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Real Estate Brokerage

Why real estate brokerages are not startups

(REAL ESTATE) Brokerages are popping up nationwide that are sleek and modern, and also misinformed as they call themselves startups. Let’s talk about the technical definition.

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Businesses that are just starting out often refer to themselves as startups (which is inappropriate given that startups are funded differently, scale differently, and have completely different KPIs). Take real estate brokerages, for example. An increasing number call themselves startups, but when you look at the definition of a startup, can you really call yourself one?

Small businesses and startups have very different definitions (and there’s no shame in being a small business or an “innovative brokerage”). Let’s discuss.

1. Startups have a different goal altogether.

Typically, startups are about growth. They’re designed from day one to scale extremely quickly. Small businesses are often limited by a target market or geographic location. There’s nothing wrong with that, but they aren’t scalable the same way an international software brand is. Think about scaling in terms of a beauty salon versus MatchCo, an app that uses technology to create a foundation just for you. A franchise does not a startup make.

2. Startups generally seek outside funding to accelerate growth.

Startup founders often give up equity shares to generate funds before becoming profitable. Small businesses are typically self-funded, bootstrapped into profitability, and owned by one or a select few. A small business venture is typically less risky than a startup, too. The idea behind a small business venture is profit, and you want the business to last. Startups are structured to be sold or acquired once it hits critical mass – a “startup” is temporary.

3. Startups disrupt the industry.

Think about these companies – AirBnB, Google, Dropbox, Facebook, even Apple, a long time ago. In their early days, they were startups. It was risky to invest in these companies as they were trying something new (not iterating on something like the real estate practice which is one of the oldest professions in America), but they have outshone their competitors. They disrupted the marketplace. That’s what a startup does. And it doesn’t always work. Sonitus Medical attempted to disrupt the hearing aid market. They raised almost $90 million in funding before the Centers for Medicare & Medicaid Services decided the product wouldn’t be covered. The company held an auction and closed its doors. Brokerages have experimented with paying salaries, going paperless, or having all agents working remotely – these are all fabulous innovations and iterations, not disruptions.

The takeaway

We’ve been on the forefront for over a decade of ushering in the era of indie brokerages, paperless real estate brands, and counter-culture companies, but brokerages are simply not startups, and this is not up for debate. Iteration is not innovation.

Don’t call yourself something you’re not – be an “innovative broker” and rock it, because you’re not a temporary company seeking to scale so rapidly that you’re acquired for your indisputable disruption.

And finally, don’t fall for real estate brokerages pitching themselves as “startups” when they’re misinformed and really mean they’re simply, and beautifully “modern.”

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Dawn Brotherton is a staff writer at The American Genius, and has an MFA in Creative Writing from the University of Central Oklahoma. Before earning her degree, she spent over 20 years homeschooling her two daughters, who are now out changing the world. She lives in Oklahoma and loves to golf. She hopes to publish a novel in the future.

Real Estate Brokerage

Best ways to handle stressed-to-the-max clients

(BROKERAGE NEWS) Moving can make even your calmest clients nightmare wackadoos. Here’s how to manage them.

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Three researchers have published an interesting study on how customer service can be improved by recognizing a customer’s stress level before a connection with your business is made.

For example, a customer can often be anxious over using a particular service, i.e., a funeral home or a lawyer in connection with a divorce. By learning more about how your clients feel when they call your business, you can better manage the customer experience. This offers your business a more effective customer base of referrals and repeat business.

The researchers identified the following steps to manage stressed-out customers:

1. Find out how your customers are feeling when they need your service.

One reason so many breast cancer facilities are free-standing, away from the main hospital complex, is because women voiced their ideas to the healthcare team designing the facilities. Women wanted coordinated care under one roof, but felt like the hospital was not a calming environment. Use your empathy to walk in your customer’s shoes to change the experience.

2. Hire not only for skill, but attitude and personality.

Employees who love their job can’t be trained. The passion and enthusiasm, even for a high-stress career like a cancer nurse or funeral director, cannot be taught. Look to bring on team members who have empathy for your customers and understand that business is all about customer service. It’s far easier to teach someone the skills needed for a job than it is to teach them to be motivated to work.

3. Study your approach to the customer’s journey.

How does your business interact with the client? From the first link online or phone call, to the payment options, what is the customer’s experience? Address the high-stress interactions by providing information about your services. For example, when calling to view a listing, what can your customer expect?

4. Give the customer more control over the service.

Dealing with a mechanic who tells you that your engine is shot is highly stressful. Instead, learn to be more specific and talk to the customer in a language that can be understood by someone without technical knowledge. Make sure your customer has one point-of-contact throughout their experience. Have a plan B in place for when that individual is sick or goes on vacation. Empower your customers through today’s technology, maybe an app that tracks the sale. There’s no excuse today for poor customer service and information.

I would highly recommend that every real estate professional read the research from Harvard Business Review. Leonard L. Berry, Scott W. Davis, and Jody Wilmet packed so much information into their report that there’s no way I could cover it all here.

