By Industry Advisor by Jose Perez

RISMEDIA, April 1, 2010—The real estate brokerage industry is in the process of coming out of a significant storm that has wreaked havoc on a large percentage of firms. Some have failed, some are hanging on, and yet others are reinventing themselves for the future. Regardless of your company’s situation, it’s time to assess where you want to be in the next few years and what it’s going to take to get there. Doing nothing is simply not an option.

For three years, innovation has been stifled due to the fact brokerages have been in “survival mode” and investments in the future, by necessity, have been largely ignored. Unfortunately, the expectation of agents and consumers has never been higher, thus forcing the industry to now start playing catch-up as the market begins to show signs of life.

Some brokerages see the next 24-36 months as a time of unprecedented opportunity to reinvent themselves and consolidate market share. Others, due to age or financial limitations, see quite a tough road ahead as it could take years to get back to earning levels that would allow for a reasonable exit.

If a brokerage does not have the time or capital to reinvent, what are its options today?

As 2010 continues to unfold, two camps exist:

Sellers: There are many reasons, personal and otherwise, why an owner decides to sell. Due to the circumstances that have led us to this point in time, several things are undeniable:

– Brokerages must innovate and reinvent in order to be viable in the future.
– Most brokerages have lost most, if not all of the value they had three years ago.
– It will take several years for those valuations to return (if they ever do) and that is only if the innovation and re-invention mentioned above are successfully accomplished.

If these brokers are not willing or able to invest the time, effort, and dollars necessary to adapt to the new real estate brokerage paradigm, their best option might be to consider an exit today and leave that task to others.

Buyers: Over the past 12-24 months, with few exceptions, brokerages have been reluctant to do any sort of expansion. Brokerages with resources and vision are seeing 2010 and 2011 as opportunities to consolidate market share and, in the process, recruit solid talent. These opportunities exist for the following reasons:

– Due to the reasons given above for those who might be sellers today, buyers have the opportunity to increase company dollars and consolidate market share while making investments necessary to reinvent.

– Many local and regional markets are lacking in leadership and innovation. Those who are giving sellers a dignified exit strategy while creating the tools and systems to succeed in the future will be seen as leaders and great destinations for selling brokerages and agent recruits alike.

As the industry continues to maneuver and gain solid ground in the midst of seismic changes, 2010 represents the year of reckoning regardless of which camp a brokerage falls into. Whether to sell or buy depends largely on one’s desire or ability to invest in a wholesale reinvention.

Jose Perez is the president of PCMS Consulting, a full service consulting, sales and management organization that specializes in real estate industry issues.

http://rismedia.com/2010-03-31/a-time-to-sell-a-time-to-buy-opportunities-abound-for-all-in-2010/