Spring has always had a special significance for the Real Estate industry. The start of a new production year, the implementation of new marketing plans and production goals, the possibility of a great market year and the disappearance of those annoying snow bound MLS photos in some areas of the country.
But for 2003 spring is even better. Like flowers sprouting and blossoming in a garden the Brokerage environment is alive with new growth, exciting new options and innovative ideas. If there was ever a doubt that the Brokerage was going to rise to the challenge presented by the circumstances of the past two years that doubt should now be lessened.
In markets all over the country traditional Brokerage firms are changing their business models to take advantage of the new business environment. Even before the new RealTrends report on Real Estate consumers revised out understandings about our customers firms were working hard to create unique consumer experiences for today’s Internet savvy customer. Even before recent disclosures that Broker profitability fell even lower in 2002 many executives were rewriting their business and financial plans to make profit a key priority in 2003. New product lines are being introduced. Existing marketing programs and product lines in the areas of mortgage, title and insurance are being revamped to both raise capture rates and ensure long term patronage. The potential of the $1200 profit target has never been closer.
Stimulated by recent premium and coverage realignments in the Errors & Omissions insurance sector Brokerage executives are developing and implementing both risk management programs and the programs necessary to implement and monitor them. These programs are being introduced and executed on a mandatory company wide basis. Many are being coordinated with the efforts of other departments to bring uniformity, responsibility and accountability to the delivery of the overall Brokerage experience.
The industry as a whole continues to wage war relative to the “referral fee” situation so articulately discussed in the Cendant White Paper. However, at the same time key Brokerages understand that what is happening to the Real Estate industry with respect to disintermediation is consistent with what has happened in many other markets and are preparing to succeed in a market where both the referral market share and the referral fee itself may reach or exceed fifty percent. Several firms have developed delivery systems that can deliver profit through a “value meal” approach to the overall transaction service package.
The NAR May meetings in Washington are lining up to be almost as exciting as CNN’s coverage of the war in Iraq. Over the past two months volumes have been written about the ramifications of the IDX and VOW issues. At the New Orleans meetings NAR elected to spend several months raising the consciousness and awareness of its membership relative to these matters. Any member who has read even half of the materials produced would be eligible for a master’s degree. Many of the big Brokerage and franchise players have weighed with their unique perspectives of the VOW issue. At stake, seems to be not only the very definition and purpose of the listing but most certainly its future. Regulatory forces at both the state and federal levels have made it clear that the proceedings will be watched closely relative to any anti-trust issues. At the same time more and more Agents have began to sense that however it turns out in Washington the VOW will forever impact their role and probably their compensation. The VOW issue may be the most significant dialogue in the recent history of the industry.
But what is even more exciting is that while the VOW discussions have continued Brokerage firms all over the country are developing a second generations of IDX/VOW web marketing programs. These programs bring the promise of a renewed and more powerful Real Estate industry presence on the Internet. After reviewing several of these programs and the projecting even their most conservative impacts it is clear that the industry is prepared to be a major player over the next two years as the Internet executes the third phase of its influence on both the consumer and the transaction.
Washington, DC continues to be the center of the “banks in the business” struggle and indeed the efforts of organized Real Estate have been most impressive. Yet in the marketplace many Brokerages have taken a slightly different approach. A fair number of firms around the country seemed to have taken the position that banks and financial institutions may just have something to contribute to the overall transactional mix. These firms are forming alliances and joint ventures with banking and mortgage entities. The focus of some of these efforts seems to go beyond capturing mortgage based profits. Many are exploring whole new marketing, data mining and product delivery options. In at least two of these ventures it has been amazing to see the level of synergy and innovation that can be generated when great Real Estate minds sit down with those whose perspectives and experience lie in totally different markets and venues.
The significance of all of these observations is both simple and breathtaking. A new spring has come to our industry and there is simply not a more exciting or beautiful place to be. We are a million people working hard to defend our heritage, expand our business opportunities, grow with our customers and ensure that residential and commercial property ownership remains the centerpiece of the American lifestyle. We are learning when to stand tall, when to change, how to adopt and how to play out our destiny. Why would you want to be anywhere else?
