Brokerage Models, Consumerism, Technology in RE
Quest for Model Perfect
December 3, 2006 by REALonomics · 1 Comment
I’m an Apologist for for the real estate industry and a two-decade participant in the management and ownership of real estate companies. As such, I have a propensity for understanding what makes the real estate industry tick and an appetite that leads me in my quest for the illusive Model Perfect.
Owners are facing what I believe is the “big squeeze” as real estate goes democratic, with the door to information access now unhinged. Innovative models, once scoffed at and maligned by traditional insiders, are carving out market positions too powerful to be ignored.
EXIT Realty and Keller Williams are two economic models based upon revenue distribution paradigms.
EXIT Realty (ER) and Keller Williams (KW) deal with transaction money, recruiting incentives and long-term economic incentives that challenge the notion that today’s closing is the sum-total of one’s real estate career.
One cannot help applauding ER and abd KW in their quest for Model Perfect. The growth of these two organizations cannot be ignored and this alone serves as reason enough for applause. Why? Courage deserves applause and success warrants encore.
Model Emergence
Model Perfect will always be elusive and in the Consumer-Centric Era there is one certainty…nothing will be certain. Owners ought to believe in the power of model emergence, the idea that kicking their organizations further out on the change continuum is healthy and profitable.
New models are going to emerge. In fact, they are emerging. The controller of the emergence will be the winners. Note, please, that the word emerge and emergency are close cousins in the linguistic tree. From all emergency situations, something will emerge. Can we stifle emergency situations and still be a part of the emerging New Real Estate Economy? REALonomics says we can and we must.
Model Convergence
Market position is important to real estate company owners and this position has heretofore been controlled by the prevailing structure within the industry. What if market position is redefined so that it has little or nothing to do with physical location of real estate companies and more, much more to do with real consumer-centric business models that control the triangulation of seller, buyer and property in a dynamic cyber reality that is the core of Model Perfect .
Buildings and branding have always been a part of positioning ourselves in the market wherein we reside and make our place. Buildings and brands are Broker-Centric flags staked in geographic areas signaling our presence and pseudo permanence, providing invitations to agent to affiliate with us and consumers to notice us.
Market position is shifting its axis so that the tilt of the playing field is going to favor those whose business models are less bulky, less geographically defined and certainly less restrictive with respect to the free flow of property information toward consumers.
Can we converge into the flow toward Model Perfect ? Can we finally begin to use technology and the Internet to create the intersection of supply, demand, service and price?
When we do, and if we can, this will be Model Perfect , which is not a destination to which we arrive buy an adventure we experience in route toward creating a real distinction in our models, as did EXIT Realty and Keller Williams.
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At this point, while Zillow.com may be able to aggregate mls type information, they still cannot effectively facilitate the transaction (thank God). The consumer, in order to take the broker out of the equation, must be willing to wallow through the paperwork all the way to the closing – not to mention negotiating the deal in the first place. Can this happen? Will this happen? As for the CAN – yes. Some consumers will take the bull by the horns and struggle through the necessary steps to get the deal done. Most, however, in my opinion, will call an agent for help.