Brokerage Models, Consumerism, Management Principles, Model Perfect, REALonomics
The Whimper of Trumpets
March 15, 2008 by REALonomics · 2 Comments
REALonomics spends just about every day talking with Broker/Owners from the Atlantic seaboard to the Pacific coast and from the Great Lakes to the Rio Grande. It’s our business.
REALonomics is one of the few voices calling for Broker/Owners to take their business and markets by the throat and recapture control of their situation by ditching antiquated models in favor of transitioning to new transparent, consumer-centric, open-market models that don’t suck-out what little profit is left, if any.
In the midst of the industry’s mortgage and market chaos a few owners appear to be going fetal and saying “That’s the way it goes…I’m waiting and praying for a turn-around.”
REALonomics is a bit edgy…we ride the rim of the business model discussion orb, hoping to pull owners out of the spinning vortex of financial distruction to the edge of new thinking that tells them, you can make a lot of money in this business but not the old way. We deliberately drag owners into a new universe of thinking, hoping they will jettison the old in favor of the new.
We espouse “New Real Estate Model Math” because the old traditional economic model will no longer a financial return commensurate with the risk owners must take. The bulbous anotomical component of an owner’s physique has been flapping in the wind for some time…just ask them. Yesterday’s ecomomic model for real estate brokerage produces RED spreadsheets at almost every level.
Our industry is fraught with issues that harm owners and run counter to consumer needs. However, the amazing thing about this is that we can actually control most of these issues but it will take enormous will power and determination. We cannot succumb to the paralyzing influences of the C-est La Vie mentality.
Have owners been too good to their agents, too patient and tolerant with their franchisor’s lack of delivery, too involved in their local network to build effective business models that work? The anwer is yes, owners have given too much and tolerated too many industry policies and practices that cut them off at their financial knees. For a long, long time, owners have been singing the C-est La Vie anthem. But now it is time for owners to start demanding something for themselves from the industry.
What should owners demand and from whom?
- Increasingly strict educational and business qualifications for agent entry and continuance in the industry.
- Higher costs and fewer agent members of NAR and local associations. There are simply too many of us and we need to create labor-market balances.
- An end to the model control policies that create DOJ lawsuits we finance. We create market control models that inevitably get struck down.
- Franchisor warranties that deliver real ROI to broker/owners in exchange for their risk and financial investment.
- Transparent 24/7/365 national property data delivery models for all consumers. Transparency will create more wealth than control.
This is but an embrionic list. Each item contains many facets and between the lines are myriad financial, operational and administrative details.
Many owners are flat worn out! Tapped! The oil has been drained from their financial engine and they are running metal-to-metal. Some owners are expended and extended beyond their physical, emotional and financial limitations! Yes, some are even disallusioned, disparing and dispressed to the degree that the only response they are giving is C-est La Vie.
While the whimper of some is C-est La Vie-like, other owners are waking up each day mad as hell and screaming, “I’m not going to take it anymore! I’m going to do what’s in my best interest because if I don’t, I’m dead in the water.”
The downturn is good, forcing self-autopsy on the industry. Tough times produce required innovation. When we are pushed to the edge our natural survival instincts kick-in and the will to survive ultimately overcomes what once seemed insurmountable.
Yes, I hear the whimper of acquience. At the same time, there is an increasingly growing number of others who are raising their trumpets in a battle-blast that calls owners to rally around the cause of industry change. I hear the whimper of trumpets.
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Absolutely spot on commentary. Woe is the broker (and agent for that matter!)who creates a self-fulfilling prophecy of doom and gloom by wallowing in it.
Wow. My reading level is way below your intelligence, but you have interesting points. This industry is in a state of flux that may or may not turn out positively. There is a post on activerain called “5 Monkeys – Why Real Estate Agents Are Willing To Give Their Listings Away” that addresses this same behavior at the agent level. The next 5 years should be interesting.