Real Estate Industry Disruption, How Does the Future Look?
Real Estate Industry Disruption…
Why it’s Causing Such Rapid Change
Real Estate Industry Disruption is available as a full PDF download. Due to the requests and the length of this article it’s much easier to read in a PDF format.
Discussion about the Great Real Estate Industry Disruption has become a hot topic! Plenty of evidence suggests that unless Real Estate agents in Canada and the rest of North America understand how technology is changing the real estate industry many may be left behind as road-kill.
For some that just may be the case but, those who are paying attention are choosing to empower their businesses with technology which will cause those who don’t adapt to become irrelevant, quickly.
Everyone knows what has happened to other traditional commissioned industries like travel agencies, insurance agencies and even mortgage brokers. Just because change is not ubiquitous it does not mean it’s not coming and already happened.
Yes, there are still many mortgage brokers thriving in the industry but just like the saddle industry there were still many saddle makers still selling horse saddles after Henry Ford sets up shop… today, not so much.
Does it Take Time for Consumers Too?
Yes… because most buyers and sellers are not in the real estate market all the time and they’re not as educated maybe, but that’s quickly changing in Canada and the USA. When the masses do adapt, technology can wipe-out industries overnight… we’ve seen it many times. That’s how industries change, in today’s world of rapid technology change happens quickly.
Big Data: The Next Frontier for Innovation
What I’m really talking about here is access to big data… with precision we can target who in the market is interested in what we offer with the ability to reach them directly. Big data is what now drives everything.
Have you ever asked yourself why Apple and Google are now entering the auto-making industry?
The money is not in selling iron and tires but, self-self driving cars are going to put people into a confined entertainment environment for 2-3 hours a day.
We won’t be looking through a windshield any longer… and whoever owns that environment owns all those ad impressions!
Not only for traditional marketing but, for example… they will also know that it’s now noon and you are traveling in your driver-less car they will deliver you a special coupon to Micky D’s and all you will need to do is instruct your car to go through the drive-through window. In fact, we’re doing that in marketing now, it’s currently known as re-targeting.
This will be the true definition of a captive audience… in a completely controlled environment. The money is in monetizing the data. And by the way… the voice coming from the little box at the drive through window may not even be coming from the building, maybe it’s even coming from another country.
Artificial intelligence (AI) will replace a lot of jobs! If you’re in middle management paid to shuffle paper around all day, (AI) will replace all of that. The Chase banks that we use when in Southern California are 100% teller free… it’s the way all banks will be very soon and it’s very efficient! While this will end most teller positions it will also open other opportunities within the banking industry.
The McKenzie Study indicates that half of all middle management jobs will be gone by 2030. Just like 3D printing is about to replace 320 million manufacturing jobs globally over the next 5 years. The self driving cars we were talking about… well, tens of millions truck drivers will be losing their jobs and it will totally revolutionize agriculture as we know it.
Yes, maybe there will be many more other driving jobs because of companies like Uber. Now that Uber has completely disrupted and altered the taxi industry… but wait! The little black Uber car won’t need a driver behind the wheel either! That’s right.
Sellers Have Plenty of Choices
So, all of this is either going to be the worst time for many people or the best time for others because of all the new businesses that will be created but, the choice is up to us as individuals, a real estate industry disruption as well as the financial industry is chopping away at many careers and many are completely oblivious.
We will watch the mighty fall because, they’re not paying attention.
Remember the “Kodak Effect?” Kodak did not pay attention either and they were offered the opportunity when digital was just a small bud but they laughed and chose to remain as they were.
In many ways both companies and or individuals are choosing to sit with their heads in the sand, ignoring and pretending that digital transformation is not happening and hoping that it will all settle down and go away.
Rather than blame technology for the changes that are rapidly taking place in the real estate industry or maybe even become enraged when you read an article like this (hey, I’m just the messenger) think of the opportunity that is available in the real estate industry for agents.
We Can Choose to Benefit from It or Suffer from It
I tend to look at these changes in a more positive light, rather than focusing on an industry that is ripe for disruption such as the Real Estate industry, I see an industry that is ripe for evolution! I think we’re in an age where we need to take a lot more responsibility for our futures.
Instead of just growing a business by 10% we need to thinking in terms of 10x a business or maybe beginning a whole new type or additional business in conjunction to whatever we do now. Lots of people are doing just that.
We have all heard Albert Einstein’s theory of insanity is doing the same thing repeatedly and expecting different results. Despite our knowing this, why are Real Estate agents and Real Estate companies continuing to rely on legacy processes, marketing and a business model that is no longer relevant in this new digital age or serving their client in the best way possible.
While some want to build walls, and hide – technology is rapidly tearing the walls down.
How Was the Real Estate
Sales Commission Structure Established Anyway?
As we see less fees and less commissions in so many other industries the same thing is happening, like it or not in the real estate industry. The real estate commission structure was originally based in time when things were much different and property prices were much lower so that the value exchange of real estate commissions of 6% or 7% made sense… now a-days we can have the whole process automated because everyone has access to the data rather than just the industry professionals.
It’s not any different than when you went through a travel agent, at one time they were the only ones that had access to the Sabre System with sole access to the flights and travel information… now, just about every human being on earth knows how to do that!
Why would anyone think that the Real Estate industry will not be affected by changes in technology? So, let’s break down how the real Estate industry is going to get squeezed… here’s a great example.
