Boutique - Today's Real Estate Brokerage Business Model

Written by Posted On Friday, 20 September 2013 10:59

Current Trends in Real Estate Brokerage Business Model - Observation - Prediction - Opinion

Yes, it was a very timely meeting - with many potential opportunities for members. I can see how this group could thrive, to continue to increase in numbers, especially as more folks become disillusioned with the status quo real estate business model of yesterday.

I fully realize I’m not saying anything most of you don’t already know, or have at least thought about. Real estate brokerage has really changed. A permanent change in consumer behavior (largely driven by the internet and technology) is forcing a fundamental makeover of the traditional real estate brokerage business model, the way real estate services are delivered.

The operative word in the new real estate business model is disintermediation, i.e., a reduction in the use of intermediaries between producers and consumers, for example by investing directly in the securities market rather than through a bank.

For today's highly informed consumer of real estate services it’s evident the internet and new technology has caused fundamental change in the way real estate brokerage is conducted. Clearly, multiple real estate offices with hundreds of agents is yesterday’s news. Most of today’s business gurus who study the impact of innovative disruptive technology agree traditional real estate brokerage is a relic of the past. Old line traditional real estate brands are struggling in the new marketplace and without affiliate owned real estate services they could not stay in business. and countless other web based business models demonstrate how the internet has permanently disrupted and transformed the way business is conducted. Why would consumers go to a bookstore to buy a book when it can be purchased online? Traditional bookstores have largely become irrelevant for the needs of today’s consumer of books.

With real estate listings/data now everywhere available online, the challenge for real estate agents/brokerage is how to remain relevant to the real estate transaction, i.e., why would the consumer want or need to work with a real estate agent? Not unlike other sectors of the new web based economy, it appears the new real estate business model will require far fewer people to do things than the old business model. So, how can real estate agents avoid becoming (obsolete) irrelevant to the real estate transaction in the new world of e-commerce?

Fortunately for some, current trends strongly point to the emergence of sophisticated tech savvy (boutique) brokerages that specialize in a niche market. And are able to provide local specific content information and services to clients not available elsewhere. These hybrid boutique companies will likely work closely with numerous real estate service providers and 3rd party real estate portals such as Google, Zillow, Trulia, et al. It’s already happening in plain sight. It’s definitely a changing, challenging, exciting time to be in the business. It’s enough to make your head spin..

Thanks much for your time and see you in the new world of real estate..

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