Real estate workplaces are closing from coast to coast. Real estate agents happen to be hanging up their licenses atlanta divorce attorneys state. The traditional bricks-and-mortar real estate brokerage can be hemorrhaging, and all that will keep this archaic business model alive is consolidations. As offices close, some agents quit, however the survivors move their licenses to another sinking ship, a ship that seems similar to the last one and frequently with the exact same name on the bow.
A big franchise office closes it’s doors, no longer able to keep carefully the lights on after greater than a year of operating in debt. The agents come to mind sick, not knowing what they’ll carry out, until their savior walks in the entranceway.
A broker from a large bricks-and-mortar anywhere with exactly the same franchise offers to take all of the agents in with the very same contract terms: each real estate agent pays $600 monthly and keeps 100% of these commissions. The agents sigh in relief and swiftly sign the new contracts 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 cash on commission splits, almost any split wouldn’t make sense for the broker right now. estate agents rawtenstall A sharp agent will charge each real estate agent a monthly cost. He laughs all the way to the lender, because with 60 agents paying $600 monthly, he’s making $36,000 a month just for living.
3 years ago I sat over the desk from a franchise broker who looked at me and stated, “Well, we’re feeding the business enterprise every month. You need to do that whenever times are tough. But we have been through tough times before, and we always turn out okay.” I remember thinking to myself that was a silly thing to say coming from a man who told me he had no business plan, no budget for marketing, no written vision for future years of his business. However, that same broker merely issued a press release he is permanently closing the doorways of his bricks-and-mortar and will be hanging his license 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 plenty of leaks, and it may take a while for people 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 slow 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 market tickets to real estate agents with promises they can not keep.
Probably 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. Many of them truly have no idea or comprehend how precarious their fate is. Most of them do have an uncomfortable feeling, plus they know something is wrong with their business model. Just like so many of the passengers on the Titanic near the stop who smiled and kept saying, “Don’t worry, everything always works out 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 issue of being stuck. It is the classic inability to think beyond oneself. Traditional brokers and agents who have operated within a traditional brokerage model for quite some time battle to think in entirely new ways. What makes this especially difficult for so many is their irritation with technology and the web. Some simply won’t learn the technologies. I understand of a top producer who refuses to adjust, and he sincerely believes he can delegate lots of the responsibilities to his assistant. Few assistants are going to spend night and day understanding and adapting for a boss, and when they do and depart someday, where does that abandon the broker? Even successfully delegating leaves considerable difficulties in bridging the gap, that i will share later.
There’s been an enormous change, but not all agents and agents recognize what’s happening. Most do not comprehend that they are in the center of a major earthquake. Therefore, they continue to do what they always have done. Underlying each one of these changes is something very large that traditional agents are missing. Just as it really is powerful forces that shift tectonic plates heavy 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 at first glance is merely a symptom of a deeper and 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 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 conduct. It’s so big with hence many implications, most people don’t comprehend it.
The full description of the changes in consumer behavior would be quite long, but this is a brief overview in the context of the true estate business. Consumers are no more willing to be sold with obnoxious advertising and marketing and told what to buy and when to get it. Consumers are sick and tired of interruption advertising and marketing, of billboards, of high pressure salesmen, of telemarketing, and of misrepresentations and boldfaced lies. Consumers have had it with qualified conflicts of interest. They’re fed up with only getting partial information upon which to base their most important decisions. Buyers want and demand freedom to control their own destiny. They don’t really like being controlled. They don’t really like being manipulated.
The next tectonic force effecting such dramatic changes in the true estate industry is strong in its own right, but also works as a catalyst for the adjustments in consumer behavior.
The catalyst which has empowered consumers and is forcing these changes that are the death knell of classic real estate brokerage is… advances in engineering.
The traditional brokerage business design has been totally unequipped to handle these tectonic shifts. The impression of the real estate recession has accelerated this process to be sure, but only with time. Had it not been because of this recession, the impact of these changes in consumer behavior would 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 cause of their doom.
I’m reminded of the newspaper salesman who tried to market me expensive print advertising lately. I question him, “Why would I market in the newspaper when it hasn’t sold any of my real estate listings during the past year or so? Help me out. Why must i advertise in your paper?” His reaction while soft-spoken and polite, had been of exactly the same mindset as many real estate brokers today, “Well, you don’t want to be left out whenever 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 could no longer contain myself, and I broke out laughing. We used that brand in sales 30 years ago. Are they still 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 glass windows in a futile work 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 similar to the last one. Such behavior is certainly insanity and a ticket to malfunction.
More real estate brokers have filed for bankruptcy security during the past two years than at any time in U.S. Record. And the earthquake has not ended as many bricks-and-mortar agents happen to be on the verge of closing their doors soon.
It is the early adopters of home based business models and new technologies who will be the millionaire real estate agents in the years to come. Because time is usually truncated with the accelerating speed of the growth of engineering and the usage of the Internet, those that pause too long to think about doing something will be left so far behind, they could never catch up. Think of a space ship going into warp speed. Those that missed the flight will find themselves light ages behind their colleagues. This is one way it will be for traditional realtors 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 web as a powerful medium.