Every company that you can name has employees, right? And the way they got hired was they met with HR maybe and they were interviewed, they may have met with other people as well during the hiring process and did whatever else was required to get themselves hired.
There was maybe even a bunch of paperwork back and forth, they meet their supervisor and finally they work for the company. That kind of describes how most people are hired or get a job.
The Other Elephant in the Room
Now let’s describe Uber… Uber has well over one million drivers who have never met anyone from the company! They have never been interviewed by phone or anyone from Uber, they report to a piece of software everyday!
Uber could fall over in a San Francisco earthquake but a million part-time Uber drivers would still show up and still get paid… it’s all completely automated!
So, let me ask you this… if someone can do something as complex as completely transforming transportation online, picking up millions of people worldwide and taking them from point A to point B along with keeping over 1,000,000 part-time drivers scheduled.
If this is possible then why would anyone have the hubris to believe that there’s something special and unique about being a human real estate agent?
I do not intend this to be an insult… but it’s a fact! Based on the data that has been collected… a seller’s home is the most significant financial transaction that most people will ever make, just as driving a car is one of the most dangerous things that people will ever do. 1.25 million people a year die in car accidents globally, autonomous vehicles will reduce that… it will be safer.
Having equal access to big data among all financial institutions in a seamless manner suddenly creates very simple transactions process for both mortgagee and mortgagor, whoever can get ahead of that data can figure out where else to monetize it too… just like Google, just like Apple or anyone else who figures all this out.
It’s Easy to Monetize and
Create New Markets Around Big Data
The jury is not out yet on this model but let’s assume it’s going to work, you might be asking how long it will be before a real estate agent might be forced to make fifty dollars for each house they show or take twenty thousand dollars a year salary rather than say the current hundred thousand dollars a year that they may be making now?
What I do know is that after the 2008 worldwide recession a high percentage of mortgage brokers that left the industry did not return… I don’t know the exact number but if I had to make a guess, I would say that 50% of the mortgage brokers did not return to the industry – that might be on the conservative side.
So, let’s deconstruct what happened to the mortgage industry… there was a seismic change to the market and what came back out of it was a far more efficient way of doing business in the mortgage industry and the older more manual method could no longer support as many people as it had prior to the great recession.
If you keep up with the trends in financing, you’ll know about all the buzz centered around financial technology also known as Financial Technology (FinTech) companies. FinTech companies have completely use the power of the internet to disrupt the financial industry.
They’re massively lowering costs by cutting out all the middlemen, it’s a much better deal for the consumer and everything that can be digitized will be in the very near future!
There Are So Many Other Examples…
Amazon pretty much wiped out Barnes and Noble and many others along the way but now Amazon plans to open over a 150 pop-up stores across the USA, they’ve already constructed several pilot projects and there will be one hundred more physical Amazon pop-up stores in 2017.
This is a brilliant way for Amazon the drive more traffic to it’s website, it’s all about expanding their data. We will freely give out information by using the Amazon devices set up around the stores for people to order online from the physical store. I think we will also see many big box stores adopt this model shortly too… it will greatly reduce overhead and increase profits.
But, there’s a human factor that can’t be mechanized out of this in the real estate industry… not yet. Until virtual reality completely takes over, there will still be someone of trust needed to have possession of a key to someone’s home to walk potential purchasers through the property. Sometimes a strong negotiator is required, an agent will this skill will still be of value in the industry.
That does not mean the person showing the home is going to be paid a commission at the same level that they are today… not at all! In fact, they may not necessarily be a commission paid person but, someone who is contracted as person who simply shows homes.
A for Sale by Owner seller will have the same access to contract this service if they so choose to keep all showings and contact arms length… a more level playing field as a seller can easily hire an independent listing coordinator and agree to pay $30 to $50 a showing.
Could we still have different levels of service? Maybe someone still wants full service and wants to pay a full commission to a real estate agent. Will this option will still be available? Absolutely! But, let’s use the socialized Canadian healthcare system as a comparison.
Most Canadians use the publicly funded health care system. Does that mean there are not private options available for people to use? Of course, there are private services but they’re not used by the mass market which limits the size of private care market substantially.
How much smaller is the private health care system than the public system? It’s a much smaller market. Apply this model to the real estate industry and you will see a radically changed industry there as well. Most real estate agents will not be making the same income as they are making today… even 5 years from now, in fact most will no longer be needed.
Remember the Good-Ole-Days?
But there is the flip-side to this too, the adapters could thrive! There is always a flip-side, it’s not all doom and gloom either, in fact it’s exciting! No matter how much we stare back at the past – we always say, “remember, the good days when everyone was happy?” Well, that was not the reality.
Things have and always will continue to change in the name of progress. The difference now is the speed of change is exponential!
There is a very long list of companies of the past who failed because they did not adapt to change as a real estate agent, a team leader of others who depend on you or a broker/office, why would you want to follow a similar path?
As baseball, great Satchel Paige would say, “It’s OK to look back… just don’t stare!” They say you can’t, “teach an old dog new tricks.” The good news is, we aren’t dogs!
We are humans who have the infinite ability to adapt!
How Do We Stand Out from the Six Billion?
But this is not at all bad news, unless you decide to not look at the world through different lenses. Sure, maybe most real estate agents will be making significantly less money 5 years from now but some will also have figured out how to make significantly more!
Why does a real estate agent solely have to make their money out of the transaction?
What’s the big data play for an agent? Where’s the value added? What is the upside? Where’s the value that is going to be unleashed by theses changes and how can that be captured today? This is what disruption is all about. This can be a time of great prosper or a time of being forced into extinction.
