Change Is A Reality - Learn To Deal With It
Posted in Technology, Tools and Tidbits By Stefan Swanepoel, Wednesday, November 12, 2008.Real estate professionals need to think differently about the future. They need to do more and they need to move faster. It has now been more than 10 years since my first book on trends, Real Estate confronts Reality, and many of the changes that we have been writing and speaking about are now coming to fruition. Things are definitely changing, and on a large scale. Within the next five years the real estate brokerage industry will significantly have changed and brokers and agents that don’t adapt now will not enjoy the benefits of the next economic upswing. Many of the leading companies of the next few decades are already starting to emerge and the time to stake your claim is now. How do you do that? The answer, of course, is not a simple one, but one that I will nevertheless endeavor over the course of the next few months to shed some light on. Let’s start our journey by identifying five factors that will characterize the future: 1. Change Change is real. It is neither bad nor necessarily good. However it is constant and ever present. It is the very essence of life. So change in our industry is not something new, nor should it be deemed unexpected. It will however alter they way you do business. The more change we experience in a condensed time frame, the larger the transformation will be. 2. Complexity Most adjustments in life are usually hard and therefore we by nature resist them. We have to deal with many changes occurring at the same time that are integrated with activities, products and processes we do not always understand – all of which create a myriad of complexities. And as the future is uncertain and ever changing these complexities just cloud the issue, often hiding very change needed. 3. Confusion And so the change together with the complexity creates confusion for us. We become bewildered by the new and often fixated with the idea that we cannot do something. This uncertainty is unfounded and must be overcome. As certain as there are new things you do not know, so also is the fact that you can master any new product, service or skill and that the path going forward can be revealed. 4. Choice Remember that every scenario provides options and alternatives. Failure is more often than not self imposed barriers. Each problem, obstacle and impediment has more than one solution and you have the capability of discovering it. It just requires commitment, focus, time and execution. 5. Courage Do not resist change. Embrace it. Make it work for you. Find the thread from the past that you can carry into the future – build on your existing knowledge by adding new knowledge, grow your skill set by expanding your horizons and remain competitive by embracing innovation. Rather than resisting or fearing the change help shape the future of the industry. Every year the Swanepoel TRENDS Report identifies, analyzes and then details out the most important and imminent changes that are expected to impact the real estate industry over the coming 12 – 18 months. The 2009 edition is currently in the final 60 days of research and writing. If you have information that you would like to share with me feel free to email me and my research team at 2009@REtrends.com before Monday, November 17th.
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Submitted by RealEstateCafe on November 13, 2008 - 12:56am.
Thank you, Stefan. Your book, Real Estate confronts Reality, was prophetic in many respects. However, from the consumer's perspective, the money-saving potential of those trends -- an estimated $30 billion annually -- has yet to be realized. Here's an excerpt from a Special report by McKinsey & Company published by Inman News, January 23, 1998:
Reinvent the closing--2nd of two parts
$30 billion in economic value could be created
Given the gap between current practices in real estate transactions and consumer needs, we believe this industry is ripe for a restructuring that could create better than $30 billion a year in economic value. This value is likely to be shared between industry participants and consumers, who should benefit from lower prices.
http://tinyurl.com/bml8t
What obstacles need to be overcome to deliver more of those savings? For example, is the industry ready to divorce the traditional two-sided commission, or establish a database of buyers that is just as easy for the public to search as the multiple listing service? Will innovators within the industry bring about those changes or players / forces outside the traditional industry?
Did any members of this group attend the Strategic Planning Committee meeting at NAR in Orlando? As in the past, that was a closed meeting but insights from that committee would certainly inform this discussion. More importantly, a public discussion of those scenarios would enable vendors to develop tools more efficiently and effectively to achieve the twin goals of delivering savings for consumers and profits for businesses.
Bill Wendel
The Real Estate Cafe
Serving a menu of money-saving services for "do-it-yourself" homebuyers & FSBOs since 1995
617-661-4046
realestatecafe@gmail.com
http://realestatecafe.squarespace.com
Submitted by Michael Daly on November 13, 2008 - 6:59am.
Stefan,
I believe it's time for the 'shotgun' approach to real estate management to change. Hiring warm bodies and letting unproductive agents sit on the rosters weakens the entire industry. A chain is as strong as its weakest link.
Real estate companies should institute fees to their agents and real estate boards need to raise their annual dues in order to separate the wheat from the chaffe.
Both need to adjust their business models to plan for a 20% reduction in agents, which would be a good thing.
The NAR and GM have a lot more in common than many people want to believe. It's time for re-tooling both.
