Are you as IRRELEVANT as REALTORS are about to become?
If you’re a Realtor, please don’t get mad. This is a business lesson, not a personal attack. I have several friends and a sister who are real estate agents. Believe me, I want you to be successful. To do so, you’re gonna have to change. Fast!
Technology comes Home
My wife and I have bought and sold numerous pieces of real estate. On the recent sale of an investment property, we went Realtor-less. It worked great.
Real estate websites like Zillow are not yet transactional venues. You can shop, snoop, and look at pictures but, for the most part, you don’t click and purchase a home. Yet. Remember, no one bought groceries or books online a few years ago either.
Enter FSBO Tech
Lori and I engaged the services of a company called FSBO Tech. For an initial fee of $159 you get access to required legal documents, professional photography, and listings on real estate sites and the multi listing service.
The property sold in less than 2 weeks. An additional fee of $400 was collected by FSBO Tech at closing. $559 beats the heck out of the standard seller commission of 6%.
When You See Realtors, Do You See You?
Each of us faces the threat of professional extinction. The Realtor’s competition isn’t other Realtors, it’s an evolving marketplace. Think Yellow Cab, who thought their competition was another cab company only to find out it’s Uber.
Technology is changing - and cheapening - real estate transactions just as it changed and cheapened ground transportation. Is this happening to your industry?
Know What You Sell
Before you can reinvent to remain relevant, you must first clearly understand what you’re in the business of providing.
Real estate agents would likely say their clients pay them to value their homes. Or handle the transaction. Or verify a home’s condition. Or negotiate the deal.
In actuality, Realtors don’t do three of those things and the fourth is debatable.
The value is set by the marketplace, calculated by appraisers, and approved by the lender. Title companies complete and record the transaction. Licensed inspectors verify the property’s condition.
As for negotiation: a Realtor is an independent contractor compensated only if and when the sale goes through. It’s in your Realtor’s best interest to get the deal done. Sale price matters a great deal more to you than it does to your real estate agent.
Bringing It Home
Most home sellers and buyers biggest need is fear mitigation. They want someone to shepherd them through an unfamiliar experience. Hence real estate agents’ biggest value is soothing anxious clients. But for how much longer will that be necessary?
A decade ago nobody bought cars online. Five years ago nobody hopped in a stranger’s car for a ride, dialed up on a smart phone app. Technology made these two formerly scary activities — riding with a stranger and shopping for a car — less scary. Home buying and selling is next.
Is your business about to get majorly disrupted? What steps can you take to remain relevant in a constantly evolving marketplace? We referenced realtors here, but no industry is immune to change.
Damian Mason is a businessman, speaker, writer, and real estate dabbler. www.damianmason.com