Brokers, Boards, Books and Buildings remain the economic blocks that continue to drive our brokerage profit models. Three of the four are still alive and kicking. What are the Four Bs, how do they function and what, if anything, do they mean to us now? More importantly, how do they meet contemporary consumer expectations?

Broker/Owners are literally the financial backbone of the real estate industry. e-Partner and this blog, REALonomics, support the importance of sustaining the roll Broker/Owners play in perpetuating real estate transactions and indeed propping up the industry at large. It is Broker/Owners who literally guarantee the financial stability of the industry. They are real estate’s preeminent risk-takers.

They are almost always the sole guarantors of market presence and it is they who take most of the personal financial risk for the real estate organizations operating within thousands of communities.

Fact: Broker/Owners are losing their ability to produce and sustain profit for their local brokerage firms. The risks now out weigh the rewards, as many are discovering. TWe are facing the financial collapse of many Broker/Owners.

Broker/Owners have increasing lost their grip on the consumer due largely to (1) the widespread availability of property information to agents and consumers; (2) the industry’s empowerment of the vast numbers of agents with cutting-edge tools that tie them directly to consumers and (3) the irrelevance of their control over local Associations, formerly called “Boards of Realtors” and the centralization of power over consumer access to property by NAR.

Broker’s once maintain an iron grip on local property information through NAR’s establishment of Boards of Realtors owned by Broker/Owners. Broker/Owners still have stated authority over local Associations but their is little or nothing for them to control and their role is primarily administrative and therefore without economic benefit.

WATCH THIS PRESENTATION

Each local Board of Realtors (BOR) (now called “Association of Realtors”) once commanded total control over local property information on behalf of the paying members. It was the Broker/Owners that owned and controlled the local property information data, how it was received, formatted and distributed.

Through the BOR, Owners owned (no pun intended) and controlled ALL property information and ALL access to the information, whether by agents or the consumer. Therefore, they were assured of income and barring reckless squandering of funds they were also assured of a perpetuation of their profit and existence.

Through such property information control, Broker/Owners were able to set individual brokerage listing fees, control agent commissions and literally decide who could play and who could not play.

The union of Brokers and Boards coupled with geographic market definitions and control of property information meant that ALL consumers were required to work through one channel of expertise for any real estate investment, that being Broker/Owners.

Local BORs were compelled to comply with local Broker/Owners who were the ligitimate owners of property information within a specified regional area. All of this engineered and mandated by NAR.

WATCH THIS PRESENTATION

It might surprise many of our readers when we tell you that the primary technology used during the era of Broker and Board control was ink and paper.

The Board of Realtors’ MLS Book was the officially designated and exclusive repository for local property information. It was, in fact, the technology used by Brokers and Boards to distribute property information to consumers through the Broker’s agents.

To distribute new property information for use by agents, who were the monitors and purveyors of current property data to consumers, a new MLS book was printed at regular intervals. At the moment of printing, the data was defective, as some properties were sold and other listed for sale prior to print.

Data updates were facilitated through thousands and thousands of local MLS meetings held each week across the nation. At these ritual gatherings agents arrived, books and marking pens in hand, for the local property information “update” wherein properties were declared “sold” by agents and then robotically lined through in the MLS book.

Price adjustments were written into the margins of the MLS book along with other information verbally supplied by agents.

These meetings were quite the scene. Nonetheless, they represented the manner in which property information was collected, distributed, managed and updated for the ultimate end user, the consumer.

Let’s also remind ourselves of the operative phrase of that generation of Broker/Owners, Caveat Emptor, Latin for “Let the buyer beware.” In those days, the buyer was an unsuspecting consumer who was not at all represented in a real estate transaction but instead was told by us, “we only represent sellers but promise to treat all parties to the transaction fairly and honestly.”

WATCH THIS PRESENTATION

This brings us to the fourth “B” and the central pillar of the real estate business model used by Broker/Owners…Buildings.

The Brokers who owned the Boards published the Books that were placed in the hands of agents who were warehoused in Buildings in just about every market in the U.S.

The Buildings were the primary real estate market expression used by Broker/Owners. Bricks and mortar was the economic junction where consumers were provided with the most important and manditory requirement for acquiring relevant property information. Such information was only provides by agents in buildings owned or leased by brokers with books in hand that were printed by the boards.

