First I want to say to all my friends at AllPro Realty Group, I am sorry you have to go through this and I hope you can get through it quickly.
All Pro is what is called a discount shop, not because of how much they charge for commissions, but how much it cost to be an agent. Different firms have different economic models. They charge(d) a nominal transaction fee of a couple hundred dollars per transaction.
That model was very attractive during the boom when there were no skills required by an agent and no services needed by a broker to sell homes.
AllPro Realty Group decided to expand during this time and increased its overhead dramatically, it had been successful during the boom. Then the market shifted and during down times this business model cannot survive. The real shame is AllPro had been successful prior to their expansion. They had expanded to about 8 offices, each having rent, staff equipment… When you are only collecting $200-300 per closing, you must have a lot of closings to pay for all those expenses.
So the question is, was the economy and the market the reason that a large firm is closing? Well yes it is, but it is more because of their expansion of their model, while some companies saw it coming and started tightening their belts and getting rid of waste.
So the real culprit of people not surviving in this market is they did not shift when the market shifted. The very successful ones started shifting before the shift actually hit our local market. I don’t know why people were surprised when the market shifted, it always has in the past and it always will.
Gary Keller the founder and owner of Keller Williams Realty International wrote a book called Shift “It’s not about the market; it’s about what you do”.
Here is a piece from the his book Shift
The real estate market has shifted drastically and dramatically. Sales volume and the number of transactions have dropped significantly. Inventory is at an all-time high and buyers are more reluctant than ever. Sound familiar? It should. It happened in 1979 and 1987, and today it is happening again across the United States.
If you are a real estate agent this is a MUST read.
