How To Hold Your Leverage As A Real Estate Agent In A Changing World
Real estate agents wear many hats. Those of us who have been in the business for a while can certainly attest to having played such roles of broker, stager, psychologist, friend, designer, accountant, attorney, babysitter, petsitter, housekeeper, counselor, chauffeur, and on occasion - chief bottle washer.
The traditional role of a real estate agent used to hold much more "mystery" behind it. Mostly stemming from what properties are on the market as well as what properties are coming up soon. Those agents who have been in the business for approximately 15 or more years can remember when the MLS listings would come out in print once a week which provided all the new inventory and price reductions.
I can't tell you how many times I've heard the phrase "back in the day when we used to write an offer on the hood of our cars". We certainly were a paper "full" society back then.
But the main point is that the most important information about the inventory on the market was at OUR fingertips. WE were the gatekeepers. WE were the all mighty and powerful Oz that held the magic behind the curtain. In order for buyers and sellers to be able to know what was going on in the market in order to buy or sell, it was pretty much a given that you had to hire an agent at that point.
Well, as most all other industries, technology has changed the playing field. And in our case of the real estate industry, it has changed the playing field dramatically.
Empowerment has been a concept in the human resources field of business for decades. It was one of the concepts I studied in college during my pursuance of a degree in Business Administration. The premise being that when you provide empowerment to an employee, i.e., the ability for the employee to take full control, responsibility and input for their goals, it not only creates much higher job satisfaction, but the overall quality of their work improves as opposed to the traditional role of an employee given a singular task and being told what to do, when to do it and how to do it.
The concept of empowerment has been infused into our industry in probably the biggest way. With the advance of the internet, buyers and sellers have everything they need (and in some cases what they don't need) right at their fingertips. So much, that in many cases they have the ability to become aware of new listings and price changes before we as agents do!
How did this transpire? What is the core of this huge transformation in our industry? Three simple little letters: I - D - X.
IDX stands for Internet Data Exchange. IDX was the original "kernal" of our MLS (Multiple Listing Service) system in that it was, and still is, the system that allows brokers to load new listings for other brokers to be able to subscribe to and view. Most of us have local board associations that supervise this in conjunction with those technological firms that provide the platform or "interface" for the entry of data into the local MLS system.
So the first technological advance we made was the conversion from the paper catalogs to the online MLS. And what an advance that was! We had the world at our fingertips, and search capabilities went through the roof with the ability to sort via select criteria. It allowed us to provide laser-like and lightning-fast search capability to our clients of equal value to both buyers looking to purchase with specific goals as well as sellers wanting to know what the activity, comparable sales ("comps") and competition was like.
Well, that empowerment went through a major shift in availability. It went from being exclusive to the MLS, to being channeled out to the public via the major websites - Zillow, Trulia, Redfin, Realtor.com, etc. Not only that, but these websites became so rich with technological features in the form of search capability that they became the #1 place where buyers begin their search. The traffic to those sites is so high now that the websites have now begun selling advertising space to agents for exposure to buyers and sellers.
How ironic is that? Those listings that you've worked so hard for are now used to generate leads that are being sold back to you! (But I'm not bitter, oh no, not I - that's another blog in itself!)
Not to sound cliche', but - It Is What It Is. Unless N.A.R. does something to change it (and soon), the major consumer real estate sites are here to stay, in a big-ass way. In fact, they may end up becoming the "New MLS". So, unless you want the world to pass you by, you'd better learn how to work that fact into maintaining your leverage as a professional in your industry.
It certainly can be done - IF you focus on the actual requirements of a real estate transaction, the flow of information available for residential real estate, and how to utilize your leverage. I've come up with a concept so that your clients continue to "like" what you have to say, enough so that you hold enough leverage in your profession to continue to add value to your clients and justify your commissions. I've actually dubbed it the "LIKE" concept: Law, Information, Knowledge, and Experience
1. Law - Know the legalities of your industry and those surrounding a real estate transaction. Contractual law. Take a course. Litigation is at an all-time high. More so in certain states than others. When you begin working with a new client, SHOW them how thick of a stack of paperwork a complete file is for a real estate transaction with all parts of the contract, addendums, disclosures, inspections and reports. Once they see the legalities behind a real estate transaction and why it must be brokered, they understand the need for a professional. Remind them that the level of legalities requires not only your expertise, but that of your affiliates - escrow, title, your broker, and also those you consult with such as preferred lenders and inspectors.
