Sunday, April 2, 2023
Chuck Marunde, J.D., Broker/Owner 360-775-5424


iRealty Virtual Brokers


Broker/Consultant

Washington State

SUBSCRIBE
  • Home
  • Search MLS
    • Sequim MLS
    • Sequim MLS Map Search
    • Port Angeles MLS
    • Port Townsend MLS
    • San Juan Islands MLS
    • All Islands MLS
    • How to Search the Sequim MLS
  • Videos
    • Sequim Videos Q&A
    • Buyer Videos Part 1
    • Buyer Videos Part 2
    • Buyer Videos Part 3
    • Buyer Videos Part 4
    • Living in Sequim Video Channel
    • Flee Fee Listing Video
  • Books
    The Coming Real Estate Crash

    The Coming Real Estate Crash

    The Sequim Real Estate Trilogy

    The Sequim Real Estate Trilogy

    Sequim Real Estate Videos for Buyers: The Ultimate Video Guide for Sequim Washington

    Sequim Real Estate Videos for Buyers: The Ultimate Video Guide for Sequim Washington

    Escaping California to the San Juan Islands

    Escaping California to the San Juan Islands

    Get Healthy

    Get Healthy: Increase Natural Immunities, Cellular Energy, Deep Sleep & Decrease Blood Pressure

    Manage Your Energy

    Manage Your Energy Not Your Time

    Real Estate Brokerage From Bricks and Mortar to High Tech Virtuality

    Real Estate Brokerage From Bricks and Mortar to High Tech Virtuality

    7 Myths of Selling Your Home

    7 Myths of Selling Your Home

    Buying Your Retirement Home

    Buying Your Retirement Home

    The New World of Marketing for Real Estate Agents

    The New World of Marketing for Real Estate Agents

    Sequim Real Estate For Buyers: Free eBook Updates Forever

    Sequim Real Estate For Buyers: Free eBook Updates Forever

    24 Secrets of Buying a Country Home

    24 Secrets of Buying a Country Home

    Sequim Real Estate: A Buyer’s Guide

    Sequim Real Estate: A Buyer’s Guide

    Living Off The Grid iin Alaska

    Living Off The Grid in Alaska

    Buying and Selling Real Estate

    Buying and Selling Real Estate

    Trending Tags

      • Sequim Real Estate for Buyers (Free eBook Updates Forever)
      • Sequim Real Estate: A Buyer’s Guide (Paperback)
      • Escaping California to The San Juan Islands
      • Buying & Selling Real Estate in The Rain Shadow
      • Real Estate From Bricks & Mortar to High Tech Virtuality
      • The Seven Myths of Selling Your Home
      • Buying Your Retirement Home
      • The New World of Marketing for Real Estate Agents
    • Agents
      Marunde Google

      Chuck Marunde on Google

      Flat Fee Listing Broker

      Flat Fee Listing Broker

      Buyers Agent Chuck Marunde

      Buyer’s Agent Chuck Marunde

      Trending Tags

        • Buyers Agent Chuck Marunde
        • Flat Fee Listing Broker
        • Google Profile & Leave Reviews
      Tetralogy
      No Result
      View All Result
      • Login
      • Register
      • Home
      • Search MLS
        • Sequim MLS
        • Sequim MLS Map Search
        • Port Angeles MLS
        • Port Townsend MLS
        • San Juan Islands MLS
        • All Islands MLS
        • How to Search the Sequim MLS
      • Videos
        • Sequim Videos Q&A
        • Buyer Videos Part 1
        • Buyer Videos Part 2
        • Buyer Videos Part 3
        • Buyer Videos Part 4
        • Living in Sequim Video Channel
        • Flee Fee Listing Video
      • Books
        The Coming Real Estate Crash

        The Coming Real Estate Crash

        The Sequim Real Estate Trilogy

        The Sequim Real Estate Trilogy

        Sequim Real Estate Videos for Buyers: The Ultimate Video Guide for Sequim Washington

