Market Bummer = Owner Ops
Merrill Lynch downgraded their opinion of the financial strength of Countrywide Mortgage Corporation and in the process dropped the “B” word on the market…Bankruptcy. Second “B” word; Bummer!
Not so fast! The market bummer is going to set the stage for another cycle of broker/owner opportunities in the real estate industry ranging from new buying cycles, business consolidations, expansions and new brokerage development strategies.
REALonomics has said real estate company owners should re-tool their thinking and their models, engage in aggressive development of cost-effective market management models that utilize consumer-centric, transparent technology and finally, penetrate more new markets by recruiting Liquid Agents who are fluidly operating in multiple markets while tethered to broker/owners via Internet management.
What not to do, in six easy steps:
- Don’t diminish Internet investment, expand it;
- Don’t depend on your vertical market alone, go horizontal;
- Don’t stop recruiting, change agent profile to fee-based and experienced;
- Don’t ignore overhead, cut physical labor fast in favor of technology;
- Don’t retreat to yourself, absorb smaller firms in new markets;
- Don’t rely on transation revenue alone, develop ancillary revenue streams;
Do you believe the current market bummer is an owner opportunity? Comment here.
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Step 1:
“Don’t diminish Internet investment, expand it.”
It is amazing that the Internet is second only to yard signs when it comes to reaching the consumer. Over 80% of real estate buyers search the Internet prior to ever contacting an agent.
Yet we still average as brokers to spend 70% of our marketing budgets on non-Internet advertising, and most brokers average less than 10% for their Internet marketing and advertising.
If we were to would double our Internet investment to 20% and reduce our non-Internet investments by 25%, we could increase our presence where the consumers are actually searching for us, and at the same time, reduce our overall costs by 7.5% . Make sense?
Having been in this business for a long, time, I am very enthused about the opportunities which currently exist to acquire weaker competitors in the marketplace .
There are scads of small companies who opened their own shop when the market was booming and are now facing the harsh realities of losing money with their offices each month. Several of these offices have some excellent Brokers and Agents who are entrepreneurial, self-starters, and who would be welcome additions to a larger office.
The “team” possibility opens up yet another vista for them to join the larger office and still have their own identity. I am encouraging our Broker Owners to invite these qualified offices to join them, as rampant consolidation will be an inevitable side-effect of the contracting current real estate market.