the next age of re presentation
DESCRIPTION
Business presentation on the incredible opportunity available to all Real Estate professionals with the ground breaking business model of Nextage Realty International, LLC.TRANSCRIPT
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The Real Estate Paradigm Shift:
Real Estate’s “Next Age” ©2010 Nextage Realty International • NextageRealty.com
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Paradigms are a belief system – the way we view different aspects of the world in which we live and operate.Our paradigms shape the way we do business and make decisions.Paradigms are usually difficult to change, and often times restrict our ability to see coming trends and embrace new market innovations.
Paradigms
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Horse & buggy The AutomobileTrains AirplanesRadio Television
Paradigm shifts continue today
Paper Books Digital BooksVideos Online RentalsReal Estate Franchising, 100%,
Revenue Sharing
Typical Paradigm Shifts
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VisionaryCourageous
Risk-TakersThick-Skinned
Leaders
A Bit Crazy?
Are You an Agent FOR Change or a Victim OF Change?
Traits That Define the Paradigm Shifters
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The real estate industry has been evolving for more than four
decades, seeking to find a “better way”.
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.
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The time has come to shift business paradigms and move the industry
into its next age - operationally, structurally
and professionally.
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“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.”
- Michael McClure, CEO,
Professional One
Source: Swanepoel Trends Report 2010
The Perfect Storm
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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.
Then came…
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The Birth of Franchising – Stage 1Large, multi-office regional companies became dominant in the 60’s by:• Creating massive advertising campaigns
in local media to build brand awareness• Developing their own sales training
programs• Establishing their own pre-license
schools to improve recruiting efforts• Building offices with large numbers of
agents
The Evolution of the Real Estate Industry
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Franchises gave the smaller independent broker a way to compete by:• Giving them a common brand name
that was recognized across the country• Providing coordinated sales training for
all agents• Coordinating group advertising in local
markets to create greater exposure• Offering recruiting focus and pre-
license training to increase agent population
The Evolution of the Real Estate Industry
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Franchised and independent offices alike were structured similarly:• Most agents were on a 50/50
commission split• High producing agents received as
much as 60/40• Brokers paid for most marketing
and operational expenses for agents
• Most agents were loyal and movement from one company to another was rare
The Evolution of the Real Estate Industry
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The Shift to the “I” World - Stage 2100% concept gains popularity:• Agents operate their own business within a business• Agents pay a flat monthly fee (desk fee) plus their
own expenses & keep all or most of the commission• Agents begin branding themselves at the expense
of the company as the marketing emphasis shifts from company to agent – “WE” to “I”
• 100% companies offer little support to agents as agents operate almost independently from company
The Evolution of the Real Estate Industry
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The “I” World – Stage 2aThe 100% concept morphs into Freedom Shops:• Agents pay a lower fee – as low as $25/month
plus a transaction fee• Agents receive very little to no broker support• “Everyone for himself” – against everyone
else• Little to no camaraderie• No company loyalty• Ultimate example of the “I” World
The Evolution of the Real Estate Industry
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Residual Income Model – Stage 3Profit Sharing (Keller-Williams):• 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
• Very popular as agents search for income beyond personal production
The Evolution of the Real Estate Industry
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Residual Income Model – Stage 3Revenue Sharing (Exit, Avalar):• Agents are encouraged to help
build the company by recruiting other agents, and if they do, they will share the revenue generated by agents
• Very popular as agents search for income beyond personal production
The Evolution of the Real Estate Industry
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Can these models help brokers and agents meet
the challenges of the industry today and in the
future?
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For Agents:• Limited to earning commission exclusively
from their own production• Their own production is limited to their
available time and energy• Continued pressure to perform leads to
burnout• Not really ”building a business, just “doing”
business – income stops when personal production stops
• Offices are closing because agents are leaving for other industries due to a reduction in income
Challenges for today and into the future
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For Brokers:• Agent Recruiting – Broker (and manager, if any) are
the only ones interested in recruiting• Agent Retention – Agents are continually enticed to
join other companies with higher commission splits or lower desk fees creating huge agent turnover
• Brokers lose quality agents that open their own brokerage business - thus training their competition
• Agents are competing against each other rather than working as a team
• Desired company profitability is difficult to achieve
Challenges for today and into the future
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Most industry leaders agree that the current real
estate business models are broken and no longer work for either brokers or
agents.
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“I don’t think a pure brokerage play as a business strategy is a viable play in this
economy or going forward.”
— Ron Peltier – President & CEO, HomeServices of America
Source: Swanepoel Trends Report 2010
What are the experts saying?
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“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.”
— Byron Ellington – Chief Products Officer, Keller Williams Realty
Source: Swanepoel Trends Report 2010
What are the experts saying?
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“[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.”
— Michael McClure – CEO, Professional One
Source: Swanepoel Trends Report 2010
What are the experts saying?
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“Brokers need to change their business
model NOW.”
— Sherry Chris – Better Homes & Gardens Real Estate
Source: Swanepoel Trends Report 2010
What are the experts saying?
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• Multiple franchise brands under one ownership• 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
• Historically independent regional brokers are moving towards franchising
• NAR now provides much of what franchisors used to
• Other vendors and suppliers have also filled many of the gaps in tools, training and support
How have the traditional real estate franchises reacted to the
challenges?
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• Many franchises have cut back on expenditures and staffing, which affects services offered to franchisees
• Fewer franchises, fewer agents…and lower profits, if any
• Trouble justifying the royalties paid by franchisees and agents
• 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
How have the traditional real estate franchises reacted to the
challenges?
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Are these the solutions - the proper and necessary
paradigm shifts that will lead the evolution of the industry
into its next age?
Is there a business model that will address the challenges?
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Can any model survive in this economy and
marketplace?• Traditional models struggle with their “value
proposition” – what do I get for what I pay?
• 100% models struggle with changes in market conditions – cyclical nature of the business
• Profit sharing models can only share profit when there is profit
• Residual income potential in revenue sharing models must be large enough to be enticing
• Regardless of the model, the customer MUST always come first
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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.
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Stage 4 – The “WE” age
• The traditional real estate model is broken.
• Nextage Realty is built for the future of real estate!
• Nextage Realty’s model is leading the evolution of the real estate industry!
The Future of Real Estate
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Now is the future & Nextage Realty is NOW:• Strong Franchise Support System• Strong Training Systems & Mentor Program• Team Atmosphere• Recruiting Solutions – National Team Building• Retention Program• Unlimited Earning Potential• Predictable Residual Income• Consumer-Centric Focus
Now…Is The Future of Real Estate
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There will NEVER be a better time.
©2010 Nextage Realty International • NextageRealty.com
NOW IS THE TIME!