As the real estate business evolves, agents are learning that they need to embrace the new normal.
by Mike Fenner
The old saying that the more things change, the more they stay the same may be true. But change can be scary. Innovation in any business may not change the foundation of that business model, but it can have a huge impact on the way professionals work every day.
In real estate, how do REALTORS® work in a system where they no longer control the information (listings) over which they used to have exclusive control? How can agents ensure that emerging business management tools, listing services and communications methods help them rather than hurt them? Should agents base their decisions as real estate professionals on whats the latest and greatest technology and trends, or resist that change to operate in more of a business-as-usual manner? And how does consumer decision-making factor in to the process?
Speakers at this years Inman Connect conference in San Francisco tackled these questions and more as they tried to give attendees some idea of what the agent of the future might look like.
Event host and Inman patriarch Brad Inman said, The industry has never been more full of invention and innovation. By embracing ground-breaking new technologies and ways of doing business, agents will help drive themselves, and the industry as a whole, to the next level. The lesson, he said, is that If youre in a traditional industry [like real estate] think before you overreact to innovation.
This refers in part to the backlash that Zillow and other online listing companies have felt from some REALTORS® who feel that such services confuse consumers and provide inaccurate price estimates.
But REALTORS® can learn a lot from that mindset of innovation. Inman said they should continue to look for new ways to deliver better service to their clients, especially if they have systems in place to help them do so. If you have infrastructure, think about adapting it to the future, he said.
One of the industrys goals, Inman said, should be to create new business models in an effort to make the home-buying and selling experience more efficient and frictionless, and a lot of that is based on emerging technologies and data-mining tools. The back-end is the next battlefront, Inman said, because agents who have the ability to track and mine consumer data will surge to the front of the pack.
Killing Inefficiency
Frictionless transactions are a noble goal, and businesses that serve homeowners, homebuyers and home sellers have jumped on the bandwagon to change the way real estate transactions get done.
For example, Inman panelist Tommy Sowers of SoloPro, said that for his company, Our enemy is inefficiency. SoloPro provides a service that offers a 3 percent rebate for do-it-yourself homebuyers by connecting them to real estate agents who offer their unbundled services for a smaller fee. The company says this enables buyers to select REALTORS® based on the services they want from an agent, and its one new option that consumers can use to find an agent who can serve their specific needs. Not all buyers and sellers necessarily want a traditional full-service REALTOR®.
Businesses related to home buying, selling and ownership have taken notice. Sowers says that Lowes, the huge home improvement and hardware company, has made a considerable investment in SoloPro, because they are anxious to cash in on new homebuyers as early in the process as possible, Sowers said.
Strike While the Irons Hot
Lowes wants to reach consumers at the exact moment when they are ready to make a decision about where to buy home-improvement products or appliances. But the problem from a human behavioral perspective is that We make a lot of mistakes when we make decisions, said keynote speaker Dan Ariely, a behavioral economist at Duke University.
This has huge implications for real estate agents. Customers dont always know what they want, and it turns out that many homebuyers may work against their own interests in spite of themselves. We have the general idea that people make good decisions, but they tend not to, Ariely said. Whether it is texting while driving or having unplanned romantic hook-ups, people make bad decisions all the time. So how does this behavior apply to real estate?
Ariely said, Housing is one of the most difficult decisions anybody makes. REALTORS® must understand buyers mindsets and the elements that will apply to their decision-making process. The way to understand all that is by asking probing questions of your clients so you have a frame of reference for their goals. The moment you start asking people questions, they start considering the possibilities of where they might live, Ariely said.
For example, if they choose to buy a smaller house, that might enable them to afford more vacations. If they choose a bigger, more expensive house, their lifestyle will be different.
Either way, consumers have to make tough decisions during the home-buying process. The REALTORS® goal should be: How can you take a good experience and make it better, and how can you take a bad experience and make it not so bad? Ariely said.
Furthermore, agents need to be more proactive to let their customers know all of the efforts they are taking to help them on their quest to buy a new property. When we get something, we dont just think about the outcome, we think about the effort that went into it, he said. In other words, show clients that youre working hard and they will feel it.
