Violent Change Coming for Real Estate Agents

By
Real Estate Agent with Sequim & Port Angeles Real Estate

The real estate business is obviously in the midst of dramatic changes, and that is certainly an understatement. I just published a new book entitled The New World of Marketing for Real Estate Agents (Early Adopters: The New Millionaires). The book will be available on Amazon for $14.95, but what I’d like to do for all my ActiveRainers  right now is give you this free eBook version that can be immediately downloaded and read on your computer or iPad. Some traditional brokers undoubtedly will think I am a radical, but I think my arguments for a new business model are supported by the evidence. Here is an excerpt from the book.

How is real estate marketing changing? The traditional bricks-and-mortar real estate brokerage is hemorrhaging, and all that keeps this archaic business model alive is consolidations. As offices close, some agents quit, but the survivors move their licenses to another sinking ship, a ship that looks just like the last one and often with the exact same name on the bow. The changes in real estate marketing are dramatic. According to the NAR, we’ve lost 300,000 agents nationwide since 2006, and one NAR spokesman suggested we need to drop from 1.1 million agents to 750,000. This past week two more offices closed in my small market, and the press is not writing about these closures. But this is happening all over the country–it’s just not front page news . . . for anyone who still reads the front page.

These changes in real estate marketing are killing traditional business models. Bricks-and-mortar real estate brokerages that stubbornly refuse to bridge the gap to an entirely new business model will die a slow and painful death. It’s one thing for brokers to ride their own ship down, but it is quite another thing altogether for those brokers to sell tickets to real estate agents with promises they can’t keep.

The most unfortunate thing about all of this is that the agents who think they are doing what it takes to survive are only re-arranging the deck chairs on the Titanic. Many of them truly do not know or comprehend how precarious their fate is. They know generally that real estate marketing has changed, but they are getting little genuine help from their brokers. Just like so many of the passengers on the Titanic near the end who smiled and kept saying, “Don’t worry, everything always works out alright,” traditional agents continue to greet people with a smile and wait for the phone to ring. But the ship is tilting, and they are at risk. They just don’t know what to do.

I outline what I think the future real estate brokerage will look like, and how it will operate. It will be substantially different than the traditional brokerage of today.

I love reading books on my iPad, and this eBook is a nice read on an iPad. It downloads in a pdf format, so you can read it on any device.

Here’s the link for this free download. Enjoy. The New World of Marketing for Real Estate Agents.

Comments are welcome and encouraged here, but please read the book before you critique it, because some of your arguments are debated in the book.

 

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Re-Blogged 5 times:

Re-Blogged By Re-Blogged At
  1. Don and Valerie Keeton 12/01/2010 03:25 PM
  2. Gabe LeBeau 12/02/2010 10:08 AM
  3. Amy Stier 12/02/2010 11:38 AM
  4. Adele Coffman 12/03/2010 02:21 AM
  5. Dale Kreiser 12/13/2010 07:18 AM
Topic:
Real Estate Sales and Marketing
Groups:
RealtorsĀ®
The Art Of Marketing You
Real Estate SEO & Web Marketing
Real Estate 3.0 Next Generation
Art of Professional Salesmanship
Tags:
traditional real estate brokerage
virtual real estate agents

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Rainmaker
55,043
Homer Ray
Eastern NC Homes - New Bern, NC
Eastern NC Homes

Fascinating....I read to about page 30 so far.

Went to NCAR Convention in 2007, in Myrtle Beach, SC.. had just gotten into real estate. Stefan Swanepoel was the first speaker I heard,I was pumped to be in real estate.

The first thing out of his mouth was there were too many real estate agents in the US and it would only get worse.  I took it personally, because I did not know better.

Had I gotten up right then and got in the car, drove home and gotten a job I would probably saved myself 100k.

I plan on reading your book.

We just had two offices close in our town of 30,000 people, we have about 150,000 population in our MLS Board area and our combined sales for 385 agent/broker board members is about 1200 homes in 2009 and will be the same for 2010...Slim pickings..Don't know what the outcome for me will be, I like real estate but this is tough!