Want to Change the World?
It Begins With Changing Ourselves!
If you are fighting these changes as most in the real estate industry are, try not to look at your real estate profession as the way it has always been.
Instead see what technology allows us to do! I remember Wayne Gretsky’s great quote, “I never go to where the puck is, I go to where the puck is going to be!”
A lot of agents feel that somehow, they “are a marketplace within themselves” and that the law will protect that marketplace, even though laws often trail technology by 20 years, the laws are balancing and catching up rapidly.
Taxi drivers feel the exactly same way about Uber… in every city they point out that Uber drivers have a driver’s license but not a taxi license and they do all that they can to prevent Uber from entering a city.
The courts are striking down anti-competitive consumer herding laws one-by-one.
Remember, laws were not given to us by God and carved in stone, they were passed by humans who were lobbied by special interests to pass those laws, so when new special interests have more capital, the old ones aren’t so special anymore. That’s just a fact!
No One Leads a Nation by Following the
Path of Someone Else…
Alibaba is the largest retailer in the world, today November 17th, 2017 they posted 17.8 billion dollars in sales in just 24 hours, they don’t even own any inventory! Think about that for just a moment, this took place today in a 24-hour period with one online company that began with zero capital, the vision of a single man in a country where few people even had internet at the time!
Uber does not own any cars, Airbnb puts more people in beds at night than any of the largest hotel chains and they don’t own a single hotel. Facebook is the largest media company in the world and yet it does not produce any content – just profits! Do you see a pattern here? It’s all leveraging big data.
Spectators Don’t Play… They Sit in the Bleachers
Firstly, this is not the time to be laying under our beds in a fetal position, sucking our thumbs while listening to Dr. Phil or the CNN. Job loss and financial fear can be debilitating. Please don’t get me wrong; I can be just as delusional as the next person.
We’ve all heard the famous saying, “ignorance is bliss,” I don’t agree – in fact nothing could be further from the truth. Ignorance is not bliss; I believe that ignorance creates a lot of fear, especially fear of the unknown.
When the dinosaurs perished the much smaller animal kingdom could finally thrive. Perhaps we can compare today’s large corporations and industries in many ways to the perishing of the dinosaurs – leaving small business people and entrepreneurs with huge opportunities to move forward and thrive.
Even Jobs are Rapidly Becoming Performance Based
The business world has changed drastically. The entire world is shifting to a performance-based economy. While China and India have spent the last 20-year educating themselves most of North America has spent the last 20 years complaining and entertaining ourselves to death.
What’s a performance-based economy? Well, let’s say someone cleans hotel rooms… they’ll no longer be paid by the hour, but instead by the room. Workers are going to be paid on a per unit, performance-based system throughout the entire world.
We won’t be paid by the week, the month or by the year anymore. If you’re accustom to earning $50,000 a year – you may be taken down to $12,000 and they’ll let you earn back the other $38,000 if you hit your performance benchmarks on a weekly or monthly basis.
If not, you don’t get the $50,000 back again, simple, and fair for the most part, it will all be based on performance
“He Who Owns the Gold Makes the Rules!”
It’s a time of great opportunity, while most people become paralyzed by fear, getting their 11 o’clock dose of news before bed while others are working hard to grown and adapt! No matter what industry you’re in there is opportunity but we need to put the blinders on and get to work.
Most of us assume that business people are far more tech savvy than they really are. Most real estate agents are so far behind when it comes to technology making it a huge opportunity for those who are not, the real estate industry disruption will see many agents scramble to cover costs to operate… they will not survive.
If you have a home on the market, ask your real estate agent how they are going to promote your open house this weekend and they will usually tell you with lots of directional signs and maybe they will shell out a few dollars to put an ad in the newspaper, often this is the extent of the marketing.
People don’t drive around like they used to look at houses randomly and obviously, the internet has grown so much that people just don’t go out and see open houses without doing their homework on the internet ahead of time.
No Longer Hiding Behind the Donuts
Sitting around the office on floor-day at one time kept the low to average producers afloat but, that doesn’t work anymore, purchasers are not walking through the office door inquiring about property listings very often, they’re researching everything online.
In fact, as many offices are going completely virtual, the day of the office door may become outdated… an old idea.
It’s also a fact that many of today’s real estate agents now spend less money on marketing and sell more homes than they ever have in the past because of technology and social platforms.
The real estate industry is a dinosaur of an industry, in many ways it hasn’t changed much at all in the last 20 – 30 years… certainly nothing compared to technology. In fact, many agents are still using newspaper or maybe direct mail exclusively to market their client’s properties.
Some agents don’t want to hear about marketing with technology – they just don’t want to hear it, even though their clients are asking and clearly noticing it.
There’s always the early adopters of every industry… usually it’s the producers that will begin to adopt new ideas and technology at an early stage. They recognize that things are changing and the need to adjust, they don’t always know where things are going but little by little they change, adapt, and thrive
Something the real estate industry needs to do is to learn how to not be a salesperson online when engaging in social media but rather connect with their database, their friends, family, and network in a much different way.
Having to learn how to create videos and virtual tours is just the beginning for today’s Real Estate agent. Even now you’ll still hear an agent say that videos do not sell houses… still convinced that the market sells houses, telling their clients that if they put their house on MLS will cause it to sell. Thankfully a much smaller percentage of real estate agents will agree with this today
Sellers are Challenging the Real Estate Industry
How pathetic of an industry are we if we are simply saying that all we need to do is put a home on MLS to sell, but let’s put our hands out and expect a full commission! This is one of the biggest issues that sellers have with the real estate industry. If that is all a seller needs to do, then why do they need a real estate agent at all?
