All across the country, real estate offices are closing. In every state, real estate agents are resigning. Consolidations are all that keep the traditional brick-and-mortar brokerage alive. Some agents leave after offices close. However, survivors transfer their licenses to another sinking vessel, one that is identical to the last and often has the exact same name at the bow.
After more than a year in the red, a large franchise office shuts down. They are anxious and don’t know what to do until their savior arrives.
A broker working for a big brick-and-mortar in town offers to take all agents in under the exact same terms. Each agent pays $600 per monthly and keeps 100% of their commissions. They sigh and sign the contracts quickly like sheep being slaughtered.
The broker cannot generate enough leads to pay the agents and the agents don’t sell enough to make enough commission splits for him, so any type of split would not make sense today. Sharp brokers will charge agents a monthly fee. He giggles as he walks to the bank because despite 60 agents paying $600 each month, he makes $36,000 per month just for his living.
Three years ago, I was sitting across from a franchise broker. He looked at me and said, “Well, we’re feeding the business every monthly. It’s important to do this even in difficult times. We’ve all been through difficult times and always come out of it okay. I thought that it was silly to say such a thing from someone who had no business plan, budget for marketing or written vision for the future. The same broker has just released a press release stating that he will permanently close his brick-and-mortar business and will replace it with another brick-and-mortar. Another consolidation.
The broker is simply jumping from one sinking vessel to another that has not yet sunk. There are many leaks on the new ship, so it might take some time for people aboard the Titanic to get up. The brick-and-mortar brokerages in real estate will soon die from indecision if they refuse to change their business model. Brokers can ride their ship down but it’s quite another for them to sell tickets to agents who cannot keep their word.
It is unfortunate that agents who believe they can survive are just rearranging deck chairs on Titanic. Many agents don’t realize or understand how perilous their fate is. Many feel uncomfortable and know that something is wrong in their business model. Like many passengers on the Titanic, who smiled and said, “Don’t worry, everything works out alright,” traditional agents greet customers with a smile, and then wait for the phone ring. They are now at risk because the ship is tilting. They don’t know ottawa real estate to proceed.
This is the great dilemma that comes with being stuck. This is the classic inability of thinking outside oneself. Agents and traditional brokers who have been working within the same brokerage model for years are unable to think in completely new ways. This is made more difficult by their inability to use technology and the internet. Some people simply won’t learn about the technology. One top producer I know refuses to learn new technologies, and he believes he can delegate some of his responsibilities to his assistant. Few assistants will spend their time learning and adapting for their bosses. And if they do, how does that affect the agent? It is not easy to delegate effectively. I will discuss this later.