We’re covering real estate TRENDS in this week’s article- check out the Swanepoel Trends Report for 2018 (CLICK HERE) for much more in-depth information and statistics. You’re going to want to know the top 10 things driving the real estate business this year! Today- it’s all about the management-empowered brokerage business model. Plus- you can get 10% off the Trends Report, ONLY here at Agent Inner Circle- use the discount code “discount10” when ordering! (CLICK HERE) to order.
The real estate industry as we know it may be in for some interesting challenges ahead more so then ever before.
Well funded new brokerage models that leverage employees vs independent contractors, consumer-centric online platforms with a deep wells of data are just a few of the trends that were identified in the 2018 Swanepoel Trends Report.
The current model, which is referred to as the legacy model has had one heck of a run dating back to just after the second world war.
A major change was the compensation agents received with the introduction of the 100% commission model introduced by RE/MAX and Realty Executives.
The 2000s were about innovation and new technology, and finally enter 2010 where the consumer had the power, access to data and a variety of choices like never before.
Consumer demand for ease of use and a great customer experience has dramatically impacted business globally – just look at Amazon, Zappos, Ebay to name a few which delivery world class on-line services and a great customer experience.
Disruption, innovation, ease of use, consumer demands is not something the legacy model of real estate is accustomed to and frankly, as an industry we are extremely SLOW to change and adapt.
8 Major Drivers Fueling the Change
According to the Trends Report there are 8 major drivers that are helping to fuel the change:
1. Management Limitations – despite their best intentions to implement change, offer new technology, deliver a user experience, management, department heads, franchisors struggle and fail to make a difference.
2. Agent-Centricity – when the brokerage considers its agents as its customers, it becomes difficult to then focus on consumers and their needs. Despite huge investments in technology and innovation, agents have generally resisted adopting company best practices and carry on as lone rangers or “solo-preneurs.”
3. Consumer Expectations – today’s consumer expects transparency and simplicity when making purchases, yet real estate transactions are becoming increasingly more difficult. Implementing operational standards would help BUT the brokerage lacks the control to force agents to adapt and deliver a consistent user experience.
Some of the emerging new brokerage models are solving this by eliminating independent contractors for “employees” – a hybrid of salary plus commission based upon consumer satisfaction. Click here to access the corresponding article/video we did on the Buyer Direct Brokerage.
4. Consumer Loyalty – consumers, especially millennials have very little loyalty or use for conventional real estate brokerages. They are market savvy and very aware of new models which cater to them and as a result are gravitating towards these industry disruptors … think REDFIN, OPENDOOR, ZILLOW.
5. Venture Capital – Over 1.9 billion dollars has been invested in emerging brokerage models over the last three years. These companies are tech savvy, leveraging the data, harnessing employees and focused on simplicity and the consumer experience.
6. Emerging Technology – there are new platforms, apps and thought leaders focused on simplifying the real estate process and making a better user experience. The ones that are the most innovative with the technology and strategies will drive significant change.
7. Failure To Respond – for the most part the legacy brokerages have failed to respond to the challenges and demands made by today’s consumer. Again until there is a universal buy-in by management and agent alike, innovation and change cannot occur.
8. Direct Buyer Movement – this is an emerging brokerage model that is meeting the needs of today’s consumer who wants the Amazon like buyer experience of a certainty of price, timeline and process within the real estate transaction.
So what’s the solution – how do we fix the legacy model and maintain status quo?
This and all your other questions will be answered LIVE on Facebook … Join Us Monday May 21st @ 1PM ET for a LIVE interactive interview with Stefan Swanepoel. We will be going over the past 3 trends and you’ll be able to submit your question LIVE and get the answers from the man himself.
Here is the link to the event on our Facebook Page, so make sure you sign up to get notified when it starts … see you Monday @ 1PM ET!
Or on Facebook enter https://www.facebook.com/agentinnercircle/