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The Death of Traditional Real Estate

By
Real Estate Broker/Owner with Fitts Agency

It was 1996 and I was the sole owner of a fledgling mortgage company.  I had just left an investment brokerage company to start a mortgage company.  I was fascinated by the real estate business, primarily the financing of real estate and how it affected the lives of everyday people.

I knew squat about mortgage lending at the time.  In fact, when someone told me that I was going to need a loan processor, I had to ask what a loan processor was.  Fortunately for me, God does really help those who cannot help themselves.  I survived.

After six years in the mortgage business, I was bored and dissatisfied with my life and sold out.  Looking back, I realized that my business had become traditional – in other words, we were saying the same things and doing the same things that every other mortgage company was saying and doing.  We had no differentiation in our marketplace. 

We were stagnant in our actions and we certainly weren’t thinking outside the proverbial box.  (By-the-way, I still can’t seem to locate that box.)

It has taken me several years to discover that traditionalist die, innovators thrive.

Many of you might be assuming from the title of this blog that because I am a founder of a non-traditional real estate brokerage that I think that all traditional real estate companies will soon face a slow death.

You are correct, but probably not entirely correct in your assumptions.  Keep reading, please.

There’s a certain legendary figure, still living, who was having non-traditional thoughts about the real estate brokerage industry.  He thought it might be a better idea to give a larger percentage of the commissions from the sale of homes to his agents.  Maybe, he thought, it would attract top producers.

This innovative, legendary leader took a cold, hard look at the real estate industry of his time, where certain old-line, aloof brokerage companies controlled the mls listings and the best pay you could count on was a 50-50 split with the broker.

In spite of opposition, this leader branched out on his own, moved to Colorado, and founded what we know as Re/Max. 

I was having coffee with one of the original attorneys who helped Re/Max to franchise across the country, and he told me of all the opposition and ridicule that Dave Liniger had to face in order to become a non-traditionalist.  It certainly doesn’t seem plausible now, being that Re/Max is probably the single strongest real estate company in the world.

Our business is changing and yes, traditional ways of doing business are changing too. 

Now don’t get me wrong.  I’m not implying that flat fee companies like ours will take over the world like Re/Max.  Nothing could be further from the truth.

There’s plenty of room for companies of all kinds.  However, the market will only open up large opportunities for those who can become non-traditionalist.

What are you doing to set yourself apart in your market place?  Are you blogging everyday?  Do you have a website that entices potential homebuyers to “surf your waves?”  How connected are you to your community and those who live there?

These are some of the actions that non-traditionalist are taking to differentiate themselves and take market share.

I’ve come to believe, in fact, I know from personal experience, that just because our company’s rate for listing real estate is lower than most “traditional companies” doesn’t mean that we will thrive and prosper above every other company.

No sireee, the opposite is true.  Just look at K-Mart.  I’d rather pay more at Target, wouldn’t you?

The death of traditional real estate is at hand, and it has nothing to do with your commission rates and everything to do with doing things the way others have done for years and years.

…just my two cents.

Blogging Todd

 

Comments (6)

GA-agent.com Georgia Real Estate Directory
GA-agent.com - Canton, GA

Greetings Todd,

Thanks for your post...I'm also with a fee for service real esate company and totally agree with your analogy. If you're not doing things that set you apart from your competition, then you're not moving ahead.

-James

Help-U-Sell North Metro, Alpharetta GA

Oct 24, 2006 02:23 AM
Rich Jacobson
Fathom Realty West Sound - Poulsbo, WA
Your Kitsap County WA Real Estate Broker

Okay, so here's my $.02 worth....

Okay, so you started your own mortgage company when you didn't know anything about mortgage lending. You got bored, so now you've embarked upon starting your own real estate brokerage when you don't know anything about real estate.

Oct 24, 2006 06:47 AM
Todd Murphy
Fitts Agency - Tuscaloosa, AL

Rich,

Well, let's put it this way.  I've personally been involved in over 1,500 real estate transactions, built forty two homes, and helped a title insurance company grow from eighteen offices to over forty two.  I think you might be surprised at just how much I do know about real estate.  I don't claim to know it all, and I'm learning new things everyday, but I can hold my own, Rich.

Maybe my two cents is worth more, eh?

Oct 24, 2006 09:00 AM
Rich Jacobson
Fathom Realty West Sound - Poulsbo, WA
Your Kitsap County WA Real Estate Broker

Hey Todd,

Sorry if I came off somewhat caustic in my previous comment. I was sick in bed most of the day yesterday, so my mind was a tad bit groggy. I commend you for launching into a new venture. It takes courage and determination to go against established, what you call "traditional" business. There is pleny of room in our industry for various models. Some will succeed, others will not. We all must change and adapt to remain successful. One can never become complacent or rest on past laurels. I guess just the tone of your post came off a little cocky and arrogant.

Oct 25, 2006 03:26 AM
Todd Murphy
Fitts Agency - Tuscaloosa, AL

Rich,

I pride myself in being a good communicator but apparently I didn't do a very good job in this blog.  I apologize if I came across arrogant and cocky, it certainly wasn't my intent.

Thanks for your input and comments!

Oct 25, 2006 10:27 AM
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HUNTSVILLE PR - Huntsville, AL

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Jun 03, 2008 11:52 PM