A whole new face for residential real estate by 2010?
Mark Nash Realty News Online
With all the scrambling for a part of the $67 million dollar real estate commissions paid annually, new faces are entering the residential real estate business to capture their share and being rewarded for it by real estate consumers. The keepers of the old real estate business model don’t like it, and while they focus on keeping it the old way, new business models are taking market share and commissions.
Real estate trade organizations have staged an aggressive and successful campaign to keep banks out of the real estate sales business. With all the power that banks have in Washington, many consider it a matter of time before banks become strong competitors in residential real estate. They will cross merchandise mortgages and other financial products to real estate consumers.
In fighting within the real estate community over Virtual Office Websites (VOW’s) and referral fees, will keep the traditional players distracted, others hungry for commissions and referral fees will continue to capture market share and commission income slowly but consistently. Local boards and Multiple Listing Services are experiencing upheaval as memberships fracture over VOW’s and member services.
National real estate franchise management’s have released figures in the last year quoting their net profit per transaction between $135-$175. As the squeeze for profits increases look for brokerages to chase the last bastion of income and profits: the real estate sales agent’s commission. See my story from July 30, 2003 on how commissions are paid. Salaried agents will become the norm as brokerages shift from a commission to salaried compensation to boost profits. This migration in compensation will fundamentally change the real estate sales agents demographics and the brokerage business model.
As the residential real estate industry transitions for the first time in forty years, many real estate consumers yawn and look forward to a more professional consumer focused real estate experience. They look forward to fee-for-service and other options than the traditional model they are gladly being driven away from by new real estate business models that focus on the consumer as “the keeper of the information”.
Mark Nash Realty News Online
With all the scrambling for a part of the $67 million dollar real estate commissions paid annually, new faces are entering the residential real estate business to capture their share and being rewarded for it by real estate consumers. The keepers of the old real estate business model don’t like it, and while they focus on keeping it the old way, new business models are taking market share and commissions.
Real estate trade organizations have staged an aggressive and successful campaign to keep banks out of the real estate sales business. With all the power that banks have in Washington, many consider it a matter of time before banks become strong competitors in residential real estate. They will cross merchandise mortgages and other financial products to real estate consumers.
In fighting within the real estate community over Virtual Office Websites (VOW’s) and referral fees, will keep the traditional players distracted, others hungry for commissions and referral fees will continue to capture market share and commission income slowly but consistently. Local boards and Multiple Listing Services are experiencing upheaval as memberships fracture over VOW’s and member services.
National real estate franchise management’s have released figures in the last year quoting their net profit per transaction between $135-$175. As the squeeze for profits increases look for brokerages to chase the last bastion of income and profits: the real estate sales agent’s commission. See my story from July 30, 2003 on how commissions are paid. Salaried agents will become the norm as brokerages shift from a commission to salaried compensation to boost profits. This migration in compensation will fundamentally change the real estate sales agents demographics and the brokerage business model.
As the residential real estate industry transitions for the first time in forty years, many real estate consumers yawn and look forward to a more professional consumer focused real estate experience. They look forward to fee-for-service and other options than the traditional model they are gladly being driven away from by new real estate business models that focus on the consumer as “the keeper of the information”.
This post was written by Mark Nash and originally appeared here
Investing in Real estate is important for every person. It not just gives us a roof over our heads but also financial security. Before investing in real estate one should know all the dos and don'ts of it.
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