In the past decade the residential real estate industry has experienced significant changes in all areas of the business, including customer acquisition, marketing channels, methods of advertising, regulatory compliance, intra-office communications, etc. Close examination of the primary drivers of these changes point to rapid developments in information technologies as the driving force. A rapidly increasing number of information and communication networks created by the Internet have introduced many opportunities and challenges that must be addressed in order to maintain a competitive edge. Business leaders must have access to tools that help them identify and assess business and technical risk, improve time-to-market of products, and understand the ramifications of globalization.
Today, residential real estate brokers can utilize Internet technologies in various ways to achieve business goals; including streamlining operations, improving customer retention rates, and developing new business models. Rapid technology adoption combined with business process reengineering can help create powerful competitive advantages which result in business growth, increased sales and healthy market positions. By aligning IT and business goals, brokers can leverage existing business models and easily create additional products and services to serve new market areas. Accurate customer segmentation and strategic marketing is enabled by a combination of integrated, ‘customer-oriented' technologies and a shift towards a ‘customer-centric' thought process. Marketing technologies such as inter-active web sites, decision support systems, and customer relationship management software should be integrated in such a way so that brokers can seamlessly create business value from their information assets and mine knowledge about their business.
Information technologies and the Internet have allowed real estate corporations and entrepreneurs to implement creative business models via packaging and bundling services and products. The terms "bundling" and "packaging" are used to describe the assembly of a variety of services for closing a home purchase transaction. However, the terms are used inconsistently and there is no substantive common understanding of what they mean. For the purpose of this of this writing and future writings, I will define what I have identified as a "standard" definition of these terms.
Bundling is best described as the internal aggregation of services that are completely owned and controlled by a single organization. Bundles typically can provide greater service to consumers because a single company can more effectively integrate business processes and technologies. In recent years, this fact has spawned mergers and acquisitions involving mortgage lenders, title and insurance organizations, and large brokerages. In response to these activities, federal and state legislative bodies have modified key legislation such as RESPA in order to protect consumers. The purpose of the RESPA Act is to regulate the settlement process so that companies cannot monopolize transactions by dictating the selection of specific vendors or charging unnecessarily high fees to compensate for illegal kickback and referral fee practices. RESPA requires full disclosure of all settlement services including title searches, attorney services, property surveys, loan origination, home warranty and processing and closing fees.
Packaging is an external process which involves a company assembling the services of a variety of external vendors. Packages are attractive to consumers because they are usually offered at a fixed price that is often lower than the total cost of obtaining the services individually. Third-party packages can be combined with in-house bundles to offer consumers more services that meet their needs while maximizing the benefits of affiliated business partnerships.
When seeking ways to design new business channels, real estate companies have a large range of activities and services to select from. The main goal is to make the company stand out from the crowd while providing excellent service. Below is a list of residential real estate services that can be added to a bundle or package.
- FSBO document preparation
- Creating Home Selling Kits
- Full Residential Appraisal
- Property Management
- Hourly Consulting for a fee (based on consumer's specific needs)
- Auctioning property
- Executing Comparative Market Analysis (for competition)
- Preparing contracts and leases
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