How Must The Traditional Real Estate Brokerage Change?

Posted by Hadraj Youssef On Thursday, April 23, 2015 0 Comments
By Ernesto Berturand


There have been a number of articles discussing the future of traditional real estate brokerages. Predictions that the next few years may mark the end of an era of real estate brokerage as we know it today. Dramatic transformation of the industry is unavoidable due to the proliferation of large real estate portals, fee for service type brokerage companies, revolutionizing Internet technologies, and the restructuring and liberation of multiple listing service data.

What has resulted is two things: continuing consolidation into larger and larger real estate brokerage companies that control multiple segments including mortgage origination and relocation or a new paradigm real estate model that supports buyer representation, agent employed, technology driven fee for service. The impact of this plus the push to change the traditional role of the agent as only a transactional middleman, places a downward pressure on commissions.

Innovation is required in order for brokerages to provide encompassing transaction support to clients throughout the real estate contract to supplement decreasing net income. Real estate business services have extended into home mortgage, title, insurance coverage, home warranty and home repair types of professional services.

The Internet and telecommunications advances have enabled a new kind of real estate. The consumer has more information available through national real estate portals such as Zillow and Trulia and begins a home search long before contacting a real estate agent. These portals may have made more real estate data available but added a middle man between agents and their clients. This has increased the amount of money spent in real estate marketing to consumers. The agent recommended on these portals is not necessarily the best agent but the one who paid the most to be in front of the consumer. The data published by the portals tends to be less accurate and less comprehensive than that of local brokerages.

The days of simply placing a for sale sign in a lawn or an classified advertisement in the local paper to gain success are bygone days for realtors. Only through mastery of numerous skill-sets that propel their business venture and becoming an expert in their niche will agents prosper. Real Estate has historically had a relatively small hurdle to admission, an opportunity to work independently as well as having high financial potential. Real estate agents in the past simply needed to express very minimal competence to successfully pass a licensing exam and after that were left unaided to get additional training.

Nowadays, new agents face more stringent education requirements, continuing education and years of transaction experience to advance. The mindset of the traditional agent, fueled by competition and the attitude of putting their commission before the needs of the client, has ultimately been the undoing. Agents must now provide the highest level of service to everyone by becoming a master of technology and expert advisor rather than behave as a traditional agent who guards their best secrets and fears the competition. Real estate agents who are committed to the success of others around them will find more success. They will need to understand a variety of things in addition to real estate, such as marketing, people, sales, negotiation, and finance.

Successful agents will differentiate themselves as consumer focused professionals who provide good counsel to clients and colleagues and learning every facet of the real estate industry. This attitude of sharing builds trust and cultivates clients who listen to the agent's advice, respect their authority and get genuine guidance and predictable results.

Because the real estate industry is changing rapidly, the best way to prevent obsolescence will be to transform your function as an agent proactively. At the time the concept of real estate brokerage came about, there wasn't any Internet. Brokers restricted real estate information to ensure that from afar, there was no way to research a property. Advertising real estate had fewer avenues as well. The purpose of the real estate agent must focus on what professional services do you really supply which a customer cannot currently perform online. The same information is available to everyone must be distilled and interpreted by the agent to deliver unique content to consumers. Realtors must continually be totally reliable by passionately pursuing what is right and developing a persona dedicated to serving clients.

Brick and mortar brokerages which have sponsored and supported independent agents will be most impacted by the changes materializing within real estate. The vast majority of us need and want the beneficial customer service that agents provide. The traditional broker structure steers toward getting an increasing number of agents that frequently are incompetent when it comes to client care, ethics and sales and consequently lowers the overall delivery of quality service. Very often the brokerage gets an even bigger commission split produced by poor achieving sales agents, producing a reputation crisis for the entire brokerage. Higher producing real estate agents receive a bigger commission rate cut mainly because they deliver the most return which implies there's diminishing valuation of the real estate broker.

The only way to cultivate consumer respect in a sector where the general public has an abundance of information and facts is to change the way business is conducted. The opportunity for the revolutionary brokerage firm really should be to collect data for their customers, analyze and interpret comparables, and dispensing critical information with prospective buyers, home sellers and property investors. Brokers can adopt the same technique to boost their agent relationships by making appropriate software selections and solutions. As a added value to their agents, brokerages must provide the service of continually analyzing technological innovation and helping to make choices for the realtors.

