The New Role Of Agents…
The Internet came along and made many aspects of our lives easier, but has it also brought some unwanted competition for many agents?
Do you remember what a property search used to entail? Remember we didn’t even have pictures on the MLS?
Technology has made our jobs easier in many aspects, but it has also created competition for us as well. The roles, expertise, and expectations of a typical real estate agent are changing due to the advancements in technology.
Do you want to adapt to the change or let your business suffer the consequences? Let’s check it out.
How Technology Has Changed The Home Buyer Experience
The way real estate is bought has changed dramatically in the last 15+ years. The emergence of the Internet, which has made information so easily accessible, has shifted the way many real estate agents conduct business. It was not long ago when consumers needed a real estate agent to obtain information on what was available for sale in their area.
Real estate agents used to control access to the majority of information about properties available for sale. In today’s world that information can easily be accessed by turning on your computer and logging onto Zillow, Trulia, Red Fin, Realtor.com, and other property search related websites.
Buyers don’t necessarily need us to see what’s going on in their area. They can do that online.
How Technology Has Affected Listing Agents
If someone were looking to sell a property, they used to rely on a real estate agent’s marketing plan and networking abilities to get the job done. Today, anyone can get their house listed online in a few easy steps or Google just about anything they want to know about selling a property.
If someone wants to see what their house is worth, there are multiple sites to go to (although not very accurate).
If someone wants to get home selling tips, they can type a keyword into their browser and receive thousands of informative articles.
There are even flat fee real estate services that list properties in the Multiple Listing Service for a large discount.
Just about anything anybody wants, they can find for FREE or at a LARGE discount online.
Sellers don’t necessarily need us to list their home for sale.
What does this mean for real estate agents?
Time To Step Up Your Game!
Competition is good. It’s what allows us to evolve the industry so turn that frown upside down!
In today’s world of real estate, consumers no longer need real estate agents to buy or sell property, but they still prefer to use them.
Consumers look for more than a licensed agent today. They look for an expert. They could easily accomplish the same tasks as a real estate agent by doing a little research and work, but informed consumers know an expert agent will do a better job than they would on their own.
Regardless of technology advancements, you will never be able to replace real live working experiences and first class customer service.
If an outsider were to look down on the real estate industry from a bird’s eye view, they would probably think that this is an industry that is slowly evaporating as technology grows.
We have seen many online services evolve over the years with the aim of becoming an alternative to your traditional agent. Buyer rebate programs and seller listing flat fee services are offered in just about every market.
I’ve even had other real estate agents admit to me that they no longer felt needed.
How many businesses have we seen killed off by technology? Look at what happened to trading once it went electronic?
I can go on and on and rattle off many industries we have seen go extinct, but can this happen to real estate agents? Can the increased use of technology and the Internet wipe out the demand for our services?
Statistics Show The Opposite
Despite the advancements in technology and information that is made readily available on the process of buying or selling real estate, statistics still show that consumers will use a real estate agent.
83% of homebuyers purchased a home through a real estate agent.
88% of home sellers were assisted by an agent with their transaction.
The question is why do consumers still rely on Realtors when they can buy or sell a property on their own?
Buying or selling real estate is one of the largest financial decisions someone will make in their lifetime. Although consumers can find any piece of information about buying or selling real estate online or any type of “do it yourself” program, they still rely on an agent’s expertise to confirm their purchasing or selling decisions.
I want to address what I mean by expertise so it doesn’t get lost in translation.
- You can be an expert in your market by knowing the terrain of your area front and back.
- You can also be an expert in the process of selling and buying real estate. The process of buying or selling real estate involve many moving parts that the general public doesn’t think about. Marketing a home, home inspection, following up with financing, earnest money, and title work to name a few. I am referring to being an expert in the both senses.
What Do Home Buyers Want From Their Real Estate Agent?
Buyers rely heavily on agent expertise in the market to confirm their buying decision. Was their purchase price at a good value or did they overpay for the property?
Do you really think a 1% rebate on the buyers commission is worth it to hire a rookie agent without much experience? The difference between good or bad avice is much more valuable than a measley rebate, but it’s out job to educate consumers of this.
