With such a prevailing view of the real estate industry, it is no wonder that so many people aspire to become real estate salespeople. After all, who would not want a job that is largely protected by a nurturing mentor, has unlimited income potential, and allows so much flexibility that you could work as much or as little as you want? It's perfect!
Unfortunately, it is also no longer true.
Sadly, many people risk being lured into the world of real estate sales under false pretenses. These folks will be in for a rude awakening as the new dawn of the real estate industry melts their plans.
If you are considering starting a career as a salesperson, you must read this book carefully and share it with your friends and family to discuss. The business of real estate is not what it seems. I don't want you to make the mistake of entering a profession with one expectation only to have the industry leave you behind, broken and disappointed.
It is no small matter to establish a new career. Young real estate agents must study for and pass multiple exams, obtain licenses and insurance, and work hard to obtain initial clients. This work requires effort and potentially expensive advertising and communication tools. You do not want to jump into real estate if you do not know what you’re in for!
I asked some of the leaders in the field for their advice to anyone considering a career in real estate, and their answers might surprise you. Read on and find out what they recommend.
Am I saying that nobody should go into real estate? Absolutely not! Once you read this book, you will have a greater understanding of the future and a better sense of whether your skills and drive match the new marketplace. If you have what it takes, you may make more money in real estate than you ever imagined. But, if you have the wrong expectations, you will almost certainly be doomed to failure. So put that real estate exam training book down and read this first. Don't waste your time until you know for sure whether real estate is right for you.
Current real estate agents
Times are changing, and you need to be prepared. You will soon find that the standard operating procedures you’ve developed over the years will no longer work. Technology and marketplace changes are upending the traditional ways of doing business.
On the plus side, real estate brokerage companies will lose their grip on you and your commission check. You can expect to keep a larger and larger cut of your sales.
Technology is swamping traditional techniques for lead generation, advertising, and running your business. If you master the new rules of tech, you’ll hit the jackpot. If you fail to keep up with the technological times, your business will suffer.
As a real estate agent, you face the increasingly dire threat of technology replacing some or all of your services. I’ll show you how to keep yourself relevant in the face of a constant computerized onslaught.
If you’re a top agent, the picture is completely different. Market forces are in your favor. It is likely that you’ll vacuum up an ever-larger share of home sales. You may become more successful than ever before. In the chapter on top agents, you’ll learn the skills needed to exploit the new marketplace and how to prepare for the upstart agents gunning for your lofty perch.
Real estate brokers
What if you are an experienced real estate agent who is considering transitioning to a broker? This book will give you a glimpse into your future.
The life of a real estate broker used to be fantastic! After all, you've paid your dues and now you are the person at the top who's calling the shots. Your associates are doing most of the work and, as long as you provide mentoring and great facilities, you can largely kick back and benefit from their labor.
Real estate brokers enjoyed great commissions from their associates’ work. In a very real sense, the associates were dependent on you. Yes, they could always switch to another broker, but people generally try to avoid that. The brokers as a collective wielded great power. But this will change as the structure of real estate brokerages evolve.
The fate of real estate brokers is tied to the brokerage system. In this book, we will explore how the system came into being and why the system in its present form is doomed to oblivion. Disruptive change is on the way and, as a real estate broker or the owner of a real estate company, you need to be prepared.
Don't let the winds of change in the real estate world drive you into obsolescence.
If you are a broker, the time to act is now. If you are not prepared for what is coming, you will be at a distinct disadvantage against the startups. I will show you the danger on the horizon and how you can navigate the waters to safety.
Executives and CEOs
Real Estate at a Crossroads may be the first and only book dedicated to the structure and future of real estate companies. We explore how technology, Millennials, and radical transparency are transforming the old real estate business model. In some ways, real estate CEOs need this book more than anyone, as your entire livelihood will be upended by innovation unless you are prepared.
We feature an entire chapter dedicated to executives. We’ll look at the dangers you face and how you can respond. Learn how to harness technology as an engine of growth, whether you should hire a Chief Technology Officer (CTO) and centralize innovation, what types of associates and markets you should target, and how to make your organization more philanthropic (and successful!). You are at a pivotal moment in history. The decisions you make now will determine whether your organizations thrive or collapse. This book is your team of experts dedicated to help you win the future.
Mortgage brokers, underwriters, and other professionals
If you’re involved in a real estate-related field such as mortgage broker, underwriter, escrow officer, or transaction coordinator, we have important information for you. Technology such as blockchain, Bitcoin, and automation tools may slash the need for escrow officers in the future. Artificial intelligence (AI) is undermining underwriters. Automation is taking aim at mortgage brokers and transaction coordinators. Millennials won’t tolerate the old, slow way of originating mortgages. The future of these careers is technology. Don’t take the conventional route. Find a technological way to do things better and you will be richly rewarded. We’ll discuss how technology and Millennials are changing these fields throughout the book.