Many vendors are now challenging the industry asking how the industry can just sit there and justify the money they are asking if they’re not prepared to go above-and-beyond their current practices by sharing more information about their listings, by paying more attention to these details as increasingly people, both vendors and sellers are turning to the internet for their real estate needs.
I recently had one agent tell me that he has been in the business even before I was born. He said in 1976 I did not need to sell a home on the internet… People laugh when I tell the story and it wasn’t a joke, he was dead serious. I would’ve loved to see what this old-timer’s business really looks like, he may still be using @hotmail too!
It’s Change or Die!
But, this old thinking is today’s reality, this has been the mentality of the industry for a long time. They don’t feel they need the Internet, they often don’t understand it and even if they do understand the value, they don’t engage in marketing online because they either don’t have the time to figure it out or the money to make it happen for their clients.
Our Bank Accounts…
Generally Follow Our Personal Development
So now, let’s fast forward and look at the early adopters… we’ve seen their businesses grow tremendously because they were the ones to take it upon themselves to leverage videos and show-case the inside of a home to establish more of an emotional connection with a prospective buyer.
These same agents are the ones who are now promoting their open houses and getting more possible buyers to their open houses with social media marketing by harnessing the power of geo-targeting and pixel technology.
In a normal market an adapted real estate agent can go into a listing appointment and easily show through the MLS data that when they list a home their list to sell ratio is far higher than the average real estate agent with the days on market far less than the average agent.
In fact, by the time they hold their first open house on the week-end after signing a listing agreement it’s very possible that they could be ready to submit multiple offers by Wednesday because they did their job the right way!
Most Agents are No Longer Relevant in the Marketplace
Fortunately, we seldom have the challenge of people arguing about this anymore, the majority agree they need to be doing much more for their clients… they know they need digital technology to remain relevant in today’s ever-changing market. They just may not know what it is they need or how to begin.
Not only is it important to stay relevant in today’s market but it important to standout from the 4 or 5 other agents when competing for a listing or even to simply take a listing and not just bring better marketing to it but, to use it as a marketing billboard so that the one listing can turn into two or more listings because listings are the real opportunity in real estate in the real estate industry.
The agents who sell homes make a living, those who regularly list the properties make the fortunes. Why? Because the selling agents basically bottom feed and work for the more skilled listing agents who can effectively secure the listings. That’s been the case since the beginning of time, it’s not a news flash in the industry!
Not only should an agent be able to show that they are leveraging the mediums but people would know who they are if they were! If they are competing against an average agent, they only present what they have done for others and what they are going to do for the client they are now presenting to along with the benefits to them.
The game would be over for any other competing agents, it makes it very difficult for other real estate agents to compete with that.
The Real Question Agents Need to Ask…
For many agents, it will become “Do or Die” but they may not realize it yet… if they hope to survive in the industry what they need to ask themselves is, “Do I want to be an online social media expert or do I want to be an expert Real Estate agent?”
If I were an agent, I would focus on being an expert real estate agent by focusing on brilliant listing presentations, buyer presentations, contract negotiations and outsource the technology and let the marketing pros do what they do best.
I think another valuable component that some agents may be missing is branding. It’s not just a fact that they need to be branding their listings to sell them quickly at maybe even a higher price but they need to be branding themselves.
What Does a Seller Need to Know?
Most people may now know that 72% of sellers only interview one agent to list their home and that’s because home sellers are going online and doing all their due-diligence ahead of time. Vendors want to know, “Who Has the Presence Out There?”
Although the majority are still using an agent to list their property sellers are heavily supplementing their research with the internet.
A vendor does not want to waste their time interviewing 3 real estate agents and sitting through 3 of the same 50-year old wash, rinse, and repeat listing presentations. What the point?
A seller wants to know how an agent is going to represent and market their property in a way that is best for the seller, not in a way that is best for the agent. All the rest of the trivial minutia does not matter.
Operating from an Empty Wagon
If a seller is going to interview agents, then they will have 2 or 3 that they have researched online.
Vendors are obviously far more informed and en-tuned than ever before… they are not only questioning the commissions that they are paying a real estate agents but they want to know exactly what is going to be done to market their property.
If an agent cannot present a strategic digital plan, then they really are operating from an empty wagon.
The Bar Has Been Raised
When asked to be involved in an interview process between a vendor and an agent I generally request the social media strategy up front, if an agent does not have one in place then there’s typically no point in even inviting them to the party.
This is about representing a seller in the very best way possible, it’s no longer about an irrelevant agent who lack systems and marketing abilities in their business.
If you’re interviewing agents don’t sell yourself short, if you are expected to pay full commission then have a right to top notch relevant full service which is congruent with the world that we live in today!
Experience or years in the business is not as important anymore although still valuable and needs to be respected for what it is… but they may not compete well either without at least social media marketing strategy in place.
Clinton had far more experience than Trump in the political arena but look who won! Trump was under-funded but was armed with a brilliant social media marketing team that almost cost nothing for marketing!
Clinton did not…
An agent who remains deeply entrenched in newspaper ad, bus benches, billboards and cold calls will find that many buyers just don’t speak that language. They will soon find it impossible to justifying a full commission in today’s market and it’s going to get a lot more difficult over the next few years.
