The Real Estate Paradigm Shift: Real Estate’s “Next Age”  ©2010 Nextage Realty International  •  NextageRealty.com
<ul><li>Paradigms are a belief system – the way we view different aspects of the world in which we live and operate. </li>...
<ul><li>Horse & buggy The Automobile </li></ul><ul><li>Trains Airplanes </li></ul><ul><li>Radio Television </li></ul><ul><...
<ul><li>Visionary </li></ul><ul><ul><li>Courageous </li></ul></ul><ul><ul><ul><li>Risk-Takers </li></ul></ul></ul><ul><ul>...
<ul><li>The real estate industry has been evolving for more than four decades, seeking to find a “better way”.  </li></ul>...
<ul><li>The time has come to shift business paradigms and move the industry into its next age - operationally, structurall...
<ul><li>“ Real estate has never experienced such a ‘perfect storm’ of events and factors, which have combined to force wre...
<ul><li>Until the 1960’s the real estate industry remained largely unchanged – relatively small brokerages with a few agen...
<ul><li>The Birth of Franchising – Stage 1 </li></ul><ul><li>Large, multi-office regional companies became dominant in the...
<ul><li>Franchises gave the smaller independent broker a way to compete by: </li></ul><ul><ul><li>Giving them a common bra...
<ul><li>Franchised and independent offices alike were structured similarly: </li></ul><ul><ul><li>Most agents were on a 50...
<ul><li>The Shift to the “I” World  -  Stage 2 </li></ul><ul><li>100% concept gains popularity: </li></ul><ul><ul><li>Agen...
<ul><li>The “I” World – Stage 2a </li></ul><ul><li>The 100% concept morphs into Freedom Shops: </li></ul><ul><ul><li>Agent...
<ul><li>Residual Income Model – Stage 3 </li></ul><ul><li>Profit Sharing (Keller-Williams): </li></ul><ul><ul><li>Agents a...
<ul><li>Residual Income Model – Stage 3 </li></ul><ul><li>Revenue Sharing (Exit, Avalar): </li></ul><ul><ul><li>Agents are...
<ul><li>Can these models help brokers and agents meet the challenges of the industry today and in the future? </li></ul>
<ul><li>For Agents: </li></ul><ul><li>Limited to earning commission exclusively from their own production </li></ul><ul><l...
<ul><li>For Brokers: </li></ul><ul><li>Agent Recruiting – Broker (and manager, if any) are the only ones interested in rec...
<ul><li>Most industry leaders agree that the current real estate business models are broken and no longer work for either ...
<ul><li>“ I don’t think a pure brokerage play as a business strategy is a viable play in this economy or going forward.” <...
<ul><li>“ In cases where their franchising is faltering, the culprit is most often that the models of  the real estate com...
<ul><li>“ [We are seeing a] decline in the number of ‘big box’ real estate office operations, which simply cannot survive ...
<ul><li>“ Brokers need to change their business  model NOW.” </li></ul><ul><li>—  Sherry Chris – Better Homes &    Gardens...
<ul><li>Multiple franchise brands under one ownership </li></ul><ul><li>The real estate business model continues to evolve...
<ul><li>Many franchises have cut back on expenditures and staffing, which affects services offered to franchisees </li></u...
<ul><li>Are these the solutions - the proper and necessary paradigm shifts that will lead the evolution of the industry in...
<ul><li>Traditional models struggle with their “value proposition” – what do I get for what I pay? </li></ul><ul><li>100% ...
<ul><li>The “We” model of real estate  is structured not only to  survive   in this economy and marketplace, but to  thriv...
<ul><li>Stage 4 – The “WE” age </li></ul><ul><li>The traditional real estate model is broken.  </li></ul><ul><li>Nextage R...
<ul><li>Now is the future & Nextage Realty is NOW: </li></ul><ul><li>Strong Franchise Support System </li></ul><ul><li>Str...