        Sequim Real Estate Videos for Buyers: The Ultimate Video Guide for Sequim Washington

        Escaping California to the San Juan Islands

        Escaping California to the San Juan Islands

        Get Healthy

        Get Healthy: Increase Natural Immunities, Cellular Energy, Deep Sleep & Decrease Blood Pressure

        Manage Your Energy

        Manage Your Energy Not Your Time

        Real Estate Brokerage From Bricks and Mortar to High Tech Virtuality

        Real Estate Brokerage From Bricks and Mortar to High Tech Virtuality

        7 Myths of Selling Your Home

        7 Myths of Selling Your Home

        Buying Your Retirement Home

        Buying Your Retirement Home

        The New World of Marketing for Real Estate Agents

        The New World of Marketing for Real Estate Agents

        Sequim Real Estate For Buyers: Free eBook Updates Forever

        Sequim Real Estate For Buyers: Free eBook Updates Forever

        24 Secrets of Buying a Country Home

        24 Secrets of Buying a Country Home

        Sequim Real Estate: A Buyer’s Guide

        Sequim Real Estate: A Buyer’s Guide

        Living Off The Grid iin Alaska

        Living Off The Grid in Alaska

        Buying and Selling Real Estate

        Buying and Selling Real Estate

        Trending Tags

          • Sequim Real Estate for Buyers (Free eBook Updates Forever)
          • Sequim Real Estate: A Buyer’s Guide (Paperback)
          • Escaping California to The San Juan Islands
          • Buying & Selling Real Estate in The Rain Shadow
          • Real Estate From Bricks & Mortar to High Tech Virtuality
          • The Seven Myths of Selling Your Home
          • Buying Your Retirement Home
          • The New World of Marketing for Real Estate Agents
        • Agents
          Marunde Google

          Chuck Marunde on Google

          Flat Fee Listing Broker

          Flat Fee Listing Broker

          Buyers Agent Chuck Marunde

          Buyer’s Agent Chuck Marunde

          Trending Tags

            • Buyers Agent Chuck Marunde
            • Flat Fee Listing Broker
            • Google Profile & Leave Reviews
          No Result
          View All Result
          iRealty Virtual Brokers
          No Result
          View All Result
          Home Real Estate Brokerage

          Real Estate Brokerages Are Collapsing

          Traditional Brokers Are Calling It Quits

          Chuck Marunde by Chuck Marunde
          October 11, 2022
          Reading Time: 9 mins read
          0 0
          0
          Brokerage Shutting Down

          It’s happening. Real estate brokerages are collapsing, at least the traditional real estate brokerages. They are beginning to close the doors on the worn out business model that has been dying a slow and painful death, as I wrote back in 2010 in my book, The New World of Marketing for Real Estate Agents. Watch the next 12 to 24 months, and you’ll see this play out like a slow motion train wreck. Let me unpack this scenario which is unfolding right before our eyes.

          The traditional real estate brokerage from the past was heavy laden with expensive buildings and overhead and advertising. Remember the huge franchise office buildings, all the office infrastructure, their costly traditional advertising with print newspapers and magazines, T.V. and radio ads, mass mailing of letters in snail mail, and even bill boards? All this sounds like some kind of distant piece of history, but we only have to reach back into the 90s and the 80s to recall these archaic brokerage models.

          Many of today’s brokerages still hang onto most of the old ways. Their use of technology and the Internet has only supplemented their traditional bricks and mortar brokerage, not supplanted it. 

          Along with these archaic methods, the traditional brokerage kept a major percentage of the agents’ fees, but required all the agents to go generate their own leads and business. If the owner/broker could fill a building with 20 to 50 agents, he could generate an income that would make him a millionaire in 10 years.