Technology has made it easier for a boutique brokerage to operate effectively with fewer people to manage business operations. Collaboration is the best way to solve difficult problems and is a rising trend as a means for brokerages to provide more value to a team of agents. Setting high standards for customer service and training agents on a common technology platform fosters outstanding agent performance because of the nurturing office environment. One of the benefits of collaboration for brokers and agents is a smoother, more consistent delivery of services to the customer. Another is the increased sense of belonging that can reduce agent turnover. The collaborative approach support specialist roles which enhances the collective knowledge and skill set of the entire team. The team approach is more effective in assuring the individual's success.

The consumer trend is to seek trust, transparency and a better real estate experience. Mobility, speed and personal service are critically important in serving today's savvy consumers. Success in real estate requires that agents understand local markets and sharing that information with consumers through their preferred communication channels (email, phone call, text, social media, etc.) Most buyers now prefer to spend hours searching portal sites like Realtor.com and Zillow largely because of the trust issue with real estate agents. They are demanding greater transparency at every stage of the buying process. But when a buyer is ready to act, they want an immediate response. Consumers are also relying on their Facebook friends and other online sources for referrals to real estate professionals. Social media is where everyone looks but you have to build trust online and provide valuable information not sales pitches. Consumers still rely on agents for help sorting through data, negotiating the transaction and walking them through the whole process.

Brokerages that take on more oversight of sales agent training, software and service performance realize an effective way to develop a strong customer identity. Typically the brokerage will have to generate web site traffic in an effort to generate substantial qualified leads and brainstorm new ways to demonstrate value to their agents. By the brokerage creating a strong web presence, generating online videos and interfacing with the client, the agents are able to concentrate on providing outstanding assistance to the customer. The proliferation of mobile, social media and digital technologies unveils a totally new world of resources that results in the public being substantially less reliant on realtors, brokers and Multiple listing service solutions to obtain knowledge. Undoubtedly the true value that a realtor provides is to present insightful issues, answer questions and be a source of knowledge. This is a unique value that real estate agents provide. Agents and brokerage services that want to dominate the industry will be those willing to streamline all facets of the business.

The ActiveLife Realty Team has embraced this brokerage model and places emphasis on outstanding service to clients. By fostering a culture of cooperation and collaboration amongst the team members, the brokerage empowers agents who work together to ensure the best possible real estate experience for clients. As in any business, when the team members are happy, uncompetitive and confident in their abilities, this positive atmosphere is transferred to the client.

This specialty brokerage was created in 2009 as Gardiner Real Estate by Broker, Alice Gardiner and joined later that same year by Sandy Hanner. The brokerage firm was established with the mission of working hard for each client and maintaining high ethical standards. Both principals in the brokerage had worked for the builder and developer of Sun City Texas, so the business focus was on helping clients find the best home for them in the community. Twenty-five years of combined experience in Sun City Texas and the familiarity with all facets of newly built and resale houses in the community was and continues to be a unique value the brokerage provides to clients interested in buying.

In 2011 the brokerage rebranded itself as Sun City Realty to identify the specialized niche serviced by the real estate brokerage. It became apparent that the active mature market would experience a boom in Central Texas and that other home builders would want to target the enormous population of retiring baby boomers. Sun City Realty subsequently reinvented itself as the ActiveLife Realty Team and added 2 more realtors to assist clients. In the later part of 2014, the general contractor of Sun City Texas finalized the purchase of an additional 1500 acres of land to continue expansion of the community. This announced growth has stimulated the ActiveLife Realty Team to broaden their marketing to include all Central Texas master-planned neighborhoods in addition to active adult communities.

By developing systems to manage clientele, operations and advertising, offering training and assistance to sales agents, maintaining transaction quality control as well as cultivating a team course of action for customer service, the ActiveLife Team has created a viable and innovative working model. The brokerage is consumer focused as a "Buyer Agency", taking no listings and providing more value to customers. Having long been interested in providing good quality lead-generation to agents, the ActiveLife Realty Team has produced an online site which gives a great deal of information to potential customers. As soon as these people subscribe to the e-newsletter or request a no cost "Buyers Guide", they are already qualified potential customers who trust the website as a source for all their homebuying needs. Because the ActiveLife Realty Team of realtors never represent sellers and are only buyer agents who provide unparalleled representation and advocacy to potential customers, the value to he consumer is confirmed. By creating a client-driven business plan, the ActiveLife Realty Team is the future of the real estate business.




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