In those days the components necessary for a real estate transaction to occur came together in a Broker/Owner’s office; these being buyer, seller, broker and property information. in those days we were the true “gate keepers” of the transaction.

Yard signs, newspaper ads, open houses and updesk calls were the path to consumer contact and ultimately a commission. These ingredients were the spider web designed to capture consumer buying leads in the local market.

Consumers had very little control over the process of buying real estate, a process completely controlled by Broker/Owners and their local marketing machines.

Circa 1970. Something began to happen in the late 60s and early 70s. National real estate franchising came into play and began to redefine a Broker/Owner’s market from local to regional and even national.

Franchising brought with it the first real attempt to provide Broker/Owners with a horizontal component to their business model, increasing their potential for referrals and relocation by means of national branding and networking with member of like kind.

During this same time frame, local Boards began to digitize property data and to generate computerized MLS systems that could deliver property data to a Broker’s office electronically. This would later prove to be the beginning of the end of one of the four Bs, the Book.

About 25 years after the first digitized MLS endeavors began . Computerized MLS, personal computers, modems and ultimately the Internet came into play and provided the empowerment of agents and consumers with ubiquitous real estate information.

In 1994, MLS property information became available on the World Wide Web (WWW), known then as the “Information Super Highway.”

Today, the MLS books are gone. Buyer beware is gone.

What still remains, hanging by an economic thread are the remaining three Bs; Brokers, Buildings and Boards (renamed Associations).

The total control of local property information by local Associations is being challenged and seems to be eroding.

Each of the remaining three Bs is now under scrutiny by an increasingly powerful consumer. It looks like the next “B” to fall is the notion of “Buildings” as an ultimate but now unaffordable retail expression of a Broker/Owner’s real estate market presence.

REALonomics, as a student, analyst, crytic and developer of concepts related to the real estate industry’s business models, can’t help but wonder which of the remain two “Bs” is most in jeopardy:

Will it be Broker/Owner or our local Associations of Realtors (Boards) that will be transformed or eliminated?

Your thoughts?

WATCH THIS PRESENTATION

Related posts:

1. Home Price Declines Hit New Records: What Can the Industry Do?
2. The Inman Comment
3. Our Genie is on the Loose & Fresh out of Wishes

Good change agents have an edge to them, typically a sharp edge. Exceptional change agents have a sharp, well informed and analytical edge to them that will cut ones mind open so that it soaks in the message of transformational change. Jeff is a sharp, well informed, analytical agent of change. He is on the march against predatory lending and other kinds of mortgage lending practices that have contributed to a large degree to the current financial state of the union.

ENTER “RATESPEED“

Jeff wants transparency in all things related to mortgage. When we spoke recently, we briefly discussed our respective efforts within the industry but digressed almost immediately to his “RateSpeed” widget for the mortgage industry.

As is usually the case within our industry, disclosure is at the core of RateSpeed. The RateSpeed widget spews out mortgage pricing analysis and its resultant solutions are the kind of transparency that sets the consumer at ease with a sense of “complete” knowledge about the financial ramifications of a mortgage commitment.

Although the RE industry and its biological twin, the mortgage wing, need a dose of RateSpeed widgetry, what we need more than widgets, good as they are, is a dose of the mentality and leadership behind the widgets. Jeff’s widget stems from a mental image of what the mortgage industry’s business model should look like, what it can deliver to the customers in this, our Third Economic Wave, the Consumer-Centric Era.

To REALonomics, RateSpeed is not a widget…the widget is the expression of a kind of business model…of course, that’s what REALonomics thinks about day and night…MODELS.

Behind Jeff Corbett’s RateSpeed widget is a business blueprint and behind the blueprint is a design that delivers a solution to the industry and the consumer. BRAVO!

ENTER “RATESPEED RESISTANCE“

REALonomics admittedly knows less about the fundamental practices of the mortgage industry than it does those of the real estate brokerage industry. But there is an initial and fundamental response to our mutual calls for transformation and transparency…resistance.

Moving from corporate hierarchy models to cooperative and collaborative platforms that embrace complete disclosure will always be met with initial skeptical cynicism and resistance. Nevertheless, the Jeff Corbett’s of this industry are to be recognized for thrusting their widgets into our faces, forcing us to think about transforming a now very sick industry into a new, vibrant and fully fluid, consumer-centric delivery model that our clients love…yes, “LOVE” is what I said.