There will NEVER be a better time. ©2010 Nextage Realty International  •  NextageRealty.com NOW IS THE TIME!
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The Next Age Of Real Estate

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The Next Age Of Real Estate

  1. 1. The Real Estate Paradigm Shift: Real Estate’s “Next Age” ©2010 Nextage Realty International • NextageRealty.com
  2. 2. <ul><li>Paradigms are a belief system – the way we view different aspects of the world in which we live and operate. </li></ul><ul><li>Our paradigms shape the way we do business and make decisions. </li></ul><ul><li>Paradigms are usually difficult to change, and often times restrict our ability to see coming trends and embrace new market innovations. </li></ul>Paradigms
  3. 3. <ul><li>Horse & buggy The Automobile </li></ul><ul><li>Trains Airplanes </li></ul><ul><li>Radio Television </li></ul><ul><li>Paradigm shifts continue today </li></ul><ul><li>Paper Books Digital Books </li></ul><ul><li>Videos Online Rentals </li></ul><ul><li>Real Estate Franchising, 100%, Revenue Sharing </li></ul>Typical Paradigm Shifts
  4. 4. <ul><li>Visionary </li></ul><ul><ul><li>Courageous </li></ul></ul><ul><ul><ul><li>Risk-Takers </li></ul></ul></ul><ul><ul><ul><ul><li>Thick-Skinned </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Leaders </li></ul></ul></ul></ul><ul><ul><ul><ul><li>A Bit Crazy? </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Are You an Agent FOR Change or </li></ul></ul></ul></ul><ul><ul><ul><ul><li>a Victim OF Change? </li></ul></ul></ul></ul>Traits That Define the Paradigm Shifters
  5. 5. <ul><li>The real estate industry has been evolving for more than four decades, seeking to find a “better way”. </li></ul><ul><li>But in the past few years the pace has accelerated significantly as the challenges presented by current market conditions expose the shortcomings of the existing business models. </li></ul>
  6. 6. <ul><li>The time has come to shift business paradigms and move the industry into its next age - operationally, structurally and professionally. </li></ul>
  7. 7. <ul><li>“ Real estate has never experienced such a ‘perfect storm’ of events and factors, which have combined to force wrenching, dramatic changes upon a staid industry not accustomed to dealing with such seismic shifts.” </li></ul><ul><li>- Michael McClure, CEO, Professional One </li></ul><ul><li>Source: Swanepoel Trends Report 2010 </li></ul>The Perfect Storm
  8. 8. <ul><li>Until the 1960’s the real estate industry remained largely unchanged – relatively small brokerages with a few agents focused on a particular segment of a larger market. </li></ul><ul><li>Then came… </li></ul>
  9. 9. <ul><li>The Birth of Franchising – Stage 1 </li></ul><ul><li>Large, multi-office regional companies became dominant in the 60’s by: </li></ul><ul><ul><li>Creating massive advertising campaigns in local media to build brand awareness </li></ul></ul><ul><ul><li>Developing their own sales training programs </li></ul></ul><ul><ul><li>Establishing their own pre-license schools to improve recruiting efforts </li></ul></ul><ul><ul><li>Building offices with large numbers of agents </li></ul></ul>The Evolution of the Real Estate Industry
  10. 10. <ul><li>Franchises gave the smaller independent broker a way to compete by: </li></ul><ul><ul><li>Giving them a common brand name that was recognized across the country </li></ul></ul><ul><ul><li>Providing coordinated sales training for all agents </li></ul></ul><ul><ul><li>Coordinating group advertising in local markets to create greater exposure </li></ul></ul><ul><ul><li>Offering recruiting focus and pre-license training to increase agent population </li></ul></ul>The Evolution of the Real Estate Industry
  11. 11. <ul><li>Franchised and independent offices alike were structured similarly: </li></ul><ul><ul><li>Most agents were on a 50/50 commission split </li></ul></ul><ul><ul><li>High producing agents received as much as 60/40 </li></ul></ul><ul><ul><li>Brokers paid for most marketing and operational expenses for agents </li></ul></ul><ul><ul><li>Most agents were loyal and movement from one company to another was rare </li></ul></ul>The Evolution of the Real Estate Industry