Thanks for your insight...When I get through the book I may reblogg you....

 

Dec 01, 2010 02:48 PM #4
Rainmaker
786,657
Mike Jaquish
Realty Arts - Cary, NC
919-880-2769 Cary, NC, Real Estate

Chuck,

Ncie job on the eBook.  And the use of the QR Codes for the audio presentation, too.

Dec 01, 2010 03:19 PM #5
Rainmaker
214,719
Don and Valerie Keeton
RE/MAX The Producers - Omaha, NE
Omaha Real Estate - 402-496-3700

Hi Chuck,

For the most part I agree with you which is why I built an office with 10 virtual office spaces of 6 ft x 6  ft.  I will give a better comment after I finish your book.

Thanks For The Insight

Don Keeton

RE/MAX The producers of Omaha

Dec 01, 2010 03:21 PM #6
Rainmaker
247,997
Matt Grohe
RE/MAX Concepts - Des Moines, IA
Serving the metro since 2003

Chuck: Some pretty dire prognostications but also some seeds of hope. I'll have to download and read your work. Thank you for making it available.

Dec 01, 2010 03:29 PM #7
Rainer
211,183
Devona Garrigus
Garrigus Real Estate - Redlands, CA
REALTORĀ® / Short Sale Specialist

Chuck - You're are absolutely right about the bricks and mortar brokers. Change with the change, or only make make ¢hange!

Dec 01, 2010 03:38 PM #8
Rainmaker
1,317,476
Joan Whitebook
BHG The Masiello Group - Nashua, NH
Consumer Focused Real Estate Services

I am looking forward to reading more about the new reality of real estate.  Thanks for this information and sharing the download... 

Dec 01, 2010 03:48 PM #9
Rainmaker
113,662
Eileen Liles
970-216-0530 http://WeSellDeltaCounty.com - Cedaredge, CO
Macht-Liles Real Estate Group - Cedaredge, CO

Thank you, thank you, Chuck.  Off to bed with my e-book download.  Left RE/MAX almost 3 years ago, went with a non-traditional, work-from-home broker for two years and then started our own company with a former RE/MAX broker in April of this year.  We do our own thing, no secretary, etc.  We run a "lean and mean" operation even though we do have a highly visible office.  We actually don't need nearly as big an office space as what we have, but great location for reasonable lease.  Feedback will follow....

Dec 01, 2010 04:16 PM #10
Ambassador
2,348,119
Fred Griffin, on leave of absence from ActiveRain
Fred Griffin Real Estate - Tallahassee, FL
Licensed Florida Real Estate Broker

Chuck, I hear you.   Gonna read the book to get your complete vision.   But from you introductory Blog here on AR, I believe that we are on the same page.  

Thanks for the Book.    Best wishes, Fred Griffin.

 

Dec 01, 2010 04:20 PM #11
Rainer
20,981
Dale Kreiser
Washington Broker - eXp Realty, Bellingham, WA - Bellingham, WA

What a great way to "Pay it Forward" by offering your new book for FREE Chuck.  I must say that I couldn't put it down / stop listening this last weekend till it was finished.  Great touch using QR codes to the audio!

It's certainly the "perfect storm" for a new Real Estate paradigm!  

Dec 01, 2010 05:41 PM #12
Rainer
3,503
John Sullivan
eXp Realty Arkansas - Springdale, AR

Love the comment about "Seeing Dead Agents and like the Movie Sixth Sense, They Do Not Know they are DEAD "  Amazes me how many really think the only problem is the economy and when it gets better , they will go back to old ways and old habits.  Thanks Chuck for the Book , On Target and Helping Me to go forward feeling that I'm Alive and aware. 

Dec 02, 2010 01:12 AM #13
Rainer
3,806
Jim Reppond
Coldwell Banker Danforth - Seattle, WA

Great article, Chuck! I know a lot of agents and brokers are in denial about the changes going on. But the one's who are willing to accept the new realities and look for the opportunities that will be the visionaries who create the future. You're one of them.

Thanks.

