Republished with authors permission. Original title & link: Real Estate is like G.O.T.! What… How…?
By Oscar T. Blasingame, Esq.
Broker / Attorney, DSCVR Realty, Inc.
The game has changed in real estate. And, it’s not over. It’s only just begun and will be a battle to dominate your territory.
Real Estate is a different profession than it was just five years ago; it will be a different profession five years from now. Only those who are willing to struggle to adapt early will succeed. The rest will flounder or be forced out. If you haven’t noticed the changes that have already taken place, then you’re already losing the war. But, there’s time to catch up and take the win.
The keys to success are adaptation to rapidly changing technology, individual omnipresent marketing, and value adding skills that keep up with these changes. The treacherous competition is the consolidation of real estate sales by a few powerful Big Box, all-in-one tech companies. And, these Big Box tech companies are paying for it with your money. They’re doing to the real estate profession what Home Depot did to local hardware stores and what Amazon and the internet is doing to retail and small businesses. They’re taking away the buyers and seller leads that were always free before and then selling access to them back to agents and brokerages for high fees. In turn, they use that money to fund technological innovation that will be used to make agents nearly obsolete. A few independent leaders will remain, but they have to prove their worth as AI and automation take over real estate transactions.
In the future there won’t be the need for the number of agents that exist today. The future of the real estate profession will be a battle to adapt and overcome the industry disruptors and to take and hold the few remaining positions of strength at the local level that endure. Buyers and sellers rely less and less on real estate agents to provide access to seller’s homes or take buyers on tours of homes the agent selected from those available on the MLS. Buyer’s and sellers have more avenues to connect without the help of a real estate agent. As a result, real estate professionals are going from the role of “Gate Keepers” to that of transaction advisors.
If you don’t control the keys to the doors, then you will need to add value to the transaction by providing expert knowledge, strong negotiating skills and transaction management systems. Buyers and sellers will still need skillful representation. In order to stay relevant and competitive moving forward real estate agents must have superior knowledge and understanding of real estate law, contract negotiation, transaction management, local market knowledge, and technology. They will also need the ability to negotiate lower fees and commissions while maintaining or increasing net income per hour spent working for a client.
The Old Ways – When Brokerages Ruled!
In the old days of real estate, you got your license and hung your hat with a brokerage. Then, the brokerage treated you like employees even though you weren’t. They ruled the marketing. Buyer’s and sellers looked for brokerage names they recognized in the yellow pages or on the early internet and called the main line. If you were lucky enough to be on floor duty you got the lead and the lead usually agreed to work with you because the well known brokerage handed you the call. People trusted in the brand the agent associated with that brand was trust by default. The brokerages controlled most of the leads, the marketing, the information. You needed office space, computer access, photocopiers, and other expensive equipment. As a result, brokerages charged a hefty split of 30-50% plus fees and you had no choice except to pay. If you were lucky, they’d have someone to mentor you, but otherwise you were on your own to sell or die. There was always someone who could take your place if you failed.
That’s all changing. Traditional brokerages remain, but for how long? Why…?
Now – They’re looking for you… Not Your Brokerage!
Technology. It’s put the power in the consumer’s hand. They don’t really care what brokerage you’re with. Fancy company logos and slogans don’t matter anymore. Big expensive offices and generic billboard advertising are overlooked, unnecessary expenses.
They’re looking for you not your brokerage! Buyers and Sellers want the best agent they can find, and they trust the internet to show them who you are. Modern buyers won’t call a trusted brokerage looking for an agent. The result? Brokerages have lost the control they once had all of the real estate leads. Buyers and sellers often bypass brokerages completely focusing on the online “resumes” of individual agents. Now, the brokerages need you need you as much as you need them! Big commission splits are fading out. Reasonable monthly and transaction fees are taking over. In house training is becoming more common. Modern brokerages offer fees you can afford to stay competitive, training you need to be a professional and stay up to date, and the support you need to focus on your business. Modern brokerages treat you like the valuable, independent business owner you are, not as expendable employees who at their mercy for leads and relevance.
There’re so many agents out there, but that’s going to change. How…?
The Future – Technology Will Rule the Industry and Few Will Survive!
Real estate is in the beginning of a rapid industry disruption. The Old Ways are being killed by a new, powerful wave of technology and thinking. The future of the real estate profession lies in adaptation to and implementation of new methods of thinking, new marketing systems and changing technology. In other words, a complete paradigm shift.
Agents who are successful now using old systems will find themselves losing more and more market share unless they begin to adopt new ways of doing business. As for new agents, just hanging your license with a brokerage and working with your sphere of influence may eventually lead to a few sales a year, but real success will come only to those who start working the new paradigm from the beginning and keep adapting as the industry evolves.
The future for brokerages is very different than past models. Old school brokerages that rely heavily on high commission splits and have tremendous expenses will struggle to survive or must adapt new models. The successful modern brokerage must be technology and cloud based with a minimal physical presence and low per agent costs. This way they can charge less, but give more to individual agents. The modern brokerage will rely less on its company brand and more on the brands of its individual agents and teams.
Conclusion – Winter is coming.
Winter is coming, but in a few months, it will be summer again. However, the real estate business will never be the same. So, real estate may not be much like G.O.T. now or in the future. It is, however, changing quickly and it will be a battle to succeed in the new paradigm.
The fact is you were somewhere online… on Facebook, Instagram, LinkedIn or other social media site or maybe you were checking your email. You saw a subject line or headline reading “Real Estate is like G.O.T.! What… How?” so you opened it and read this article which is on my personal real estate website and is imbedded with links to my brokerage’s website. Maybe you’ll click one of the links and read about my brokerage, DSCVR Realty which is dedicated to raising the standards of the real estate profession through training, mentoring, and support, adopting the latest technology and adapting to the changing sales paradigm.
And that’s the point; the technology used to get this article in front of you didn’t exist a few years. I would have had to have the article accepted by and published in a trade magazine or spent a fortune having it printed and snail mailed in a thousand hand written envelopes. Instead I used one marketing application that published the article to 10 social media accounts which in turn used AI and algorithms to determine who would make the best audience. That’s a huge change in the way information and marketing are handled and that’s nothing compared to where real estate is going. Floor time is dead; this is how you reach your future clients now!
It’s time to modernize your real estate practice. Bring your business in line with the future of real estate by joining DSCVR Realty and be ready to succeed using looming industry disruptors to your advantage. Read about what offer you on our “Join Us!” page. Join today or call me to meet for lunch or coffee and we get to know each other and see if we’re a good fit for your future.
About the Author: Oscar is a practicing, Florida attorney, Real Estate Broker, and Florida Supreme Court Certified Mediator. He began working in real estate as a Realtor in 1994 and later went on to become a real estate attorney in 2002. He is currently the managing broker and CEO of DSCVR Realty in St. Petersburg, Florida. From 2002-2005 Oscar was the sales director for Ballast Point homes LLC. During his tenure with Ballast Point Homes, he managed a sales team that produced over 55 million dollars in condominium and townhome sales. With over twenty-five years of experience, Oscar represents buyers, sellers, business owners, other Realtors, and Brokers with professional, personalized service. In addition to residential sales, as an attorney, Oscar practices real estate and small business law and prepares and negotiates commercial and residential contracts and leases. He prefers to focus on residential and income property sales in St. Petersburg and the beaches. A native of St. Petersburg, Florida and a second-generation Gator, he received a B.A. from the University of Florida and a J.D. from Stetson University’s College of Law.