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Op/Ed

Algorithm predicts uncertain future for real estate professionals, now what?

A new study predicts that real estate professionals are at risk of being replaced by machines, but is that possible, and if so, how can the industry circumvent this?

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Is it War of the Worlds all over again? I’m probably dating myself when I tell you that on the night before Halloween in 1938, millions of radio listeners were shocked when radio news alerts announced the arrival of space aliens. At that time, listeners panicked when they learned of the Martians’ attack on Earth. Many listeners ran out of their homes screaming, and others were said to have packed up and fled.

What radio listeners actually heard on this day was a portion of Orson Welles’ adaptation of The War of the Worlds by H. G. Wells. And despite the fact that this was fiction, many listeners believed what they heard was real.

The concept of machines replacing up to 50 percent of the U.S. workforce may incite a level of panic not much different from that which occurred on Halloween day in 1938. Unlike the publicity stunt however, the mechanization of America may, in fact, be true.

Will Machines Take Over the Work Force?

Just last month, Bloomberg reported that 50 percent of the U.S. workforce would be at risk of being replaced by machines. In a study entitled “The Future of Employment: How Susceptible Are Jobs to Computerisation?”, Frey and Osborne shared what happened when they created an algorithm that analyzed the types of jobs subject to automation and predicted the probabilities of future automation for 702 different occupations.

The results were particularly favorable for those working as recreational therapists, since this field was the least likely to be automated with the probability of automation listed at 1/20 of 1 percent. If you believe that an algorithm can predict your future, this study does not bode well for telemarketers (automation probability of 99 percent). Loan officers came in at 98 percent and real estate professionals came in at 86 percent.

Will a Machine Replace the Real Estate Agent?

It’s true that a lot of what real estate professionals do every day can be automated or perhaps handled via computer by the consumer without need for an intermediary. That’s probably what resulted in the Frey and Osborne automation probability of 86 percent.

In 2013, Seth Godin wrote about this very issue. Godin stated, “If your project or organization depends on knowing things that other people don’t know (but could find out if they wanted to), your days are probably numbered. Ask a travel agent.” What Godin is referring to is the fact that years ago, we phoned a travel agent to make flight and hotel reservations. Now we can search locations, and make our own reservations online.

Not unlike the travel agent, real estate professionals have previously provided information that the consumer didn’t have: information about properties available for sale. Now, of course, much of that information is available online free of charge.

So, what can be done to avoid the potentially numbered days of the real estate professional? The solution “is obvious,” Godin says, “provide…non-commodity service and customization.”

How to Provide Non-Commodity Service and Customization

Real estate professionals must think long and hard about how they provide a unique value in the marketplace, and they must market that value to their current and future clients in order to assure that the machine does not wipe them out. And it’s a good idea to start on that now before “the war of the worlds” becomes a reality.

Here are four ways that a real estate professional can provide value in the current and future marketplace.

  1. Process navigation. Individuals who only buy and sell a few homes in their lifetime will need assistance in navigating an extremely challenging process. Real estate professionals know what to expect, how to avoid legal issues, and how to make the process of selling what is possibly the most valuable item in an individual’s portfolio as easy as humanly possible. Consumers may believe that they understand the process. But, will they know how to respond correctly when the seller takes the bathroom fixtures or if there is a rat infestation prior to closing?
  2. Paperwork preparation. Depending upon the state in which you reside, the paperwork required for state compliance can be upwards of fifty different documents or contract addenda. While a computer program may be able to spit out a list of documents, will that list be correct in each situation? Will the consumer know how to complete them? Will the consumer understand the legal ramifications of each document?
  3. Transactional Nuances. Lots of real estate transactions have very subtle nuances—little issues that are hanging out on the sidelines that need to be resolved prior to closing. These may include clouds on the title, financing limitations, encroachment or boundary issues, and zoning and permit issues. Only an experienced real estate professional would be attuned to these nuances in a way that can get the deal to the closing table the very first time. No computer can do that.
  4. Personalized Customer Service. While the Internet is great for getting the word out about a property or getting a document signed at record speed, there is no replacement for face-to-face communication. Personal consultations, as opposed to quick text messages, provide clients with the detailed information that they need in order to understand the scope of the real estate process. Additionally, busy real estate professionals have long lists of homebuyers who may be looking for a home that meets specific criteria. Agents can leverage personal connections to put a strong, solid deal together in no time flat.