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Real Estate Brokerage

Iowa police hope new website helps solve Realtor Ashley Okland’s murder

(REAL ESTATE) A tragic end to a young Realtor’s life brought Realtor Safety to the forefront for so many practitioners. While still an unsolved case, police hope a new website will generate interest, tips, and hopefully the missing puzzle pieces.

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Eight years ago this week, Iowa Realtor, Ashley Okland was brutally gunned down in a model townhome while she worked. She was only 27 years old. Open houses in the city were immediately shut down, as it was thought it could be a serial killer targeting agents in the field. That theory has since been put to bed.

But the case continues to plague the officers that have spent nearly a decade investigating, and despite hundreds of leads and interviews, it remains an open case.

Local police say they are still getting tips trickling in, but “It’s like a puzzle that you’re trying to put together and you’re wanting to find those last few pieces to complete it,” West Des Moines Police Department’s (WDMPD) Lt. Anthony Giampolo, told KCCI.

In hopes of finding those final pieces, WDMPD has set up a website called Answers For Ashley where people can submit relevant tips anonymously online.

The site appears to be a work in progress, as only the “submit a tip” feature works, but the wish is that offering an additional outlet for tips could solve this murder.

Okland’s murder inspired the industry to revisit (and establish) safety plans, and several Realtor safety apps were born. Her situation was one that was so relatable, it generated a lot of conversation and idea sharing, making a long-lasting impact on the real estate industry.

Okland is not the first or last Realtor to be murdered – beloved Jacksonville Realtor, Derrick Hartley was gunned down in a road rage incident this month, leaving behind five children. Asheville Realtor, Tina Kessinger was savagely stabbed to death with a screwdriver and tossed into a dumpster. And we’ve lost others – an El Paso Realtor recently died in an ATV accident, a Kentucky Realtor died in a hit and run auto accident, and a Florida Realtor died in a freak accident, falling from a boat. An unnamed Chicago Realtor was recently attacked with a stun gun in what would have been a sexual assault had she not gotten away to call police. The list is far longer, but these recent incidents have scarred the industry.

Okland’s case has always been on the industry’s mind is because it is thought to have happened in conjunction with her career, while she was at work. Potentially similarly to another high-profile case, Beverly Carter’s 2014 murder.

Realtors are often in a vulnerable position, spending time alone in the field, and while Okland’s murder very well could have had nothing to do with her profession and being alone in a model, it is worth considering how your team is educated on the topic of Realtor safety.

The National Association of Realtors offers ample Realtor safety resources and recently launched an alert system, akin to Amber Alerts (read about the Realtor Safety Network and know how to file an incident report).

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Real Estate Brokerage

The game doesn’t matter until you keep score

(BROKERAGE) How you collect feedback can determine whether your service actually improves or not. #science

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Every significant endeavor utilizes measurements and scorekeeping to record activities and progress. The most trivial of human pursuits often involves record keeping and statistical analysis.

While the sales and production side of real estate services are measured in-depth, the service side of the business enjoys less measurement, scorekeeping, and analysis than one might find associated with the performance of a neighborhood Little League team.

What does this truly say then about the importance many brokers, owners or managers place on service delivery, customer satisfaction, consistency and service performance?

It’s true that a few organizations do attempt to measure service performance by means of a customer satisfaction survey. Most of these programs are produced and administered internally. The surveys are sent under the company banner and the company tabulates the results.

First, when a customer is asked directly by the professional or the company for performance/satisfaction feedback, that feedback is always more positive than what is obtained by an independent, third-party asking the same questions.

This is known as the halo effect. Consumers are more diplomatic in their response to the person or company that provided the service.

Second, internal service/satisfaction assessment programs typically develop standards and objectives to validate the belief that good service is already being delivered. Thus this positively biased feedback data suits the objectives of the internal program just fine.

It’s just that measurement of those areas of service performance that sellers and buyers feel are important is not taking place.

For those more serious about customer service satisfaction and service performance assessment, there is recognition that the halo effect lessens the value of the data for internal use, and that keeping score of one’s own results has less credibility externally.

Instead, they seek the objectivity and credibility that third party validation of service assessment can provide.

Ironically, even without expert resources and objectivity the attention that measurement brings to the organization will effect positive results and performance improvement. This phenomenon is known as the Hawthorne effect.

The effect was first noticed in the Hawthorne plant of Western Electric. Production increased not as a consequence of actual changes in working conditions introduced by the plant’s management, but because management demonstrated interest in such improvements.

Unfortunately, this phase of initial improvement is not sustainable. Sustaining improvement requires more than measurement and leadership interest. Action steps that result in the actual improvement of the situation must follow collection of data.

Measuring service results and satisfaction in the real estate organization is an important first step. It will certainly gain the attention of the organization and send a serious signal.

Sustaining organizational interest and performance improvement requires more.

It requires systematic and timely feedback, objectivity, systems and service delivery processes, coaching and recognition/awards. But it really all does start by keeping score.

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