Transcript of a December 2014 B-School coaching call discussing how the real estate industry is evolving. The speaker argues consumers are better informed, predicts shifting commission/payment behaviors, contrasts traditional brokerage/team models with team structures that deliver unified client experiences, and emphasizes systems/processes to capture lifetime value and avoid agent churn and burnout.
One thing, if you haven't been through, been through sort of just thinking of how the real estate industry is changing, this kind of goes back a little bit to traditional teams and just the brokerage model and why I'm so passionate about going down this path. I do believe that consumers are pretty smart and there will be a day where buyers are going out and hiring buyer agents and paying their commission. And there's different options available for sellers, full service. There'll still be people listing homes at 4 to 5% just for them and they'll always be people that are doing the bottom of the barrel and selling off of no fee or low fee, a discount rate Lister. So obviously the consumers have a lot of information. There's nobody more sort of, you know, buyers and sellers these days, I mean they're so they have a ton of information but there's nobody more interested in the outcome than them. I've got a lot of different sort of players on the call today. I've got people with small teams and I've got people with big teams. There was a post and I don't believe it's going to happen the same way that it happened for travel agents. You know, where Expedia and Travelocity and all those sites, I mean, really wiped out an industry. There are still travel agents around, but I don't believe the same thing is going to happen. I mean there's, there's just local MLs and the hold they have on, you know, the listings and how you can get listings in there and you have to be a member and all that stuff. And most markets have sort of generally accepted ranges of listing commission and buyer agent commissions. Even if you suck as a buyer's agent, you still get paid what a traditional split is. And even if you suck as a listing agent, generally you can go in and tell someone, if they're not going to talk to anyone else, you can tell them, well, you know, the market generally charges 6%, so that's what I charge. And obviously there's no commission fixing amongst this group or anything like that. I just use that 6% as an example. But you have to decide that not just because you don't want to work, but because you feel like the best way to serve buyers and sellers is by building a team and a team that everyone is dialed in. Not a team where everyone has their own signs or anything like that, but everyone is dialed in to a unified experience for buyers and sellers. So traditional team leaders can generate more income, gain time leveraging more time, leverage by distributing leagues to their agents, however, these benefits are gained at the expense of losing control of. Of the value proposition, as well as handing over lifetime value to clients. So on our team, buyers and sellers, when they're surveyed at the end of the transaction, they're, they're all saying, lars and his team, the Lars Group. And so it's not about one person. They're touched by a few people that help them. And the result of having that sort of team where all you're doing is giving out leads and you're not. You're not delivering the value proposition to clients your agents will leave to compete with you, or they'll demand commission splits higher than you can pay because you're not providing value to them and you're not controlling the value delivered to your client. So anyway, the systems and processes that can bring the profit goals that you have, but also controlling lifetime value is the only way to set this thing up, in my opinion. Most industries obviously operate this way. And in real estate, it's just such a slow industry that some of the stuff that you can't believe, it's in every market. You know, someone that's newly licensed and totally clueless. We had someone who submitted an offer. John was telling me my listing agent submitted an offer on forms that were like four iterations old. They were like back from 2006. And she said that she didn't know how to access her forms. And she just googled it. You know, she Googled North Carolina, offered a purchase. And that's the stuff that exists in our industry. So it's a very cool industry to be in because it's not hard to compete with a lot of the stuff that's out there. And most of you came to me at a point where you literally are a superman or a superwoman. You're doing everything in your business, and it's a huge limit to income because you're doing jobs that you just shouldn't do. But it's also real easy way to burn yourself out. And the bottom line is if you don't have a business, you have a.
