Real estate offices are closing from coast to coast. Real estate agents are usually hanging up their licenses atlanta divorce attorneys state. The traditional bricks-and-mortar real estate brokerage will be hemorrhaging, and all that helps to keep this archaic business model alive is consolidations. As offices in close proximity, some agents quit, but the survivors move their licenses to some other sinking ship, a ship that looks just like the last one and often with the very same name on the bow.
A big franchise office closes it’s doors, no longer able to keep the lights on after greater than a year of operating in the red. The agents are worried sick, not knowing what they will carry out, until their savior walks in the entranceway.
A broker from the large bricks-and-mortar anywhere with exactly the same franchise offers to take all the agents in with the very same contract terms: each agent pays $600 monthly and keeps 100% of these commissions. The brokers sigh in relief and rapidly sign the new agreements like sheep to the slaughter.
Because the broker can’t generate enough potential clients for the agents, and because the agents aren’t selling enough to make the broker enough money on commission splits, any sort of split wouldn’t seem sensible for the broker nowadays. hazelwoods estate agents A sharp broker will charge each agent a monthly price. He laughs all the way to the lender, because with 60 agents paying $600 per month, he’s making $36,000 a month just for living.
Three years ago I sat across the desk from the franchise broker who viewed me and explained, “Well, we’re feeding the business every month. You have to do that when times are tough. But we have been through a down economy before, and we always come out okay.” I recall thinking to myself that was a silly thing to state coming from a man who told me he had no business plan, no budget for marketing, no written vision for the future of his business. Regrettably, that same broker merely issued a press release that he is permanently closing the doors of his bricks-and-mortar and you will be hanging his license with another bricks-and-mortar. Another consolidation.
This broker is only jumping in one sinking ship to one that hasn’t sunk yet. The new ship has a lot of leaks, and it might take a while for folks on the Titanic to wake up. 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 death. It’s one thing for brokers to ride their own ship down, but it is quite another thing altogether for all those brokers to sell tickets to real estate agents with promises they can’t keep.
The most unfortunate thing about all of this is that the brokers who think they are doing what it takes to survive are only re-arranging the deck chairs on the Titanic. Most of them truly have no idea or comprehend how precarious their fate is. 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 near the ending 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. However 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 beyond oneself. Traditional brokers and agents who have operated inside a traditional brokerage model for many years battle to think in entirely new ways. What makes this especially problematic for so many is their distress with technology and the Internet. Some simply refuse to 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 studying and adapting for a boss, and when they do and keep someday, where does that depart the broker? Even successfully delegating leaves critical challenges in bridging the gap, that i will share later.
There’s been a huge change, but not all agents and brokers recognize what’s happening. Most do not comprehend that they are in the center of a significant earthquake. Therefore, they continue to do what they always have done. Underlying all these changes is something very major that traditional agents are missing. Just as it is powerful forces that approach tectonic plates heavy below the earth’s surface, we are experiencing powerful forces leading to an earthquake in the true estate world. Much like so much in lifetime, what we see at first glance is merely an indicator 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 haven’t recognized.
This is actually the first tectonic force that is at the root of most these changes effecting the true estate industry: a change in consumer behavior. Granted, it’s a huge change in consumer conduct. It’s so big with hence many implications, most people don’t comprehend it.
The full description of these changes in consumer behavior would be quite long, but here is a brief summary in the context of the true estate business. Consumers are no more willing to be sold with obnoxious advertising and told what things to buy and when to get it. Consumers are sick and tired of interruption advertising and marketing, of billboards, of ruthless salesmen, of telemarketing, and of misrepresentations and boldfaced lies. Customers have had it with expert conflicts of interest. They’re sick and tired of only getting partial information where to base their most significant decisions. Customers want and demand freedom to control their own destiny. They don’t 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 functions as a catalyst for the modifications in consumer behavior.
The catalyst that has empowered customers and is forcing these adjustments that are the death knell of classic property brokerage is… advances in technologies.
The traditional brokerage business design has been totally unequipped to manage these tectonic shifts. The impression of the true estate recession has accelerated this technique to be certain, but only in 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 be the same. The recession has acted like a diversion, however, distracting real estate agents from the real cause of their doom.
I’m reminded of the newspaper salesman who attempted to market me expensive print advertising just lately. I inquire him, “Why would I advertise in the newspaper when it hasn’t sold any of my real estate listings in past times year or so? Help me out. Why should I advertise in your paper?” His reply while soft-spoken and polite, seemed to be of the same mindset as many real estate agents today, “Well, you don’t desire to be left out whenever your competition is advertising, do you?” In reaction 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 could no longer include myself, and I broke out laughing. We used that range in sales 30 years ago. Are they nonetheless using that line? Yes, they are.
Apparently, that kind of sales page still works with many realtors and brokers, because like flies bouncing off the plate cup windows in a futile energy to flee from bondage, many agents remain doing what they admit doesn’t work very well any longer. Whatever we were doing that has been not working before must be done twice as fast now. If the ship you are on is sinking, be quick about your business and join another ship just like the last one. Such behavior can be insanity and a ticket to failure.
More real estate agents have filed for bankruptcy coverage during the past two years than anytime in U.S. Background. And the earthquake has 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 will be the millionaire realtors in the years to come. Because time is certainly truncated with the accelerating tempo of the growth of engineering 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 of a space ship entering warp speed. Those who missed the flight will find themselves light years behind their colleagues. This is how it will be for traditional realtors who insist upon 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.