Price is What You Pay – Value is What You Get
So, when a seller asks, “Why would I pay this high commission, when I can pay this other guy over here 2%?” An expert Real Estate agent is prepared and will be able to show that marketing matters!
Do you think most people want to sell their home quickly and would they like to net the highest possible dollar? Obviously, this is what most people want and it can only happen when there’s a proper pool of potential buyers for a listing to feed from.
I would not be afraid to compete against any “Big Name” in the industry because I know exactly what I would do to represent the home seller in the very best possible way. It’s so easy to shine the light on inadequacy and very big problem in the industry as it functions today. Those who do this well will not need to compete – they can easily dominate the real estate industry.
Let’s Just Be Real with People
I know there are companies and agents out there who love to be applauded for saying, “If you list with me I’ll also expose your property by listing it on one hundred different websites.” Well, in my opinion that’s like saying, “Hey… when you buy a car from your local KIA dealership they’re going to put a steering wheel on it for you!”
That’s not an agent who’s make the 100-site listing replication thing happen that’s an employee of the MLS office making that happen… you know how difficult that is? Let me show you… all you need to do, is this… CLICK – It’s done! I work with data all day long… that one is getting old and data replication should not impress anyone anymore.
That’s also like agents who are taking photos with their smartphones… they want to sell a half a million-dollar home but they don’t want to invest a few dollars having professional photos done that will represent the property in the best way possible.
Sellers are noticing and agents are being called out and they’re not getting the call backs from the sellers either.
And… let’s talk about the video, the agent tells the seller they are going to create a video for their property, that’s great!
But, a video without a structured distribution plan is virtually worthless! What purpose is a video if no one is going to see it? At some point, marketing common sense really needs to prevail.
This may sound like an aggressive approach – but it’s not, if we look at this dinosaur of an industry through the eyes of a seller, the human being paying the big dollars to have their property marketed through a professional real estate agent!
Why should they possibly expect anything less than the best when it comes to choosing the person who’s going to represent the sale of their most important and valuable-asset in many cases?
Improve Your Online Image
Most agents need to consider is looking much better online. The great majority of sellers are going to Google an agent… whether it’s a personal referral, a door hanger, door knocking, cold calling, calling FSBOs or whatever it is, they’re going to check you out.
How easy is it to find you? Remember, the best place to hide a dead body is on the second page of Google! What is your value proposition… is it being delivered in a very clear and concise way to your prospective client?
As an agent who has people Googling you, wouldn’t it be nice if a potential client was impressed enough with what they see online to pick the phone and give you a call? Of course, it’s possible!
Help People Learn More About You…
If I was currently an agent, I would at least have a personal video on my site… just an intro video. If you’re not comfortable on camera there are other ways to build out a short video.
The purpose is to be able to deliver your value proposition, it covers the years of experience, how you genuinely enjoy your business etc. It’s not necessary to go all the way back to the womb with details about your life but a lot of relevant information can be captured in a short video.
This can be super effective, once you have a good video it’s something that should be shared with every client you meet at an open house or if you’re door knocking and even if you have sparked their attention even a little, send over your video.
Most agents understand the importance of running an automated email funnel system, as soon as someone enter the system the video should be going out to connect with your new prospects! And it should be on all automated thank you pages too!
If you are not automated with a good CRM system… WHY not? If your system can be automated it should be!
How Responsive is Your Website?
Websites can reflect our businesses – all business websites need to be mobile responsive. Many are not. Most real estate agent sites can be enhanced with a few updates, some are free sites provided by a company and perhaps there are not any editing features available, even if you are paying for it… a site of this nature is cheap fix for nothing!
The next step, others are purchased sites but often just a cookie cutter template system with hopefully some excellent and always updated content along with a webmaster involved. I see many agent sites are trying to force people to opt-in for listing information now.
I think that’s a great way to turn people off. How do you feel when you are forced? If you have nothing of value to offer causing visitors to want to engage then what’s the point? My point is this… learn to give a lot before you expect to take, for some I know this is an novel idea.
Forcing people for their name and email address in exchange for listing information is a very poor tactic, people know what you are doing and many find it offensive. Your website offers little value if that is what you are doing to your visitors.
I do speak and teach on this topic so I can’t spend a lot of time on it here but always happy to help with questions, feel free to contact me.
I would add two important videos to an agent’s site, one to the home page and one to the about page as well as making sure the social media accounts all have a branded continuity across the board. Looking professional online helps with conversions and people notice!
Facebook and the KIA Steering Wheel Story
Agents tell a seller at a listing appointment that they’ll also promote their listing on Facebook or social media.
When a seller asks you what you’ll do differently for their listing that others are not, please don’t embarrass yourself by telling them that you’re on Facebook! What does that mean? Everyone’s grandmother is also on Facebook!
Those words don’t really mean much, they may even make a real estate agent seem foolish, especially if a seller does visit an agent’s Facebook page and see the status of a page that’s rarely updated at best, again it may be of little value.
If I was a seller an agent’s Facebook page would tell me the real story about an agent and their ability to represent my property
An Eagle or a Duck?
Show exactly what you’re made of, show how you’ll market your seller’s property on Facebook or maybe another chosen channel. Explain the details, show your numbers, I would even have a simple presentation video produced to easily explain your marketing system.
If you do it right, you’ll blow your competition out of the water, and it’s just not that difficult to do!
