Today, more than ever, buying or selling real estate is like trying to win a football game. To win the game, every player involved must do their part. There is the offense to move the ball toward accomplishing the goal of scoring. There is the defense whose job it is to keep the game going toward our goal, not the opponents! Then, often overlooked, there are the special teams. Designed to provide strategic positioning on the field these are specialists whose job is to do one thing extremely well.
After 34 years of operating in and around real estate, I believe the future of real estate is bright in spite of the coming changes to real estate! The housing market is such an economic driver that many will try to disrupt and change, but no one will defeat it.
Right now, the primary change in the market is toward consumer choice. It will start with compensation. The broker co-operation model as we know it will disappear in the next 3-5 years. No longer will Sellers dictate what Buyers agents will be paid. Buyers agents will have to negotiate with their Buyers for what they get compensated and what services they provide.
Other coming changes to real estate are that consumers will want all services coordinated in a cohesive single environment including contracting, title, escrow, mortgage, and inspection. These services will need to be digital, accessible, and coordinated. This requires fewer people and thus less cost as the industry moves forward.
The Industry will evolve to a single nationwide (worldwide?) database that will replace local MLS’s. That provides greater access to knowledgeable brokers/agents and will erode the “local knowledge” advantage currently enjoyed.
As all of this comes into play, it will hasten the entry into the industry directly of at least one of the mega players; Amazon, Google, or Facebook. Not as on-demand or iBuyers but as full-fledged integrated real estate services companies.
Last, but far from least, the Independent Contractor model that we are familiar with is going to be replaced with an employee/employer model. That’s right, the one with withholding, job descriptions and requirements, and social security!
Are you ready:
All of this bodes well for those agents who have exceptional knowledge, refined negotiating skills, and understand the true nature of customer service. They will have access to the nationwide MLS and be able to coordinate the process from scheduling showings, writing contracts, and obtaining mortgages to closing the transaction digitally! They will need to be exceptional at creating, building, and maintaining relationships with consumers.
New mortgage advances, more employment, and greater opportunity are going to make home ownership more accessible to more people. More customers and a reduction in the number of agents competing for their business, what could make the market any better? The future of real estate really is bright if you are ready, willing, and able!!
This is the time of year that we first start looking to see where we stand on our production goals. Statistics show that we should have closed or have in the pipeline as much as 40% of our entire year. Many of us suddenly have to wonder why we aren’t on pace to reach our goals. Others will say they are on track if they can simply continue as they have. For both, the determining factor is really the same, can we make the decisions to take the necessary action to pick up the pace and finish out the year strong. What actions are you willing to do to finish the year strong. Will you take the time to do those calls? How about getting out to do a pop-by to those important contacts? This time of the year sees many agents taking it back a notch because it is the beginning of summer, graduations are near, and summer vacations are at hand. While few are out there in our space, the time is ripe to make noise and make up ground. However, the point is if you aren’t prepared to take action, you won’t make up any ground and hit your goal. If you are still waiting to get it just right or still trying to figure out what you should do, don’t wait any longer. Make the decision to take action, move forward and find food. That’s right, it is a conscious decision that only you are in control of. If you don’t finish the year the way you wanted to and you didn’t take action each and every day, you have no one to blame but you. Remember, the legs feed the wolf and like the wolf you only eat if you run towards the prey. It is even better when there are fewer wolves to compete with.
I love getting new real estate recruiting ads. I continue to see claims of providing 1 to 1 support and a whole laundry list of support services while paying out something near 100%. When I look to find out how many ” employees” these companies have to provide the services they claim to their real estate agents, I find the number to generally be 1 or 2 support personnel. Really?
That number of support personnel works if there is less than 10 agents. Otherwise, they must be super talented employees, have many years of experience in real estate and thus must get paid well. If that’s the case and you receive 100% of your commissions, how is this payroll covered? As a matter of fact, how is the rent, internet, copier, and utilities paid? Now ask how many real estate transactions the broker does in a year? That governs how much time he or she has available for thee. Without a reasonable split from the real estate agents, related service providers from which they profit, or a large number of agents the math simply doesn’t work. If you have a large number of real estate agents and a fixed fee, how many “people” are there for you to ask real estate questions of and get specific real estate advice from? You can’t expect specific advice from a video and you can’t get specific advice from an out-of-state “broker” as they have no knowledge of local laws and forms.
You get what you pay for, regardless of how much business you do. Nothing more, nothing less, even though they will tell you they can give you more for less. One model even claims no franchise or tech fees of any kind. So, am I to believe the real estate Franchise company gave the right to use their name and resources to a real estate broker that gives all his real estate agents 100 % of their commissions for no compensation? Either capitalism or math has dramatically changed. In my 34 plus years as a real estate agent, broker, lender, and developer, I have met few real estate brokers that will take on liability for no return and even fewer real estate franchisors that provide name recognition and services without charging a fee. There is always a “but” in these arrangements. Don’t let the “butt” be you! Ask questions. Get fully informed. If we as agents made these representations in selling a property, we would violating the rules in most all states, yet they just keep recruiting with the same old promises.
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Grind Real Estate Group/ERA Sellers & Buyers Real Estate is a premier team of Real Estate consultants specializing in Southern New Mexico and West El Paso, TX.Weather you are relocating from out of state or looking for your next new or second home, we are here to help guide you to make the RIGHT MOVE.