I spent three days in Scottsdale last week where I participated in several sessions at Leading Real Estate Companies of the World’s Future Tense 2009 conference. Amid the golden Arizona sunshine and within the Westin Kierland, one distinct sentiment echoed throughout:
The current brokerage model is broken.
Throughout the day it danced around the panels and through the corridors, pursuing bloggers, leaders, competitors, vendors – folks from every position on the real estate track. In the evening, they gathered in lounges, bars, and outside by the fire pit. Where they conferred. Sharing opinions. Angles. Theories.
A human mashup.
I took notes. Placed them inside my mental blender. On the flight home, I pressed pulse. The resulting smoothie might be icy to the touch. Sip slowly. Avoid the brain freeze.
The real estate brokerage was once moored within the community.
Care. Trust. Dependability. Knowledge. These were sentiments a brokerage worked hard to earn before typing them across their letterhead. Or shout from the homepage of its Website. These were feelings, beliefs and experiences voluntarily expressed by past clients. To friends. Family members. All based on something real.
Along its journey, the real estate brokerage went adrift. It lost its bearing. And scraped across an iceberg.
The Internet. It ripped a hole in the brokerage hull. And caused it to list.
The brokerage had no understanding of the Web. Or those who used it. It discounted both, either ignoring them completely or relegating them to vendors that pretended to understand it.
The result created a disconnect. Real estate brokerages looked odd. They had funny looking websites that all looked the same. They were stingy with information. Or fooled you into viewing it. The brokerage sought to generate, capture and drip — words that sounded and felt too much like caught, bound and tortured.
This was the new face of real estate to the burgeoning horde of hundreds of millions of people using the Web. They saw a side of real estate they never had before. It was hideous.
When the fervor hit real estate, online innovation exploded. Dozens of powerful new websites emerged within the industry, climbing over the brokerage to reach the consumer. They were cool. Designed properly. They offered better search. Better data. No strings.
They treated the consumer experience with more reverence than the brokers did.
Meanwhile, real estate sales tsunami-ed. Agents got powerful. Top producers became superstars. Free agents. Brokers entered bidding wars to land the bell cow. They drew in the lower producing and new agents, who also struck it rich.
Brokers pretty much gave away their piece of the action for volume. And they continued to recruit more superstars who, in time, cost them their brand. And they recruited more newbies who cost them everything else.
Between late 2005 and 2009, the the tides shifted. Though it was forecast, and despite the fact that is was a slow decline, brokers could not correct its course. Their websites remained terribly backward. Often maintained by vendors who built set it and forget it website systems. They became undernourished by their superstars, who kept most of the pie. And drained by the younger agents who, due to the lack of training and experience, were unable to sell. Unable to close.
All participants, grazing on the broker’s diminishing pasture. Occupying space. Chewing up resources.
Whatever identity brokers once possessed, whatever company culture they might have created, whatever meaning they may have had within the local community … capsized.
The real estate brokerage is now broken. As John Reinhardt, CEO of Fillmore Real Estate suggested, it’s time real estate paid attention to how companies outside of real estate are behaving.
The brokerage of the future
In my estimation, based on what I saw at the conference, the future brokerage is already here. They go by the names of EWM, Seven Gables, Latter and Blum and @Properties. [Disclosure: @Properties is a client of 1000watt Consulting]. There are others. They lead. They innovate. They invest in enhancing customer experiences.
They enlist and train better, smarter, more productive sales agents rather than accumulating a company filled with mere “licensees.”
Perhaps their websites need some work. Their messaging could be improved. They need to figure out social media. After all, nothing is ever perfect. Certainly not now.
The brokerage of the future is already here. And you can move towards it tomorrow. That’s about as far into the future as you can wait to make your move.
– Davison Twitter: 1000wattmarc