The science is very clear on this topic – whether you’re buying or selling, real estate transactions are one of the most stressful times of life. Searching for homes, cleaning and staging a home for sale, showing appointments, open houses, contract negotiations, inspections, pre-qualification letters, mortgages, closing dates, all of your possessions in boxes, movers, disclosures… it’s legitimately enough to make your head spin… like Dorothy’s house landing in Oz. Only if moving was THAT easy, right? Just lay down on your bed, fall asleep, and your house just lands in a new location. Convenience personified.
Okay, maybe the whole ‘relocate your house via tornado’ isn’t the best idea – especially residing in Oklahoma. I digress.
In recent years, the Real Estate vertical has seen the beginnings of change to what was previously a well-established model for buying and selling property. The industry has seen a significant rise in ‘For Sale By Owner’ properties, as well as a spike in online real estate startups who promise little to no commissions and ‘Listing Only’ Firms – a nominal commission or flat fee will allow for a Seller to list their property in the local Multi-List System (MLS) so it is visible to potential buyers. Especially Sellers see these options as a huge opportunity to save on costs associated with a real estate transaction. And they would be correct – it is a cost savings. Five to six percent of any transaction paid in fees to a licensed Real Estate Agent (Realtor) is quite a bit, especially when you’re talking about your home.
Unfortunately, as people are thoroughly excited about monies they will not have to pay in commissions, they neglect to see the glaring problem with these avenues – massive increases in legal and financial risk in completing the transactions. Additionally, the relationship and rapport Realtors build with their clients are mission critical in delivering on the ‘soft side’ of the transaction – trying to provide confidence and comfort to clients that someone is in their corner and looking out for their best interests. Human relationships cannot be replaced by reduced commissions.
Very few individuals outside of the Real Estate industry understand the complexity that comprises every transaction. Most people associate Realtors with the ‘drive you around town until they show you the house you want to buy’ stereotype. And while they do, in fact, do that, there is so much more after these initial interactions. Lending, titles, inspections, negotiations, legal hurdles, contractors, closings – and this only scratches the surface of what goes on behind the scenes that most Buyers and Sellers will rarely, if ever, see.
Let me put it in other terms to assist in illustrating the point. Say you had a leak in the roof of your home. Would you go out and select a roofing contractor that was unlicensed, not bonded, carried no insurance, and had little to no professional experience to fix your roof, but can charge you half as much as the next guy? No – of course not – that’s just silly. You’d be looking for a licensed, insured, bonded roofer with a good reputation, good references, and is offering a reasonable price to do the repairs. But wait though – if you wouldn’t do that in this circumstance, then why would you do it when you’re BUYING or SELLING a home? How does that make sense?
Short answer – it doesn’t.
Real Estate Agents and their Brokerages are professional organizations who are licensed and trained to assist their clients in navigating the murky waters of real estate transactions. The five-percent or six-percent you pay to that Realtor to shepherd you through these transactions is a pittance in comparison to the time and effort they put in to ensure the transaction goes smoothly and you, the client, are protected from legal or financial issues – both in the present and in the future. I strongly advise all of my clients to work with licensed Real Estate Agents for all of their related needs.
That said, there are still opportunities for Real Estate Agents and Real Estate Brokerages to improve the level of service they bring to their clients. While some agencies are willing to make steps forward with the technology they use to deliver services to their clients, often time many brokerages are stuck in antiquated, analog ways to manage their brokerage processes. With the rise of mobile technology (smartphones, tablets, 5G internet connections, digital signatures), Real Estate Brokerages have massive opportunities to leverage new technology and solutions to improve overall customer experience, directly increasing Realtor productivity and reducing the need for clients to physically be present in order to participate in the process.
While several solutions do already exist in the marketplace to help Realtors and Brokerages improve their digital footprint, very few of these solutions are directly integrated with each other. For example:
- Customer Relationship Management (CRM) tools exist specifically for clients, but how many directly integrate with an MLS to pull key data points once a client wishes to submit a contract on a piece of real estate?
- How many Realtors are truly ‘mobile’, in that their client information and files are all digital and securely accessible from anywhere they travel?
- How many Realtors are able to capture prospective client information while conducting an Open House, short of having them write client contact information on pieces of paper?
- Are Realtors able to capture Digital Signatures from their client that will hold up in a court of law?
The opportunities to leverage these solutions are not just present in this moment, they are nearly a requirement to avoid falling behind in this digital age. However, it will take a professional organization to help link these solutions together so they may be used in an optimal manner – improving productivity, reducing overhead, and maximizing the impact to client experience.
The analog world is collapsing – are you and your brokerage ready?