          There is a surprise in all this history. The surprise is that the traditional bricks and mortar brokerage has lasted this long! When I wrote almost 13 years ago in 2010 that they are dying a slow and painful death, I didn’t think it would be so agonizingly slow. For an industry expert who has been in the business for over four decades like me, it’s rather uncomfortable to watch this slow train wreck happening.

          But there are several understandable reasons they have not been able to adapt to the changing climate. If you’ve been a successful long term entrepreneur yourself, you know that businesses and entire industries are slow to respond to changes in consumer preferences. Even when big successful businesses know consumers are taking a different path into the future, their huge business model is built on a proven profit center based on the old way of doing things. The big real estate franchises cannot adapt quickly, like a boutique brokerage, and if they did, they might break their model. After all, they have a massive infrastructure of fixed and variable costs they cannot terminate overnight. They have long term franchise agreements with all their franchise offices, and those contracts cannot simply be breached or changed. The corporate offices have shelves of three-ring binders with operating procedures, forms, and checklists. It would take years to slowly adapt all that their business models are built upon. To adapt a nationwide business model to changing consumer preferences would be like trying to turn the Titanic quickly to avoid an iceberg. They cannot do it.

          If the big real estate franchises had forward looking leadership that was motivated to adapt, it would have been possible to adapt over a period of 10 years, but the original founders of the big franchises were already very wealthy and revered in their companies. They became too old to re-build their companies. Most of them just retired on their own island in the Caribbean or they are dead now. Unfortunately, for those who took over, it seems they think it is better to ride the momentum of a huge snow ball down the mountain rather than try to change its course. It appears they can’t see very far down the mountain, because there is a “Cliffhanger” type precipice and a roaring river at the bottom of the valley. 

          Disruptive Changes Happen

          On the consumer side of life, people got tired of worn out sales pitches, stupid print advertisements, junk mail, and cold calls. And then came the Internet and computers, and since 1994 we were off to the races with advanced technologies and new ways to communicate to the masses inexpensively. People learned they can search for homes on the Internet without talking to an agent, and they can view the home and learn all about it from the comfort of their home on their laptop. 

          The Death Knell of Traditional Brokerage: Real estate agents no longer held the keys to the castle. Buyers didn’t need to go to a real estate broker’s office any more to view listings. They could do everything on the Internet and on their cell phones. They could even sign an offer digitally without leaving their own home. This was disruptive to the traditional brokerage model, and Realtors hated these changes.

          Along the way the traditional bricks and mortar real estate brokerage found itself on a slow and painful death march. I wrote this in 2010, and a few times since, but we are seeing what I would call a tipping point in which the obvious is now reaching out to slap us in the face. Many are waking up to this new reality, but they only wake up when they suddenly aren’t making the big money anymore. Real estate commissions are drying up like Lake Mead or the Great Salt Lake in Utah.

          Over the past decade locally in my real estate market we saw many agents begin to abandon the sinking Titanic by exiting the bricks and mortar brokerages and hanging their licenses with a national company that offers agents 100% of their commissions with a transaction fee of a couple of hundred dollars. Since so many agents were already working out of their home offices, it made sense for them to transfer their licenses. The ships they abandoned lost big commission splits, and over the past five years more agents abandoned ship as they got no value out of staying with a big brokerage that did nothing for them but keep 20% to 50% of their commissions.

          In my market a tipping point was just reached when a leading traditional brokerage just sold out to a national brokerage that offers agents 100% of their commissions with a fee per transaction. If the traditional brokerage model is a big ship, it’s been taking on water for a long time, and it’s starting to tilt to one side. This does not bode well for the remaining traditional brokers.

          Why? First, more agents in the traditional offices are going to realize at some point that they could be earning 100% of their commissions instead of 80% or even less. In a declining market when commissions are few and far between, agents (called brokers in Washington state) are going to be forced to make a financial change or go out of business entirely.

          Second, there’s another big looming dilemma staring all these brokers in the face, both the traditional brokers and all the independent agents who go out to join a 100% brokerage. None of them are adapting their business models to anticipate and deal with the new consumer and seller preferences that will soon be forced on them.