REALonomics applauds Jeff and all of the rest of the Jeff-like transformers who are inching us forward in our “Qwest for Model Perfect.”

Try RateSpeed. Visit The XBroker.

Related posts:

1. Our Genie is on the Loose & Fresh out of Wishes
2. Wikinomics
3. REALonomical: an Economic Mentality

We have been inside, outside and throughout the industry for quite some time. Our vantage point has changed, enabling us to see what we heretofore could not. In the world of business development and economic analysis one’s vantage point can bring the kind of insight that frankly, changes one’s faulty fundamental assumptions while confirming sound precept.

REALonomics now realizes, without further equivocation, analysis or debate, that our industry’s real estate genie has been released from its bottle and is fresh out of wishes!

Pushing the Vapor Back into the Leaky Bottle

From here on out, all attempts to capture the vapor, return it to its confines and cork the RE bottle will fail.

The Genie that once belonged to us, obeyed us, served us and made us what we once were is loose and fresh out of wishes.

The bottle is tarnished. Rubbing the bottle produces nothing. Our Genie is loose and now serving multiple masters simultaneously, none of whom, save one, the consumer, has sway over the Genie’s capacity to grant new wishes.

It’s impossible to bottle this kind of vapor; its seepage passes through the tiniest of spaces, spilling into the open atmosphere, moving where it wills to go. Where does the Genie go? It ALWAYS takes the path of least resistance, shunning confines, rejecting control and moving to open expanse where it finds its ultimate economic freedom.

Bottling the vapor no longer creates reliable “RE Economic Tonic” for the industry. The vapor is meant to be breathed, not bottled.

RGB, NGB and NGCs

Retail Generation Brokerage (RGB) used the bottle to control the Genie in vertical markets where the consumer was required to submit to the model in order to invest in real estate. Net Generation Brokerage (NGB) is the post 2000 freedom model where horizontal peer collaboration is replacing hierarchal control models.

The real estate industry is now the most vulnerable mainline industry to peer-to-peer models where the consumer and the Genie meet up for property inventory data exchanges and local community collaboration. The context is different and the conversation is different. Both the Genie (property and community information) and the consumer have reached agreement…FREEDOM Rules, open space ROCKS!

Vertical (retail, local style bricks and mortar) real estate brokerage models are being quickly replaced with a viral model, spread by a Genie on the loose and fresh out of wishes.

Two dangers to the industry and its economic models occur in this environment. First, there is the danger of complacency, of not re-tooling our economic ship so that it can operate fluidly in a viral, horizontal world where profitability is defined by open, collaborative peer models facilitated by the real estate industry.

Secondly, and perhaps more importantly, there are now signs of the emergence of what REALonomics calls “self brokering” whereby and wherein the consumer creates their own economic reality, ignores real estate professionals, only calling on them if they must and when they so desire for services they define for themselves.

The next generation of “consumer-buyers-sellers-clients” that will fuel the recovery and beyond will be Next Generation Consumer (NGCs) whose informational points of reference are alltogether dissimilar to old line retail brokerages.

Great News and More Great News!

Great news! The Genie, once our beckoned servant, existing only to accomplishing our economic wishes, rather than rejecting us, invites us to follow into new the new economic space of opportunity…to collaborate, to join the viral horizontal world of the consumer with new approaches to property information management and peer-to-peer community information services.

More great news! Never before has the industry and its adherents been afforded the opportunity to engage in a kind of real estate information alchemy, where our old lead bottle can be turned to a golden horizontal field of freedom for both us and our partner, the consumer.

Related posts:

1. RateSpeed: Inching Us Toward Mortgage Transparency
2. Mug Shot: A New Front Face & Profile
3. Wikinomics

Participation has, according to a Wikinomics, reached a tipping point where new forms of mass collaboration are changing how goods and services and invented, produced, marketed, and distributed on a global basis. Now the perfect storm of technology, demographics and global economics is an unrelenting force for change and innovation.

