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13 May 2009

One Size Will Not Fit All in the Future

In the early days of the economic downturn, many broker owners took a “wait and see” position, hopeful that the market would turn around quickly. As the bad news continued, survival mode kicked in and brokers found themselves playing catch up and making tough decisions they never thought they would have to make such as closing offices,  downsizing staff, merging with competitors. The focus was primarily on doing the things in the present that would help guarantee a place in the future. Times such as these do not allow most of us the luxury of thinking ahead and planning for what the future will look like in this industry.

The thing is, this business will look and feel much different five years from now than it does today. There are several drivers that will facilitate this change. The emerging demographic of new consumers is one. The increasing sophistication of technology is another. The horse has left the gate, as they say, and  there is no turning back. We really mean it this time.

The first tiny signs of an upturn in the real estate market are being reported across the country. Things like small percentage increases in new business month over month. The odd bidding war on a well priced property. Larger than normal turnouts at Sunday open houses. While some skeptics are claiming it can’t possibly be so, brokers across the country are channeling these signs into positive thinking and have begun to think what their companies need to look like in the future.

We have been thinking a lot about this  as well, and plan to share our thoughts and more importantly some  solutions with you in the months to come.  Here are some preliminary observations:

  • Both big and small companies will thrive in the future. One size or one model will not be the norm. In fact broker owners may transition their businesses by operating more than one model.
  • Mobile has taken over. No more waiting for that to happen. One of the most challenging exercises will be the divesting of existing office space and configuring what an office needs to look like now.
  • Lead generation and lead management need be managed by professionals. Sending postcards to zip codes is over.
  • We have only scratched the surface on social media as a business tool. So let’s stop making fun of it and start taking it seriously.

The road back to sustained growth and profitability isn’t going to be an easy one.  It will be a lot more involved than closing an office or two. Personally, I can’t think of a time that presents more exciting and challenging opportunities than right now.

13 thoughts on “One Size Will Not Fit All in the Future

  1. “Sending postcards to zip codes is over”, I completely agree and I am glad that someone is saying this with me. Down with paper, up with email, Twitter, iPhones and more. The digital revolution has finally caught up to our market and there has never been a better time to try it out.

  2. The #1 thing traditional companies can do, is change the way they talk inside the office, to set the right tone for agents outside the office.

    No more:

    leads, deals, getting buyers off the fence, baiting the hook, everyone SELL this one, etc…

    Until real estate companies talk about and respect buyer clients the same way they do seller clients, they are leaving the door open to be pushed out of it.

    Office meetings should be adult discussions of market conditions, as seen by the agents out on the street. Not “sales meetings” where listing agents bug the other agents to sell their listings.

    Ask any agent who was in the business before Buyer Agency what hasn’t changed inside their office since Buyer Agency…and fix that.

    Raise the bar and the public won’t keep crawling under it to the newest biz model that appears to understand buyers better.

    1. Ardell, I couldn’t agree more! What you are talking about is culture, and for our offices and companies to completely evolve, cutture needs to change as well. Thank you for your comment.

  3. It’s been said that the true test of a man/woman is what they’ll do when they are down. I honestly love this downturn for it’s ability to shine the light on those passionate enough to thrive.

    Great post Sherry.

  4. Timely post Sherry. I see mobile office becoming a reality in the near future and our next generation agents demanding more from their brokers in terms of integrated technologies to help them run their real estate business.

    I also agree with Charlene Li’s Groundswell and that Social networks will be like air and become part of how we build our referral base and relationships going forward.

    Great time to reinvent your business!

  5. Sherry,

    I absolutely agree with you, but I think we, as an industry, need to take that “one size does NOT fit all” a whole lot further. The Big Box real estate model is certainly feeling the pinch and is being forced to rethink office space and marketing dollars (hopefully it will also rethink the referral stranglehold it’s been under for the past 15 years as well!)

