How Are You Preparing for the Coming Paradigm Shift?
We hear it every day, in general terms, that the real estate industry is changing, but what does that mean if you list and sell homes for a living?
How Will You be Impacted?
How will the envisioned change affect you, and how do you prepare for what will be more than change, but a paradigm shift?
Change is constant; it bubbles along until there has been enough for that change to manifest in one way or another. The change that is approaching is not just any change, but a fundamental shift to the significant aspects of buying and selling real estate… it is a paradigm shift.
A paradigm is a model, a set of rules, the way something gets done. They surround us, from sports to the rules of business. Paradigms set up boundaries and give us the rules for success within those boundaries.
The rules surrounding the purchase and sale of real estate are changing, shifting. A significant aspect of paradigm shifts is that when it happens, everyone goes back to zero. No matter how good you were under the old paradigm, when the rules change, all bets are off. Your past success guarantees nothing when a paradigm shifts and in the business of residential real estate sales, the paradigm is shifting. Fundamental changes are underway that will soon manifest in new ways to do old things.
What is Causing the Change?
Technology, the internet, the consumer, and boatloads of capital to the tune of hundreds of millions of dollars flowing into the real estate industry, will streamline the home buying process. These “nodes” are converging in a way that will forever change much of the current real property transaction process. Everyone wants to stake out a claim to what is now recognized as a long-term, trusted, relationship gateway, the real estate transaction, before, during and after the purchase.
How Will you Make a Living?
Why is this important to those who earn a living helping others purchase and sell real estate?
In this new emerging ecosystem, real estate professionals, what we call The New Real Estate Professionals, must be able to articulate their value proposition in a more concise way than ever before. The need for expressing clear value among real estate agents is especially true as every aspect of a piece of property becomes readily available to the consumer online at sites such as Zillow, Trulia, and REALTOR.com, at no apparent cost to the consumer.
Commissions will continue to decline over the long term, as technology and the advancement of internet technologies specifically, remove friction from the transaction. Consumers will be given more choice and more control over the home buying and selling process. Many new business models are ready to provide consumers with the tools they need; in many cases even before the consumer knows that they need them!
Consumers will be afforded increased transparency about the real estate transaction, and just as important, they will adopt the new tools and methods of buying and selling. In the not-too-distant future, it will require more deals to earn the same gross commissions. Over the next five years, more new pricing models will be available to the consumers of real estate services. What is the business model of your real estate practice now and how does it compare to your real estate practice of the future? Moreover, how will technology and the internet shape your model? Whatever that model is, you must stand ready to substantiate it with the value you bring to the table, as a New Real Estate Professional.
Are you ready for a new real estate industry?
Ready for Part Two? Read it here!