When we examine the evolution of the industry in-depth we can break it down into three distinct eras, each characterized by"?different technologies, business models and controlling entities."? See if you agree with these distinction in the developmental eras of the real estate industry."? For detailed information and downloads, please visit my website.

The First Economic Wave (circa 1776-1976) was the broker-centric era."? From the founding of the country until about 1976, a two hundred year period,"?Broker/Owners were the controlling parties within the industry.

The Broker-Centric Era of the real estate industry was two centuries in the making and was the dominant business model in the timeline."? At its apex the cultural and business model characteristics of the Broker-Centric Era were truly amazing."? Through the mechanisms of the local Board of Realtors the primary or "Designated" Broker of a real estate company exercised enormous control over literally all property information."? Real estate agents themselves had no access to the information unless such access was approved by the Broker."? The mantra of the Broker-Centric Era might be "brokers, boards and"?books!"

The Board of Realtors model, with the Broker at the nucleus, did not come into play until 1908, with the founding of the National Association of Real Estate Exchanges (later NAR) on May 12, 1908 at the YMCA auditorium in Chicago, IL."? The Broker-Centric Era was not challenged until 1976, which leads us into the next era.

The Second Economic Wave (circa 1976-1994) was the agent-centric era which"?began in the mid 1970's and continued until approximately 1993-94."?

There are three primary events in Second Economic Wave, which I refer to as the "Agent-Centric Era.""? These three factors fueled this era and gave impetus to the beginning of the most rapid set of changes to occur in the real estate industry."? The events are (i)"?The introduction of the real estate franchise concept to the industry; (ii)"?The first computerized Multiple Listing Service; (iii)"?The advent of the personal computer;

Franchising. RE/MAX, was founded in 1973 in Denver, Colorado, and in my opinion is the historical axis upon which all real estate ownership business models spin. The RE/MAX concept was not just a franchise but a watershed economic model representing a series shift from Broker/Owner controlled commissions to Agent-Centric businesses that would empower the agent as independent contractors with fee-based obligations the Broker."? Franchising opened the door to the agent-centric culture and began the process of defining real estate companies geographically and nationally.

Computerized MLS."? Something began to change in 1968."? One of the local Board of Realtors located in Long Island, New York, made an attempt to automate the MLS book by use of computerization of the property data."? This was truly visionary, despite the failure of their attempt."? It was not until seven years (1975) later that the Long Island Board of Realtors successfully created a computerized Multiple Listing Service.

Whereas franchising began the process of tearing down the local real estate geographic territorialism by introducing national networks, it was the computerization of the MLS that would ultimately prove to be the second major step in unleashing the full power of technology within the Real Estate industry.

The PC."? With the advent of the PC a door was opened that would allow real estate practitioners to tap into the computerized MLS system from just about any location, office or home!"? This development began to loosen the iron grip Brokers had over agents and property information."? The PC is the third leg The Second Economic Wave that would ultimately give rise to the Agent-Centric Era, an era that meant less dependency on the broker-controlled office environment."? Agents, if they preferred could actually meet sellers and buyers in their homes, and they did!

The Third Economic Wave (circa 1994-present) is the consumer-centric era."? This era, or wave, is the outcome of all that has gone on before it within the real estate industry and I believe it will be the most powerful era in re-defining our business models.

When"?one studies the eras of real estate business model development one can"?easily see the transitional components of the real estate industry and how these factors influence our business models as owners."? What is important to notice is that in each era, profitability of owners diminishes and the income of agents increases. The third era is no exception and has three fundamental injections of technology that unleased the changes we see today; real estate websites, Internet listings and the online consumer.

Websites."? SSome time during the 1993-94 timeframe with the discovery by forward-looking real estate professionals of the Internet's power to convey property information to consumers."? The first actual property listings and accompanying property photos appeared in 1994.

The International Real Estate Digest (IRED)"?was launched on February 3, 1995 by Becky Swann, a real estate agent."? IRED.com and was one of (it may have been the first) the early repositories of real estate and community information services via the Internet."? By December, 1995, IRED's directory entries exceeded 3,000."? Real estate websites were officially born and were crawling around.

Internet Property Listings."? The manual entry of property listings with photos marked the beginning of the escape of the property information genie from the MLS bottle."? This was"?a single event so significant that more than a decade later the industry is still fighting about the event and the outcomes.

The Online Consumer.'On the other side of the real estate cyber spectrum was the consumer, now gaining more and more access to the Internet via the early Internet Service providers such as AOL, CompuServe and ultimately the granddaddy of them all, Netscape."? Through home and office telephone lines and PCs equipped with 2400 baud (bits per second) modems, parts of the real estate world started connecting to the consumer.

Locally, Boards of Realtors were allowing real estate companies and their agents to have access to the property information via WAN portals and then ultimately, the Internet."? This began to change everything.The office-less real estate business model became more than a theory as tens-of-thousands of real estate agents began purchasing PC for use at home and office (there were no notebook computers at this time)."? The cataclysmic change took place right before our eyes, yet in some respects we missed it.

Agents no longer had to meet prospective buyers in the office as the primary method of introduction."? Email and property information could bridge thousands of miles of geography and initiate a real estate relationship across a city, State or the Country without having the office, the books, the board or the brokers involved."? Wow!"? That's industry transformation.

Consumerism is now the central most powerful factor influencing the real estate industry's business operating models."? I have called Consumerism, the ultimate "ISM" because it is the consumer who will dictate how they will converse with us in the new open, freedom markets."? The demand for 24/7/365 online services that can be used by the consumer from any location should now be paramount to every owner's business model.

The territorially defined, static geographic markets are going to be ripped to shreds by the consumer's demand for instant access to everything, any time and anywhere."? Our out-dated models that emphasize territorialism and antithetical to consumerism and they won't hold up in the future.

My Conclusion."? We have entered the New Real Estate Economy."? The rules for entry and operation are being re-written by a consumer backed by both the Internet and apparently the Department of Justice."? Are we listening."? More importantly are we re-tooling our real estate business models so that we can expand horizontally into new markets all around us without the need for the old bricks-and-mortar operations that suck-out the capital we could be using to re-invent and re-margin our businesses?

WATCH THE NEW REAL ESTATE ECONOMY.