Michael Daly
True North Realty Associates - A Hamptons Buyers Agency
The Hamptons Real Estate Blog
www.beachamptons.com
631 725 0554
Submitted by Steve Murnin on November 13, 2008 - 8:30am.
Thank you Stefan. I agree completely. Two of the biggest changes that will happen in the next fives years are:
1. Electronic Signature. The consumer will drive this change. When they know they can sign the majority of their documents by having them emailed to them, they will want the service.
2. Wireless. Everything is moving to handheld devices e.g. iphone, etc .... On the spot information and productivity is provided by handheld devices and will impact real estate.
There will be other important changes for sure. Yet these two are a "sure thing".
The leaders of change always receive the greatest benefit when implemented properly.
Keep up the great work and thanks again for the message.
Steve Murnin
Vice President
FNF Integrated Technology Solutions
408.396.4688
steve.murnin@fnf.com
Submitted by zia montesi / OuterBanksNC on November 14, 2008 - 3:00pm.
Yes I say always "Thank heavens for change!", and thanks finally to NAR / realtor.com for the update to their archaic website. Access to 21st Century wireless apps with the ability to quickly respond / provide real time data to potential clients is vital to our progression and success. Another trend as we, often the 'average' age REALTORS of 50 yrs +, continue to participate as long as possible because we love what we do as the generations continue to whizz past us, brokerages cannot make light of our experience / knowledge / contributions in hours at a desk. Our business model includes mentorship inspite of sometimes lower productivity. Michael Daly, how old are you anyway? ZZ
Submitted by Carmen Multhauf on November 14, 2008 - 5:13pm.
The "silent generation"ages 63-82 may still be participating in our industry and their main contribution is to share that knowledge and experience of working with clients with the younger generations who think social networking is never being face-to-face with anyone. Mentorship should be encouraged in brokerages. Both young and old can benefit from each other.
Submitted by Stefan Swanepoel on November 16, 2008 - 7:39am.
Bill
Quoting a 1998 report is tad old don't you think? ;)
Interesting is that the savings detailed in that report has not, to the best of my knowledge, been confirmed or denied by another major report since then, or has someone? That said I do agree there are significant savings and improvements to be had in the home buying transaction, and far less has been done than had been hoped.
With regard to your comments about a National Buyers Database and the NAR Strategic Planning Committee...
I am aware of significant steps being taking by different parties regarding both above initiates and we will be covering both topics extensively in the 2009 Swanepoel TRENDS Report that wraps in 45 days.
You will be excited about some of the inititaives ahead...
Submitted by RealEstateCafe on November 16, 2008 - 7:59am.
Stefan,
Thanks for the follow-up. Others have used the $30 billion figure more recently, see:
Real estate fees inflated by $30 billion
Article criticizes industry's commission structure
By Glenn Roberts Jr., Inman News, October 11, 2006.
http://tinyurl.com/69b9bs
With respect to divorcing the traditional two-sided real estate commission, here are some ideas starters on our wiki:
http://tinyurl.com/2fw5uf
Plus quick slide show from 2006 (needs update, too):
http://tinyurl.com/6gqlbr
Can't wait to experiment with vendors creating ways to aggregate and search buyer profiles, particularly anyone developing a business model which does not restrict access to MLS members. We've been doing some experimentation ourselves, advertising buyers on Zillow, posting buyer profiles on Twitter. Need a way to automatically update and search this raw list of buyer profiles (working draft includes many duplicates):
http://tinyurl.com/5scwka
Look forward to reading your report and glad to correspond with anyone privately re: divorcing commissions and / or database of buyers.
Bill Wendel
The Real Estate Cafe
Serving a menu of money-saving services for "do-it-yourself" homebuyers & FSBOs since 1995
617-661-4046
realestatecafe@gmail.com
http://realestatecafe.com
Submitted by Sammy Wolcovinsky on November 25, 2008 - 8:32pm.
Hello!
I live in the republic of Panama and over here we do not have two side commission.
Sellers have to pay 5% commission to their broker and let me tell you that does not work either.
Here are one of the results of doing that:
In Panama we do not have an MLS, since the sellers are the only ones paying commissions to their brokers - brokers do not want other brokers to know about their listings since they might take them away and if they do, then they wont get paid their commission.
That has caused many problems. It is hard to know what are the listings available in the market, you dont know about the real value of properties. Since everyone is hiding everything there are no statistics of sales, etc.. in the
panama real estate market.
When you see a property listed in Panama it would never have the correct address (it wont say exactly where it is). This causes many irregularities in the market.
There has to be a better way...
Till then I will keep charging a low flat fee (below 2.0%) including the seller and buyer side.
Sammy Wolcovinsky
Panama Flat Fee Realty
www.panamaflatfeerealty.com
We keep money in your pocket and put a smile on your face.