What’s Next for the Field of Real Estate?

When asked about whether the future of the real estate professional will be mechanized anytime soon, Michael McClure, COO of T3Experts, stated, “I do think there will be a more-rapid-than-most-expect concentration of power in which those who leverage technology and other large societal trends most effectively will gain real competitive advantage and differentiation.” McClure also asserts is that it does not necessarily matter whether the information provided is accurate; those professionals who leverage technologies will have the upper hand.

Consumers will become increasingly reliant on the Internet as a research tool before selecting an agent to use in their next real estate transaction. McClure points out that previously “lots of agents have been able to hide behind the ‘ambiguity of information.’ That is, sometimes people don’t ask a lot of questions because they are simply not comfortable asking them.” McClure goes on to say, “I believe that’s a reason why the agent that does one or two deals a year can do one or two deals a year: because people often don’t dig very deep in researching agents.”

What McClure recommends is that agents “leverage things like advanced search technologies and the next generations of review sites.” It will be more important than ever, McClure states, “to actively manage your online reputation.”

How to Ensure That You Are Not Replaced by a Machine

There are actually some things that real estate professionals can do right now to attempt to protect themselves from the mechanization of their profession.

First and foremost, put a process in place to manage your online reputation. Set up Google Alerts for your name and the name of your company, if applicable.

Next, develop strategies to increase your online reviews. Utilizing the large syndication sites, Google, and Yelp, continue to build your online reviews. You can even install WP Customer Reviews, a plug-in for WordPress.

One final—and perhaps obvious—suggestion would be to continue to develop professionally. You need to be constantly reassessing your business model to be sure that what you are offering the public is “non-commodity service and customization” and not just Swiss cheese. (The profession of cheese sales, by the way, has an automation probability of 96 percent.)

Melissa is an in-demand business success speaker and author, as well as a real estate broker with thousands of short sale transactions under her belt. She leverages her experience as a short sale insider to motivate thousands of business professionals to plan their careers better, execute more effectively on their plan, and earn more because of it.

Op/Ed

4 red-flags to see if you (or your boss) may be an ineffective leader

(EDITORIAL) Leadership is hard as is, there’s no need to make it harder on yourself. Avoid these bad-leader habits and you’ll be golden.

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Being a leader can be tough

Whether you are heading a soccer team, a choir, or a team of young realtors, being a leader is tough. Even the best leaders have character flaws. Under pressure, these peccadilloes are often exacerbated. If you find yourself in a position of influence, your flaws may magnify into strategic disasters.

To prevent such scenarios, it is critical that we dissect our own behavior, not only for the sake of our professional careers, but also for our own conscience and sense of self-worth.

Tips for success

Use the following 4 red-flag-raising behaviors as a blueprint, making sure you refrain from (or rectify) these mistakes as you evolve into a better leader.

1. Wavering on tough calls

Bad leadership 101 is an indecisive leader. A pitiful half-panicked state of ‘I cannot make up my mind’ hesitation. Nothing frustrates a team more.

More poignantly, nothing destroys an employee’s respect in a leader quicker.

Decisions, especially the big ones, need a steadying, confident hand. Buying yourself time, by demanding more research from the team, or hiding behind the excuse of another round of “brainstorming” shall only delay the inevitable. Rise to the occasion; do not be dragged to it by your circumstances. Dignify a problem with a decision!

2. Inefficient communication

This problem is more nuanced than simply bad communication. It may mean three things: under-communication, obfuscation, or over-communication. Try to avoid each like the black plague.
Nothing makes a project stall quicker than an unclear path forward. Make time to explain things to the team, clearly and precisely. Lay down a path. After all, that is your job! No one can be a “leader whisperer” or thought interpreter.

A team should not have to second-guess the direction of an assignment.

Obfuscation stems from the leader’s own lack of direction. Do not call a meeting where there is nothing definitive to announce. What is the operational plan? How should it be implemented? Do not assume that a plan shall present itself during a meeting.

Then there’s the sin of over-explaining.

This is a behavior where the leader drones on and on, wasting vital time, in order to elicit tacit or verbal endorsement of his/her idea. This is the control-freak micro-manager. Efficient communication does not mean more time in the conference room. Efficient communication is more productive in less time.

