Pretty much every day, I hear of a new real estate firm business model.
That’s what happens when the market is HOT . . .
Suddenly, everyone wants to be a REALTOR because the myth tells them that all REALTORS are KILLING it in this HOT market.
For sure, the population and REALTORS and firms has likely more than doubled in the past 2-3 years (I don’t know the real stats on this, but I’m betting I’m not far off).
You’ll hear some REALTORS feeling threatened about “Discount Brokerages” and weird concepts advertising that they’ll buy your house, so you can move on “without the hassle of listing your house for sale.”
Everyone is scrambling for their piece of the seemingly ever expanding pie.
There are many of these “Discount Brokerages” and unique business models – and have been for many years.
Having been a REALTOR since 1993, I’ve seen MANY emerge with only a few surviving when the market turns down.
They are not as much of a threat as you might think . . . Just as “For Sale by Owners”
Most of the Sellers who use these discount Brokerages are folks just wanting to save money and not thinking through the complexity of a home sale transaction.
These business models may be perfect for the “Seasoned Home Buyers and Sellers” who have bought and sold many house through the years and don’t feel the need to “Hire” a full service REALTOR. Interestingly, many of these folks end up “eating crow” when they realize the value of full service agent through absentia.
Many of them end up not being able to sell their house and/or getting themselves in trouble (Legally) because they don’t know what to do, and their “real estate agent/service” is not advising them as well as a full service agent .
There will always be room in the market for all kinds of business models . . . Many of these discount brokerages fizzle and go out of business when the market cools down (and it will because it’s a cycle)
Just think of Dollar General vs Target or Nordstroms . . . All valid business models selling many of the same products and each appealing to a different set of customers.
In real estate – When people ask me about these models . . . I remind them:
You pay for what you get
Real Estate is LOCAL – Rely on a local expert who knows the local market
Real estate is personal – Most Home Buyers and Sellers want to work with someone they know, like, and trust
Real estate transactions are complex and not something most people do frequently enough to know how to navigate
Real estate documents are legal, binding agreements that require the parties to “perform” within defined time deadlines.
If you’re a REALTOR feeling threatened by these “creative business models”, I offer you the following “Mantra” that the agents in my firm hear day in and day out.
Pareto Realty is “The Vital Few”
We do not discount because all of our agent members are Local Professionals
We know that our business model is not for everyone
We are students of the local market and of the trends and laws relating to real estate and the economy
We are staunch advocates and advisers for all of our clients
We understand the 80/20 principle at a very high level, so we focus on the 20% of the Home Buying and Selling public who align with our business model.
We know that the people who we already know, like, and trust us are our most loyal sources of business through repeat and referral business.
We succeed first by identifying who the 20% advocates for our business are, and we Consistently and persistently communicate with these people over time so as to be “Top of mind” for these folks when they hear their family, friends. and work associates considering a move.
We derive 80% of our closed sales from THESE 20% Vital Few people in our Sphere of influence.
We, as a team, learn together and support each other as we develop our respective real estate sales businesses.
The best way to “combat” these myriad other business models is to speak our language and ooze our culture to everyone we already know and to everyone we meet.
The right people will then choose to work with you/us and “will be blind” to all those other business models.
Whatever your business model is . . .
Know what you stand for and refuse to compromise your standards, and your business will thrive in ANY market conditions regardless of all these “new players” on the field.
As you can see, it struck a chord , , , so much so, I’m going to polish up this response and use it as my blog post for today 🙂
You’re doing the right stuff . . . Just keep on keepin’ on
Have a great weekend,