The Future of Real Estate

Opened up 2010 online, learning at the Virtual Real Estate Bar Camp.  I had given the dogs an extra long walk despite the sub freezing temperature.  They and I were to be chained to the desk for the next seven hours.  As I reviewed the listing of presenters one thought entered my mind; “…wish I had a TIVO for this!”  There were so many topics and people of interest and as a result scheduling conflicts.  I did however create a master list which looked like a offensive coordinator’s play chart.   

My list was as follows:

•  Brad Inman – What Is Inman News Predicting?
• Sherry Chris – Next Generation Brokerage
• Brad Andersohn– Blogging Tips For Beginners
• Stefan Swanepoel – Social Media Beyond Mainstream:Augmented Reality & More
• Glenn Sanford – The Real Estate Office Of The Future, Part II
• Jonathan Rivera – How To Leverage The Power Of Social Media In Real Estate
• Drew Meyers – Online Reputation

There were many insights shared during the presentations some where Ah-Ha’s and others were Oh-Ya’s.  An example of the former came from  Glenn Sanford of ExpRealty when he walked attendees through the 3D immersive work enviroment he and his team have created.  While an Oh-Ya was “be authentic” when you are online.  Since I still take notes with pen and legal pad I’ll list my thoughts as they happened:

Q1 2010 will be a good barometer for the year.  How we start the year Hot, Cold , or Moderate will give an indication to the next three-quarters.  The clock is ticking  on some Federal programs that will affect the mortgage markets from toxic debt to FHA rules.  It is important as a practitioner to know the mortgage rules and have resources for you customers.  While qualifying rules for mortgage money are getting tighter, and customers may need to revise their expectations, transactions can get done.  Knowing local trends is more important than National numbers.  Focus on inventory, absorption, market time, median price for you area and lead customers to the best decision they can make. Be Ethical, Be Honest, Be focused on Customer Service.

Real Estate companies need to make their physical plant, the square footage they lease, pay for itself.  Most companies have 150 square feet of office space per agent, that number should be cut by two-thirds.  Leased space is one of the highest fixed costs for a company and it is so underutilized with the business going mobile.  Not real news, we know this, but how many agents and brokers are willing to let the space go?  Agents skills are not best used managing leads.  It takes time for people to develop into customers and clients.  The cost of lead creation, and capture is too high which is why most agents focus on only the “hottest” leads.  Here is an area where brokers and agents can collaborate with the broker managing the opportunities while the agent manages transactions and closes sales.  Customers expect brokers and agents to work together to create a positive transaction experience.  Consumers don’t care about splits, referral fees, or desk costs, all they want is great customer service, we should give it to them.

If you are a blogger, or you tweet, or have a Facebook profile or fan page; Know your audience, Be Yourself, and Give Great Content.  Leave the hard sell for the late Billy Mays, your comments should not be a shout or a rant, but a useful dialogue.  Confused about what write about?  Need good blog ideas?  Go into your sent email folder and read your reply to others.  There should be fertile ground in that outbox.  Read other bloggers, comment on their posts, and engage others when they comment on writing.  There are hundreds of channels for you to persue, pick one and give it your all, once you have that going well add another.

Bandwidth and storage are allowing use to push huge amounts of data through our computers and mobile devices.  This in turn is driving the move to augmented reality.  Real Estate will be affected by this real-time data flow.  We have a marriage of real and virtual worlds and consumers are getting very comfortable with them being together.  Google has a product (Feature?) in development called Google Goggles that can be used to search based not on words but images.  Point your phone at the Golden Gate Bridge and the search engine tells you everything you need to know.  Perhaps more than you wanted to know.  In the not too distant future will customers be able to point a phone at a property and see the ownership history, floor plan, tax records. liens, or the dated kitchen?

What if someone were to take the reduce your square footage mantra seriously?  What if a broker used 3D immersion environments to collaborate with staff, agents , and vendors?  With currently available tools it can be done, but it requires an agent who is highly tech savvy.  Small office spaces with conferencing spacer leased business lounge space, online document storage, VoIP, digital signatures for contracts, all combine to lower overhead and deliver on customer satisfaction.  We have been talking about this for some time now but brokerages are making it happen.

Automation is not the answer, good systems are.  The question?  How do you leverage your online reputation.  Agents and brokers should create a web that is hype local when it comes to their online and social media presentation.  Link all your channels Facebook, Twitter, YouTube wherever you are let people flow from on to the other.  Search you local area for words of interest using cloud tag features.  Again share content of value, don’t sell, the business opportunities will find you.

Changes in Buyer and Seller profiles ’08 to ’09

Changes in consumer behavior and more interesting and more telling than data for single moment in time.  As we know trends have a Tipping Point, an actual moment in time where the change explodes across the majority of the population.  So watching the changes can keep salespeople, marketers, politicians, any influencers, ahead of the change.  They Pre-Position themselves to meet consumer demand ahead of the competition.  I have been in several meeting with the C.E.O. of CENTURY 21, Tom Kunz, where he quotes Wayne Gretzky as saying; “I skate to where the puck is going to be, not where it has been.”  Tom’s point being that those who are where the market is going will be the ones who score.

So how do you succeed by Pre-Positioning?  Follow the numbers, watch for trends, and have a little luck.  I have annually followed the numbers of the  Nation Association of Realtor’s.  Most specifically the Buyer and Seller Survey.  I first learned it was available when I worked for Carla Cross at Windermere Real Estate (early 1990’s).  Today we take the Internet’s role in real estate as a given, yet 15 years ago it was used by less than two percent of the buyers as a source of information.  Today that number is ninety percent.  Companies like Zip Realty and Redfin have positioned themselves for this change and as a result have carved out market share.  In the most recent NAR survey buyers reported that they looked at an average of 12 homes before making the buying decision.  That is nearly a forty percent decline from 1992 when buyers looked at 19 homes before making the buying decision.  It is apparent that the two numbers (homes  the Internet as a source of information) are related since buyers can pre-view homes and “disqualify” those that are not appealing.  All from the comfort of home rather than a Realtor’s car seat.  

In an effort to understand the changes, and to bring something of value to you for reading this post, I have created a PowerPoint presentation comparing the 2008 NAR survey highlights to the 2009 results.  Where I see the biggest change year over year is in the number of sales to first time buyers, no doubt spurred on by the Tax Credit.  If I were selling a home that would appeal to a ‘Tax Credit motivated’ buyer I would have it on the market, and positioned for sale in the first quarter.  That is the window of opportunity and it is open for a limited time.

My thoughts moving forward: as an agent, I would look for the most effective ways to stay in front of my social network.  Using the tools that would allow me to keep a conversation, about the things most important to buyers and sellers, going.  For some it may be Twitter, Facebook or Foursquare, and for others it may be the traditional telephone, face time and direct mail.  Don’t say you don’t have time, after all you are showing seven fewer homes than before!  Agents will have to judge based upon your own business plan and personal nature what is the right mix.  For brokerages I believe that they will have to find ways to support the efforts of their staff that does not break the bank.  Coaching, mentorship, marketing, technology are the thinks brokerages do well.  There clearly needs to be an investment in leads management to professionally capture inquiries.  Leads management is something that agents, on their own, cannot afford to make.  The two companies that I mentioned earlier, the ones that pre-positioned themselves for the changes we saw over the last ten years, have created a system to create and capture leads which is why they have made an impact.  Oh you could say they bought the business, but the fact remains; they Got the Business!  Brokerages also need to find ways to maintain the high quality of service consumers expect through professional standards for associates.

That is my take, what’s yours?