3. Abusing power privileges

Leaders enjoy considerable leeway to enforce their decisions. However, it is easy to forget that this “power” exists not for the leader to bask in its glory, but to deploy as necessary for the team to operate more efficiently. The possibilities in which a leader can abuse power are countless, and varies wildly, but here are some of the usual suspects:

Humiliating an employee publicly: constructive criticism is an art, delivered with compassion. It requires restraint and strength. Weak leaders have “outbursts”, aspire to be feared by others, and work hard on creating an air of intimidation and un-approachability.

Breaking your own word: Leaders may also make casual promises to a client during a meeting, without owning up to the promise. The leader may then avoid to the agreed upon request entirely, or worse, hand it off to subordinates to deal with. Empty promises make for empty leaders.

Rewarding loyalty: Leaders often play favoritism by distributing assignments and workloads unevenly.

Feigning neutrality: This may seem contradictory to the previous point, but it is not. A leader should take clear sides on arguments (not people) put forward. Not committing to opposing views leaves everyone directionless and confused. There are good ideas, less good ideas, great ideas, and terrible ideas. Which one do you like? Whose is it? Point it out. Give direction and move forward.

Insubordination: Weak leaders often bad-mouth their bosses, behind their back, in order to win cookie points with the team. It shows a lack of dependability, trust, and character.

4. Evading feedback at all costs

If your team cannot express grievances, complaints, and concerns freely, your leadership is off the mark. The most likely cause: YOUR unwillingness to take responsibility for failure. Shifting blame to others for what has gone wrong, attributing harsh decisions (like letting someone go) to “the company” and not yourself, bemoaning lack of resources as an unfortunate scenario where your hands are tied— these are all ways to clamp down on criticism. Seeking revenge on, or appeasing your critics is worse.

If you do not like employees to ask you questions, you should reevaluate your own position immediately. Feedback is essential to growth. To dismiss them as “whining” is going to kill your effectiveness as a true leader. In times of true crisis, you will find it impossible to rally the troops to your cause.

Leader to the core

Keeping these common leadership flaws in mind shall help you become “self-aware,” your best guard against becoming a horrible boss. In the process, it will take you much further—it will inspire you to inspire others, the very essence of great leadership.

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Op/Ed

8 lessons on how to keep work-life balance in your real estate career

(EDITORIAL) Your real estate practice can be overly consuming if you let it. With discipline, you can have a good work/life balance.

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Real estate agent shaking hands with clients over a For Sale sign marked sold.

8In your real estate practice, you have a plate, and you can only put so much onto that plate before things begin to fall off into the cracks. These cracks are what I call “fires” – you know, those things that become emergencies because simply put, you let them.

What I am about to share with you at first glance may come off as cold, however, I believe that with a little thought, some practice, and your own tweaks, you can realize the income you want and afford time with your family – all while elevating the respect you deserve from your real estate clients.

Balancing work and life in real estate is no easy feat.

At no point in my real estate career have I ever allowed myself to appear too eager or desperate for a client, and my clients always felt special and cared for, even though I observed a strict daily schedule. The following is how this can be accomplished:

Lesson one: You know your threshold of how many clients you can handle at once. Your pipeline should be full, and the next client in line for your services should know you’re worth waiting for, and be assured that the same care and attention will be shown to them as soon as they are “next” (never answer a client call while with another client, or this will not work for you). A client became “next” when an offer was accepted on one of my existing transactions. My threshold was originally four clients. If my pipeline was expanding quickly, I brought on agent assistants. As they waited their turn, my assistant held their hand and kept them busy with pre-qualification, buyers agreements, and the like.

Lesson two: When I took on the next client, clear rules of the road were established. I do not leave the house (home office) until 10. I have better things to do with my time than to sit in rush hour needlessly. Some like this time for phone time, however, your undivided attention is not always given, and the possibility of missing vital details while driving and negotiating grows exponentially (as do safety risks). My phone calls were made from 8am to 10am before I left my office.

Lesson three: All of my appointments were set on the half-hour – I’m not sure why, but it worked and I was always on time, as were my clients. The same went for phone calls. Schedule them on the half-hour. You will find, for example, that if you grab lunch at noon, you’re ready for business again at 12:30.

Lesson four: Be home either before or after rush hour. I preferred before. The implied impression of my work hours with my clients worked in my favor nearly 100% of the time. Why? Because I skipped the salesman b.s. of showing them more expensive homes first – I actually took them to the home described in the range they wanted. I set the proper expectations in the first place. I listened to my clients, and they appreciated it. The day they may have waited for my undivided attention gave them immediate results, and they loved it.