Quit competing at the level of your competition, decide to soar like an eagle… ducks no longer make great real estate agents! This is what your seller deserves and needs!
But, be sure that you can perform, don’t be a “Big Hat No Cattle” type of agent. A lot of Real Agents depend on a social media assistant or VA, but how effective are they? Often these self-induced social media titles don’t have a lot of marketing skills behind them.
What EXACTLY are they doing for your sellers? An agent contacted me the other day suggesting that her post “LIKES” were very important and they work hard to increase them daily! “LIKES” are not very important in my world, I did point out that “LIKES” do not sell properties.
It’s Not for the Love of “LIKES”
That’s the problem with so many these days, we’re more concerned with being “LIKED” than doing an amazing job for our clients!
Facebook “LIKES” are why the masses are addicted to social media… but they have nothing to do with marketing and “LIKES” are not where the money is either! “LIKES” may give some agents a warm and fuzzy feeling… so while they’re spinning their wheels on “LIKES” and silly posts, the seasoned early adapters are crushing it the right way.
It’s difficult to overstate and summarize the role that Facebook played in the Trump campaign. This next few words have nothing to do with how anyone feels about Trump or the elections results but, the truth is this… the republican campaign was underfunded throughout, it was Trump’s son in-law who eventually tipped the states that swung the election with social media. It was done in a manner that will change how future elections will be won and lost.
And it wasn’t Trump’s itchy Twitter finger that did it either… although they did lean on traditional media it was the unprecedented use of Facebook that eventually won the 2016 American election.
Trump and his team borrowed from the President Obama playbook 8 years’ prior… do you remember, he also had unprecedented success?
Obama, pretty much a complete unknown at the time, wisely harnessed the power of social media with all that it was in that era… he crushed it, leaving Clinton in his dust! A lot has changed since then – specifically with social media.
We Are Only Limited by Our
Personal Ability to Think and Create
Whether you’re an agent or for Sale by Owner who’s holding an open house in any area, we can literally ping the smartphones of Facebook accounts users who come anywhere within a predetermined radius of the Open House property, this all takes place during the hours of the Open House.
Facebook is tracking absolutely everything, have you ever used Facebook to log into another account… like a baby registry or something?
Many people use their Facebook account to log into other accounts because they don’t want to remember another password. It’s all being tracked and it’s all going into big data.
A lot of agents are on Facebook and many are creating awesome videos that often includes drone footage, these videos can be emotionally powerful for a buyer and a seller.
But, that’s just not good enough, property listings video need to have a targeted marketing strategy attached to them.
There’s a mindset to social media for it to work effectively and not be annoying. I have a video running on Facebook right now, in two days we’ve literally had 5300 video views of a home in a relatively small population. A log home located on Vancouver Island… MLS is just not to do this!
What About Local Businesses?
I often speak on local businesses and their growing marketing dilemmas… this information is valuable for local businesses as well, even life changing when done properly.
Many businesses are struggling to gain a greater market share, most of them are not on page #1 of Google or in even in the Google map packs!
Can you imagine owning a local business and having a website that’s not ranking as one of the top 3 listings on Google and top in the maps when local people search the locally for a business?
Search engines are almost humanized… they see through the eyes of their searchers, it’s more important that their advertisers. This is another reason I teach that “Relevant Content Rules!”
What does that mean? That means when the competition is winning someone else is losing and is leaving a LOT of money on the table… in fact the business may be struggling or unhealthy.
Situations like this can often be turned around fast and easily… I would never compete with competition online, it’s important to remain dominate… it’s not difficult to take over market share for almost any business.
What Are You Doing with Your Seller’s Marketing Dollars?
Social networks are an opportunity for all professionals and all businesses. Are you still putting your marketing budget into print ads?
Let me ask you, “when was the last time you seen someone in the passenger seat of a car driving by reading a newspaper?”
It might be effective for a few but I’ve not heard that it is from any agent in a long time. Your community is not networking on the local newspapers… learn to connect with your community where they are.
I know, someone will always say… but my grandfather still read the local real estate listing paper. We do not need to argue from either side of extremes, of course some do but the masses do not.
Many local real estate publications are struggling, what some are now doing is giving the top producer in an area a heavily discounted price. Why you ask?
Because if they can keep the top producer advertising in their papers then it will keep the local herd paying to advertise their listings.
If they don’t keep the top producer of an area in the paper what do you think will happen? Sometimes it’s all about perception.
A few real estate agents have mentioned that they’re still running real estate listing ads in the paper because it makes their “sellers happy.
” Now listen, I’m not here to shake up anyone’s Slurpee machine but, if you really believe that you’re advertising just to “massage your vendor’s ego” then I would sincerely think twice about renewing my real estate license next year.
There’s no point in throwing good money after bad.
There are plenty of ways to make your “seller happy” without using valuable marketing dollars to do so, this money should be working for your seller’s property.
Real Estate Industry Disruption
“The Culling of the Herd”
Humanize your brands and your businesses more efficiently, there are so many mediums and opportunities to do so. All businesses have their processes and their marketing… most businesses are not healthy because they have very ineffective marketing strategies, some have nothing in place!
What’s about to take place in the real estate industry will be “The Great Culling of the Herd.”
This always occurs in a downward market anyway. People with real estate for sale want value! Without these strategies in place sellers are now asking how they too can have their properties represented in a better way?
