An old friend from college, a dentist, feels compelled to send me rants about the real estate industry. As if his industry doesn’t stink with its own overly priced, unnecessary procedures. But, this particular rant was very different. Yes, it was well-written, a rarity for sure, but it was the tone that set it apart. Negativity I get, people have been grumbling about our industry for years. But, this rant’s tone was more a passionate, vindictive hate spew which I fear is becoming a new cultural trend.
The core reason for much of the discontent stems from the fact we, as a society, have the desire, know-how and technology to re-create the real estate industry. And this time, we want an industry where it’s the consumer, NOT the agent or their brokerage, who is responsible for setting the rules of engagement. It’s almost as if the public is telling us; “I think we should see other people”.
So, how would an industry start over from scratch? A far-reaching topic for sure and one that you would think beyond the scope of an agent. But, if you look at the issue of home sales at its most basic level, only three things are required: a defined market area, common sales platforms, and an agreement between all involved.
Real estate is a comparative sale. In this regard, home sellers need their neighbors. In order for sales messaging to be effective and efficient, it makes sense to group together collections of neighbors for comparative selling. Luckily, much of real estate is already organized in neighborhood-friendly formats; subdivisions, condominiums, legacy areas or mixed-use communities.
These existing realty communities represent potential “markets” or brands from where a new type or form of real estate experience can be established. Today, we live in a much more fractured and branded environment than generations past. Agents need to use this dynamic to their advantage. It seems logical any future direction of our industry would accommodate the localism that is inherent in real estate. And, while the idea of agents “farming” particular areas or zip codes is not new, the execution of that activity, through Social Media, has become an art form. Successful next generation agents will be equally versed in both real estate and all forms of Social Media communications.
As a matter of fact it will be an agent’s understanding of Social platforms that will be critical in their ability to define a market. An agent branded market is going to need a communications system from which buyers, sellers and agents can share information. Prior to the personal computer, the old real estate industry created the hundreds of different and disparate MLS systems and platforms still in use today. But, if the industry were starting over in the information age, it wouldn’t favor any one communications platform over another. And, it certainly wouldn’t be prohibitive to the use of any newer technology. We now live in a world of nearly endless options. The market or community at large will dictate the communications platforms they want to use in any new real estate world going forward.
The good news is; its pick a card, any card time. The days of the MLS being the only communications platform has long passed. Today we have Facebook, Instagram, Twitter, plus any number of websites and YouTube channels. Going forward, the agent’s role will be that of their client’s quarterbacks for each of these communications platforms. However the consumer wants to communicate will ultimately be the direction of the future. Fear not, the MLS will continue to play its role, it just won’t be the only communications channel playing in that role.
The final, and most critical, element in any re-imaged real estate experience is the relationship between the individuals involved. People need to work and people need to get paid. The elephant in the room: percentage-based agent commissions. People hate it. Moreover, people are tired of putting up with and listening to the verbal gymnastics it takes agents to justify it. It’s over. In the future-world of real estate, agents will need to repackage their services into consumer justifiable segments.
The public wants a flat-fee commission structure. How can an agent make that happen and still earn a living? The answer, not surprisingly, is through technology. With a well-defined market and a suite of Social tools, any agent can begin to re-define an entirely new real estate experience.
Could a flat-fee service work for people of a defined area? I suspect we will soon find out. Make no mistake, the real estate community is going hate any flat fee or consumer-driven idea. Traditional million dollar neighborhoods, to real estate agents, could be challenged by common sense and the utilization of technology. Detractors will sell fear and doom at every step. The integrity of those trying anything different will be questioned at length. You can almost hear; “God help the homeowners who lose everything with fly-by night brokerages”. (For record, this never happens, but it doesn’t stop the old-schoolers from continually claiming it)
In the end, any new real estate idea will need to be supported by homeowners who identify themselves as “early adopters”. Only over time, with the success stories of those early faithful, can any new real estate idea hope to cross over chasm into mainstream. It will take time.