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As the National Association of Realtors (NAR) settlement sends shockwaves throughout the industry, dogmatic camps are forming. On the one hand there are those who think there will be no change. “Trading is complex,” they said. “Without us, consumers would be at a disadvantage,” said others. And then there’s always the old saying: “Always need an agent.”
On the other hand, there are those who claim this is the end. “No more real estate agents,” they said. “Consumers can get all the information they need through Zillow and Redfin.” Some may sound like downright apocalyptic, “The day of reckoning is here!”
The trouble with dogmatism is that you become blind, but taking a side does not determine the future.
As agents, we must realize that the market does not care what any camp thinks, no matter how entrenched their views. Instead, what matters – and always has mattered – is how good agents respond to a changing market.
Fortune telling
While none of us have a crystal ball, we do have a historical perspective to help us see the evolution of the competitive environment. In fact, the winners in our industry over the past 50 years have been those who saw changes in market patterns and then turned them into opportunities.
Those who understand what these visionaries saw and how they responded to the troubling times they faced will be ready to unlock the keys to real estate’s next phase of development.
Real Estate 1.0: The Shift to Standardization
From the early 1970s to the early 2000s, the real estate industry experienced an incredible era of standardization.Forms used to write contracts, how brokerage firms Share information in MLS agreement and even reconceptualization buyers agent Significantly shaped industry norms.
As a result, the industry established new standards for agent education, new laws regulated consumer care, and teaching new agents how to use repeatable scripts to solicit business became common practice.
This standardization allows unprecedented scale When it comes to the number of agents. At the national level, during NAR’s first 60 years (from 1908 to 1969), the number of real estate agent members increased from an initial 1,646 members to 91,625. But over the next 35 years, from 1970 to 2005, Real estate agents increase to 1,271,057.
Standardization in Real Estate 1.0 is to our industry what Henry Ford’s assembly line was to cars. It brought NAR’s annual growth rate to more than 20 times that of the previous period, and the total number of agents expanded tenfold in a generation.
Brokerage entrepreneurs saw the opportunities presented by the population boom and created large brokerage firms.Family-run giants such as Howard Hanna, William Lavisand long and foster Attracting thousands of agents to the region.Meanwhile, franchise visionaries, including Art Bartlett, Gary Kellerand Dave Ringer Works with local agents in the U.S. and overseas.
Big companies also harbor big data. As technology makes the internet faster, agents can not only list data but also quickly crawl it and enhance it with images that load quickly. This data revolution brings new transformations.
Real Estate 2.0: The development of democratization
In 2005, I was in a room full of experienced brokers and brokers who had built admirable businesses. In between browsing our Blackberries and Palm Pilots, we discussed a new website called Zillow.
“This estimate is terrible,” one agent chimed in. “These people aren’t even in this industry!” declared another. But the question no one dares ask themselves privately, but the question each of us is asking ourselves, is: “How will we protect our value if consumers own these lists?”
We have entered an era of democratization of inventory data. The technologists behind Zillow, Trulia and countless other websites that have emerged in the race for consumers’ eyeballs have transformed the experience of buying and selling a home.
In previous eras, agents were taught to be “last on the list.” But now that consumers who used to call listing agents for information can search anonymously, the value of inventory has diminished to listing agents. Zillow has begun capturing this flow of leads by redirecting consumers to the highest bidder.
New, predictable sources of leads allow agent-led teams to scale and become less reliant on the brokerage brand, reducing brokerage profits. As agents’ negotiating power grows, the stakes in the brokerage game change.
according to a Real trend researchThe average size of a brokerage firm surged 84% between 2012 and 2022, from 54 brokers on the roster to nearly 101.
New technology-driven lean brokerage models, e.g. Experienceexplore, and real Cut the burden and overhead of office space and recruiter salaries, then train virtually. The threshold for the number of agents that the fast-growing brand took decades to establish in the 1.0 period was achieved in just a few years through the lean model.
Is Real Estate 3.0 coming?
If the impact of standardization-driven growth in 1.0 was like the exciting descent at the beginning of a roller coaster, then the democratization of 2.0 is the acceleration through big cycles and turns.
These dramatic changes in direction and speed can be unsettling and even damaging if you’re not prepared. But those who are prepared not only enjoy the journey, but make the most of the experience.
Industry veterans who have been on this wild ride sense that something is turning the corner — not just another barrel roll, but an entire reimagining of the continuum.
I believe our industry is ready for the changes of 1.0 and 2.0. This change requires embracing new rules, becoming a leader in the AI revolution, and quickly adapting to changing consumer behavior.
For some agents, the coming changes will be overwhelming, but for those ready to embark on Real Estate 3.0, it will be a new and exciting journey.
Patrick Kilner is the founder and CEO of TowerHill Realty.You can follow him LinkedIn.