2. Information Technology - Stay ahead of the curve. Take advantage of any and all that provide with faster or time-saving techniques. Use tools to "subsidize" the powerful internet sites that are currently at your clients disposal. BE CAREFUL, however. Don't subscribe to everything but the kitchen sink just because you think having more technology is better. BE SELECTIVE. Burnout is a VERY dangerous element. I've learned that first-hand. Invest in technology that not only acheives your goals, but that is a right fit for your own capacity and logistics. Don't subscribe to technology merely because you hear it's the "IT" thing right now. Kick the tires. Make sure the investment will have the right return for you in the form of long or short-term results and/or time-saving capability. Blogging is even more powerful these days. I can't tell you how many referrals and dozens of deals that I've completed as a result of agent referrals AND consumer inquiries from my blogging on ActiveRain over the past 8 years. Not only that, but reading other blogs has provided me with MUCH inside information that builds my arsenal of informational leverage.
3. Knowledge - Know your inventory! Get out to those broker caravans and open houses as well as staying on MLS alert. Find out what's actually INSIDE those homes and WHY. Participate in neighborhood activities. Become part of the local organizations. Know what's going on with the business and political climates of your areas. When a client sees clearly that you "know the neighborhood", there will be a natural gravitation to you. YOU CANNOT FIND THIS INFORMATION about the residential/geographical areas on the major consumer real estate sites. It is UNIQUE to you, through your own legwork.
Very important - Know the affiliate information surrounding a real estate transaction. Finding a home is one thing, but a real estate transaction involves in most cases a loan, insurance, property taxes, maintenance that is unique to certain kinds of properties. Become an expert in ALL of those fields. Take your affiliates out to lunch - Loan Officers, Escrow Officers, Title Reps, Real Estate Attorneys, Inspectors, etc.. Pick their brain. Ask them to teach you about their jobs so that you have that knowledge. For example, understanding the different kinds of loans, their requirements, and how that affects a real estate transaction. I cannot tell you HOW MUCH power that gives you as a real estate agent. I guarantee it is the key to your profession in the future.
4. Experience - What transpires during a real estate transaction is something NO ONE can teach. It only comes with experience. We all know that real estate transactions can be problematic. Why? Because it involves a lot of elements coming together in a short amount of time - real estate, finance, contractual law, construction, horticulture, taxation, accounting, etc. Problem solving is probably one of the largest tasks you complete during a transaction. Once again, this information is not available on any website. It comes from your own experience. Your client may be able to find a home online, but how do they craft an offer that will get accepted? How do they get through an escrow successfully? How do they negotiate through a transaction with all the elements at hand? What happens when you hit a lender guideline obstacle? Your experience is gold.
And if you want to take it up a notch, there is a 5th element I will dub as "anticipation". I've been a tennis player since I was 12 years old and still play competitively. Some of the greatest tennis players ever possess an extremely high level of anticipation. And what that means is they have an uncanny ability to predict their opponents next shot and where it's going, and why, according to patterns they've observed. As an agent, you must develop that same sense of anticipation. Stay on top of trends - technological trends, economic trends, sociological trends. Read as much as possible. Also, know when to go against the grain - when everyone else is running in one direction, chances are it's probably time to think about running in another direction.
Of course, demographically, there are going to be exceptions in which some (not all) of the "baby boomer" and older generations do not delve heavily into technology and will rely upon you to take the more traditional role which will involve the property search element, and will want you to do it all. Those will be few and far between, but you are certainly prepared for that. But for the most part, the bulk of buyers and sellers are plugged into the technological matrix. And your fluency with that matrix is critical to your career.
The playing field is shifting, peeps. Who knows? Commissions may become a thing of the past. Perhaps a real estate agent will become a salaried position? Don't laugh. Whatever the case, be prepared. Your experience and expertise, just like any other job, is the key to your marketability.