They pinpoint 2006 has been the year when the programmable Web eclipse the static Web, on every level. For example:

• Flickr beat out webshots
• Wikipedia beat out Britannica
• Blogger beat out CNN
• Epinions beat out Consumer Reports
• Google Maps beat out MapQuest
• MySpace beat out Friendster
• Craigslist beat out Monster

The losers were websites. The winners were communities.

Wikinomics believes that profound changes in the world of technology are giving rise to power new tools based on community and collaboration. We are a new economy – a vast global network of connected people that swap and exchanging ideas, information and an endless list of other services.

And from where I stand I can see it happening to our industry as well. The real estate industry is changing and the thousands of blogs, social networks and the wikis are already laying the foundation for the new world. New business models are already being born, new paths already being charted and new leaders already being groomed.

Real estate over the next decade will change forever and Wikinomics may shed some light as to the path.

Below are a couple of examples of social networking in action:

Related posts:

1. Our Genie is on the Loose & Fresh out of Wishes
2. RateSpeed: Inching Us Toward Mortgage Transparency
3. REALonomics on CityBlogUSA

The stock price rocketed after its initial public offering price of $85 dollars in August of 2004 to over $720 in November 2007. At that time only Exxon Mobil Corp., General Electric Co., Microsoft Corp. and AT&T Inc. had a higher market capitalization among U.S. companies. Today at around $470, nearly 40% from its high, Google still commands a market capitalization of over $110 billion and continues to battle with giants such as News Corp. and Microsoft. 

Google, with its network composed of hundreds of thousands of servers, Google’s system never ages. When its individual pieces die, engineers just pluck them out and replace them with new, faster boxes. This means the “Google cloud” regenerates as it grows, almost like a living organism. 

At the same time Google at some accounts has become the gatekeeper of all information. Google also advises us that “real estate” is the most searched category on the Web – with the 2000-05 housing boom and the subsequent sub-prime and foreclosure catastrophe, this is maybe not that all surprising. But let’s look beyond that for a second.  

With some 141 million individually identified pieces of property in the U.S., real estate is at the very center of the American way of life – whether living, working, sport or entertainment. As Google conducts more real estate searches it aggregates more real estate information. Potentially with each new property search, each new listing added to its “deep search” database, each virtual street tour completed, each foreclosure filed, and so on Google gains more knowledge of the real estate industry. 

It actually is becoming increasingly harder to wrap your mind around just what exactly Google is – and more importantly what it may become.   

Could Google become the best advertising vehicle of all time to find and to market a house for sale?  

And if it does, could that reduce the need for various traditional real estate brokerage services?  

And if yes, to what extent and in what way, could Google influence the fundamental re-engineering of one of the oldest sales professions? 

What are your thoughts?

Related posts:

1. Real Estate Recovery Quo Vadis?
2. Obama & a New Real Estate Industry
3. The Democratization of Real Estate

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.

Related posts:

1. Market Bummer = Owner Ops
2. The Four “Bs”
3. Our Genie is on the Loose & Fresh out of Wishes

My ownership experiences created the foundation for REALonomics, new real estate model math. I’m no longer a believer in the traditional brokerage business model. It cannot sustain owners and provide them with the return on the investment they need to justify their risk and certainly in most cases provide them with an exit strategy. More importantly, the model is increasingly being rejected by the consumer, who favors less control and much, much more transparency.

The fickle markets, all-wise consumer, transaction complexities, capital and legal risks and the arcane nature of the industry itself have rendered the notion of a broker-centric business model nearly obsolete. Want the unvarnished truth? Of the dozens of broker/owners I speak to each month, almost none of them believe in their model, not with the passion necessary to an ongoing and profitable business endeavor. My broker/owner friends are just stuck knee deep in the cement of a dead model.

Power brokering is becoming highly irrelevant. My broker/owner colleagues, nearly to the person, shake their heads and mumble, “…not worth it…I’m keeping the doors open so my agents can make money…and even they aren’t making money any more…”

Our Quickening March toward Obsolescence

Has the pace of change created an every quickening march toward functional and more importantly, economic obsolescence? Yes, it has! To a large degree the idea of opening a brokerage, complete with agent office space, desks, computers, copiers, coffee room and the assortment of industry trinkets that have little or nothing to do with providing consumers access to property information and homes, seems frightening and very risky.

Ours is an industry where owners just won’t let go of themselves, even after staring into the mirror of obsolescence, where we see ourselves, tired, lonely, frustrated, isolated and economically challenged.

