Every day our President openly lies while he takes a dump on our democracy. Our new Governor openly cheated our voting processes to win his own election. Neither suffered consequences—both won. Up is down. Down is up. Even Lola thinks it’s a mixed-up, muddled-up world.
It’s hard to pinpoint when Normal died, but it’s been a while. Long gone, except for those who work in the trade of real estate. Real estate has its own Normal. And, to be blunt, it’s a very stupid and costly Normal.
What if home sellers said NO! What if they said; “I am not paying for the agent I am negotiating against”. “Why should I have to pay for the buyer’s agent anyway”? Great questions. Bad answer: “that’s the way it is”. Real estate Normal says Sellers pay 6% with 3% going to each agent. And sure, some listings are less than 6%, but that means the Listing agent took the hit. For the most part, the Buyer’s agent is always protected.
The current real estate business model was founded during the Richard Nixon administration. For you old time Georgia history fans, that would be the Lester Maddox era. (And yes, it’s THAT Lester Maddox) Point being, it’s been too damn long. Hermetically sealed for nearly 50 years, the real estate industry today operates in much the same fashion as it did then. Listings are still 6%! WTF!
Why do Sellers have to pay the sales commission of their Buyer’s agent? Honestly; because Buyers don’t want to pay them either, so somebody has to. It’s as simple as that. The “business model” of the real estate industry is dependent on the Buyer’s agent getting paid. The Buyer’s agent is the industry’s; “third rail”. Touch the third rail, and the whole business model falls apart.
Name another industry on Earth that shares a similar business model with the U.S real estate market. You can’t. Challenge any business analyst or educator by asking them why paying your adversary is a good idea. They will tell you it isn’t. Then why do we do it every day in real estate? “Oh well, real estate is, umm,–(tap with a little soft shoe), unique”. Societal Norms are falling all around us. Yet, this business turd remains?
In California, agents are hiring “Social Influencers” to create buzz, prestige and status for their listings. Turns out, buyers who spend several million dollars on a home, want a little buzz and prestige. But, if you think that “style” of real estate won’t come down to the everyman level, you’re selling history way short. Yes, the buzz factor on a 2-bedroom condo in Tucker may seem like a stretch—today. But it won’t tomorrow.
How long before Sellers realize they can hire their own Social Influencers? What was the value-add of the Realtor again? When Buyers are coming to Sellers, why would they want keep paying the Buyer’s agent a sales commission? In the future do Realtors become Social Influencers or is it the other way around?
As long as the real estate industry clings to their cabal of poorly funded non-profits; i.e. the 800 or so MLS’s companies strewn across the country, things aren’t likely to change. The national MLS is NOT coming!
It’s hard to watch norms, we once held dear, come to an end. I supposed its progress. But the norm of real estate MUST go! And, the sooner the better. This silly business model costs home sellers billions of dollars every year. Enough already! You may think this is an odd position for a real estate Broker to take. But, we have been championing change ever since we began ten years ago.
Unfortunately, we are NOT smart enough to figure out where the industry is going. We just know, it’s going somewhere much different than where it is today. Still, basic brokerage services will always be in demand.
Wynd Realty promotes a “Proctor and Gamble” brand model strategy. A single brand, or approach to selling, will always hit a ceiling. Offering multiple brands with different approaches expands opportunities for everyone. So, if you believe in change and want to be a part of the future, we would love to talk to you about how we can help you realize your vision.
Let’s change the real estate business model to something more realistic. New agents, be thankful technology has given you a new playing field. You’re going to need it. It may take some time, but the Buyer’s agent 3rd rail won’t last that many more years. The death of Normal will require anew. Bring it on!