What real estate company will survive the housing cool down?
John Vanhara In 2006, a Harsher Reality for Realty: “–Home sales volumes exploded from $695 billion in 1995 to over $2.1 trillion in 2005.
–Residential real estate commissions grew from less than $25 billion in 1995 to over $63 billion in 2005.
–Membership in the National Association of Realtors grew from about 720,000 in 1995 to nearly 1,200,000 in 2005.
Now, says Murray, it looks like there will be a shakeout. But who will get shaken out? Traditional full-service, full-commission brokerage argue that the discount brokerage, flat-fee firms, and do-it-yourself operations will be the first to bite the dust because sellers will be willing to pay well for the services of trusted guides in a more treacherous environment.
But Murray isn’t so sure. Markets that cooled first like Denver and Atlanta haven’t seen any rebound in commissions. And some homeowners who need to sell will have so little equity in their homes that they won’t be able to afford full-service commissions. So, he says, the discounters are here to stay.
How can full-commission brokerages survive? Murray says leading firms have added mortgage, title, and other settlement services; established Internet marketing and service to communicate better with customers; and invested more in recruiting and training.”
Very good article, but I don’t think it will open eyes to many brokers. The trend in real estate is to invest at least as possible in business development. The only investment most of the companies do is in beautiful office space to attract agents, but it ends there.
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