The Broker-Centric era (the first economic wave) and Agent-Centric era (the second economic wave) business models are in a final march toward obsolescence. In effect, neither owners nor agents can afford to push the model much further into a future where liquid property information will abound, consumers will bask in the democratization of real estate and we will service transactions from wholly new vantage points.

This “march toward obsolescence” is a not an industry death knell. More accurately, it could be described as the introduction of a new “script” that charts the direction for highly innovative blueprints that finally redefine how we interface as an industry with people in the Consumer-Centric Era (the third wave of our economic development).

Exorcising the Resident Demons and Myths

Like Emily Rose, we are possessed by many demons. In order to build a neo design we will need to cast out the old counter-productive forces that have taken up residency within our business models and whose negative influence permeates the industry. We are possessed of many…most must go…some will be allowed to remain, temporarily, due to necessity…others can be tamed and trained, perhaps.

The long held notions, superstitions and fairy tales about real estate brokerage will need to be addressed, as these have long held sway over our creative capacity to reinvent, paralyzing us and placing us in an economic stupor.

We must cast-out the idea of property information control and open a transparent portal for the consumer to enter into new conversations with us about real estate investment, where we are truly qualified, trusted and knowledgeable about their investment strategies.

We must expunge the idea that bricks-and-mortar retail models in fixed and defined metro market service areas can continue to produce adequate ROI. We must drag the demon of overhead, kicking and screaming out into the open market where it can be exposed for what it truly is, the enemy of owners and franchisors.

Our demons are legion…they do not come out easily and when they finally do they leave a mark, a dent, a scar that says, “We once lived here.” Our resident guests impact our economies of scale, our market agility and most importantly, our long term survival.

Etch-a-Sketch®: a Neo Design

In 2008, REALonomics will etch concepts for the creation of a neo design. We will put it on paper (well, in the blog) and make the model ideas accessible to you. We will interview brokers, agents, industry leaders and of course, real people who buy and sell real estate. Novel, eh?

Changing our industry’s design is daunting. We need to take a look at our sprawling geographic markets, such as California, Florida, Phoenix, Las Vegas, Chicago, Atlanta and the rest and ask “what can work here, now and tomorrow?” Our industry should deliberately engage in designing the optimal consumer-centric, consumer-partnered, brokerage services model, replete with features necessary to the era in which we live.

Baseline business modeling begins with unfettered access to property information…sketch it in!

Baseline business modeling includes a renewed commitment to standards of practice that please the consumer and create a new, more comfortable reality…sketch it in!

Baseline business modeling marries cultural realities to the real estate transaction prototype…sketch it in!

Baseline business modeling has something to do with expunging the ego-centric expressions and components from the industry that continually project a self-serving, money-grabbing image…sketch it in!

Baseline business modeling is predicated upon a model for all participants, one with the highest possible qualifications for entry…sketch it in!

Baseline business modelling requires rigorous adherence to qualification standards for owner/operators, agents and core service providers…sketch it in!

Finally, baseline business modeling demands adequate ROI when measured against the risk of capital, creative and intellectual investments of the players and principals…sketch it in!

Our impending obsolescence is merely temporal. Our model is being replaced, part-by-part. Can we, those of us within the industry, shake the demons that possess us and sketch a new, highly productive model that will propel us into the future? REALonomics thinks so…sketch it in!

Related posts:

1. Demons & True Marketing
2. RateSpeed: Inching Us Toward Mortgage Transparency

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.

Related posts:

1. Same Game, New Rules – Owner’s List
2. Owner Lock-Down, Cell Block “D”
3. Tyranny of the Market – No Trespassing

CBRB is a large operation, but don’t let that create images of traditional entrenchment or lack of agility. CBRB’s application of the second of the Ten Commandments of the New Real Estate Economy, “Get Big by Being Small Everywhere” is evident in their cutting-edge Manhattan Beach office.

A Liquid Digital Office Model

Chris Crocker, Vice President of the Southwest Region for NRT, spoke to REALonomics about the Manhattan Beach model, describing it as an “environment for the mobile agent” consisting of “no assigned offices or private desks” but one where agents can “plug-in a notebook and be connected” to their entire operation. Agents have mobile access to all documents in digital format utilizing VREO’s Dashboard and a Transaction Manager utilizing Planet RE.

