Jon Strum of the LA Real Estate blog put together a very interesting article manifesto that outlines what it will take for real estate agents can be successful in the future. It is a fascinating article and was picked up by both the NYT real estate blog and Redfin’s blog.
While he was picked apart in the comments section of the NYT’s blog, I think a lot of what he has to say is extremely relevant and that the successful real estate agents of the future will be the ones that learn how to re-invent what they do!
Jon’s point that “real estate professional is in the unique position of adding massive value on behalf of their client to the final outcome of the sale or purchase of a home” is extremely important. Many people are simply not equipped to buy and sell their own home on their own and are going to benefit from the assistance of a professional. While programs like Redfin Direct that allow people to buy and sell homes via the internet may some day capture 10 to 20 percent of the market that still leaves 80 to 90 percent of the market requiring more assistance. (This comment is not meant to invalidate Redfin’s business model as 10 to 20 percent of the real estate market is a HUGE chunk of change!).
The crazy part is that anyone would disagree with Jon’s general premise that real estate consumers are becoming better equipped (information-wise) and they are going to continue to demand more “value-added” services from their agents. The vast amount of money that is currently spent on “branding” techniques by agents (ads on postcards, billboards, magnets, super-market dividers ???, etc) will inevitable need to give way as the commission structure on many deals change and successful agents learn how to operate on a much leaner budget. People are going to turn to the internet to find out about not only the value of their home (Zillow?), but context around how that value might change (blogging?). People moving to a new area are not only going to want neighborhood information (homepages), but context around those neighborhoods (blogging?). The agents who figure out how to use the efficiencies of scale that the internet can provide are the agents who will be successful into the future!
So what are the internet tools that agents should be using? I had a great email today from a Seattle real estate agent who has a very prominent position in the local search engines (he or she shall remain anonymous). They mentioned that they had been following Rain City Guide for a while, but it took them a while to figure out what I was doing… That brought a big smile to my face because I’m not sure that I’ve figured out what I’m doing! I’ve seen a huge growth in Rain City Guide traffic as we’ve added some wonderful contributors, but I’m convinced that there are still hundreds of ideas and opportunities that I’m yet to take advantage of. Will Rain City Guide learn about those opportunities? You can bet on it!
My advice? Agents who do not want to get lost in the internet shuffle that is sure to take place in the near future should get involved in internet. But don’t waste your time posting your marketing materials on-line because people rarely read that stuff when you spend good money to send it to their homes! It seems like a no-brainer to me that agents should start blogging… But do more than that… Put interesting and challenging ideas on your blog. Blogging may not be the panacea for the future of real estate agents, (there is a lot more to being a good real estate agent than being an engaging writer), but by blogging to learn more about the internet, you will learn about the trends that are shaping the industry!
Great post; what I like best about RCG is that you support a real free-for-all of thoughtful opinion, which gives the site some zing. I would love to see more posts talking about how to make the homes we list (and not just our overall sites) more searchable via Google and other search engines. Keep the dialog going.
Glenn,
Very interesting idea on how to get homes listed better… It seems that a search engine that was focused on real estate would be the best bet here (Zillow?), but I’ll think on some ideas that will hopefully go beyond posting on your listing on Google Base.
I’ve been thinking about the ideas that Jon threw out in his manifesto for the past couple days. I was glad to see someone present those views in a public forum. A lot of real estate professionals have their heads in the sand and aren’t realizing the changes going on.
I also agree with your post. There’s some really cool innovation going on that’s going to provide more options for home buyers and sellers. The Redfin model does serve a niche and you’re right when you say that even if they capture a small percentage of the market, it will work out very well for them.
But, while there is a certain percentage of people who these edge services appeal to, it’s hard to see the traditional full service brokerage model go away overnight. A real estate transaction is a complicated process and whether it’s finding properties, negotiating, limiting risk, maximizing exposure, or any other service that we use to define our value there will still be a sizable percentage of the population who will go that route.
I also think it’s great that there’s a wealth of information available to the general public. Some of the most satisfying transactions that I’ve had were with well informed clients. We pooled our resources and worked as a team to achieve their goals.
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Dustin, I wasn’t aware that Z let people search on listings. I was thinking that a site with listings could publish a nightly catalog that could be indexed by a search engine like Google.
Glenn,
Z doesn’t let you search on listings, and the question mark after Zillow was just meant to suggest that they don’t let you search *yet* (note this post from today’s inman news).
My understanding of Google Base is that it was made for just this type of application. The idea behind Google Base is that you can upload a database of information to Google on a regular basis and have it quickly indexed by Google. However, I’m not sure that would go over too well with most of the MLS organizations, and that’s why I think the specialty search site will win out at the end of the day.
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