Lesson five: If you cannot show your buyers their next home within five showings, either you’re deaf to their needs and wants, or they don’t intend to buy – if you’re experienced, you know it when you see it, and they’re wasting time for the next customer in your pipeline. Place them on a drip campaign with a buyer’s agreement in place, or refer them.

Lesson six: Decide when your workday ends. Mine was at 5:30. However, from 8:30pm to 10pm I would work on offers, faxes, enter listings, answer texts, and emails.

Lesson seven: Not every client was right for me. For example, I have a zone of travel. The markets I work in. Working outside of that zone takes up time from my clients in travel, and time from my family. Refer them, or if you’ve tapped into a further away zone, build your team. Teams can grow and shrink as needed.

Lesson eight: You are a business. Real estate is a business. You have business hours, and you have you time. My you time was with my family, but I love marketing, so I added a 6th half-day for my marketing, blogging, and the like.

As my business grew, my referral network grew. I utilized an assistant until an indie brokerage was established. We had a clear code of how we conducted business, encouraged our buyer’s agents to adapt their business model as I’ve described, and never allowed an unseasoned agent to handle more transactions than their limit. Inevitably my threshold grew to six, but it took time.

With the technologies we have today with instantaneous communication, it’s very easy to allow things to creep onto your plate. So my final lesson is to utilize an assistant frequently.

It is possible to work and live but it takes discipline and a set of business rules for yourself that you’re accountable to besides just the Code of Ethics. It’s about being honest with yourself, and never being so desperate that something can’t wait a minute.

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Op/Ed

Tips to become one of those people who is good with their money

(EDITORIAL) In real estate, it’s difficult to anticipate which years will be the busy ones and which will be eerily empty. So how do you manage money?

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money for transactions

I’m a firm believer in making mistakes. Specifically, the all-out, crash-and-burn kind. You know those people who say “own it” – yeah, that’s definitely me. That’s the sort of high-risk, high-reward mentality that leads to really thrilling moments onstage and in life. And when the reward is that intense, so is the loss. It’s the same with money.

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My formal background is as a professional opera singer. The level of training for a full-time career in the field includes Olympic-level physical, emotional, and intellectual training. Opera singers don’t use microphones, which means they must use their bodies in a perfect, practiced physiological balance to become a human megaphone.

They learn several languages, with enough facility to jump into rehearsals with colleagues who are relative strangers, singing about passionate love, and infuriating politics while maintaining that physical balance in a foreign tongue.

Unlike the Olympics, regular opera singers don’t get endorsement deals. (Okay, famous tenor Plácido Domingo is sponsored by Rolex, but that’s a particularly singular example.) So despite its extreme training, opera is a medium that requires its artists to manage themselves as freelancers. Freelancers and be-your-own-boss types, I know you feel me:

It’s difficult to anticipate which years will be the busy ones and which will be eerily empty.

Preparing for financial uncertainty

So how do you manage finances with so much up and down?

Invest time instead of money. I rethink how I’m approaching my everyday needs. I’m talking about what methods of transportation I use and how often; I’m talking about regular doctor’s visits or self-care; I’m talking about any payments that you owe regularly. Is there any way to reassess seemingly non-negotiable expenses? Can you refinance a mortgage? Can you drop the gym altogether and commit to really learning and developing an exercise routine? Find something convenient you can replace with a free education; the Internet is an insanely abundant resource and should be milked for information.

Develop multiple interests and invest in them. I am a professional singer, but I also love to cook and am serious about it. I write frequently and across a wide spectrum of interests. I read avidly. When you invest in other ideas and interests, you make yourself a more powerful candidate for the workforce, and you give yourself more ability to seize opportunities. Who knows – you might find yourself pivoting careers.

Design a financial contingency plan before you need it (but go broke at least once). Do you have a place to crash if you can’t afford your own place? How much money do you really need to get through the month? How far can you stretch $50? If you can’t define your limits, you’ll never be able to develop a plan with thoughtful security.

What’s life without risk?

The freelancers who truly succeed are the ones who failed. It’s that Oscar Wilde quote, right? “Experience is merely the name men give to their mistakes.” And so have I before, and so will I again. The only way forward is up. I’m going to take my experience along with me for the next chapter. I hope mine will help color yours a little, even if with a passing thought. Dare to lose it all — and see where it leads.

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