  12. 12. <ul><li>The Shift to the “I” World - Stage 2 </li></ul><ul><li>100% concept gains popularity: </li></ul><ul><ul><li>Agents operate their own business within a business </li></ul></ul><ul><ul><li>Agents pay a flat monthly fee (desk fee) plus their own expenses & keep all or most of the commission </li></ul></ul><ul><ul><li>Agents begin branding themselves at the expense of the company as the marketing emphasis shifts from company to agent – “WE” to “I” </li></ul></ul><ul><ul><li>100% companies offer little support to agents as agents operate almost independently from company </li></ul></ul>The Evolution of the Real Estate Industry
  13. 13. <ul><li>The “I” World – Stage 2a </li></ul><ul><li>The 100% concept morphs into Freedom Shops: </li></ul><ul><ul><li>Agents pay a lower fee – as low as $25/month plus a transaction fee </li></ul></ul><ul><ul><li>Agents receive very little to no broker support </li></ul></ul><ul><ul><li>“ Everyone for himself” – against everyone else </li></ul></ul><ul><ul><li>Little to no camaraderie </li></ul></ul><ul><ul><li>No company loyalty </li></ul></ul><ul><ul><li>Ultimate example of the “I” World </li></ul></ul>The Evolution of the Real Estate Industry
  14. 14. <ul><li>Residual Income Model – Stage 3 </li></ul><ul><li>Profit Sharing (Keller-Williams): </li></ul><ul><ul><li>Agents are encouraged to help build the company by recruiting other agents, and if they do, they will share in the profits generated by the company </li></ul></ul><ul><ul><li>Very popular as agents search for income beyond personal production </li></ul></ul>The Evolution of the Real Estate Industry
  15. 15. <ul><li>Residual Income Model – Stage 3 </li></ul><ul><li>Revenue Sharing (Exit, Avalar): </li></ul><ul><ul><li>Agents are encouraged to help build the company by recruiting other agents, and if they do, they will share the revenue generated by agents </li></ul></ul><ul><ul><li>Very popular as agents search for income beyond personal production </li></ul></ul>The Evolution of the Real Estate Industry
  16. 16. <ul><li>Can these models help brokers and agents meet the challenges of the industry today and in the future? </li></ul>
  17. 17. <ul><li>For Agents: </li></ul><ul><li>Limited to earning commission exclusively from their own production </li></ul><ul><li>Their own production is limited to their available time and energy </li></ul><ul><li>Continued pressure to perform leads to burnout </li></ul><ul><li>Not really ”building a business, just “doing” business – income stops when personal production stops </li></ul><ul><li>Offices are closing because agents are leaving for other industries due to a reduction in income </li></ul>Challenges for today and into the future
  18. 18. <ul><li>For Brokers: </li></ul><ul><li>Agent Recruiting – Broker (and manager, if any) are the only ones interested in recruiting </li></ul><ul><li>Agent Retention – Agents are continually enticed to join other companies with higher commission splits or lower desk fees creating huge agent turnover </li></ul><ul><li>Brokers lose quality agents that open their own brokerage business - thus training their competition </li></ul><ul><li>Agents are competing against each other rather than working as a team </li></ul><ul><li>Desired company profitability is difficult to achieve </li></ul>Challenges for today and into the future
  19. 19. <ul><li>Most industry leaders agree that the current real estate business models are broken and no longer work for either brokers or agents. </li></ul>
  20. 20. <ul><li>“ I don’t think a pure brokerage play as a business strategy is a viable play in this economy or going forward.” </li></ul><ul><li>— Ron Peltier – President & CEO, HomeServices of America </li></ul><ul><li>Source: Swanepoel Trends Report 2010 </li></ul>What are the experts saying?
