Brokerage Models, Consumerism, REALonomics
Time Magazine Anoints YOU!
December 18, 2006 by REALonomics · 1 Comment
It’s official. According to Time Magazine, YOU (as in you, me, he, her, him) are the 2006 Person of the Year!
Empowered by the World Wide Web (WWW), a.k.a., the Internet, the Consumer-Centric Era is the zone of personal empowerment and the democratization of self via the blogosphere and Napster-like peep-to-peer portals. Millions upon millions of consumers now wield the power of ONE, exponentially extrapolated into near infinity. According to Time Magazine YOU is the euphemism for an all powerful consumer, who shapes personal and corporate outcomes.
What does Time’s proclamation mean to the future shape of the real estate industry?
Time’s Perspective – Right On!
Lev Grossman, Time Magazine’s technology writer and book critic said about the crowning of the consumer as Person of the Year, “It’s about the many wresting power from the few and helping one another for nothing and how that will not only change the world, but also change the way the world changes…”
Time’s selection recognizes the global power of consumer-centric, consumer generated collaboration on an unprecedented level of exchange as reflected via massive information exchange portals. Consider this: YouTube generates daily video viewings in excess of 100 million; MySpace has a global following approaching 150 million people.
Searching the Soul of RE
How does all of this relate to REALonomics, the New Model Math for the real estate industry?
Let’s adopt a new NAR mandated business mantra; no, not “le’ts whip the DOJ” but rather “We Empower YOU!” Let’s get rid of our whips and buggies and finally realize that our industry is in dire straits and needs to replace brokers and agents as the central personalities of its business model with guess who, the big YOU, the consumer.
REALonomics does not advocate the obliteration of the real estate profession nor its professionals, just our patently ineffective and transparently self-serving, anti-consumer-friendly business practices.
Our Lock-Step RE World
Why do we as owners continue to allow the industry to dictate practices and policies that are truly out of step with the all powerful YOU? Things like:
- National and local MLS systems that control data and reduce owner profitability;
- Bricks-and-Mortar business models that create unnecessary overhead;
- Agent-centric ego cultures that pamper to too many independent contractors;
- Labor intensive, capital guzzling transaction management systems;
- Look-alike brands that offer little value distinction to consumers;
- Brokerage models that stifle peer-to-peer contact between sellers and buyers;
Why is it that one of the most powerful economic industries, real estate, can’t generate a YouTube.com approach to real estate marketing? Why doesn’t every consumer that owns a property have a HomeSpace.com they, he, she controls? Why does the real estate industry continue to be so over-controlling and over-bearing with the consumer, to the point that we are not respected, generally speaking? Why can’t we seem to Napsterize real estate with billions of seller-buyer conversations in cyberspace daily?
Time Magazine got it right,
It’s about the many wresting power from the few and helping one another for nothing and how that will not only change the world, but also change the way the world changes…
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It is interesting to note that several non-broker online endeavors are taking shape in the new real estate economy being powered by the consumer. The platforms are being developed by large YOU “aggregatorsâ€Â, just as YouTube provided the portal for individuals to post independent video content.
To answer the question, “Why can’t we seem to Napsterize real estate with billions of seller-buyer conversations in cyberspace daily?â€Â, I believe that the infancy of this consumer-driven change is indeed right before our eyes.
There are virtual platforms in development that allow consumers to post their own offerings, listings if you will, at locations such as GoogleBase, Trulia, Craigslist, Zillow and others, providing an online marketplace for home sales. Several of these allow interested buyers to contact the sellers directly, completely bypassing brokerages and agents. Consumers already have all the technical gadgets, digital cam-corders, home offices and computers to market their own properties – in fact, some luxury properties are already being marketed via video on sites such as YouTube.
At some point we can imagine an online auction, or even a small interaction fee being charged to set interested parties up with regionalized real estate attorneys, who would pay for the transaction leads by region to monetize such a business model. The company with the most marketing dollars to create consumer acceptance here wins.
Seeds of change are emerging right before our eyes: Recently, the Pacific Northwest MLS pulled it’s listings feed from Realtor.com in an effort to empower the individual broker from non-broker generated leads eating into their net profit, yet last week the Houston MLS announced it is voluntarily streaming of it’s feed to GoogleBase in an effort to market Broker’s listing on a world-wide format. Consumers can enter their lisitngs directly into these databases themselves, for FREE, thus bypassing agents and MLS’s altogether. It seems as though the powers that be are facilitating the For Sale By Owner proposition.
Thus, it is imperative for owners to understand the power of individual consumers en masse, and for those in the business of operating real estate brokerages, to not put our heads in the sand and ignore the impending change, but to learn how to embrace the available technology to grow our businesses, recruit more freedom agents, promote our listings with these tools and preserve our bottom line before the traditional models of burdensome brick-n-mortar go the way of the dodo bird.