For context, we met with three different groups of brokers, About 20 people, for a total of four meetings at one of the Colorado Home Realty offices. Our aim:
To brainstorm a radical solution that would profoundly raise the professionalism of the real estate industry, affected by a small group people with a reasonable amount of effort.
I am sorry to say, that a radical solution to easily and profoundly affect professionalism was not discovered. However, some very simple and individually actionable ideas were brainstormed that will help you evolve as a professional in the eyes of your database/sphere of influence and raise their demand for professionalism, thereby making you the broker of choice.
Now, because of your years of experience you might think you already are the broker of choice, and that is great. However, I fundamentally believe the practice of real estate is evolving. The requirements for the service we provide and value we add must also evolve.
Your business development will no longer be just about having great relationships or throwing parties. You won’t get to show up to a listing appointment and wow them with a slick brochure or tell them how many homes you’ve sold.
The practice of real estate is evolving and I believe those who are to become the true professionals of the future, running highly profitable and value add businesses for their clients, must shift. They shift from marketing to a database to adding value to a group of consumers over the lifecycle of homeownership (now on average 10 years (depending on your particular demographic)). They become the wealth management advisors when it comes to managing the real estate portfolio and they do so through regular value add communication about real estate and non-real estate related items alike, balanced with maintaining a genuine personal relationship.
In this document I will summarize our conversations, and provide what I believe are some actionable solutions. My hope is that by reading what we discussed, it will move you to take action to affect your business, where you are more profitable, your clients are happier and you eradicate any instability of your business future.
I started these conversations with this premise; professionalism in the real estate industry will only be affected by consumers demanding greater value in a knowledgeable way.
What has shifted for me is the assumption that consumers want knowledge. We, great agents and leaders in this industry, want them to want knowledge. We want them to be smarter about the real estate process so they can make wise decisions. As experienced brokers, we know the wise decision for the majority of consumers is to hire an exceptional broker.
However, consumers are lazy. They (we) don’t want to be educated, we want a five-star rating and a one click purchase. You may disagree. I won’t detail out the years of research of consumer buying behavior.
Overview of the questions we asked and our brainstorming
Below is a recap of the questions we asked and the answers we brainstormed. I make no judgment about the quality or application of the thought shared. This is just the list.
What do consumers think about this industry?
- All agents are the same-commodity
- All agents are overpaid
- The business is easy
- Agents are a necessary evil
- Agents are sleazy
- I can do it better (based on what I’ve seen)
- Only I will look out for my interests
- I should use the agent I already know (even if that is my idiot brother-in-law), or the “local expert”.
- I would rather hire someone than do it myself
- Fear from lack of knowledge
- Time, complicated, stressful (not because of money, not because they believe we add value, because they believe the pain of doing it on their own is greater than the pain of hiring us)
What do consumers want?
- They want to trust
- They want easy
- They want to know their best interests are being served
- They want a relationship that is attractive, not one full of obligation
- They want to know their options, but when they are ready to absorb the information
- They want to be protected
- They want to believe in their decision to hire us
- They want to avoid PAIN
- They want to feel knowledgeable to make the right decision
- They want to know why they should use a Realtor.
- They want to know when they should use a Realtor.
- They want to know why we “charge so much”.
- They want to know how we are more valuable than the technology at their fingertips that doesn’t obligate them, or pressure them, only serves them (remember, their perception).
What is wrong with our industry?
- Barrier to entry is too low
- dollar investment required
- length of education process
- In most Brokerages, no standard of excellence, no accountability for performance or professionalism
- Governing bodies that are motivated by size, not quality
- No standards of how much business you must be doing, allowing hundreds of thousands of part-time agents.
- No central repository through which an agent is reviewed by the consumer. Lack of transparency
- Arrogance and independence of agents versus collaboration and partnership
- No, meaningful, recognizable and valuable advanced certifications
- The image of our industry for the most part is correct. Uneducated, fairly lazy, mostly incompetent brokers charging far more in costs than they deliver in value.
- This industry has an image problem. There is no partnership amongst brokerages or governing bodies to facilitate excellence that inspires consumer confidence. It is a wide open industry that anybody can dive into, with the sole goal of most being, the capturing of the clients. Not the service to client.
- Few Brokerages that stand for something meaningful, thus most agents are on their own
What is an agents true value?
- Setting and managing expectations
- Reliable and consistent
- Expert – product knowledge, neighborhoods, construction, architecture, community.
- Professional excellence – contracts, managing process, pricing, discovery with the consumer to help them identify their needs, best listing and buying practices to achieve objectives.
- Being resourceful – handyman, attorney, CPA, lending, title. Using the experience and expertise by which you are surrounded.
- A true professional uses their knowledge and experience to put the customer first.
- Transparency and proactive communication. Our truth to the consumer interpreting the conditions that exist independent of how they might feel.
- Demonstration of delivering more in value that charge in commission.