  21. 21. <ul><li>“ In cases where their franchising is faltering, the culprit is most often that the models of the real estate company are not suited for these times.” </li></ul><ul><li>— Byron Ellington – Chief Products Officer, Keller Williams Realty </li></ul><ul><li>Source: Swanepoel Trends Report 2010 </li></ul>What are the experts saying?
  22. 22. <ul><li>“ [We are seeing a] decline in the number of ‘big box’ real estate office operations, which simply cannot survive given the high overhead levels typically associated with such large operations.” </li></ul><ul><li>— Michael McClure – CEO, Professional One </li></ul><ul><li>Source: Swanepoel Trends Report 2010 </li></ul>What are the experts saying?
  23. 23. <ul><li>“ Brokers need to change their business model NOW.” </li></ul><ul><li>— Sherry Chris – Better Homes & Gardens Real Estate </li></ul><ul><li>Source: Swanepoel Trends Report 2010 </li></ul>What are the experts saying?
  24. 24. <ul><li>Multiple franchise brands under one ownership </li></ul><ul><li>The real estate business model continues to evolve – constantly searching for a way to deal with the realities of today’s market and the challenges of tomorrow </li></ul><ul><li>Historically independent regional brokers are moving towards franchising </li></ul><ul><li>NAR now provides much of what franchisors used to </li></ul><ul><li>Other vendors and suppliers have also filled many of the gaps in tools, training and support </li></ul>How have the traditional real estate franchises reacted to the challenges?
  25. 25. <ul><li>Many franchises have cut back on expenditures and staffing, which affects services offered to franchisees </li></ul><ul><li>Fewer franchises, fewer agents…and lower profits, if any </li></ul><ul><li>Trouble justifying the royalties paid by franchisees and agents </li></ul><ul><li>Many franchisees and agents now question the value of the brand name – which most feel is the only real value they’re receiving from their affiliation with the franchise </li></ul>How have the traditional real estate franchises reacted to the challenges?
  26. 26. <ul><li>Are these the solutions - the proper and necessary paradigm shifts that will lead the evolution of the industry into its next age? </li></ul><ul><li>Is there a business model that will address the challenges? </li></ul>
  27. 27. <ul><li>Traditional models struggle with their “value proposition” – what do I get for what I pay? </li></ul><ul><li>100% models struggle with changes in market conditions – cyclical nature of the business </li></ul><ul><li>Profit sharing models can only share profit when there is profit </li></ul><ul><li>Residual income potential in revenue sharing models must be large enough to be enticing </li></ul><ul><li>Regardless of the model, the customer MUST always come first </li></ul>Can any model survive in this economy and marketplace?
  28. 28. <ul><li>The “We” model of real estate is structured not only to survive in this economy and marketplace, but to thrive when a lot of the other models are consolidating, losing offices/agents or going out of business. </li></ul>
  29. 29. <ul><li>Stage 4 – The “WE” age </li></ul><ul><li>The traditional real estate model is broken. </li></ul><ul><li>Nextage Realty is built for the future of real estate! </li></ul><ul><li>Nextage Realty’s model is leading the evolution of the real estate industry! </li></ul>The Future of Real Estate
  30. 30. <ul><li>Now is the future & Nextage Realty is NOW: </li></ul><ul><li>Strong Franchise Support System </li></ul><ul><li>Strong Training Systems & Mentor Program </li></ul><ul><li>Team Atmosphere </li></ul><ul><li>Recruiting Solutions – National Team Building </li></ul><ul><li>Retention Program </li></ul><ul><li>Unlimited Earning Potential </li></ul><ul><li>Predictable Residual Income </li></ul><ul><li>Consumer-Centric Focus </li></ul>Now…Is The Future of Real Estate
  31. 31. There will NEVER be a better time. ©2010 Nextage Realty International • NextageRealty.com NOW IS THE TIME!
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