These three things will present a challenge for brokerages in the future.
Today, I’m here to talk to you about what I believe are the three biggest challenges and issues surrounding real estate brokerages moving forward this year.
The first thing is that we are coming out of a time that has had an immense amount of transactions and a lot of agents that have grown. The agent count has topped out at just over 1.5 million agents in the United States. And so, as we move forward in 2023, we’re going to see both agent count and transactions go down. What has happened in real estate brokerages and real estate teams is that our budgets have expanded for the time we’re in. So one of the biggest challenges that real estate brokerages have is how to do more with less. There are really fewer transactions. There can be fewer agents, which means a brokerage is going to have less income coming in. So there are areas in a real estate brokerage that have gotten bloated with salaries or programs that aren’t really needed. I think, right now, every real estate brokerage needs to remargin their business. They need to understand what is going on in the world and where they need to make cuts to make sure that they can thrive in 2023. That’s the first thing.
The second thing is that the challenge that real estate brokerages face is that we need to get into the lead game. So we all know that whoever controls the lead controls the industry. As real estate brokerages over the last ten, 15, and 20 years, we’ve given up the control of leads. We’ve delegated and outsourced that to real estate teams and agents. By doing that, we’ve given up a lot of control of the industry. I think the most successful brokerages going forward are going to be the ones that get back into the lead game and figure out lead generation and being the source of the lead versus delegating that out to agents or online lead aggregators or whatever the case is. So get back into the lead game.
“We’re going to see both agent count and transactions go down.”
The third thing is that real estate brokerages need to evolve with the times. Many things have changed over the last 36 months—there’s an interesting dynamic between physical brokerages and online brokerages. I think we, as a brokerage, need to evolve. It’s very clear to me that it’s not one or the other. I think the most successful brokerages going forward will be physically based and virtually enhanced. They’ll have a physical space, and have a lot of services online for their agents. So I think the real estate industry, real estate brokerages really just need to evolve faster and really just kind of accelerate into 2023 versus holding back.
So those are the challenges that I think real estate brokerages are going to have. I think it’s all doable with the right leadership. If you’re interested in finding out more about what Powered by Impact does, what our “team-erage” model is, and how we’re helping real estate brokerages evolve and kind of meet some of these needs going forward, we’d love to sit down and chat with you just to talk to you about what “team-erage” is, and how we’re helping market centers across the United States. We would just love to sit down and chat with you.
