Revolutionary thinking for real estate
Essay: Roadmap to Recovery
By Inman News, Friday, December 12, 2008.
Editor's note: The following is a response to a question posed by Inman News as a part of the Roadmap to Recovery editorial project. This project seeks to engage real estate industry visionaries in charting a course for the future of the real estate industry. Click here for more details.
This past month the unthinkable happened in our resort town of Bend, Ore. Two long-standing name-brand brokerages constricted out of the Bend marketplace. I was one of the unlucky agents to find myself interviewing with new principal brokers ... and questioning the validity of the brokerage business model.
To survive in today's market you must be nimble and sure-footed, with a firm grasp on where your market is coming from and what your sellers are expecting from you in this new media generation.
The brokerage model fails because its focus is "THE BROKERAGE," not the individual agents who must create their own momentum, separate from that of the larger corporation.
I believe the new model for the industry will be a grand throwback to the ages of true network marketing, paired with the new generation of media capitalization as my generation lives on the Web. Monthly desk fees, coupled with the enormous "nut" to crack at brokerages, simply doesn't jive with capable, entrepreneurial, well-adjusted business brokers of 2009.
What would happen if the crème de la crème in each city formed their own network and readjusted their business to revolve around a collaboration of product, clients and marketing aimed at specific target markets? That, my friends, would be a revolution.
Alisha Alway Braatz is a broker for Sunriver Realty in Bend, Ore.
***
What's your opinion? Leave your comments below or send a letter to the editor.
All rights reserved. This content may not be used or reproduced in any manner whatsoever, in part or in whole, without written permission of Inman News. Use of this content without permission is a violation of federal copyright law.
You must login or register to post a comment.
Submitted by Lenn Harley on December 12, 2008 - 3:53am.
I've operated from a home office since 1994. I've operated as a broker from a home office since 1998.
To my recollection, I've lost 2 potential buyer/clients because I didn't have an office for them to "come in and sit down. . . . "
Lenn Harley
Broker
Homefinders.com
http://www.homefinders.com
Submitted by Eden Jordan on December 12, 2008 - 5:20am.
What does a successful real estate company look like in a challenging market? Transparency!
We keep hearing the word transparency in the media these days, what does that mean for a real estate industry that has been rattled at its core. Agents that were making over $100,000, $250,000 or even more a year are now having a hard time making their mortgage payments. These agents I am talking about are not the fly by night get rich quick agents; these are Consistent Top Producers that have given their lives to this industry. They lived, breathed ate and slept real estate. Every move was calculated. They were respected by the media, their community, their industry and their clients. These are highly effective people that would be successful in any career that they had chosen. They chose real estate for many reasons, the flexibility, the challenge, the love of their community, and a career where they could be in business for themselves, but not by themselves. These are not part timers I am talking about these are the agents you would see in the paper as top producers every weekend. They were die hards, leaders, talented agents that had passion. Many had years of experience in this business and were able to change with the times. Most of these agents that worked before the boom, will tell you that the boom had its challenges just like the bust. We were spent more money than some brokers, we had no social life & no balance. Flexible…. Meant we bent every which way when the client, team member, or vendor called or emailed weather it was at 6 in the morning, or 11 at night. We took on every aspect of this business ourselves. We embraced the internet even though we did not know what we were doing. We neglected our families, our health, our social lives and our inner beings. To be a top producer in the boom time was not easy, it was exhausting and agents who were successful were tired and worn out.
We were taught that we always had to put on a happy positive face, but when you are exhausted, burned out and worn out that became harder to do. Then the market began to slow down, this was not a slow leak, this was like when you were a kid on a playground and you fell of the top of the monkey bars, it was like having the wind knocked out of you, you couldn’t breathe and you couldn’t get up. You just laid their until someone came to help you. The problem was when the real estate industry busted it seemed as if there was no one there to help, you were alone on the playground just laying there, you could hardly breathe, you hurt and you didn’t even recognize where you were . You were alone, with no support, no one to help you, emotional, and money was going out faster than it was coming in. We had staff, buyer’s agents, marketing people and huge broker bills bigger than your mortgage, vendors to pay and just enough business for one agent. We had to feed the machine, but there was no food left.
We were told by the industry and our brokers, that this was just part of the cycle, the strong will survive. Wait it out. That was easy for them to say, they were on salary or had fat bank account to float them for the next 2 years, they did not have to right these checks out of their home equity or credit cards every month. Some of us saved for a rainy day, but the rain did not stop, it just kept raining and raining and raining, till agents were drowning in debt and could not come up for air.