          I’m talking about these ridiculously high 5%, 6%, and 7% real estate commissions. Sellers are recognizing that in this day and age when buyers find their own homes on the Internet, and when listing agents do almost nothing except post a listing in the MLS, 5% or more is way too much. Listing agents used to earn their commissions, but not any more.

          Just as agents are no longer willing to pay a huge chunk of their commissions to a brokerage, home sellers are no longer comfortable paying huge commissions to a listing brokerage. Discount and flat fee brokerages are exploding around the country.

          The traditional brokerage is caught between a rock and the proverbial hard place, and it will inevitably lead to closing the doors or bankruptcy or dramatic changes in the business model without all the expensive overhead. More than that, the new model, which most brokers still don’t comprehend, will require a new approach to customer service, and new and efficient ways to use advanced technologies and the Internet. The mindset of the traditional broker/owner is unprepared for all of these changes.

          The bottom line of the traditional brokerage model, and its achilles heal, is that it is focused on getting listings, listings, and more listings, and everything they do is bent on protecting their commissions–big fat commissions. Of course, they do all of this claiming that their clients are at the center of the Universe. I rebut that argument thoroughly and explain all this in my book, The Seven Myths of Selling Your Home.

          The Best Brokerages Are Small Boutique Models
          Where The Best Buyer’s Agents and The Best Listing Agents Perform Their Magic

          I developed a new way to connect with buyers and provide them with all the resources they needed, and I did this 15 years ago. It became one of the most successful real estate models for a buyer’s agent in the country, and it became the number one business model in my market for 7 consecutive years for an individual broker. My boutique model truly put clients at the center of the Universe, gave them incredible resources1The tip of the iceberg of my resources include over 2,200 blog articles, a video channel with over a 100 videos, a dozen real estate books, a specially designed and programmed MLS site, checklists, forms, guidance on all aspects of buying and selling, and many more resources. totally free that they could find nowhere else, reduced unnecessary overhead, eliminated ineffective advertising, and used technology and the Internet to meet consumers where they were–on their laptops in their homes. And get ready for this: my boutique brokerage maximized net commissions to the point that for every home I sold, other Realtors in traditional offices had to sell 3 to 5 homes to earn the same total commissions. All this may sound like the obvious to you, but Realtors are generally not trained to develop a business model that will help them adapt. Let’s just say it out loud: “Realtors are not good at business development.” Most wear horse blinders and just go to work every day doing the same things over and over again. In a hot market any broker with a heartbeat can make money.

          Flat Fee Listing Service

          I recently developed a new business model for home sellers, and the advantages for home sellers over the traditional model is dramatic. For those in Washington State who are interested, you can learn more about this new approach for home sellers at Flat Fee Listing Service. 

          My prediction for my local real estate industry? Lots of brokers will put their licenses on inactive status while others will just quit the business forever. Broker/owners who have buildings will lose most of their brokers and their income will peter out to less than their expenses, so they will eventually close their doors. Some who own their building will try to find another commercial tenant. Others will sell their buildings. Many who are retirement age will likely just close out their businesses entirely and give up, saying “it’s time to retire.” Who wants to retire? I love what I do. I would agree that it’s time to retire the traditional bricks and mortar brokerage model. It’s no longer good for buyers or sellers.

          All of this isn’t going to happen overnight, but it will happen sooner than most brokers realize. It is undeniable that the traditional brokerage with massive overhead and buildings and fixed costs are not going to be able to navigate the treacherous waters ahead. Everything is changing, and buyers and sellers are demanding change. The real estate brokerages that will survive and thrive are the boutiques like my own brokerage. 

          In the 2008-2011 recession, the NAR (National Association of Realtors) lost about 300,000 members nationwide. Get ready for a larger slaughter this time around. The perfect storm is on the horizon. I predict they’ll lose 500,000 members over the next 24 months. Meanwhile, buyers know how to use the Internet to find their homes, and they know how to track down a good buyer’s agent. And home sellers will be doing their research online to find other options, like a flat fee listing broker who can actually do a good job for them for a reasonable commission.