    But the industry also needs to rethink it’s entire approach to the consumer! One size does not fit all there,either! The commission approach will always have it’s place with SOME consumers – buyers and sellers alike. But we as an industry have not made it easy for the consumer to find other quality, reasonable options. While there are “alternative” models out there, for the most part the one component most leave out of their equation is fiduciary representation – which is the one thing the consumer needs from us the most! That’s where the rubber meets the road in this industry! We must be proactive in providing alternative approaches that (1) respect the rights and needs of the consumer, and (2) respect our own time and talent as well.

    Mobile is definitely here to stay. Social media of all sorts are saturating our environment and morphing into a variety of tools to connect with the consumer. But the truth is, once we HAVE connected with them, we also must be able to provide them with options that are sensible for their needs, not just what the big boxes of our industry have led us to believe is the only “right” way to conduct real estate. The consumer has been begging for something different, and there’s no time like the present to give it to them.

  6. Sherri- I agree that this is a great time to be in the industry. We are undergoing a sea change and I am thrilled to be a part of it.Time to let go of the old thinking and welcome the new day. Social networking, mobile technology and forward thinking agents and brokers are already making huge strides. Who ever thought we would get listing appointments via a facebook notification? And this is just the beginning…stay tuned!

  7. Hi Sherry,

    I could not agree with you more!

    Most consumers want choice and value. They want good information beyond what they can find online and they want us to help translate it for them into useful knowledge.

    An emerging new model will be with no office or a small office but agents who rely on more web tools&d ways to quicklyand effectively communicate.

    Our clients know that if we’re doing a lot of print ads and have a gigantic office, they’re the ones paying for it indirectly. Those are not useful to the clients, but data and online marketing are.

    Additionally, I think we’ll see more ways for buyers and sellers to choose how to pay for their services beyond the two extremes that are the mainstays today (discount brokerage and full service). A menu of services, and various ways to pay for them, will be forthcoming as a viable alternative in many areas where that’s not currently the case.

    The shift is coming.

    Great post.

    1. Mary, thanks for your comments! The consumer is clearly in control, we need to listen to them very closely. I can’t think of a more interesting time in our industry!

  8. Sherry, your thoughts are right on the mark!

    There are those who cling to “the way we always did things”

    Those who cling to “it is all about our contingent model and traditional lead gathering”

    Then there are those who understand that the world has already changed and that these changes have already started to permeate our industry. They know that consumers have evolved and that we must evolve in a compatible way or watch our clients as they buy, sell and invest with other – more current professionals.

    I have always admired your business savvy. Your post here is just one more example of why I appreciate what you do.

    Best regards,

    Jack

  9. This is a great blog and a topic that really interests me. I’m enjoying and actually returning to your blog to see what new discussions have resulted from comments. We couldn’t find this amount of depth and richness in discussion in regular newspaper advertising. It’s also nice to see a CEO engaged in conversation with readers.

  10. Interesting thread.

    Although I’ve been offering consulting choices that meet the needs of the sellers or buyers for over 10 years now, I believe that until the consumer understands the way real estate works, with regards to choices, risk, and reward as well as total transparency, nothing will change.

    It is our duty to educate the consumer so they know what their choices are. It is all about education.

    I’m trying to help my cousin buy a house now, she lives in another state and has made offers on over 10 houses during the last year.

    She didn’t realize consulting was an option, she didn’t know the difference between a buyers agent or using a listing agent, nor was she ever told her rights regarding agency when she contacted the listing agent about a house she was interested in. How unprofessional.

    If it weren’t for the fact that my Mother, who is her Mothers sister had medical issues, and they just brought the subject up of how hard of a time she was having, she would not know what she does now.
    I referred her to a buyers agent, told her about consulting and commission, risk vs reward, and she is now buying her house and having no problem.

    We need to get the word out, more education, more transparency, more professionalism, and more happy people!

    She has spent tons of money and all because she doesn’t understand the way real estate works and her choices.

    I finally referred her to a buyers agent, educuated her about buyer agency, consulting, commissions vs consulting and she is now on a roll with buying her first house.

    What we need is more education for the consumer and the agents, and life will be good.

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