Companies that burn bright can burn out
Letters to the Editor
By Inman News, Monday, March 24, 2008.Bookmarking Sites
Re: 'Help-U-Sell management restructures' (March 19)
Dear Editor:
I've been in the real estate industry since the 1970s. Every "bull real estate market" creates a fertile ground for "a new concept" of discount brokerage. In reality it's the same business model in a different outfit.
Their intention is honorable, I am certain, but these companies initially burn bright, and unfortunately burn out just as quick.
Real estate brokerage is a tough business and becoming more difficult as we move forward. There is a reason why established, conventional brokerage firms remain in both good times and more difficult markets such as we have been in since April 2007.
Tough times don't last -- tough people do.
Murray Rubin
Long & Foster Real Estate Inc.
Cherry Hill, N.J.
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Submitted by Sol Sek on March 26, 2008 - 6:10am.
Murray,
If I am not mistaken Help u sell has been around since the 70s as well. They've experienced double digit growth from 2000 to 2005 ( probably due to the web ).
However, agree with you that this is an extreme tough market. Even the mother of all real estate companies like Realogy lost $800 million this year. The former CEO of Realtor.com resigned.
When you consider the $2-$10 million in annual profit that these small franchise names earn, it's no wonder they burn out.
Are they less tough than the ones that can afford to lose $800 million?
I would argue that it's more to do with deep pockets. Those with more food in the fridge tend to outlast those without in tough times.
Submitted by Mitch Argon on March 26, 2008 - 6:35pm.
During the boom times, I saw the fixed fee listing companies doing quite well. Unfortunately, they only really focused on 1/2 of the market (or less) - discount sellers.
As days on market increased, their inventories decreased and so did their mean time to transaction closings.
They are definitely not as visible in the Reno real estate market and I'm sure, if measured, would have lost significant share relative to other firms.
Submitted by Sol Sek on March 26, 2008 - 10:13pm.
I'm looking forward to the day when real estate companies start competing on result guarantees. Consumers won't care whether you call yourself a discount broker, no name outfit, or that your company can afford to lose more in one year than others make in a decade.
They won't care how many blogs you run or how many year experience you have. They just want to compare your guarantees.