Three staff personnel are involved in operating the liquid office model; a Broker/Manager, a licensed Transaction Manager and a Marketing Coordinator who handles communication and coordination of agent/client needs.

According to Crocker, CBRB still wanted a community presence in Manhattan Beach and he stated, “Being small means you can take down prime retail space for exposure.” Chris states, “There are new realities in our business…when an agent comes to the office they are looking for management, marketing and transaction support and a quality place to meet clients…we have designed the office around those who are tech savvy…”

The Manhattan Office Deal Points

CBRB’s Manhattan Beach office is promoted in their online video that outlines the deal points for this business model, which include, among other features:

• Licensed Transaction Management
• Digital Access to Documents 24/7/365
• In-Office Docking Stations, Printers, Faxes, Conference Room
• Paperless Transaction Solutions
• Centralized Processing

REALonomics would like to congratulate Coldwell Banker Residential Brokerage for tweaking their model in its >Quest for Model Perfect.

Please preview our other Model Perfect Award recipients.

Related posts:

1. Home Real Estate – Model Perfect
2. Model Perfect – the Awards
3. Quest for Model Perfect

Real World Modeling

Perhaps the most accurate description of Home Real Estate’s model is that it is just flat out “real world.” There is a refreshing absence of the all too common place bravado and hype sometimes seen in a company’s offerings. Home’s real world approach to business modeling is clearly NOT lopsided, being neither “Broker-Centric” nor “Agent-Centric” (our terms).

Home’s ownership team seems to grasp reality…i.e., we are in a third economic wave of the real estate industry, one that is decidedly different in focus, being market-driven and consumer-centric. There is a keen, sharp edge to their recruiting website and if I were an agent shopping around, I’d be spending some time analyzing Home’s agent offering and setting up an appointment.

Real world modeling has to be based upon economic performance and viability for the owners (a.k.a. ROI); Home’s model appears to fit the bill. With a pragmatic eye for agent options, Home seems to have struck the balance between the essential and non-essential overhead components. It seems to be working, having attracted 1,300 agents in just a few years!

The right model is always real world and Home Real Estate’s model keeps agents where they need to be; in the markets, meeting consumers, running a business and executing transactions. Real world modeling always involves the tri-fecta of real estate operations: Company…agents…consumer. Home is real world.

Home Real Estate’s Common Sense

We reviewed Home’s their recruiting website and assessed their offerings. Our take was “hmmm…common sense has prevailed.” Home’s common sense business model hits ONLY the important issues…optional compensation programs for agents, relevant “hard-hitting” training, make-sense overhead, empowerment of the market to work its own magic, ancillary services and dead-on, no frills Internet models.

The common sense approach is seen in their recruiting bullet points:

• More Money
• Independence
• Upscale Facilities
• Hard Hitting Training
• A Program that Works!

Some owner/brokers will look at Home’s common sense approach and instantly conclude with the question, “Why didn’t I think of that?”

Consumer-Centricity and Transparency

REALonomics believes the best real estate brokerage models of this era must contain two important ingredients, transparency and consumer-centricity.

Transparency. When one visits the culture of Home Real Estate , as exemplified within its online marketing messages and their recruiting website , one comes away with a sense that all things are transparent. There exists a refreshing absence of “smoke and mirrors” in the message. Transparency creates trust and with Home Real Estate, everything’s on the table.

Consumer-Centricity. This is the big one…and, it’s subtle. The business model of Home Real Estate, without its saying so, is a consumer-centric model because it shoves the attention away from the bricks-n-mortar monoliths of the previous brokerage eras (broker-centric and agent-centric) to the markets where the consumer now resides. Smart thinking!

In the early days of my real estate career, my broker used to tell me, “the market is not in the office, it’s out there…go get it.” But, the building kept seducing me, drawing back into the old-line retail model and sucking me out of the market where I should have been. True, in those days, we had the MLS books and the books were in the buildings and the consumers had to come to the buildings. Home Real Estate lays claim to but one structural offering…”Upscale Facilities.”

Home Real Estate – Model Perfect!

Related posts:

1. New Improved Real Estate Model Math
2. Quest for Model Perfect
3. Model Perfect – the Awards