I spent three days in Scottsdale last week where I participated in several sessions at Leading Real Estate Companies of the World’s Future Tense 2009 conference. Amid the golden Arizona sunshine and within the Westin Kierland, one distinct sentiment echoed throughout:
The current brokerage model is broken.
Throughout the day it danced around the panels and through the corridors, pursuing bloggers, leaders, competitors, vendors – folks from every position on the real estate track. In the evening, they gathered in lounges, bars, and outside by the fire pit. Where they conferred. Sharing opinions. Angles. Theories.
A human mashup.
I took notes. Placed them inside my mental blender. On the flight home, I pressed pulse. The resulting smoothie might be icy to the touch. Sip slowly. Avoid the brain freeze.
Adrift
The real estate brokerage was once moored within the community.
Care. Trust. Dependability. Knowledge. These were sentiments a brokerage worked hard to earn before typing them across their letterhead. Or shout from the homepage of its Website. These were feelings, beliefs and experiences voluntarily expressed by past clients. To friends. Family members. All based on something real.
Along its journey, the real estate brokerage went adrift. It lost its bearing. And scraped across an iceberg.
The Internet.
It ripped a hole in the brokerage hull.
And caused it to list.
Internet
The brokerage had no understanding of the Web. Or those who used it. It discounted both, either ignoring them completely or relegating them to vendors that pretended to understand it.
The result created a disconnect. Real estate brokerages looked odd. They had funny looking websites that all looked the same. They were stingy with information. Or fooled you into viewing it. The brokerage sought to generate, capture and drip — words that sounded and felt too much like caught, bound and tortured.
This was the new face of real estate to the burgeoning horde of hundreds of millions of people using the Web. They saw a side of real estate they never had before. It was hideous.
Then…
Fools gold
When the fervor hit real estate, online innovation exploded. Dozens of powerful new websites emerged within the industry, climbing over the brokerage to reach the consumer. They were cool. Designed properly. They offered better search. Better data. No strings.
They treated the consumer experience with more reverence than the brokers did.
Meanwhile, real estate sales tsunami-ed. Agents got powerful. Top producers became superstars. Free agents. Brokers entered bidding wars to land the bell cow. They drew in the lower producing and new agents, who also struck it rich.
Fools gold.
Brokers pretty much gave away their piece of the action for volume. And they continued to recruit more superstars who, in time, cost them their brand. And they recruited more newbies who cost them everything else.
Capsized
Between late 2005 and 2009, the the tides shifted. Though it was forecast, and despite the fact that is was a slow decline, brokers could not correct its course. Their websites remained terribly backward. Often maintained by vendors who built set it and forget it website systems. They became undernourished by their superstars, who kept most of the pie. And drained by the younger agents who, due to the lack of training and experience, were unable to sell. Unable to close.
All participants, grazing on the broker’s diminishing pasture.
Occupying space.
Chewing up resources.
Whatever identity brokers once possessed, whatever company culture they might have created, whatever meaning they may have had within the local community … capsized.
The real estate brokerage is now broken. As John Reinhardt, CEO of Fillmore Real Estate suggested, it’s time real estate paid attention to how companies outside of real estate are behaving.
The brokerage of the future
The conference featured a breakout session on this very topic. I was unable to attend since I was speaking in the adjacent room at the same time. Different topic, same theme.
Bummer.
In my estimation, based on what I saw at the conference, the future brokerage is already here. They go by the names of EWM, Seven Gables, Latter and Blum and @Properties. [Disclosure: @Properties is a client of 1000watt Consulting]. There are others. They lead. They innovate. They invest in enhancing customer experiences.
They enlist and train better, smarter, more productive sales agents rather than accumulating a company filled with mere “licensees.”
Perhaps their websites need some work. Their messaging could be improved. They need to figure out social media. After all, nothing is ever perfect. Certainly not now.
The brokerage of the future is already here.
And you can move towards it tomorrow.
That’s about as far into the future as you can wait to make your move.
- Davison
Twitter: 1000wattmarc
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I went to this session – it was interesting but not what I expected. No blueprints here – three VERY different speakers/leaders from three VERY different companies in different markets. There is no one right answer for everyone – the only shared answer is that things are changing. This market cleansing is such a good thing.
I had the same problem at the conference – spoke at a session time when there were 2 other sessions going on that I really wanted to attend. I guess that is the hallmark of a good conference!
Thank you so much – the Saturday strategy session was especially brilliant.
@pmcolorado
If you are referring to the Friday session, that was an odd one. Yes. I attempted to offer some strategic direction but going last, I was a prisoner of time.
Thanks for attending though
Marc-
I completely agree with the comment, “it’s time real estate paid attention to how companies outside of real estate are behaving.”
As widespread as the real estate world is, it is still a ‘stagnant’ and ‘stale’ industry overall.
There are some brokerages doing great things that all of us can learn from. But I really believe in order for a brokerage to progress it’s model and services, we need to look outside of the industry. Businesses in other industries do it all the time.
There are Blue Ocean opportunities out there in real estate – it’s just a matter of discovering them.
Hi Marc:
Thanks for the mention – nice to know we are not broken.
For the record, each firm mentioned in the post is not perfect. They have issues. Just like every brokerage in America. They are saddled with less than stellar agents, old technologies, high cost leases, etc.
“Moving beyond broken” is about recognizing these problems. And taking measures to correct them rather than letting things operate as they always have and hoping the market gets better soon so the issues can once again be shoved under the rug.
As we think about the brokerage of the future, we can’t allow ourselves to see that as a perfect entity void of issues, problems, and hurdles. They have them. And they will deal with them. As the firms I mentioned are doing today.
Beautifully written. I often found myself thinking the same thing when I am not a customer, but a “website lead to be captured”.
So “the future” brokerages will treat people better…is that the bottom line?
Nice writing, but I’m missing the actual content I think. There’s no doubt the shift is still continuing in Real Estate, which is a great thing for a lot of people who really want to succeed and help buyers and sellers.
The future brokerage will:
Recruit & provide more educated, experienced and service oriented agents
Be more efficient in their cost of operation
Have an aptitude for technology rather have a big question mark over their head all the time
Be profitable.
In constant change mode never allowing themselves to fall behind and be viewed as out of touch with their consumer base.
The future should include shifting more energy to the client. Spending more time with the client is critical we can’t simply drive them to the web for answers. One solution to consider is going paperless. Efficencies created from paperless solution is not only driven by cost but by the time wasted between the office and being in front of clients. Yes, entry costs for a paperless solution are high but longterm realization introduces the concept of a truly virtual office. Brick and mortar approach is changing the meeting should be with the client in the field. There are a couple of companies in my mind that have solutions available but there is certainly a lot of fluff in the marketplace. A true paperless solution starts and ends with an electronic document. Check out http://www.gopaperless.com I believe this company is way ahead of the curve on paperless solutions and I know agents that are using a tablet and their software and killing it!
I went to this session – it was interesting but not what I expected. No blueprints here – three VERY different speakers/leaders from three VERY different companies in different markets. There is no one right answer for everyone – the only shared answer is that things are changing. This market cleansing is such a good thing.
I had the same problem at the conference – spoke at a session time when there were 2 other sessions going on that I really wanted to attend. I guess that is the hallmark of a good conference!
Thank you so much – the Saturday strategy session was especially brilliant.
@pmcolorado