This is long and rather a study in changes taking place in Agent/Broker relationships and business models. Read at your own risk!
It has been an interesting five years and the changes that have occurred in our Industry. I have watched as the Real Estate Industry has basically done a double back-flip in evolution and change. I am not sure that what is happening in my area is nationwide, however there is some indication that it may be so.
When I first became a Realtor (8 years ago), I started a third career. Having worked at Apple Computer in a marketing and business planning capacity for a training division and then running my own software development company focused on using technology for business development for work groups, I decided to become a Realtor. I was tired of building and delivering business development for others and wanted to build my own business. I always had an interest in real estate and was very happy to finally put my attention on it full time. There would be no one but me to manage.
I started to work for a GMAC franchise in Groveland, CA....a small recreational fly-in community made up of recreational second home owners, retirees and local people. I enjoyed learning the ropes from some very nice people. Every aspect of the business was controlled by the owner/office. I did not mind....I had my hands full learning about real estate. All web leads were directed to the floor agent. Web leads that came during the night went to the morning floor person. We counted on these leads. I never realized how progressive this Broker was in having a website that generated effective leads. It accounted for about 40% of my business.
We needed to move back to the Bay Area and get back in business. My husband finished up a 6 year project and the real estate market in Groveland would not sustain us. We moved to Alameda and lived on our 36 foot Hershine Trawler and I went to work for Zip Realty! What a trip. Jumped right into a company who had designed a website front end and consumer solution for searching and finding homes on the MLS nationwide by zip code. Agents were assigned a territory and received all the web leads for that area. It was overwhelming. Being software developers, we built tools to help us manage the leads and to help us observe the behavior of the visitors. We soon learned how to recognize who was real and who was just looking. About the time I got the business going and received my first commission check....I decided that the Devil was in the details of the fine print in the contract and that basically this company made there money off a 5% commission with a rebate to the Buyer and from the Agent's commissions. The payment plan was dreadful. We pulled up stakes and I went to work for a client and friend in Salinas, CA.
This company was a "Mom and Pop" business with just the couple running their real estate company. They were discount brokers (the majority of brokers in Salinas were). This couple was instrumental in starting the discount wars which ended up in a low percentage commission market (half of normal). The market value of homes in the area were large enough that even a low commission still made a sound business proposition. There was really no website (other than a placed holder with contact information) and no web leads. I really had little responsibility at this company other than to show up and get business. I learned a lot from these two generous people. They did all the advertising and I had NO escrow work that I had to do. They had two full time escrow assistants. I simply did real estate. Took up calls and sent out mailers. I learned that in this business model you did business however there was no opportunity to brand for your own business. The trade off is one to consider. I had a life when I work for this company. I had two very good years there. They retired and I moved on.
I went to work for another independent broker in Salinas. He was a full service broker and tried hard to demand and retain a full traditional commission. At times we caved however as times began to slow. I had to do all my own prospecting, advertising and escrow work. There really was no website and no web leads. I began developing my own website. WOW I said. I never knew I had it so good with my last company. I worked longer hours.
I knew the market was heading for an adjustment and I researched where we should move. We moved to Redding, CA just before the California market started to decline and adjust.
I went to work for Real Estate Professionals, GMAC. I was pleased with the support from the company as they paid half my advertising and told me that I had escrow support (which only amounted to a review for a completed file). I was told that floor time was good, their website was awesome and that it generated leads on a regular basis, and that their training programs were comprehensive. They were known to have the largest by far percentage of multi-million dollar producers within our County. I worked hard and my first year I had a walk-in and a web lead that resulted in a listing and then a purchase. This accounted for 30% of my business in this first year. The company was sold and the new broker made changes. We kept the same website, however the leads dried up....why you say? I don't know. We changed from a dying website to a blog website that has fairly good SEO. We still don't have website leads however. Go figure....where did they go. I can remember when I got 3 or 4 a week. I know how to work website leads. I turn them into happy clients and good business. You would think that this result would be a good business result and proposition for THE COMPANY and the agent!
Other changes have continued to come our way in the way Agents must do business. Our Company no longer advertises in the paper and I am sure that this is occurring on a national basis. I invest heavily in building web tools for my clients and an Internet marketing presence from my listings. I need to use the paper to drive traffic to the dedicated websites and to my other websites. For the last two years, I have not received one lead from my company.
My Broker is currently setting up a e-group to handle Internet leads that come to the front page of the blog website. The blog site has a landing page that belongs to THE COMPANY and several featured posts from Agents. Leads that come to the agent's site (which I have received none except on my land listings) go straight to the agent.The leads that come to the Main Page or Landing Page are the leads given to the group.
There are a number of conditions that the agent must meet in order to be in this group. You must have a ePro designation, meet a specified company dollar amount, maintain your current business development level....and others. Frankly, I quit reading half way through, took a call and never came back to the meeting. Oh, and I forgot....these lucky agents pay a referral for these leads. Web leads.....they are not my favorite.
I am happy for clients to use my website and blog sites for information and research. They can call me when they need my help. I never bother them until they call me for help in their real estate needs. I don't like to invade clients or chase my clients. When I get a web lead from my websites, I touch the client once or twice and then I leave them be to use the tools and systems we provide for their use. When the time is right they will contact me.
What would be the value of these leads? I just don't see the world this way. I love blog leads much better. They usually have a good handle on who you are and if they want to work with you. The transparency of social networking has changed my world. It may not have changed for others, however those that can address openness and transparency will move forward in the future of our Industry and those that don't....will be left in the dust.
The old world order is crumbling and the old model just doesn't work anymore. The old model stuff will just fall by the way side.
Where and when did Brokers decide they don't need to provide the agent with leads. I am a seasoned agent. I don't need training or business development help. I do need escrow help which I DON'T get. I do need support in advertising which I DON'T get. I DO EXPECT TO GET SOME LEADS FROM MY COMPANY AND BROKER which I DON'T get. I DO NOT expect there to be a referral fee attached to any lead that I might get.
I missed it all somewhere and I'm puzzled as to how we got here. Just as the real estate market is upside down....so is THE COMPANY and their business model. Why am I paying THE COMPANY a commission?
It sure is a good thing I have been building my own pervasive web presence and that for the last two years all my business has come from my own web development and from blogging. All the leads I get are generated by my work.
I certainly recommend that you get as independent as you can and own your business in the true sense. It appears that working for THE COMPANY has been changing as rapidly as the real estate market. You should use and own your own phone numbers, email, and efax. You should brand for yourself and your company and make it easy to change. Get your Broker's License. You may need it. You just don't know what the future will bring. In my humble opinion, I don't see how THE COMPANY can survive going foward when they don't have a value proposition. You just may have to make it on your own. I think we may see real estate companies going out of business, if they are not technology focused.
No one in my area is offering leads to their Agents. Maybe the day of giving leads to Agents is over. My Company and Broker are the most progressive in web presence and new technology in our area. Perhaps paying the Broker a 25% referral fee for the lead is not so bad. Perhaps it is occurring out of a need to offset the cost of the technology solution. The Agent becoming more independent and the Broker investing in long-term technology solutions for their clients may go hand-in-hand. Some of my short sales are at 50% and so 25% looks pretty good. Perhaps we will both learn not only how to survive in this market but to be successful. At least there are leads....and I can't say that for anyone else in our area. Observation is a great tool for change and perspective can help us all understand the nature of change.
Just my two cents......I am Jeanean Gendron, your Redding and Shasta County Real Estate Specialist. You can reach me at 530 276-7417. I answer my phone and I work hard to provide my clients with the tools they need to learn about the trending real estate market and about living in Shasta County.
