Episode 009: "Chapter 9 - Understanding The Old Model"

Just like anything, in order to grow into something new, you will have to know what you were. This is no different.To best understand where we are going, we must understand where we have come from.

I want you to think about this for a second… The real estate model that most agents are plugging into right now was built before the internet was invented. Yet, not much has changed in the way that model operates. For the most part, ALL companies, up until recently have operated the exact same way, and almost all of them still do today.

First you start with an international company, the main brand that you are representing. That international company then divides itself into regions. These regions are then sold as franchises to owners who take on all of the risk and liability of being an owner of their selected territory. At that point the franchise owner must hire a manager and staff in order to recruit agents to join and grow the franchise, which in turn grows the company.

The modern day challenge with this model is the need for brick & mortar locations. This brings unnecessary costs and liability that significantly cut into profits. Profits that are coming from the sales of the agents on the front line. Their commissions are being sent to pay the brokers, the franchise owners, the regional owners, and the international company, as well as paying for the rents and utilities of the physical offices.

In the past this was a great model and just fine before the internet, it has definitely served its purpose. But now, it is just outdated. Why is it outdated? Because now that we have the internet we have never been so connected with our clients. We can meet them for the first time or show them homes through a video conference call while they are in another state, taking them on a virtual home tour. We can use our computers from our cars, or even meet them in a coffee shop. I know some agents will say, “it’s not professional to meet in a coffee shop”. To that I say, “it's not professional to waste your client’s time by making them come to an office when they don’t have to”. Let’s be honest, unless you are in an office in a tourist location like the beach, people are not just walking off the street into your office to buy or sell a home. How are they finding you? Once again… the internet.

We have tools available to us that we have never had before, why would we continue to fight the advancements in technology? Remember the chapter on tradition? This is exactly what I was talking about, when people want to fight change because it’s “not how they do things”. This mentality will get you left behind. The industry is going to grow with or without you. You are the only one that can decide if you are going to grow with it.