So where does that put the top producer now, what we thought we knew was true is not, for those of us that want to stay in this business we had to change. We cut staff, cut expenses, did what it took to stay in business. The problem with that was that many of us were at companies that did not provide any support, marketing, management or resources. These companies were founded on the principle that you paid for what you used and the broker was there just as a building and brand name. Our fees were Now we are coming into 2009 and this market is our new reality. How do we survive as top producers? I think the solution is to marry the traditional broker with the 100% broker. We all understand that it costs money to be in business. No top agent has a problem with the broker making money, as long as the agent is making money too.
How does this look in 2009? I think I found a broker that got it. I had met with Pete Dalton at Vanguard GMAC after a dear friend and huge producing agent there sensed that I was stressed out. She told me about a meeting they had with their broker and the top 20 agents. He said, I made a lot of money during the good times and I am ready to reinvest it in the top talented agents in the business. Some of the discussions that came out of that meeting were. 1. Get rid of the non producers, they were taking up recourses. 2. Research and pay for the top websites as a company so the agents don’t have to worry about it. 3. Take on some of the marketing tedious work because we have let our staff go. 4. Get rid of the bills, stressed out agents are not successful agents. 5. Put successful agents together in pods or groups to mentor and support each other. 6. Research the market and provide us with REAL market and company statistics so we do not have to guess if we are doing ok. 7. They wanted the broker to be involved in the day to day operation, accessable to the agents for counseling. 8. They wanted a leader who was willing to invest in their businesses. 9. Some counseling on money management, where to spend money, and how to budget in these uncertain times. This would be a give and take business model, something that was not common in the real estate industry in the past 10 years. They did not want to be an island, they wanted to be a small community of top agents that exchanged ideas, resources and positive energy, the agents wanted a place to go to talk and tell them how they were feeling. They are tired of being competitive, they just want to sell real estate, have a successful business and have a balanced and healthy career. With turmoil two things can happen, you can die, or you can pick yourself up, restructure and change with the times. I feel that I have found a new home at Vanguard GMAC, Fleming Island. I am excited to go to work every day. The energy is positive, I am working with excited agents that are at the same level as me, and it is refreshing to exchange ideas, collaborate, share resources and feel part of a team.
Submitted by Jeff Bergstrom on December 12, 2008 - 5:27am.
I agree the brokerage model will change drastically over the next couple of years. But, agents will still be responsible for making their own way. Agent dollars and focus will be centered on branding themselves and carving out their own niches and not spent on marketing the Broker who just happens to hold their license. The Broker function will move to the background and be a service to its agents. This brokerage service will actually be a better value add to State organizations in an education and contractual oversight role.
Jeff Bergstrom
Wynd Realty
www.WyndRealty.com
Submitted by Rob Aubrey on December 12, 2008 - 6:06am.
The brokerages that are failing are failing for the same reason agents are failing. They FAILED to see “THE INEVITABLE NEXT PHASE OF THE REAL ESTATE CYCLE”. Where volume is down and therefore expenses need to go down.
Real Estate is a simple business that requires skill and work. Technologies are tools for the skilled worker, not the replacement.
In my office, I serve on the board, we structured our equipment leases to expire right around when we knew “THE INEVITABLE NEXT PHASE OF THE REAL ESTATE CYCLE” was coming. We pretty much nailed it and we managed to lower our expenses, not just in that area, that is just an example of business people running larger offices.
Those agents and brokers that make it through this phase will be extremely profitable in “THE INEVITABLE NEXT PHASE OF THE REAL ESTATE CYCLE”.
The real road to recovery for the agent and brokerage is expense contrl and WORKING.
I never see skills talked about on Inman.
Submitted by Ross Milroy on December 12, 2008 - 7:47am.
Eden,
Unfortunately, your story is one that I hear over and over from most real estate practitioners. When is someone going to make it happen for me?
I think that you have made an important step in aligning yourself with a broker, Pete Dalton, that is interested in WORKING TOGETHER to get the results. However, if you really want to self-advocate for yourself and your career, then get your brokers license and develop your own real estate business.
Good luck !
Ross Milroy
Managing Broker
Miami Angel Properties, LLC
http://www.miamiangelproperties.com