Jim Reppond
Managing Broker
eXp Realty

Dec 02, 2010 11:52 AM #14
Rainmaker
76,710
Chuck Marunde
Sequim & Port Angeles Real Estate - Sequim, WA
Sequim Real Estate Broker

Thanks to everyone for all the great positive comments.  It's great to hear from each of you and what's going on in your areas too.  I agree with you Jim, denial is a major problem in the industry right now.  I often think about how hard it is to think outside myself, but we must do it and grow, or we will die.

Dec 02, 2010 01:07 PM #15
Ambassador
1,583,911
Norma Toering Broker for Palos Verdes and Beach Cities
Charlemagne International Properties - Rancho Palos Verdes, CA
Palos Verdes Luxury Homes in L.A.

I plan to read you book this weekend--before I finish my 2011 business plan.

Dec 03, 2010 02:40 AM #16
Rainmaker
214,719
Don and Valerie Keeton
RE/MAX The Producers - Omaha, NE
Omaha Real Estate - 402-496-3700

Okay Chuck,

Ive read the book, and I agree with most of what you say.  During my first 31 yrs in real estate, I worked from the basement of my home with my wife, and I made many of the same claims that you have in the late 90s about Brick & Mortar offices, but good creative Brokers will survive no matter what their affiliation. 

I'm very proud of the fact that I spent less than $300.00 on print advertising this year.  The only way brokers can get away with paying less for print advertising, is by retraining their agents.  Agents need to be trained on presenting to sellers why print no longer works, and until the agents are able to sell the sellers they are doomed to pay for print.

You are also correct about agents needing to be better educated.  However, the real reason SOME agents fail is due to the following 1. They expect the business to come to them 2. They lack the committment to be self employed.

In 2001 I bought a RE/MAX Francise and it was one of the best thing I've done.  One correction about RE/MAX I would like to make is that "Each Office Is Independently Owned & Operated" which means my office doesn't charge any fees, is not 95% or 100%, and I have a virtual office with an internret caffee.  I developed a commission program known as  "The Producers Program".  I can't explain the program here, but none of my agents would accept a 70% split which is high in our market.  There will be a lot of offices that will close for many of the reasons you mentioned, but I would not doom all the franchises, but I would doom the offices that continue not to change.  Like many companies RE/MAX closed offices due to this recession, and that's due in part to bad office management, and bad agents.  I am positive that some day that an eXp Office will close.

After I started reading the book, I started to get the feeling that it was going to be a sales book, and right about page 92 I realized it was.

Like you, I am very proud of my organization, and the founders of RE/MAX Dave and Gail Linigar and those who support us at RE/MAX.

Bottom Line...  I agree with you and I wish eXp Realty the best. 

 AND IN MY OPINION both (AGENTS AND BROKERS ARE RESPONSIBLE FOR THEIR DESTINY).

Respectfully Commented,

Don Keeton

RE/MAX The Producers of  Omaha

Dec 03, 2010 02:25 PM #17
Rainmaker
214,719
Don and Valerie Keeton
RE/MAX The Producers - Omaha, NE
Omaha Real Estate - 402-496-3700

PS. Chuck,

I forgot what to say what I tell my agents, and this is one of my quotes.

"You Don't Have To Be Big To Be Good, But You Have To Be Good To Make Money"

Thanks Again

Don Keeton

RE/MAX The Producers of Omaha

Dec 03, 2010 02:34 PM #18
Rainmaker
76,710
Chuck Marunde
Sequim & Port Angeles Real Estate - Sequim, WA
Sequim Real Estate Broker

Thanks for your wisdom Don.  Great stuff.  I worked for a RE/Max broker, and he really didn't understand so much of how to run a brokerage.  He was truly stuck in a 30 year old model, but he also wasn't good at motivating and building up the agents.  He actually went out of business recently.  Sad.  Had he thought more like you Don, I might have stuck with him. 

