June 2007 Archives

In real estate today, large numbers of agents are competing for a shrinking market. With unlimited real estate information available online and multitudes of sites competing with, and seeking to replace the agent, the public increasingly looks at the agent (and brokerage), who only offers the traditional full-service package payable only by commission, as a commodity to be shopped by price. Limiting themselves to the traditional commission model, agents and brokerages are indeed swimming in a bloody red ocean of cutthroat competition.

By contrast, real estate consulting, which provides the consumer responsible choices in the services they can obtain and how they can pay for them, while paying the professional fairly for their time, experience, and expertise, creates an "uncontested market space, ripe for growth that makes the competition irrelevant."

In a recent article, the founder of a leading online real estate referral site, tried to make the case to beleaguered real estate agents that buying leads is good for their business and intimated that failure to buy these leads from third party companies (such as theirs) is to miss out on business.

First, let's start with the basic premise - I agree with them that there is a cost to agents of obtaining business. Whether they do old-fashioned farming, mailings, phone calls, or put your resources into your client base and get your business from referrals, business has to come from somewhere and it has a monetary cost.

In a recent article, the founder of a leading online real estate referral site, tried to make the case to beleaguered real estate agents that buying leads is good for their business and intimated that failure to buy these leads from third party companies (such as theirs) is to miss out on business.

First, let's start with the basic premise - I agree with them that there is a cost of obtaining business. Whether you do old-fashioned farming, mailings, phone calls, or put your resources into your client base and get your business from referrals, business has to come from somewhere and it has a monetary cost.

Every seller is a "For Sale by Owner." Every buyer is a "do it yourselfer." It is simply a matter of how much of the work in a real estate transaction is contracted to a real estate professional. From none to the entire transaction. Or in industry speak, from the stereotypical FSBO for a seller to a "full service" listing.

In the article, "Discount Brokerages Band Together" Matt Carter of Inman News wrote that Virginia-based RebateReps.com helps agents who want to dabble in discounting without alienating full-commission customers, or work for a discount broker full time. "Most Realtors® don't want to advertise themselves as rebate agents because it cannibalizes their other business," said RebateReps founder and owner Daniel Rubén Odio-Páez. "RebateReps connects buyers to local agents who are willing to rebate part of their commission but don't necessarily want to advertise that fact." Odio said. "RebateReps allows agents to have their full-service brokerage and to service our (discount commission) leads."