Each month, CREA will invite an industry expert outside of CREA to contribute to CREA Café under the “Open Mic” banner. First up is author and speaker Stefan Swanepoel.
As a rule it’s incredibly hard for players in any industry to reinvent themselves and often, before they do, someone snatches away the opportunity. Real estate is no different!
So What Do You Do?
Over the past two decades residential real estate brokerage, the business model and the way homes are bought and sold, have undergone a substantial reorganization. As part of this evolution, the expanding impact of technology, mobile, and social media as well as the introduction of new companies is, at last, causing the industry to reengineer the physical real estate office.
What is evident is that the traditional office model, created approximately a half a century ago, even with ongoing tweaks and minor adaptations, appears to have run its course and is no longer cost effective in the new economy. Large bullpen zones, dividers, a plethora of top agent offices along the windows, oversized conference rooms that double up for training facilities and back office MLS® System tech rooms are being questioned.
The Options: Starbucks, Amazon.com or Target
Some say the time has arrived to say hello to uncluttered and inviting reception areas with high tech viewing lounges and see-through glass walls. Virtual offices with cloud computing are increasingly touted as a strong solution to yesterdays challenges. However, enormous one-stop Superstores with everything are also in very high demand.
The good news is that some major real estate companies have taken innovation to heart and are adapting their existing business models to accommodate the changing market. Unfortunately, many are not and will most likely find themselves candidates to become casualties of war.
Some brokers and agents say that offices are no longer necessary and you can operate without a physical office, while many others say big offices will stay for around for decades to come. Well, after years of research and hundreds and hundreds of interviews, we found truth in both of these statements.
What is evident is that brokers must reduce the office space allocated to individual agents to make them more cost effective. Offices that pencil out to over 100 square feet per agent are simply outdated and not cost efficient; 60 to 80 square feet per agent is borderline while 35 to 70 square feet seems to be the goal and a very profitable model.
Basically your four primary options are:
1. Stay the same;
2. Go big;
3. Go café-lounge;
4. Go virtual.
The 2013 Swanepoel TRENDS Report delves into each of these office models, their layout, features and services, as well as their advantages and the disadvantages. For the past eight years the Swanepoel TRENDS Report has been the leader in looking into the future and addressing the trends, people and events that shape, influence and change the real estate industry and impact everyone involved. Released earlier this month, the 164-page 2013 edition also analyzes the Fiscal cliff, agent, broker and franchise branding, broker profitability, the Realogy IPO, the acquisition of Prudential Real Estate Affiliates by Berkshire Hathaway, and numerous other trends.
If you are one of those people that like to know more than your competitors, you should get your hands on the new, just released, 2013 edition of the Swanepoel TRENDS Report (www.retrends.com).