The Great American Real Estate Alchemy
October 2, 2009 by e-Partner · Leave a Comment
For centuries, the notion of turning lead into gold has captured the imagination of countless Alchemists, all of whom were doomed to failure.
The real estate industry’s economic model has been for decades akin to conjuring concoctions that claim to convert the weight of our tarnished enterprise models into shining bars of profitability.
We have not always understood the true alchemy of our industry and the relationship between the decline of profitability with the introduction and application of new technologies to our industry.
Each of the two great historical shifts (economic eras) in our industry have occurred with the rise of new technology, the independence of agents and the empowerment of the consumer. Consider the following diagram and then listen to the accompanying presentation.
The shift from the Broker-Centric era to the Agent-Centric era was created largely as a result of the introduction of a technology known as the Personal Computer (PC) to the daily work habits of agents, empowering them to globalize their reach. From that point on, Broker-Owners were not able to fully contain the spillage of property information into the streets of their marketplace.
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The loss of the MLS Book coupled with PC access to MLS data created a decline in the control of property information (always a key contributor to loss of profit) and the empowerment of the consumer who no longer had to enter a real estate office in order to see the Holy Grail.
Nor have we fully appreciated how technology has always defined each of the three economic eras of our history and most importantly how each increase in technology within the industry reduces profitability.
In 1994, along came the Information Super Highway and property data began to find its way to the Internet, where a hungry consumer was waiting. The Internet created a bridge from MLS sources to consumers who were also empowered with PCs. This was the beginning of a shift from the agent-centric model to the current new real estate economy where the consumer is now the central character.
“Pb” (lead) can become “Au” (gold). The alchemetrics (not sure that is a word but I’ll run with it) are simply undeniable. Technology creates the shift and transition from one real estate economic era to the next. With each transition three things always occur:
- Technology always defines the shift, the model and the wealth in our economic models
- Owner profitability declines as control over property information control diminishes
- Information control is distributed over time to an increasing number of people thus, democratizing real estate
What does all of this mean? Simply, and yet rather profoundly, this means that ours is a history made up of transitions created primarily by the introduction of new technologies and a fundamental shift in economic control from us to consumers. It also means that the principle of alchemy is real.
Our lead-based model (forget lead-based paint for a moment!) is in the process of being turned into gold. However, in the alchemic (not sure that is a word either but I’ll run with it as well) process, we will not necessarily become the benefactors of the creation of new wealth being created by the introduction of new consumer-centric technologies. We could be but we are not, it appears, equipped to transition with the consumer into The New Real Estate Economy.
Watch the presentation and please, comment.
Barefoot Owners on the Razor’s Edge
April 6, 2009 by e-Partner · Leave a Comment
Owners are engaged in the delicate balancing act; walking on the razor’s edge, barefoot.
Slicing into Profit
The razor upon which owners must balance themselves is now slicing so deeply into revenues that profitability is now proving more and more illusive. Today’s Broker/Owners are confronted with an economy that is not rebounding fast enough to enable them to survive.
e-Partner has long held that Broker/Owners are the financial backbone of the real estate industry and that their survival should be one of the top priorities of our industry through 2010.
Our Bleeding Feet
The razor’s edge takes no prisoners and yields no concessions to owners who are struggling to meet their ever increasing general operating expenses. Trapped by the same economic factors faced by other businesses, owners are looking for ways to decrease fixed and personally guaranteed obligations.
e-Partner talks to owners from every brand and those who are independent and the story is generally the same. There are simply too few closing and too much bricks-and-mortar operating expenses. “There is just not enough transaction commission to meet the monthly demands we have,” one broker/owner told us.
Mandatory Agility
Agility, created and sustained, is the first of the Ten Commandments of the New Real Estate Economy.
Although we are not quick on our feet, the razor’s edge is sensitizing us to perils of standing still for too long in one place. Our bloated organization body weight presses down on the sharp stainless steel edge and this slices away large chunks of capital required to sustain retail models.
New principle: the razor’s edge is now an owner’s continuing reality and he/she/all of us will learn to walk on this edge nimbly and quickly or, we will be cut to pieces.
Hungry? Read more and comment…
Real Estate & the Social Media Explosion
April 1, 2009 by e-Partner · Leave a Comment
Blogs, blogging, commenting, posting, authoring, YouTube, LinkedIn, FaceBook, MySpace and Twitter; What does the social media explosion mean to the real estate industry and its business models?
More than 100,000,000 people use social media each day! More and more real estate agents are joining the social media explosion. Are brokerage models utilizing social media as a means to capturing consumer loyalty and brand recognition?
How does your real estate company engage social media as a component of its business model and how can social media tools create revenue relationships? These are big questions that need to be answered by Broker/Owners who want to develop and maintain relationships with consumers who are increasingly utilizing interactive online media as a communication and business tool.
