4 Reasons Commercial Real Estate Brokerage Is Failing NOW! And You Can’t Stop It!

You can’t, you think you can but no, you can’t.

Let me lay it out for you simple and clean and for the entire world to see.

What does it take to have a competitive real estate company today?

At at least the basic level it should be what?

 -Understanding the market and the size of that market.

This is a great opportunity and at the same time is going to kill the traditional model. Why and how? So many ways to own transact and find property. The access to that information is endless. What is the basis of most if not all brokerage models? “Local Knowledge.” What is the true definition of local knowledge? Hiding information?  The good news is that there is plenty of room for several platforms. The bad news is that there is plenty of room for several platforms. How many can you name now?  How about in your backyard? Do you understand the market you are competing in? I don’t think you have a clue.

-A great team or the way that team works. Also how that team gets paid.

What if the brokerage structure goes away? It will. It may be regulated away. The way we do it is illegal almost everywhere in the world. It’s called Criminal everywhere else. But it works for “us.” Fine cut that on your gravestone. Guess who does not want it that way? The way a deal is created now is going away piece by piece minute by minute. What is the skill set necessary to maintain that way of doing business now? It has no use whatsoever. The user or the people paying for that will find that what? Criminal?

-Providing a product or service.

What is the actual product you provide to the market? You say you don’t provide a product you provide a service. How is that service used again? In a siloed data controlled “unregulated marketplace.” When you describe it in those terms is that a marketplace you would personally be a consumer of. Hell no right? What if the stock market was, again siloed, unregulated and data controlled by a just a few people?  Wow, that sounds like a shitty way to do business. Again it works for us. I get that, wait no I don’t get that.

-Control the transaction.

Let me dig into one very special part of your service.

The transaction. Might want to copy and paste this somewhere after you read it.

Let’s take the entire transaction as a whole from the beginning of the funnel to the end.

(As a side: researching this was ridiculous and sad at the same time. I need to write a book.)

Lead generation.

Identifying potential property.

Identifying potential users.

Financing secured.

Creating an informed offer.

Due diligence.

Closing.

Ownership.

NOW that is generic as hell. I know, I know!

But!

Let me break that down.

Lead generation will be done how? With (AI) Artificial Intelligence. Why? Becuase of Data. How much more in depth do I need to go? None at all.

Identifying the potential property. Do me a favor. Search for a property in New York City or Los Angeles. What comes up first. A brokerage company? Nope. How many portals are out there with ALL the property information? You say NOT all information because YOU keep the good stuff to yourself for those special clients.  What do you think the owner of the space thinks about that?

Identifying the Potential users, Where is brokerage in the funnel now. At the beginning? Not anymore. Why? Search. The users find the property or potential space and do what? Find a broker, right. By then it’s too late. You don’t think so? Stay with me.

Financing secured. How many deals get done without pre-approval? NONE. How many types of sources are there for financing online now. I’m not talking about Mtg Brokers I’m talking about REAL #CRE financing. How hard do you think they try and get those leads before you even know who they are? I know I would be. It’s what they do to make a living. Do you think they should just rely on your referrals? I sure as hell would not base my entire business on that. Guess what that’s called today? Direct to the consumer.

( Is your next potential client, reading this?)

Due Diligence. Pretty straight forward as far as you are concerned. Not so much. How much of that process is all about regulation? You think regulations are a good thing. It protects the marketplace. How about title insurance? You’re smart. Is title insurance not one of the world’s biggest scams? Think about it. Pay to search and make sure the title is clear and then insure it. Hell, it’s always clear or you could not buy the property right? So, what are you insuring again? If something is found what happens? The parties go to court and then what happens. The title companies NEVER pay. NEVER, so what did they insure again? They ensured that the regulations in place make them Billions. The consumer will just accept that forever. Sure they will. Especially smart savvy commercial real estate people.

Closing. Of course, it’s simple and straight forward. Want me to stop? Do you show up now or is it all electronic? Think about the workflow and time it takes. What? Compliance? Regulation? Signing papers to sign papers to make sure nobody but the client or user can get sued? One more time. When does that change? When will the agreements switch and be biased toward the client? Oh, that does’t sound too good does it. Signing a bunch of papers that are not actually in your best interest. You do it every day right? Don’t you? You’re ok advising someone else to do it instead.

Ownership. Don’t want me to touch this one? Hey, I’m on your side. I will leave this one alone…..for now!

DO YOU UNDERSTAND WHAT THIS MEANS?

IT”S ABOUT THE TRANSACTION.

IT’S NOT ABOUT THE SERVICE YOU THINK YOU PROVIDE.

There are comapnies out there right now spending Billions to buy market share.

They are buying market share to do what?

Learn how to do transactions better.

Why?

It’s all that will exist. It’s the only way to make money.

Do you see that? Come on, do you?

So to have a competitive real estate company you think you need what again?

 -Understanding the market and the size of that market.

-A great team or the way that team works. Also how that team gets paid.

-Providing a product or service.

-Control the transaction.

And I just tore that apart piece by piece.

And I tore apart the transaction you base your entire business upon.

4 Reasons Commercial Real Estate Brokerage Is Failing NOW! And You Can’t Stop It!

What are you going to do?

I have a simple answer.

Become a software company, not a real estate company.

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Commercial Real Estate Owners are Missing Their Big Opportunity.

 

 

  • Janice Sangster-Phalen

    I don’t see the 4 reasons, many more than 4. Is this a rant or do you have the 4 reasons?

    • Duke Long

      1 -Understanding the market and the size of that market.

      2. -A great team or the way that team works. Also how that team gets paid.

      3. -Providing a product or service.

      4. -Control the transaction.

      It’s all GONE!

      • Janice Sangster-Phalen

        10 things, and really more
        1. understanding the market
        2. Understanding the size of the market
        3. a great team
        4. how the team gets paid
        5. Providing a product
        6. Providing a service
        7. Control the transaction
        8. Invoicing
        9. Collecting on payment
        10. Paying the team members

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