Soon household names like LJ Hooker, Ray White, Raine and Horne & Century 21 could be brands of yesteryear.
It is hard to think that companies like “Google” were started in September 1998 – less than 10 years ago. Their initial public offering was in August 2004 – less than 4 years ago. Google is currently ranked number 289 in the Forbes 2000 List. This means that Google is now the 289th largest company in the world with a share price of $US472.86 and market capitalization of over $US200 billion.
Google has done all of this without a shop front, without an office in every suburb, without an advertisement in the Wentworth Courier, Mosman Daily, Newcastle Herald or any other real estate related newspaper in Australia. Yet they are the largest internet search engine in the world and are growing by the day. In the last 12 months Google have grown so much that their company ranking in Forbes Magazine had increased by around 200 spots.
Also have a think about E Bay – have you seen an E Bay store in your suburb? The answer is no and yet this business is now one of the most recognized and fastest growing in the world.
The importance of the shop front has gone. The internet is the new shop front. So where does this leave the local franchised real estate agent? The reality is that the local shop front is under such financial pressure that they are on the brink of extinction – the local shop front is dying. Buyers rarely search in every shop window in every possible suburb they are looking in to find a new home – they search on the internet. They search by suburb name and by price – they are able to define their search criteria online better than ever.
With total spending on real estate advertising in newspapers tipped to decrease by around 18 % annually for the next three years according to the National Association of Realtors the world is evolving rapidly. We are moving to a point where remnants of the past are discarded quicker than many companies can keep up with.
The new shop front is the internet and the new real estate agent franchise is one that can innovate, minimize costs, provide exceptional customer service, reward and incentivise their people like never before and take the lead with a completely new business model.
Real estate agency’s are not keeping up with change, stubbornly sticking to business practices that most other industries have left behind.
Thus, who will “do a Google” by transforming real estate? Whoever it is, it surely is not far off. Watch this space!