Listen to Real Estate and the Social Media Explosion podcast by Donald Teel, the Founder of e-Partner.
Need help with your Internet business model. Call e-Partner toll free at 1-877-380-1000 or use our contact form.
Consumer and Agent Response to Brand
April 1, 2009 by e-Partner · Leave a Comment
Do brands work? If they do, for whom do they work?
Are consumers brand loyal when it comes to real estate purchases? Do they possess a predisposition to repeat transactions based upon brand loyalty?
What about real estate agents and the question of brand loyalty? Do agents seek affiliation with Broker/Owners out of a conciousness for brand?
Listen to this short e-Partner Podcast about consumer and agent response to brand and then, comment if you so desire.
Need help with your Internet business model. Call e-Partner toll free at 1-877-380-1000 or use our contact form.
Defining Commission Models
April 1, 2009 by e-Partner · Leave a Comment
The ability to create contemporary commission models is a requirement for profit and survivability in the New Real Estate Economy and when it comes to your commission model, creativity can work wonders.
One of the prerequisites for creating effective commission models is allow them to be driven by market area and Broker supplied assets. Another requirement is having an accurate market penetration model that allows you to hire agents in “NEW” markets who work from home offices, creating fee-based cash flow for Broker/Owners without the corresponding bricks and mortar commitment.
Listen to this e-Partner Podcast; it will help you think about your commission model(s).
Need help with your Internet business model. Call e-Partner toll free at 1-877-380-1000 or use our contact form.
Can NAR Save Us?
April 1, 2009 by e-Partner · Leave a Comment
The National Association of Realtors (NAR) is without question the dominant national force that holds the real estate industry in place.
NAR provides the industry with a huge lobby influence in Washington, D.C. and a national platform for Realtors® that includes training, support and association leadership.
Is the role of NAR still relevant? Should the mission and contribution NAR makes toward Broker/Owners change. After all, we believe the backbone of the industry is Broker/Owners who take on most of the risk and guarantees in thousands of communities across the U.S.
Check out this e-Partner Podcast entitled Can NAR Save Us?
Need help with your Internet business model. Call e-Partner toll free at 1-877-380-1000 or use our contact form.
Unlocking Franchise Economics
April 1, 2009 by e-Partner · Leave a Comment
What is the criteria for analyzing the impact of a franchise relationship on a Broker/Owner’s company? How is the franchise commitment qualified and its return quantified?
How does a Broker/Owner determin the ongoing economic value of a franchise to his/her business? What tangible and measurable market contributions should a franchisor deliver to a Broker/Owner?
Whether you are a franchisee currently or are considering investing in a franchise, please review the following e-Partner Podcast.
Need help with your Internet business model. Call e-Partner toll free at 1-877-380-1000 or use our contact form.
The Technology Trap
April 1, 2009 by e-Partner · Leave a Comment
Technology can become a trap…that is, technology for the sake of technology can ensnare a Broker/Owner, creating additional expense, frustration and yes, a reduction of profit.
However, technology that is understood and properly applied can and should deliver operating efficiencies and over time, additional profit.
In this e-Partner Podcasts you will discover the critical questions that need to be asked and answered to avoid the technology trap.
Need help with your Internet business model. Call e-Partner toll free at 1-877-380-1000 or use our contact form.
Horizontal Recruiting for Cash Flow
April 1, 2009 by e-Partner · Leave a Comment
Recruiting is always a buzzword and hot topic in the real estate industry and Broker/Owners who understand that the best way to build a successful, profitable and sustainable company is through successful recruiting strategies.
Too much of the time Broker/Owners are recruiting from a crowded pool of candidates in their core market, i.e., where they operate their traditional brokerage company. Horizontal recruiting means targeting “new” markets for “new” from home-based (e-Partner) agents who deliver “new” revenue to the Broker/Owner’s bottom line without the trappings of bricks and mortar.
Listen to this podcast by e-Partner Founder, Donald Teel, as he addresses Horizontal Recruiting for Cash Flow.
Need help with your Internet business model. Call e-Partner toll free at 1-877-380-1000 or use our contact form.
Re-Defining your Market for Profitability
April 1, 2009 by e-Partner · Leave a Comment
A solid and accurate definition of “market” is the foundational premise of building a working and profitable business.
If a brokerage firm has a deficient or innacurate definition of its true market all of the outcomes will be impacted by this inadequacy.
What is or, what should be your market definition. Is is only geographics or does it include other dimensions such as consumer behavior, business trends and other factors.
The following e-Partner Podcast puts a spotlight on the importance of market definition to a real estate brokerage firm’s business model and bottom line.
Need help with your Internet business model. Call e-Partner toll free at 1-877-380-1000 or use our contact form.
