Death of a Salesman
Is 2018 going to be the year that the real estate industry implodes?
It’s been an ongoing discussion for some time now – Will traditional real estate agents be able to survive the onslaught of disrupters, disintermediators, cut-price merchants and DIY providers that have swamped the industry over the past five to ten years?
The answer may arrive this year – 2018 has been the year many pundits have predicted the strain would become too much to bear. Agents have been fending off industry threats for years now, but after dealing with the rapidly inflating costs of on-line listing portals, the proliferation of flat fee and cut price real estate agencies, the avalanche of third party referral services who farm out leads for a massive cut of the sale commission, and finally the arrival of a certain UK based company who makes you pay to list your property rather than sell it, it may just be that the moment of truth has arrived. Has the pressure become too much to sustain for the old school real estate agent?
The proof is in the pudding. The industry has become fractured and disjointed, with little cohesion or direction. The big-name franchise companies have left their run too late – Despite the warning signs being obvious for over a decade now, only recently have the big names in real estate been inspired to get their collective act together. And it may be too little too late.
THE VIRTUAL AGENCY MODEL – A NOBLE BUT FLAWED ATTEMPT TO REBUILD OUR INDUSTRY
The “virtual agency” model has been touted by many as the answer to our problems. By removing the traditional costs and overheads associated with running a real estate agency, these companies have attracted a small army of disillusioned sales agents by offering generous commission splits and a freewheeling, do-whatever-you-like lifestyle.
While this is all largely a well-meaning attempt at changing the game, it is a model that is fundamentally flawed. Their assertion that “the individual agent is the brand” is only half true – While agents will have cultivated valuable relationships and profile in their own right, in the real world it is difficult to convince someone to hand over control of their biggest asset into the hands of someone who is working out of their car. The virtual agency model refuses to recognize this and does nothing to resolve it.
There is an intrinsic value in having a great brand and infrastructure behind you that transcends many of the difficulties salespeople face when trying to win business. While it is important to have great skills and relationships, consumers feel more comfortable dealing with companies that have significant capital and resources. They like to touch and feel – Having a physical office makes a huge difference. If you choose to work for one of these “virtual agencies”, you’d better have the utmost faith in your interpersonal skills because without bricks, mortar and a solid capital base supporting you, many clients will be hesitant to do business with you – Regardless of how much they like you as a person.
TRY BUILDING A RENT ROLL WITHOUT AN OFFICE
While it might be possible to sell a few houses while working out of your garage, building a rent roll is another topic entirely. And the rent roll is the cornerstone of any successful real estate business. While many salespeople will have no interest in growing a rental portfolio and focus exclusively on listing and selling, those with a view to the future and who want to grow a business need to understand the importance of have a healthy property management portfolio in a real estate business. This will not happen without having infrastructure and in particular, a physical office or shop-front.
THE MARKET WILL HAVE ITS SAY
The market is subject to fluctuations and when there is a slump or “correction” – And there will be, as there has been many times before – Suddenly sales won’t be so easy to come by, no matter how many listings you’ve got. What sustains real estate businesses through these difficult times is the rent roll. And if you are serious about growing a top drawer rental portfolio, you need to have a physical space for it to happen. You need an office – A virtual office or your home address listed on a website just doesn’t cut it.
If you’re one of the many who have decided to quit your job at the franchise agency, work for yourself from home, and do your own thing, ask yourself this: When the market turns, and the sales suddenly aren’t there anymore, what is the value of your business going to be?
WHY AM I TELLING YOU THIS?
Because we are focused on finding and developing solutions to these problems. HOUSE has it in mind to reconcile the best aspects of both the traditional agency model and the virtual agency model, giving our agents the best platform to succeed by having well positioned, well fitted offices and developing a strong rent roll and client database. These are the cornerstones of the business.
When the market turns, the hilarious irony is that the low cost providers and disrupters will probably be the first to perish. But they will leave behind an industry in ruins if we do not wake up and protect what is ours. Unless you are a seasoned veteran of the business with a massive database of prospective clients, working out of your car and making prospecting calls from the pub is probably not the answer.
WE ARE LOOKING FOR BOTH AGENTS AND OWNER/PRINCIPALS
It doesn’t matter if you’re an agent looking for a better environment to succeed or an owner looking for better support to take your business to the next level. We are looking for both.
Sick of working under tired old systems and sitting though endless micro-management sessions? Maybe you have tried the virtual agency system and found it hasn’t worked for you. Either way, we want to talk to you. Whether you are on your salesperson’s certificate or are a fully licensed sub-contractor, we have the capital, resources and infrastructure to help you grow your income and develop a better quality of lifestyle.
Our model provides great flexibility – Meaning we are able to offer both franchising and joint-venture opportunities depending on your situation. If you are an existing owner/principal with a solid team and portfolio already in place, then we would love to speak to you about how our brand can help you launch your business to another level. If you are just starting out on your ownership journey or are looking for assistance with getting things kick-started, we can help with that as well. Helping you with finding an office, building a team, acquiring a rent roll… We can make this possible for you.
LET’S GET THIS PARTY STARTED
Time’s a wasting… If you’re keen to get involved with real estate’s hottest new brand, call me today on 0412 757 981 or email to firstname.lastname@example.org to discuss how you can grow your business, and help take back control of our industry.
Til next time, ciao 😉