It’s an interesting question especially if their agent is not willing to do more. I’ve been on the seller’s side several times, planning and preparing a property for sale and open houses takes a lot of effort and often to only have a few people show up… yes, there is a much better way.
When in California I see, the industry is facing many noticeable changes. The next couple of years will be very interesting for the both the American and Canadian Real Estate industry.
Let’s Look at Our Own Habits
When we think of radio… who still listens to the local radio station? At one time, a business may have spent $50,000 a month on radio ads but now most people have tuned into Pandora, Spotify, or even selected podcasts on Bluetooth.
If you are still running paper or radio ads, how are you tracking your results?
And… what about TV, what do we tend to do when a commercial comes on? People tend to grab their devices or in many cases they record their favorite shows and fast forward through all the commercials!
So, that’s where Facebook, other social networks, digital media, and video creates such an amazing opportunity because we can meet people where they are at. There’s other avenues other than Facebook such as Instagram, Snap-chat, etc.
It’s best to figure out your demographics and target you market where they are rather than throw money at everything, I also advise most to find an expert to put ad campaigns together.
When I first began a couple of years ago, with Facebook I lost a couple thousand dollars overnight and had 2 accounts shut down, you need to know how to set up your ads!
It can be extremely effective and I think it’s much less costly that many other forms of advertising that does not have near the upside. There are plenty of long-tail benefits that I can’t explain here but again, if you have any questions please contact me.
I’ve seen some massive results with Facebook for both REALTOR®, for Sale by Owners and all kinds of other businesses. I’ve never seen any other type of marketing more effective for homes for sale than I’ve seen with Facebook if it’s done properly.
There’s the added element of Google ads and Google re-targeting… not just one of the best opportunities to get your message out but a great way to convert that traffic to actual names and numbers.
Why is the Digital World Such a Struggle?
Know where your market is at and where they are looking… this will help you to know where to focus your ad spend. Business schools are still teaching a lot of philosophy, there’s little focus on digital media and that is why it’s still a challenge for most people, it’s still so new that most people are still trying to figure out, but that’s where lies the opportunity!
I’m 55 years old with an extensive real estate background, I no longer work in the industry as a licensed Realtor®. I began to study and adapt to digital technology over 15 years ago, age should not be an excuse for anyone, if we choose to remain operating in an analogue world I cannot see how an agent or any business can survive for long.
Those who don’t are rapidly finding themselves in the marketing dark ages… it’s becoming apparent. The gap is growing by the day!
Change requires that we no longer “cling to the old” but instead move towards the new. Thinking in a new way can require a lot of mental energy, so we often cling back to the old ways; it’s just much easier and natural to want to claw back.
Learn to Master Change – Or It Will Master You!
An agent is paid to market properties… it only makes sense that the more eyeballs you can put on a listing the better chance your seller has of not only a quicker sale but it’s very possible that the seller could net a higher dollar.
If I was put in the position of representing a seller, I would be uncomfortable with agents who do not have a solid online marketing strategy intact for all listings.
With pixel technology, the demographics we can now blow-down are unlimited. If you hire an expert to do this, you’ll find it’s inexpensive with great results… your seller will be telling everyone about you and what you are doing for them! This could easily take your business to new heights.
When we hear, people talk about the extinction of the real estate agent, I feel that’s a little extreme, I don’t see the good agents who adapt going away at all but, I do see a lot of other agents and their businesses going away regardless of experience. If agents choose not to adapt… without question.
Who’s going to want to work with them? Who’s going to be able to keep them? And who is going to want to list with them? Who’s going to find them or their virtual office?
It’s a costly profession with plenty of office overhead, a lot of the dead-wood and expenses will need to be trimmed as commissions will also be reduced.
What trends do I see eventually happening in the real estate industry? Well, it’s just an opinion but I think the industry as-a-whole needs to do a much better job of delivering much more value to their sellers, that’s the bottom-line.
A seller does not care how much of a superstar you think you are, your shingle on the wall means nothing, they want to know they can trust their agent.
Is there a problem with having as many licensed agents as we do? The problem, many people feel a lot of agents do a half-ass job at best when it comes to serving their buyers and sellers and yet, they still expect to be paid a full commission.
I had a very successful agent take both our time to educate me on the value of real estate agents.
I also believe in the value of a GREAT agent but if the industry was loaded with GREAT agents, then there would be little need for almost 100% of part-timers who often don’t do a very good job, and there are so many of them that they cream the market.
A seller or a buyer is not an experiment. My guess… the number of agents could easily be half the number we have today.
So… what would we have? We would have a greatly scaled down industry, it would be a well-paid profession with sellers who would be much happier and better represented with real estate agents who have strong negotiation skills with an exceptional understanding of contract law and a solid marketing team behind them. It’s all coming.
Real Estate Industry Disruption
How it Will Affect Real Estate Agents
Where agents are going to be affected the most is by way of their commissions as-a-whole and there’s no way around it.
There are certain markets now known as the 4% markets… even the largest real estate franchises and brands, despite of their costs and everything that they must pay, have their agents walking into a listing presentation with a 4% contract in hand, it’s starting to become the norm.
Perhaps it will become a big issue, as more real estate sales tools and online real estate marketing systems become available to sellers, vendors are quickly learning they have other options when it comes to selling their properties.
Here’s a great example, recently I called a for Sale by Owner whose property was being self promoted on Facebook, it was hard to not be impressed!
I followed the link to a beautifully laid out page displaying the property for sale. She had a professional video with drone views of the property along with beautiful images on the page.
