woensdag 16 mei 2012

Your business model is broken, brokers!

Dear German and French real estate brokers: your business model is broken! 

Of course business models are just as variable as everything else under the sun. 

I was in Germany and in France, looking for a house to live for my family and me. I found that German and French real estate brokers try to - at first - hide the address of the houses they are immediating. The owner and one or more different brokers can have the same house on offer. The one who makes the deal can pick up the commission (or no commission at all, when the buyer knows how to contact the owner by himself).

So, the brokers need proof they were the intermediator of a sale. They typically do this as follows: they advertise the house with very little information, most often no photo's from the street side, and certainly not the address. Ofcourse I would like to lookup the address in google earth, but I can't, unless I give them my name and address, so they will send me more info and later claim they were the one who first gave it to me. If I already knew about the object, I have something like 5 days to claim so.

What a disservice!

Ofcourse this is no practical service for me as a potential buyer, but it is no good service to the seller either. If I must go through all that hassle, I might miss out on an object that looks not so interesting to me - but that would have drawn my interest by it's very location. (You know how the old saying goes: for selling real estate there are only 3 things important: location, location and location. This is not a silly joke, location has at least 3 different aspects,

In the end, the seller get less potential buyers and I find less potentially interesting objects. Prices remain lower, and I must be satisfied with a less attractive house, or a longer period of searching, apart from the hassle.

The internet deconstructs all old business models. It typically de- and re-intermediates. If the French and German brokers want to have a future business, they should understand that information is freeing itself. Already I can fly the earth and find objects in a certain area, just by comparing all data, except the address. Already I can compare photo's to find the place where they were taken.
Already I can google and find the same house on offer by the very owner, but on a different site in cyberspace.
It's more and unnecessary work. The brokers should help the market to speed things up, not to slow things down, if they want a future business. Yes, they should change their business model from "information monopoly" (which they are loosing) to "customer intimacy", or "excellent service".

A solution for buyers, sellers and brokers

Make this deal with a seller: when you, the seller, sell within a certain period from now on, you pay me, the broker, a commission. I will do everything I can, because you and other brokers are not competing with me, nor profiting from my work and investments. If you, the seller, are not satisfied with my work, you can cancel our contract, and do business with another broker or without one.

Now you have no longer a reason to keep the address of the house a secret. To the contrary, you might as well hang a panel on the house, which attracts buyers who are interested in that region where they have their holidays, for instance.

When you change your business model this way, you get all of your commission from the seller - which is right, because it helps the buyers to orient themselves freely. There are more advantages to this model, and I'd think that the one broker who starts it, will gain a lot of business and happy customers. If you know a German or French broker, you might as well let them read my blog. If they'd want to discuss this with me, I'd love to - in German or French: kein Problem, pas de problème.

This very blogpost I had to write in German, French and a couple of other languages, but not in Dutch. The Dutch real estate brokers have already changed their business model years ago. Far from perfect, but they do a good job, they earn a decent living and they can do business without frustrating their customers. That's how I sold my house in Utrecht this year with the help of a Utrecht based real estate agent.

The Dutch band Lucifer singing House For Sale, a goldie that gives you some time to think it all over:

Foto: maison a vendre cc austinevan on flickr.com