The “full-service” broker-centric real estate model will soon exit the "maturity” segment of its product life cycle and signal the beginning of a 20-year decline. We’ll explore how disruptive technologies triggered the broker-centric life cycle stages and the alternative business model that will replace the established one. Less than two years ago most brokers were sure the backbone of the broker-centric model -- the MLS -- would never be at risk, and just months ago, most brokers were sure that robots -- computer algorithms -- could never replace aspects of their job. Both events have now occurred. Let’s explore the one thing the real estate industry most fears: technology and the decline of the broker-centric model. Economist Raymond Vernon created the concept of a product life cycle describing how a product, business or industry moves through four stages from its inception: introduction, growth, maturity and decline. Broker-centric product life cycle In Clayt...
- The broker-centric life cycle, as noted in "The Innovator's Dilemma," is in decline.
- Real estate is now a technology industry that sells homes.
- Of homebuyers age 36-50, 50 percent found the home they purchased on the internet; 44 percent of the time a broker was paid for not finding the buyer a home.
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