By the way, you noted something interesting.  You wrote, "After I started reading the book, I started to get the feeling that it was going to be a sales book, and right about page 92 I realized it was."  Don, don't fool yourself.  All of us write to sell ourselves.  Think about it.  Every book ever written is selling an idea, a concept, a service, or a passion.  You write in ActiveRain to sell yourself.  We all do.  In fact, every member of ActiveRain is selling a service or a product.  My book is about traditional real estate models and the incredible transition to the new way of marketing.  Should I not mention that I work for a cutting edge business model?  If I didn't everyone would wonder.  I work for the best brokerage in the world, in my opinion, and I'm not ashamed to tell everyone that is eXp Realty.  But give me a break--99% of the book does not mention eXp.  The fact that did not occur to you until page 92 tells me that I was writing objectively and sharing concepts more than selling my own company.  (By the way, you are still selling and defending RE/Max even in your comment.  That's okay, because we are all selling.)

I think the concepts and ideas I share in the book are relevant for any brokerage today, not just mine.  My hope is that some of these ideas will be beneficial for agents and brokers around the country.  I know they work, because they are working exceedingly well for me in the worst real estate market I've seen in 30 years, and because Realtors are going out of business all around me.  I give the book away with all the ideas I shared, and I wish every agent and broker success in this market, no matter where you work.  Join me at eXp or don't join me, but if you ignore technology and the Internet and the need for new business models, you'll join the ranks of the unemployed.  At least in my humble opinion.  Of course, as Dennis Miller likes to say, "I could be wrong."

Dec 03, 2010 06:14 PM #19
Rainmaker
214,719
Don and Valerie Keeton
RE/MAX The Producers - Omaha, NE
Omaha Real Estate - 402-496-3700

Chuck,

All of your points are well taken especially the last paragraph.  I have a final thought of what's hurting agents and brokers, and I'm interested in your opinion.

I think that many internet service providers are leading to our demise and they are cloaked as a wonderful free service for our listings.  Most definately buyers and to some degree sellers are needing our services less and less. WHY, because we are pushing our listings out to search engines that promote our listings, but then they capture the leads and sell them back to us.  The sooner we help our competition build a national MLS, the sooner we'll be obsolete.

Thanks

Don

Dec 04, 2010 02:52 AM #20
Ambassador
1,583,911
Norma Toering Broker for Palos Verdes and Beach Cities
Charlemagne International Properties - Rancho Palos Verdes, CA
Palos Verdes Luxury Homes in L.A.

I'm back.  I read the book, took notes and recommended it to my business partner.  Thanks for putting my thoughts on paper---I found myself nodding in agreement nearly every page from start to finish.

Dec 04, 2010 03:24 AM #21
Rainmaker
76,710
Chuck Marunde
Sequim & Port Angeles Real Estate - Sequim, WA
Sequim Real Estate Broker

Don, on the national MLS you make a good point, but I'm not concerned about getting cut out as a Realtor with sellers not needing me.  No doubt there are massive changes occurring and many Realtors are going to be obsolete and sellers won't need many of those agents when they can list properties and get exposure without them, but those kinds of agents are the Realtor that I think should be washed out of the business and who take away business from full-time hard working professionals who are educated and work hard to do a fantastic job for clients.  In other words, I believe there will always be a need for a knowledgeable, experienced, professional, and trustworthy Realtor who is using the best tools and the best customer relationship management to effectively market and sell their listings.  A national MLS will never replace the value of this kind of Realtor.  Also, many of us are getting good at connecting with buyers as buyer's agents.  100% of my buyers find me through my Internet and my technology tools, and this has been helping me sell about one house every month in this terrible market.  This is going to be a time when the boys are separated from the men and the girls are separated from the women.  As I argue in my book, the time of any Tom, Dick, or Jane getting a real estate license and just making money by showing up is over. When the music stops, the only ones standing will be the agents who are practicing and being the true professionals using all these tools and placing their clients at the center of the Universe in every way.  I think we will see a new age of the Professional Realtor, and we will continue to be busy and prosperous, but we are the minority.

Dec 04, 2010 04:07 AM #22
Anonymous
Ross Hair

Hi Chuck,

 

I loved the eBook.

 

I listened to it on audio (iPhone) using your QR codes - very cool and innovative way to deliver content.Congratulations.

 

Dec 04, 2010 04:21 AM #23
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76,710

Chuck Marunde

Sequim Real Estate Broker
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