are two years than at any time in Oughout.S. History. And the earthquake has not ended as a number of bricks-and-mortar brokers are on the verge of closing their doors in the future.
It may be the early adopters of clients models and new technologies who might be millionaire agents in the time to be delivered. Because time is truncated with the accelerating pace of web marketing space . of technology and the usage of the Internet, those who pause too much to give some thought to doing something will end up so far behind, they might never get up to date. Think of a space ship starting warp hustle. Those who missed the flight will are light years behind their colleagues. This is the way it will be for traditional real auctions who insist on staying underneath.
There a good answer, as it means embracing technology, new marketing methods, new tools to reach clients, and mastering the internet as a powerful medium.