          Note: I was in real estate in the mid-1970s when the big franchises were getting started and expanding. I watched RE/Max, Century 21, Better Homes & Gardens, Sotheby’s, Coldwell Banker, and Keller Williams grow across the country. I observed their successes and their failures. These are the traditional brokerages, and while they would all argue they’ve been adapting, I fear it is too little, too late for them. The entire real estate industry is changing dramatically. In the next two to three years, I believe we will see many of the titans of the industry collapse under their own weight. The traditional real estate brokerage is dying.

          Last Updated on October 11, 2022 by Chuck Marunde

          Tags: Real Estate BrokerageReal Estate Brokersreal estate brokers are closing offices
          ShareTweet
          Chuck Marunde

          Chuck Marunde

          Chuck grew up in remote Alaska, graduated from the University of Alaska with a degree in Economics and Teacher Certification, and after teaching high school for two years, went to law school at Gonzaga University in Spokane, Washington. He served four years as a Captain and JAG in the USAF at Nellis AFB in Las Vegas. After practicing real estate law for 20 years in Washington, Chuck founded iRealty Virtual Brokers covering Sequim and the beautiful Olympic Peninsula. He is the author of 2,200 real estate articles and a dozen real estate books, and he produced over 100 real estate videos. Chuck combined his love for real estate and technology to create a massive Internet presence, and his articles and videos and books have been viewed by millions. Chuck is a well recognized real estate expert and his counsel is sought by other brokers and practicing attorneys around the country. Buyers from New York to Hawaii and from Florida to Alaska seek him out to retain him as their buyer's agent, and home owners around the State of Washington seek him out because of his new Flat Fee Listing Service. 

          Related Posts

          Real Estate Brokerage

          Real Estate Brokers Falling All Over Themselves to Attract Agents

          September 6, 2019
          0
          Real Estate Brokerage

          Who is iRealty Virtual Brokers?

          September 6, 2019
          4
          Real Estate Agents

          Real Estate Broker Way Out in Front

          September 7, 2019
          1
          Buyer's Agent

          Real Estate Brokers Missing the Point

          August 19, 2015
          3
          Buyer's Agent

          Real Estate Broker Leadership is Everything

          September 21, 2019
          4
          News and Commentary

          The Death of Newspapers: What’s Going On?

          September 21, 2019
          2
          Next Post
          emergency preparation

          The Safest Place to Live: Survival Preparation

          Sequim homes

          Sequim Homes Sold Recently

          Leave a Reply Cancel reply

          Your email address will not be published. Required fields are marked *

          I agree to the Terms & Conditions and Privacy Policy.

          This site uses Akismet to reduce spam. Learn how your comment data is processed.

          "I wish I read this before selling my
          home. I could have saved $50,000." Andy 

          Search 2,200 Articles by Category

          • Trending
          • Comments
          • Latest
          Buyer and Seller

          What if a Buyer and Seller Talk to Each Other?

          August 5, 2022
          Prorate Propane

          How to Prorate Propane at Closing

          August 15, 2015
          Terminate a real estate contract

          How to Terminate a Real Estate Contract

          December 31, 2020

          The Sequim Blue Hole – A Map of Rainfall

          September 1, 2019
          print newspapers

          Print Newspapers Losing Readers to the Internet

          42
          Buyer and Seller

          What if a Buyer and Seller Talk to Each Other?

          32
          FNMA Killing Transactions by Requiring Private Road Maintenance Agreements

          FNMA Killing Transactions by Requiring Private Road Maintenance Agreements

          31

          What Documents Does a Buyer Need to Buy Real Estate?

          24
          Bidding for Listings

          Are Listing Brokers Bidding for Listings?

