Is this Agenthousing Armageddon?

4-horsemanIts no secret that these times are bringing great change to real estate brokerages.  As the big brokers struggle with large empty offices will Corporate real estate finally take a look at their practice of hiring any agent to fill them?  I call this Agenthousing – the practice of hiring anyone in the hopes of bringing a deal into the Company. If they can fog a mirror, they can join our company.

Big real estate is in trouble. As the market volume falls away with fewer and fewer deals for agents.  Just spend some time reading blogs regarding big brokerage to see that to survive, they must change, and change quickly.

Perhaps Marc Davison on his 1000watt blog said it best….

The corridors of real estate echo with the anxious cacophony of futuristic business model chatter.

Environmental branding, virtual space, marketing, social media and stemming the ooze profitability caused by the open gash of lopsided splits are now on the gurney as the present model heads for open-heart surgery.

Today’s brokerage is dying. Its value proposition, earnings and moribund branding all are in dire need of defibrillation. Clear!

Its future hangs in the balance. A ghostly spirit invisibly hovers over its stilling life form, hoping for resuscitation and a second chance to exact influence over the marketplace.

Given the prognosis, today’s brokerage must look to the future. It needs the future. It can’t remain on life support much longer. Especially as they appear to have no influence over the masses who should be stampeding the marketplace during the greatest time in our lives to buy real estate.

You see real estate brokerages of the past have a problem.  During the boom days where money flowed down the streets and appreciation was out of control these business built huge momuments – The Notorious Rob had this to say regarding office space….

A beautifully built-out, expensive space in a prime location is like a pimp’s fur coat and alligator shoes; they’re not meant for the customer. This is not a model for success in a legitimate business. Brokerage has to own the customer relationship if it is to provide real value to the agents who are associated with it.

Bigger and bigger offices were built, higher and higher splits were given to top agents, then agents that were top agents 10 years ago.  Marketing allowances were paid, agents were recruited from other companies – the grass certainly must be greener over there?  Agents jumped from Broker to Broker for the better higher split.

Markets started to constrict, profits dropped.  Solution:  Hire more agents.  Seems it does not make any difference if they are good, or ethical, or competent, just hire them…we must fill the offices.  Those Agenthouses must be full, deals must be made at all costs.  We must charge the consumer transaction fees, get them to use our Title and Escrow Companies – need more profits.

Fewer and fewer agents are doing most of the business.  Most agents are waiting for the good times to come back, drinking coffee, sitting on floor time waiting for the prospect to walk in or call, or complaining to the others in the office about the end times of real estate.

Can these companies continue with this practice?   No something will have to change and it needs to change quickly.  Offices need to be closed, profits need to be made, top producing agents will need to make less.

The big broker is between a rock and a hard space – they cannot kill the golden goose, those top quartile agents taking the lions share of the profits without loosing them, and yet blood runs down the halls of the lavish offices.  A few agents are carrying the many – dragging them through one of the roughest real estate markets in history.

Big change is in the wind!

9 thoughts on “Is this Agenthousing Armageddon?

  1. Heidi Marsh

    Excellent article – not only is the content right on…it’s a fun read!

    If you want to check out our answer to “The Perfect Storm” of rising overhead and higher agent expectations ck us out at http://www.ConnectRealty.com (Click the join button at the top and it will take you to an overview of the platform & model)

    Thanks for the article and if you don’t mind…I would like to re-post as well, do i have your permission?

    Heidi Marsh, Realtor

  2. Heidi Marsh

    Excellent article – not only is the content right on…it’s a fun read!

    If you want to check out our answer to “The Perfect Storm” of rising overhead and higher agent expectations ck us out at http://www.ConnectRealty.com (Click the join button at the top and it will take you to an overview of the platform & model)

    Thanks for the article and if you don’t mind…I would like to re-post as well, do i have your permission?

    Heidi Marsh, Realtor

  3. Jeffrey

    Heidi,

    Of course, any of my content can be quoted, just be sure to give me a link back. I’m going to check out the “Perfect Storm”.

    Best, Jeffrey

  4. Jeffrey Post author

    Heidi,

    Of course, any of my content can be quoted, just be sure to give me a link back. I’m going to check out the “Perfect Storm”.

    Best, Jeffrey

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