- Education and leadership.
- Trust, comfort, convenience.
- What we know, not just what we do.
- Consumer education – at the individual level.
- Character – be honest about who we are, how we will operate in the experience we demand of ourselves to provide to the client.
What could this industry or brokerages do to affect change?
- NAR- “quality certified”
- Post-closing survey focused on professionalism and educating the next consumer
- Consumer education campaign about excellence
- Create a consortium of brokers dedicated to excellence that self-certify.
- Raise the educational standards and requirements to that of a series 6, series 7 or law degree.
- Run a brokerage that has a meaningful mission and only hire agents that believe in that mission.
If we stopped there, all we would have is good brainstorming. We knew most of this already, though I think there was value for every individual to recognize that others feel similarly, to have some realizations about consumers real desires and maybe shift thinking just enough to have you take slightly different action with your clients.
Recognize that the massive investment in technology over the last 10 years in real estate is mostly about the disintermediation of the consumer from the agent. I believe instead, there is a tremendous opportunity to effectively use technology to deepen your relationships.
SO WHAT ACTION CAN WE TAKE?
While likely, not one of us by ourselves, and probably not the 25 of us together, are going to change this industry, there are some things that you can do to profoundly impact a small group of consumers, in particular your own database/past clients, sphere of influence and future clients. Some of these are immediately applicable to you, meaning you can take action starting today. Here are a few ideas that might just be pebbles in the pond, but at least we are creating some ripples.
Focus on your clients over the (average) 10-year lifecycle of homeownership.
Don’t try to time your clients need by adding enough the value when they want to buy and sell. Add value every month, every quarter, every year such that when the time comes for your clients to buy and/or sell they will already have had a deep, rich, value-based relationship with you such that they already know who they are calling. Incidentally, you will receive a lot of referrals over that homeownership period. (We have a lot of ideas and best practices if you would like to get our insight).
Create a consumer awareness campaign.
To inspire consumers who are at the threshold of making a buying or selling decision to understand the 10 the most important factors about the real estate process and hiring the broker to partner with. This is an advertising campaign that could be taken on by a brokerage or an individual agent. As a brokerage, it would probably be across the city, like Denver. At CHR we are working on this initiative. As an individual agent, this could be a campaign you employ with your database, with a farm territory, with particular industry/vertical you are going after, with your business-to-business relationships.
Have a post-closing conversation with all of your clients, focusing on your professionalism.
Ask them not just how you did so you can be more referral, but specifically what was their experience and how could it have been better. What was great about you as a professional, how did that shift their perspective about the industry and real estate agents.
Call every single person your database.
Let them know that you are truly passionate about adding value, not just when the time comes to buy or sell real estate, but now, while they are homeowners. Ask them what would add the greatest amount of value to them. Recognize that for the most part, they will have no idea. So, you need to have a couple of ideas of what you want to do regularly to be a great resource for them. We have a list of our top ideas if you are interested.
Surround yourself with excellence.
We all get tired. We all get a little disconnected from a bigger mission or purpose at times. Not anyone of us is exceptional, all the time, on our own. Create a small group you meet with on a regular basis and share best practices around business development, and professionalism. Share best practices around education and inspiration of consumers. Don’t do this on your own, that is one of the problems with this industry. Agent arrogance. (We call these strategy groups at CHR. We have refined this practice with many years of coaching, consulting and experience contributing to these best practices and would be happy to share.)
Know your Value
Get very clear on how you add more in value than you charge in commission. You must know it, not hope the consumer doesn’t ask.
I want to thank all of you who participated in these conversations. From my perspective, there was some subtle, but profound education I received that has shifted how I am approaching this business and the services we are providing to our team.
These discussions slightly shifted the conversation I am encouraging our agents to have with their clients and has actually impacted the tools we have created within our technology to create more consistency and value.
I encourage you to take two steps in particular:
- Affiliate with a handful of brokers who believe what you believe and are willing to do what it takes to be great. Go find those people if you don’t already have them, and be consistent about meeting.
- Stop being a recipe card real estate agent. Figure out how to add real value every month, every quarter, annually. Balance this with having a real relationship. Throw your parties, make your phone calls, write your notes. But, understand the evolution of this industry; this is no longer just about a relationship and it is no longer just about timing. The recipe card real estate agent was all about top of mind awareness and they will be dying out or discounting for the rest of their career. Top the mind is great, but when you couple that with value add over time, you create a walking group of ambassadors who will passionately use and refer you without question. You eliminate all of your competition because of how you served over years, not just in a moment of time to get the business. If you remain the recipe card real estate agent, you are competing against every other form of advertising out there, offering no real value.
What is the best way for us to change the industry?
Manage and influence what you can and dedicate yourself to being exceptional for the people you can affect.
Interested in learning more about partnering with Colorado Home Realty? Click here to read up on how we are helping our agents reach the top 1%.