REALTORS, The Disruptors are at the Gates!

 The Disruptors are at the gates, the industry is seeing more clamoring to get into the middle of the transaction than we have seen in many decades. We are watching Wall Street dump billions into the home selling sector. They are not doing that without the belief that they can take the lion's share of the commissions currently going to Brokerages and Agents.

When I mention disruptors to most agents, most seem to think that the "new cool kids" broker model is what I am speaking of, I am not. While those types of "disruptors" might be disruptive to brokerages for a period of time, but that has been going on for the entire time I have been in the industry and longer I am sure. These remind me of a big Ferris wheel, who's cool this year is old next. Every hot cycle also spawns a lot of new low fee brokerages to attract agents, they are popular while it's hot and disappear when it's not. Those are not the disruptors I am speaking of.

 The disruptors I mean is the game changer big data companies, and even more so this potential lawsuit against NAR and the industry practises. Anyone who thinks this is nothing isn't paying attention to who is involved, and the argument they are making. I see no way that we won't have a big change coming in the next 3-5 years when it concludes.

 We have allowed them space in the market, just as we did Zillow, by not focusing on client experience and believing that our value was simply our control of information and data. As an industry most gravitated to a transactional model and away from a consumer focused one. This allowed our services to become commoditized making it vulnerable to these outside threats.

 I am doing a deep dive study in my family's ancestry and since I'm a history and economics nerd I'm seeing some real lessons we should pay attention to today. As I look back across the centuries in my family almost all were farmers. Each generation the oldest living son would take over the farm. This went on from the 1600's until my siblings and I were the very first generation that no one stayed on the farm. This was in the late 70's to 1980. My dad and I tried to keep it going but to create enough cash flow to support two families we had to increase revenue per acre. We tried to put in a confinement hog operation to do that but were shot down on zoning. When you look to economic history you would see that in 1930 there were 30 million American farmers producing just enough to feed 100 million Americans. By 1980 there were only 3 million farmers producing enough for 300 million Americans as well as those all over the world. In 50 years technology eliminated 90% of American farmers. But this was fifty years so it wasn't as noticeable until about 1985 when Willy Nelson was having Farm Aid to try to save family farms.

 I believe we are at the tipping point right now in the real estate industry and will see a similar sea change take place.

  I had my "Scarlett O"Hara" moment, that "As God as my witness, I'll never be hungry again," was in 1999. It was the early days of the Internet, when we still called it the World Wide Web, the public was only introduced to it around 1996. I was running two businesses, one was selling new homes for a builder, the other was a marketing and distribution company. At our meeting on Tuesday morning the builder said that all of our contracts were going to be going online and paper would be no more. This was terrifying to me, because I had never touched a computer, anything with a keyboard intimidated me. I recall thinking that I would just put all my effort into my distribution company. However, that Saturday at a convention we were told it was going 100% online. I have never felt so terrified. I saw myself living in a cardboard box, wondering if there was even a place for me in this new world.  I made the decision to learn, immersing myself in not only the Internet, but online marketing, reading, going to every seminar where the stars at the time were speaking. Michael Dell at the Detroit Economics Club really helped me see more clearly. Ever since, I am committed to never get left behind, to jump in front of whatever I see on the horizon to see if it is something that will be the disruptor or not.

 My beliefs are that there will be two models that survive and thrive and those will he large super efficient systematized teams that will be transactional. They will be the Walmart lower cost per transaction to make everything happen quickly and smooth but the client will be responsible for more leg work. This will be lower commission but high volume. The other will be the Nordstrom model as professional concierge level service for those who value their time and experience more than trying to do it as cheaply as possible. This will be a higher commission rate for higher service levels. All those in the middle become Sears with similar futures.

All of this will require running as a true business model not the traditional self employed model where agents get lost doing all the transaction activities "pushing paper" and not focused on the ONLY two things they should be doing, giving their clients a wow Experience that they will refer and pay more for, and communicating with database and doing business development. Anyone who doesn't figure out how to systematize all their back end processes are going to be the farmers heading into town.