Thank you for the comment. As it happens, I completely agree with your analysis of the situation. Given consumer behavior, holding a top ten SERPS ranking in Google for major key phrases, like “Las Vegas Real Estate” is probably worth more than the brand or brokerage company. And as it happens, I completely agree that those agents who hold such rankings can easily move their license to any broker and do just fine. Finally, I agree with you that the reason why major real estate firms went bust was because they failed to invest in the Internet.

I think the only place where I differ with you (and a vast number of really smart, knowledgeable realestistas) is what happens going forward. You and many others believe that the Old Dinosaurs are on their way out, driven to extinction by nimbler, smarter, more tech-savvy upstarts, like Redfin. That may very well happen.

I just believe that the Old Dinosaurs aren’t quite as old, nor are they quite as doomed for extinction. I rather think of many of them as sleeping giants who haven’t woken up just yet… but this market will force many of them to do some serious soul-searching, and serious strategizing for how they stay alive. Many of them will come to the correct conclusions about where to shift their investment. And when they do, they have the resources to make it work in ways that a venture-backed firm that is still burning investor capital does not.

True, many of them will fail to wake up, and still others will fail to execute properly, and they will be phased out. Creative destruction has ever been the way of the capitalist economy. But to write off all big brokerages is, I think, a bit premature. The next few years will be very, very telling.

-rsh

Thank you for the comment. As it happens, I completely agree with your analysis of the situation. Given consumer behavior, holding a top ten SERPS ranking in Google for major key phrases, like “Las Vegas Real Estate” is probably worth more than the brand or brokerage company. And as it happens, I completely agree that those agents who hold such rankings can easily move their license to any broker and do just fine. Finally, I agree with you that the reason why major real estate firms went bust was because they failed to invest in the Internet.

I think the only place where I differ with you (and a vast number of really smart, knowledgeable realestistas) is what happens going forward. You and many others believe that the Old Dinosaurs are on their way out, driven to extinction by nimbler, smarter, more tech-savvy upstarts, like Redfin. That may very well happen.

I just believe that the Old Dinosaurs aren’t quite as old, nor are they quite as doomed for extinction. I rather think of many of them as sleeping giants who haven’t woken up just yet… but this market will force many of them to do some serious soul-searching, and serious strategizing for how they stay alive. Many of them will come to the correct conclusions about where to shift their investment. And when they do, they have the resources to make it work in ways that a venture-backed firm that is still burning investor capital does not.

True, many of them will fail to wake up, and still others will fail to execute properly, and they will be phased out. Creative destruction has ever been the way of the capitalist economy. But to write off all big brokerages is, I think, a bit premature. The next few years will be very, very telling.

-rsh

If you ask me, these agents that hold these top positions are more valuable than the company they hang their license with. These agents are providing free branding for their firm and because of their positions in the search engines, they have a large reach. These agents could easily move to another firm very easily without it affecting their business.

Major real estate firms in Las Vegas went out of business or filed bankruptcy this year even though just a few years ago they were bringing in millions of dollars. Their mistake was not investing in the Internet. This is why will begin to see new firms emerging like Redfin that will become a “Brand Name”.

If you ask me, these agents that hold these top positions are more valuable than the company they hang their license with. These agents are providing free branding for their firm and because of their positions in the search engines, they have a large reach. These agents could easily move to another firm very easily without it affecting their business.

Major real estate firms in Las Vegas went out of business or filed bankruptcy this year even though just a few years ago they were bringing in millions of dollars. Their mistake was not investing in the Internet. This is why will begin to see new firms emerging like Redfin that will become a “Brand Name”.

@Alan -

I think commercial is a totally different beast from residential, so I agree with you 100%. I just can’t imagine a “desk-fee” approach working there; even the Sperry Van Ness model isn’t strictly a “desk-fee” model, after all, because once it’s all said and done, the agents need so much support that you might as well pay a percentage of commission.

Plus, it is my sense that CRE tends to hold client relationships at the corporate level far better than residential does. I have no proof of that, of course, but CRE really strikes me as being similar to investment banking or law than residential (for now).

-rsh

@Alan -

I think commercial is a totally different beast from residential, so I agree with you 100%. I just can’t imagine a “desk-fee” approach working there; even the Sperry Van Ness model isn’t strictly a “desk-fee” model, after all, because once it’s all said and done, the agents need so much support that you might as well pay a percentage of commission.

Plus, it is my sense that CRE tends to hold client relationships at the corporate level far better than residential does. I have no proof of that, of course, but CRE really strikes me as being similar to investment banking or law than residential (for now).

-rsh

One truly significant point that I have never seen written anywhere is this: the big 100% companies like Re/Max and Keller Williams charge the agents LESS here in Phoenix than they do anyplace else. For obvious reasons this does not get promoted by them.

One truly significant point that I have never seen written anywhere is this: the big 100% companies like Re/Max and Keller Williams charge the agents LESS here in Phoenix than they do anyplace else. For obvious reasons this does not get promoted by them.