Real Estate Brokerage: Time to Dance to the Music of Disintermediation
In one of my posts on disintermediation, I stated that the residential real estate industry is and will be undergoing restructuring due to this force. In that post and in another, when I defined disintermediation, I warned the real estate brokers that this was historically inevitable and that they needed to develop ways to be creative and add value within this new dynamic.
All this came back to me in a form of confirmation when I read a great article in the New York Times called â€œThe Last Stand of the 6-Percenters?â€. Please read this article and see what is already at play in the residential real estate market due to the disintermediating power of the Internet. The real estate industry does not seem to understand that it is up against an irresistible force. They seem to be operating under the false assumption that a 6% commission is a natural law. This makes them look like they are purely coming from self-interest at the expense of their clients. When examined under a bright light, collusion will always look ugly to those that must pay for it. Holding on to the â€˜way we have always done itâ€™ when the times are changing is never a strong position.
I want to point out that the real estate brokerage business is an incredibly important business. I have several good friends in this business. I know that there are people in the real estate business that subscribe to this blog. I absolutely support the value that they can provide in creating a dynamic, customer oriented marketplace. What the industry must do is find new ways to earn their worth in a manner that truly reflects the new world order that the Internet and other forces have created. Combine an acceptance that the world has changed with a shift in thinking and throw in a lot of creativity and desire to serve clients. That is a path to success.
The forces of disintermediation, led by the Internet, have reorganized the stock brokerage business, the travel business, the media business and have brought efficiencies to many other businesses. This is the reality facing the real estate business. Accept it, take action or someone else will.