Don’t you think consumers would rather work with someone they could rely on their advice to make a sound investment vs. taking a few thousand dolar credit?
Buyers also rely on an agent to facilitate the transaction for them as buying a house has many moving parts to it. You have earnest money, home inspection, title, paperwork for lender, and so on.
Since homebuyers do not typically pay for the use of an agent’s services, why wouldn’t consumers use as agent? It doesn’t cost anything and you have someone to watch your back and do all the running around for you. That sounds like a good deal to me!
The problem is educating consumers on this!
Home buyers WANT an expert advisor and facilitator. So don’t you think you should position yourself as one?
You might believe I am an expert on this subject, which I am :), because I am writing an article like this. Why couldn’t you do the same thing with real estate, and inform potential clients like this by sharing and creating good content?
What Do Home Sellers Want?
Consumers who are selling a house bear the cost of commission in the amount of 5-6% traditionally. While they can easily list their house online and even the Multiple Listing Service for much less, roughly 88% of sellers still chose to use the services of an agent. All statistics show that home sellers who try to sell their house on their own sell for less money than when listed with an agent. One statistic has the average FSBO selling at $174,900 vs. $215,000 when listed by an agent.
Does the commission a real estate agent charge really net the seller less money in the long run?
How do sellers know the TRUE value of their property?
How do sellers know how to present and position their property for sale to receive highest and best price?
These are services a good listing agent, who is an expert marketer, would provide for their clients. A marketing expert would more likely fetch a higher sales price for a seller therefore making their commission justified. Home Sellers want a professional marketer to maximize their sales price.
The only way to compete against the seller flat fee services and FSBO’s is to be a better alternative. That means sharpening up your marketing plan so that your commission becomes justified. As long as your involvment in a transaction nets the seller more money and less stress in the long run then where’s the competition?
Agents are not going anywhere, but we do have to compete.
Although the total number of active licensed real estate agents are down, the demand for agents remains large. One of America’s most wealthy businessmen and owner of Berkshire-Hathaway Home Services, Warren Buffet, is aggressively performing mergers and acquisitions of real estate companies throughout the country. In a short amount of time Buffet’s real estate company has become a staple in many markets! Where many see nothing but doom and gloom for real estate agents in the industry, Buffet sees a major opportunity. His actions have brought reaffirmation that the demand for real estate agents is not going away. However, the demand for cetain skills possessed by real estate agents are changing.
A Paradigm Shift In Real Estate
Right now the average age of a real estate agent is 57 years old and only 6% of real estate agents are under the age of 34! A large population of real estate agents is getting closer to retirement. Warren Buffet and other industry insiders took notice of this and saw opportunity.
Did you know that the average age of homebuyers is getting younger and very familiar with technology?
Who is going to service all of these younger homebuyers who are more inept to technology?
All of this suggests that there will be demand shift for more technologically advanced agents.
What’s it going to take for agents to make it in this industry? 80% of newly licensed agents do not make it long term in the business. Technology, social media, and the Internet have opened a door for younger agents to compete with the older generation in real estate, but you must practice two very important principles for success.
Regardless if you are a seasoned vet or a brand new agent, your skills in marketing, technology, and customer service need to be sharp to compete in today’s competitive real estate world.
Here’s the formula to compete amongst the best going forward.
You must be an expert in the process of buying and selling.
You must be an expert in marketing
Be an expert at customer service
An expert marketer is going to pick up more online buyers.
An expert marketer is going to offer a seller a better alternative than their “less expensive” options.
An expert marketer will get more referrals and repeat business using their skills in technology to nurture on and offline relationships seamlessly. This equates to more referrals and repeat business.
These are just couple of things to consider going forward as the real estate dynamic changes. I say let’s give the market what it is asking. The one thing we know for sure is that real estate agents who view themselves as professional marketers are also the ones who I’d put my money on to be here for the long haul. Are you a licensed agent or a real estate marketing expert?
I know who I’d hire to sell my next house.
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