The owner had also created a beautifully written description of her property, not a description that was carelessly copied and pasted from ½ a dozen other prior regurgitated real estate listings for the same property, it was so well done and it was all original content!
I asked the vendor if she had a background in marketing, because the reality was her listing looked so much better than what most real estate agents ever do.
That’s a sad reality for the real estate industry, not only is she marketing her property online very effectively and even holding her own open house but she said she was getting a ton of calls and interest.
I said, “I bet most of the call are from Realtors.” She agreed, “Yes, lots are agents calling and I’m happy to negotiate a selling commission if one of them happen to bring me an acceptable offer.”
This homeowner was a smart cookie… she said, “why would I sign a listing contract when I can have any one of them show my home and bring an offer and still pay less than half the commission that I was quoted?”
“But”, she said, “several other people are actually already interested in my property and it looks like someone is already preparing an offer to purchase my property.”
I think that’s a little scary for the real estate industry because everyone now has access to the same information and sellers are becoming much more comfortable with selling their own homes because they are so connected to their devices!
More people are online, creating their own videos and posting – all they’re doing is becoming much more comfortable with technology. So, as companies offer many more resources and tools I believe you will have a lot of sellers happy to utilize them.
The more this happens the more sellers will question, “why they would pay a real estate agent” and those who do hire an are now getting better a qualifying an agent before committing to a listing contract.
You know how an agent qualifies their purchasers… now sellers are qualifying the agents!
Again, I know it’s a sad reality but if I were to interview 6-8 real estate agent most of them would give me some sort of BS listing presentation response that will sound just like any other agent from any other company with the same cookie cutter looking websites and expect to be paid a full commission!
Sales Skills Will Rule…
I believe that sales skills are going to be needed more than ever along with great marketing and great service, a seller wants it all!
People are still very willing to pay for an agent to handle their needs but when you have an agent who is not responsive, or they hold an open house and they don’t have many people to attend, they don’t produce a video, there’s little marketing other than the local paper and MLS… this is generally not considered an amazing job.
This is where I see the entire industry being hurt, more than ever.
We will not only see the industry hurt as this poor service is now a reflection of the entire industry but agents will see their individual businesses hurting more than ever as well.
Consumers are so much wiser, it’s almost 2017 and the sellers are only going to get access to more tools and information!
It’s already very noticeable when people show up at an open house… buyers have all the information they need about a property in hand, they’ve come prepared! Potential buyers are asking educated questions and I think this intimidates a lot of agents, many of them don’t necessarily know how to respond.
I know that there are a lot of great office owners and brokers out there who are helping their agents but I also know that there are a lot of offices where if an agent stays where they are, it’s going to be difficult for them to make the transition from today’s business to tomorrow’s.
The real estate industry has changed more over the last 5 years than during the previous 20 years when it comes to buying and selling real estate and it’s primarily because of consumer behavior.
If you’re a real estate agent and are uncomfortable with what I am saying, then let’s try taking this to a more personal level.
If you’re spending money going out for a dinner, and then perhaps go for a movie, you’re not going to want to accept an OK dinner and an OK movie, are you? You want and expect greatness and you’re pissed-off if you don’t get greatness!
Well, if you’re not focused on becoming great in your business the marketplace is going to punish you. With the technology that exists today agents need to focus on doing far more volume to combat lower commissions – if they do go down (which they will.)
It’s going to be the regular agent who will not adapt to the new world who’s going to be screwed. Fortunately, the average age of today’s real estate agent is 57-years-old and many will be seeking retirement anyway.
Real Estate Industry Disruption Means Opportunity!
The more technology is out there, the more ubiquitous, the more the human dimension matters. Technology doesn’t innovate, yet… people do. Technology isn’t disrupting any industry, people are. Technology is enabling and amplifying the potential of people and our potential is far greater than ever before.
It’s really a function of two things… what you know and what you are connected to. Today we all have access to endless sources of information. We have a tremendous mindset gap between the world that we operate in and the potential of people and technology to do great things.
Organizations and industries do not change… people do, change is human. Change is hard and we can’t change unless we confront out fears. It’s undeniable… it’s there. But we do little to manage fear, to confront and even help one another through it.
Fear is not always a bad thing… it can be a good thing it can help us through life. Many of us who were born into an analogue world, when hired for a job then we were likely hired for our arms and our legs, we were expected to do what we were told.
Generally, we were not hired as innovators, collaborators, or creators in the workforce but now that is exactly what we’re told we need to do and it’s a challenge for many.
We have a dominate mindset which is a product of the industrial age past and we need to shift it. Many companies are gone because of their unwillingness to change.
Often our knowledge, successes and degrees get in the way of our being open you may of hear of it coined as “with blinders on.” We may do better to become a “learn it all” rather than a “know it all.” It may even require us to let go of what has led us to where we are today.
Knowing our purpose is not something we often visit, it’s important not only to ourselves but to those who are closest to us, how do we add value to others? We are creatures of habit, how often do examine why we do what we do?
In today’s rapidly evolving world we need to be constantly asking this and if what we’re doing is no longer relevant for those or rely on us and for those who we serve then we need decide if we are ready to act and consider some major changes?
This article on Real Estate Industry Disruption began as a simple blog post but has concluded with over 10,000 words. I would like to thank you for taking your precious time to read this article.
I’m not a professional writer as you’ve probably come to understand by now but I’m passionate about my topics and write with a desire to contribute to others in some way.
Have a question? Contact Colleen