          March 29, 2023
          home title theft

          Is Home Title Fraud Real or is it a Fraud?

          March 27, 2023
          Sequim Real Estate Maps and Docs

          Sequim Real Estate Maps and Documents

          February 6, 2023
          Flat Fee Listing Service

          Sellers Chase the Market Down Once Again (UPDATED)

          March 22, 2023

          Subscribe to Chuck 
          Marunde's Newsletter

          Popular Stories

          • Buyer and Seller

            What if a Buyer and Seller Talk to Each Other?

            0 shares
            Share 0 Tweet 0
          • How to Prorate Propane at Closing

            0 shares
            Share 0 Tweet 0
          • How to Terminate a Real Estate Contract

            0 shares
            Share 0 Tweet 0
          • The Sequim Blue Hole – A Map of Rainfall

            0 shares
            Share 0 Tweet 0
          • Dangers of Buying a Fannie Mae Foreclosure Through Homepath

            0 shares
            Share 0 Tweet 0

          Leaving Comments   I hope you’ll join our community and leave comments from time to time. Please realize that comments, if approved, will be public, so do not use any personal information you don’t want broadcast to the world, and definitely don’t leave a phone number. Comments are not the place to ask Chuck Marunde for help in finding a home. To do that, call or text Chuck.

          Neither Chuck Marunde nor iRealty Virtual Brokers offers legal advice on this site. Please Read Our Legal Disclaimer

          If you’d like to view how we protect your privacy, see our Privacy Policy.

          iRealty Virtual Brokers

          iRealty Virtual Brokers reaches out to buyers around the United States with thousands of online articles, MLS sites, apps, real estate books, videos, and much more specifically to help buyers find all the answers to their questions. We also now offer a flat fee commission listing service that saves sellers tens of thousands of dollars.

          iRealty Virtual Brokers
          125 Olympic Ranch Ln
          Sequim, Washington 98382
          360-775-5424

          Search the entire NWMLS in Washington State:

          Sequim-Homes.com

          The largest independent real estate blog in the State of Washington with over 2,200 articles totally focused on our client’s best interest, their needs and their curiosity. All free and 100% reliable. I’m here if you need me, 

          © 2006-2022 iRealty Virtual Brokers and Chuck Marunde

          No Result
          View All Result
          • Home
          • Search MLS
            • Sequim MLS
            • Sequim MLS Map Search
            • Port Angeles MLS
            • Port Townsend MLS
            • San Juan Islands MLS
            • All Islands MLS
            • How to Search the Sequim MLS
          • Videos
            • Sequim Videos Q&A
            • Buyer Videos Part 1
            • Buyer Videos Part 2
            • Buyer Videos Part 3
            • Buyer Videos Part 4
            • Living in Sequim Video Channel
            • Flee Fee Listing Video
          • Books
            • Sequim Real Estate for Buyers (Free eBook Updates Forever)
            • Sequim Real Estate: A Buyer’s Guide (Paperback)
            • Escaping California to The San Juan Islands
            • Buying & Selling Real Estate in The Rain Shadow
            • Real Estate From Bricks & Mortar to High Tech Virtuality
            • The Seven Myths of Selling Your Home
            • Buying Your Retirement Home
            • The New World of Marketing for Real Estate Agents
          • Agents
            • Buyers Agent Chuck Marunde
            • Flat Fee Listing Broker
            • Google Profile & Leave Reviews
          • Login
          • Sign Up

          © 2006-2022 iRealty Virtual Brokers and Chuck Marunde

          Welcome Back!

          Login to your account below

          Forgotten Password? Sign Up

          Create New Account!

          Fill the forms bellow to register

          *By registering into our website, you agree to the Terms & Conditions and Privacy Policy.
          All fields are required. Log In

          Retrieve your password

          Please enter your username or email address to reset your password.

          Log In
          This website uses cookies. By continuing to use this website you are giving consent to cookies being used. Visit our Privacy and Cookie Policy.