Important Disclaimer
This book is not about how to invest in real estate. We make no predictions about housing prices or whether it’s better to buy condos or vacant land. We make no claim about the long-term value of real estate vs. the stock market. If you’re looking for investment advice, there are plenty of other great books on the topic. Rather, this book is strictly about the real estate industry and what you need to do to become a successful real estate pro.
About the Author
I don’t fit the mold of a typical real estate writer. As a result, I can offer you a perspective that you won’t find anywhere else.
I am the founder and host of the premier real estate flash briefing on Amazon Alexa devices, The Real Estate Flash (www.TheRealEstateFlash.com). Every day, I share the most important news and I interview top industry insiders. We take a deep dive into industry trends, emerging technology, and threats on the horizon. Real estate pros across the country stay current by listening to my broadcasts every morning. Click on this link to join the Real Estate Flash community on Facebook. If you have an Alexa, be sure to sign up for my free flash briefings. Just say, “Alexa, enable The Real Estate Flash!”
Real estate has immense power to improve lives. I am the founder and CEO of Dignified Housing, Inc. We are dedicated to helping seniors and the disabled find affordable and safe homes that will reunite them with their families. Our goal is to end senior isolation and help the aged find meaning and purpose. We work with top real estate agents and manufacturers who are equally passionate about aiding the elderly. Visit DignifiedHousing.org or look for us on Facebook to learn more or join the team. We’d love to hear from you!
As an expert in real estate technology and
senior housing, I’m a regular contributing writer for the websites Inman News and Real Town. I write about innovations, industry trends, accessory dwelling units, and the latest news. I feature interviews with leaders throughout real estate. Here’s a link to my Inman writer’s page and another for my Real Town page.
I founded the Real Estate Tech Expo, a series of conferences held in California. We bring top real estate technologists and CEOs together with the front-line agents and brokers. Our speakers and attendees are united in the goal of using technology and innovation to help the less fortunate.
As the founder of the Real Estate Flash and Real Estate Tech Expo, and writer for the top real estate websites, I know most of the leaders in real estate and technology. I know what’s hot and what’s not, what people are using, and what’s just over the horizon. With my deep industry connections, I know where the marketplace is headed. With this book, I’m now able to share with you my special access with these thought leaders. Consider this book your insider’s pass to the greatest executives in real estate.
The Real Estate Tech Expo, Real Estate Flash, and Dignified Housing have philanthropy woven into their DNA. My goal is to mobilize real estate pros to help the community. Real estate agents and executives have just the right insight and specialized knowledge to benefit their neighborhoods and society. There is a chapter on philanthropy at the end of this book and I encourage all of you to roll up your sleeves and join a local charity or start your own!
My first startup, Visionary Remodels LLC, used data analytics and augmented reality to help real estate agents prepare homes for sale. I understand the pain points involved in selling homes, and I know technology can make the process easier. Cutting edge at the time, we aimed to use artificial intelligence to automate the process of remodeling homes to optimize them for the market. While the company has been shelved so I could focus on consulting and senior housing, it was a great crash-course deep inside the world of real estate tech.
I traveled down an unusual road to real estate technology. In fact, I didn’t start out in the real estate field at all! I’m a pediatric anesthesiologist by training and I care for children during complex and dangerous surgeries. As a result, I constantly read and review the latest research. A child’s life depends on it.
As a trained physician and data expert, I understand what the numbers tell us and I critically interpret trends. Now, I bring this data-driven perspective to the world of real estate. I offer you powerful analytical tools and an outsider’s perspective of the complex world of real estate.
As the CEO of a tech-based real estate company, journalist, and the founder of the Real Estate Tech Expo and the Real Estate Flash, I've met the key players in the field including senior executives from major real estate companies, marketing firms, finance, and remodeling. As part of the startup tech community, I regularly speak with leaders from the new breed of companies that are reshaping the field.
I know the inside scoop.
It is with this background, with views from both the inside and outside, that I'm able to bring you this book. Since I'm not part of any silo, I can integrate the whole field of residential real estate. I've been involved in every side, from entrepreneur, to investor, to executive. And as a physician, I know how to critically look at facts and reach difficult conclusions.
Now I’m sharing what I've learned so you can prepare for what’s coming. This book will pull back the curtain and give you a front-row seat to the future of the real estate industry. Whether you’re an agent, broker, technologist, potential real estate agent, or brokerage CEO, you’ll benefit from my outsider’s view and insider’s connections.
I am available for consulting or speaking at your next event. Reach out to me on LinkedIn so I can help your real estate business thrive.
Now, let’s get started!
