The Great American Real Estate Alchemy
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.
Awash in Paper! Part 3
June 6, 2009 by e-Partner · Leave a Comment
Paper, paper and more paper! Who can deny that the real estate industry is awash in paper? More importantly, what does the paper operation do to Broker/Owner profitability and what are the paperless tools available to us that can help eliminate unnecessary paper labor?
In this e-Partner Podcast Donald Teel, the Founder of e-Partner, addresses concrete ways that Broker/Owners can create streamlined transaction management systems that save time, create efficiencies, lower costs and bring benefit to consumers.
Click below to listen to Awash in Paper! Part 3.
Reinventing Amidst the Storms
Caught in a Perfect Storm
And, it is especially difficult for owners to direct the re-invention or re-direction of their companies when the industry is engaged in what appears to be “perfect storm” conditions.
Experience tells me that owners want and need help in analyzing their businesses and this is where e-Partner can help. Our business development services include the following and more:
- Market Analysys, Definition and Deployment;
- Social Media Development for Maximum Branding
- Confidential Merger & Acquisition Services
- 360 Degree Technology and Internet Audit
- Franchise Analysis, Negotiation & Leveraging
- Recruiting Development and Implementation
- Profit Assessment and Company Disposition
- MORE!
e-Partner was created by an owner, for owners. This means that our services do not include “theory 101″ but rather, focus on the immediate priorities required by owners to move their ship through uncharted waters.
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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.
Factor 5 – Consumers at the Economic Joystick
March 24, 2009 by e-Partner · Leave a Comment
Where does the consumer fit into the new emerging real estate economy? We believe the consumer has control of the economic joystick and will dictate the brkerage models of tomorrow.
The consumer, joystick in hand, now drives the economic train. Armed with access to property information, multiple ancillary support services, online mortage and title services, the consumer has more power over the transaction than the broker and agent combined.
Today’s consumer will have a 70-80% chance of conducting research via the Internet prior to selecting a brand, company or agent.
e-Partner believes that the consumer’s appetite for information is insatiable and that brand, broker and agent are now secondary to real estate transaction.
Hungry? Read more and comment…
Factor 6 – We’re Re-inventing
March 24, 2009 by e-Partner · Leave a Comment
The brokerage industry is trying to re-invent itself while maintaining and resurrecting old business models that continue to suck out capital, energy and the ability to move into the third wave.
There have been three distinct waves in the evolution of the real estate brokerage industry.
The first wave was traditional brokerage enhanced by franchise development. This is the model that lacks the versatility and agility to adapt quickly to market demands and is sometimes steeped so deeply in the operating traditions of the past that any thought of re-invention is out of the question.
Hungry? Read more and comment…
