B-SCHOOL COACHING CALL: How Real Estate is Changing and What It Means for You

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Transcript:

If you haven't been thinking of how the real estate industry is changing, this goes back a little bit to traditional teams, the brokerage model, and why I'm so passionate about going down this path.

The Evolving Consumer & Implications

I do believe that consumers are pretty smart, and there will be a day where buyers go out and hire buyer agents, paying their commission.There may be different options available for sellers, too. Full service, there will still be people listing homes at 4-5% just for them, and there will always be people that are doing the bottom of the barrel, selling off of no fee or low fee—a discount lister. Buyers and sellers these days have a ton of information, and there's nobody more interested in the outcome than they are.

I've got a lot of different players on the call today. I've got people with small teams and people with big teams. I don't believe it's going to happen the same way it happened for travel agents, where Expedia and Travelocity and those sites really wiped out an industry.

There are still travel agents around, but I don't believe the same thing is going to happen. There are local MLS's, and the hold they have on listings and how to get listings in there. Most markets have generally accepted ranges of listing commissions and buyer agent commissions.

Even if you're no good as a buyer agent, you still get paid a traditional split. And if you're no good as a listing agent, generally you can go in and tell someone, "The market charges 6%, so that's what I charge."

Creating a Unified Experience

You have to decide that the best way to serve buyers and sellers is by building a team, and not just because you don't want to work. A team that everyone is dialed into. Not a team where everyone has their own signs, or anything like that, but everyone is dialed into a unified experience for buyers and sellers.

Traditional team leaders generate more income, gain more time leverage by distributing leads to their agents. However, these benefits are gained at the expense of losing control of the value proposition, as well as handing over the lifetime value of your client. On our team, when buyers and sellers are surveyed at the end of the transaction, they're all saying "Lars and his team," The Lars Group. It's not about one person, they're touched by a few people that help them.

The result of having that sort of team, where all you're doing is giving out leads and not delivering the value proposition to clients, is that your agents will leave to compete with you. Or they'll demand commission splits higher than you can pay, because you're not giving or providing to them, and you're not controlling the value delivered to your client.

Who is Your Competition?

The systems and processes that can bring the profit goals that you have while controlling lifetime value is the only way to set this up, in my opinion. Most industries operate this way, obviously. Real estate, however, is such a slow industry that some of the stuff, you can't believe. In every market, there's someone that's newly licensed and totally clueless.

My listing agent was telling me we had someone who submitted an offer on forms that were four iterations old, back form 2006. She said that she didn't know how to access her forms, so she just Googled it. She Googled "North Carolina Offer to Purchase." That's the stuff that exists in our industry. 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.

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. That's a huge limit to income, because you're doing jobs you shouldn't do. It's also a really easy way to burn yourself out. The bottom line is this: If you don't have a business, you have a job.