Real estate offices are closed throughout the country. Real estate agents are hanging their licenses in each state. Traditional brick and mortar real estate agents are hemorrhaging, and all that keeps this archaic business model alive is consolidation. Like offices close by, some agents give up, but those who survived the transfer of their licenses to another sinking ship, a ship that looks the same as the last and often with exactly the same name on the bow.
A large franchise office closes the door, no longer being able to keep the lights on after more than a year’s work in red. Agents are worried about the disease, not knowing what they will do until their Savior enters the door.
A large brick broker and mortar throughout the city with the same franchise offers to take all agents in exactly the same contract terms: each agent pays $600 a month and retains 100% of their commission. Agents sigh in relief and quickly sign new contracts such as sheep for slaughter.
Because the broker can’t generate enough leads for the agents, and because the agents don’t sell enough to broker enough money to split the commission, any kind of split wouldn’t make sense for the broker today. A sharp broker will charge each agent a monthly fee. He laughs all the way to the bank, because with 60 agents paying $600 a month, he makes $36,000 a month just for life.
Three years ago I sat in front of a desk from a franchise broker who looked at me and said: “Well, we feed business every month. You have to do it when times are hard. But we’ve gone through difficult times and we’re always going well. I remember how I thought it was a stupid thing to say from a man who told me that there was no business plan, no budget for marketing and no written vision for the future of his company. Unfortunately, the same broker has just issued a press release that he is constantly closing the door of his bricks and mortar and will be hanging his license with other bricks and mortar. Another consolidation.
This broker is only jumping from one sinking ship to a ship that has not yet sunk. The new ship has plenty of leaks, and the awakening of the people on the Titanic may take some time. Brick and harbour brokers, who stubbornly refuse to fill a gap in relation to the completely new business model, will die a slow and painful death. It’s one thing for brokers to ride their own ship down, but it’s another thing for those brokers to sell tickets to real estate agents with promises they can’t keep.
The most unfortunate thing about all this is that agents who think they are doing what they need to survive, are just rearranging the deckchairs on the Titanic. Many of them really do not know or understand how dangerous their fate is. Many of them have an unpleasant feeling, and they know that something is wrong with their business model. Like many passengers on the Titanic at the end, who smiled and constantly said, “Don’t worry, everything always works fine”, traditional agents still welcome people with a smile and are waiting for the phone to call. But the ship tilts and they are in danger. They just don’t know what to do.
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