The real estate brokerage business has been experiencing an earthquake of sorts, and the very foundation of its existence is being violently shaken. Most people are unaware of this, and what is even more amazing is that many agents and brokers are unaware of this, although brokers are wondering why they have a non-stop headache. I’ve written elsewhere on this subject, Traditional Brokerage is Dead.
Here is an enlightening perspective by author Sean Purcell:
The real estate industry is a never ending source of change and excitement. I can remember only two years ago coaching agents on what disintermediation meant, how it was affecting the mortgage industry and how it (and the internet) would affect their success. I was never too worried that the mortgage broker would be eliminated, but some agents were more than a little concerned about their future. As it turns out, agents are embracing the internet; they are alive and well and thriving. So, is there a problem?
No, disintermediation is not a problem: but disbrokeration is. Teri Lussier, blogger extraordinaire, recently posted a thoughtful article on BloodhoundBlog. I certainly found it thoughtful. I have been gnawing on the state of the current real estate brokerage system like a hungry dog with his last bone. I have speculated that the current Broker based system is outdated and weathered beyond its useful life. I am quite sure I am not the only one to have said this. But how do we play this out? What happens, or what is happening, as this model fades away?
I believe the new model is in place, we are just not calling it that yet. Going back at least twenty years to when I was first licensed, the existing Broker model seems to be based on a simple premise: work hard as an agent and eventually, if you have the desire and the money and the wherewithal, you will create or purchase your own real estate shop. You are then the Broker and you hire agents to represent you in dealing with clients who wish to buy or sell a home. In many ways it was a grand retirement plan. New agents counted on the Broker for everything from an office to phones; from training to accounting and from organization to guidance. In return the broker kept a hefty portion of the commission. It was rare for an agent to even reach 50% as it was the Broker who had taken all the risk, fronted all the bills and established him or herself as successful enough to own a brokerage in the first place.
But times change and the intermediary that is now serving less and less of a function: the Broker.
Read the rest of this article at How Do You Find Real Estate Success in Disbrokeration?
Last Updated on June 17, 2019 by Chuck Marunde