Chapter 1: Agents and Future Agents
Do you have what it takes to succeed in the new world of real estate?
Your life as an associate is about to change. Perhaps you’re already feeling it. The job that you have known over the years already seems different. The world is evolving, and you have to adapt.
This chapter is a guide for what the future may hold for you, and how you can prepare. It is a must read if you make your living helping folks buy and sell homes.
You've always known that your success in real estate depends on how well you sell, and there have never been any income guarantees. The more you sell, the more you make, and a dry spell could lead to tough times. There has always been turbulence.
Now, that income variability will explode. The successful associates will be even more successful, and the unsuccessful ones will have a harder time recovering. Success will beget success like never before, while failure will be more damning. The safety net, such as it was, will vanish.
Thanks to modern technology, you have more freedom than ever before to find new clients. You really are the captain of your own ship. But you’ll find yourself without the protective bubble of real estate brokerage firms as you chart your path.
In this chapter, we will talk about what leads to success and failure for real estate agents. Under the new rules of the real estate marketplace, success may primarily be driven by your willingness to embrace technology and specialization and your work ethic. We will explore in detail what you need to succeed as a salesperson.
We'll begin this chapter by exploring how you will find clients. Increasingly, customers will be finding you, and you need to be ready. How can you reach these people? How will they find you? Hint: performance matters more than ever.
As we discuss elsewhere in the book, real estate brokerages are experiencing a radical transformation. Many of the institutions you grew up with may soon disappear, while technology-based upstarts will quickly replace their market share. There’s a good chance you’ll either work for a new brokerage firm or change your business strategy in the face of technology upstarts like Opendoor and Home Bay. (We describe Opendoor and Home Bay later in the book.)
We will look at how the rise and fall of other real estate brokerage companies will directly impact you as an associate. It will be a constant struggle to add value, as more and more companies look to reduce transaction costs for real estate sales. You will need to prove your worth!
A lot of folks enter real estate with the goal of working part-time with a flexible schedule. Will that still be possible in the new marketplace? Short answer: it won’t be easy. However, we’ll consider some options for those looking to work part-time.
Finally, we’ll conclude the chapter by focusing on folks considering starting a career in real estate. This is not your father's real estate industry. Apprenticeships will be tough to find and competition will be fiercer than ever. We will look at whether a career in real estate is right for you. If you want to become a real estate associate, you must read this chapter, so you know what’s to come.
In the new world of real estate, winners take all.
Back in the day, folks looking to buy or sell a home would call the major real estate firms in search of an agent. If you happened to be on floor duty that day, you would take the call and likely land a new client. The callers didn’t know you from Adam, but they heard of your company and trusted you by association.
Real estate brokerages spent vast sums of money advertising their brands in order to build that trust, and the sales agents benefited from the association.
The buying and selling public had no idea how good you were or how hard you worked. They didn’t know if your former clients loved or hated you. And they had no way of judging your performance.
The sales and satisfaction data either didn’t exist or wasn't accessible to the lay public.
There was no transparent, online system for evaluating real estate agents. From the public’s perspective, as long as you had your license and a decent brokerage affiliation, you were just as good as the next person. You could work part-time, be fresh out of training, or have smelly feet. It didn’t ma
tter. As long as your broker decided to send incoming business your way, you had an opportunity.
Of course, you still needed to perform.
The quicker you moved houses, the greater your income. And, like any salesperson, you would lose clients if you didn’t close deals. Your broker would tire of you if clients started complaining.
But the point is that almost all associates, regardless of their level of training or part-time status, would still have ample opportunities thrown their way by their brokers.
Not anymore.
The Yellow Pages have gone the way of the Dodo bird, and floor time ain’t what it used to be. There’s a whole new way that customers find representation, and results matter.
The internet changed everything.
The public is watching you. They know how well you compare to every other agent in their area. They know how many homes you’ve sold and whether you negotiated prices above or below market for their neighborhood. They know the top agents in their town because they can see the results online.
They also know whether your former clients like you. You’re being reviewed by everyone and those reviews are posted everywhere. They know how many stars and points and smiley faces you've earned on each of the sites.
In short, your customers know all about you before you meet.
What are the consequences of this explosion of publicly-available information?
The most obvious change is that home sellers now search for particular associates rather than real estate firms. The clients want to be represented by winners, and now they know who the winners are.
How do potential clients find the premiere agents? The technology and companies may change, but the three main channels of inbound agent discovery are MLS portals, review sites, and agent connection sites.
Currently, popular MLS portals are Trulia, Redfin (also a brokerage), Zillow, and Realtor.com. For finding high-performing salespeople, they all work the same way. Home sellers search their town and review all of the most killer sales. They see who transacted the deals, and presto, they know the most successful agents in their community.
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