Broker and Technology
Last week I had the opportunity to teach a risk management class for Brokers, in regards to technologies used by agents. I would guess that the percentage of Brokers who have bought fully into technology were about 50%. Not surprisingly, most the Brokers who seem to actually get it, were also those with large companies and higher production levels per agents.
After the class several of these brokers stopped me to thank me for helping them find more policies and ideas to help their agents become more productive, as well as safer in their marketing. However, a few came up to say that they still think that consumers usage of the internet was over-rated and devised by younger agents who enjoyed the technology. Although the evaluations turned in by the Brokers were very positive, one helpful Broker commented that they would have found it easier to follow, had I not referenced resources that they were not aware of. My presentation only referenced, FaceBook, Blogs, ActiveRain and YouTube. How sad that there are office leaders who are still so disconnected….
Why Are We Still Trying to Convince Them
One of my friends, who is a new managing broker and was in the class, observed at the end: “It amazes me that we still have to go over this with Brokers.” I agree with her, but every time we review it, I get a room full of starry eyed office leaders who just haven’t caught up yet.
Swanepoel made this observation from a 2007 survey: 87% of Brokers [surveyed] feel that servicing smarter and more informed consumers as their largest concern”
I find it somewhat disconcerting that the largest majority of Brokers feel that a smart consumer is an obstacle. The Real Estate industry needs to really refocus on the consumer and how they need the practioner to serve them. No longer can the MLS book be kept under the desk. Listing information is ubiquitous and all the consumer is left with is raw data. Danilo Bogdanovic wrote a great post on this a few days ago.
Marc Davidson of 1000 Walt Consulting is quoted in Swanepoel’s Trend Report: ” How Long can a trillion dollar industry sustain disregard for the iPOD, MySpace, Facebook, YouTube, Starbucks, text messaging and brand consious consumers?”
I completely agree.
Consumer Actions
I think most of us in RE.net get the concept of technology’s role in working with obtaining and working with clients. It’s a tool to do a better job and not, at all, a tool for eliminating the agent’s need for good client centric service and face to face interactions. Let’s look at what client telling us by their behaviors and preferences:
How fast does a on-line consumer expect to hear back from their agent?
I heard a vendor, during an interview last year, state that on the national average it takes agents 52 hours to respond to a potential consumer’s e-mail inquiry. (disclosure: I can’t recall who said it and I can’t verify the information, but it’s close to my personal experience)
When the consumer was considering what they wanted from an agent during initial contact, this is what they were looking for:
I find it very interesting that a large determining factor in who the client hired was based on who quickly the agent got back in touch with them. The second (but very close) factor was the most qualified. Most interesting was the fact that only 10% of consumers confessed that lowest commission was a factor in hiring an agent.
What did the Consumer utilize:
84% of Consumer used information from a Realtor® to research their home purchase
84% of Consumers used the Internet to research their home (yes the consumers used the internet just as much as they used the Realtor®
Frequently Used Resources for the Consumer
Internet 66%
Realtor® 64%
Consumer found the following useful during a transaction
Agent 70%
Internet 78%
First step in the Real Estate Transaction
55% Researched On-line
20% Contacted a Real Estate Agent initially
When looking on-line, the consumer was looking for:
95% Properties for Sale
21% Information about the Area
4% the REALTOR®
4% Firm / Company
(So why are so many agents still using their webpages as a resume or ‘all-about-me’ webpage as if they were part of an on-line dating service?)
Demographics of an on-line consumer:
64% are Married
18% are Single Females
Median age is 37
Median Income is $76,900 a year
Convinced?
I think these numbers, extracted from the NAR Profile of Buyers and Sellers are pretty self explanatory. For Brokers, who should be looking at new trends and reading the pulse of the consumer, it’s a fairly simple decision to pursue investments in technology. I am frequently disheartened when I hear Brokers disparaging their agents from spending time with social media and personal education in technology. Just because a Broker may not use or needed these tools, doesn’t mean a competitor in today’s market doesn’t need to master them. Previous education, age, experience and investment costs can no longer be an excuse.
Here is a great video that I use when teaching about exponential times:
Danilo Bogdanovic
June 10, 2008 at 8:24 pm
These are probably some very eye-opening numbers to many agents and brokers (such as some of the ones you spoke with). But this has been the reality for some years now and many of us have taken notice.
Too bad some agents/brokers just don’t want to get it….
Great post and stats! Mind if I pass this along to some folks that really need to see it?
Matthew Rathbun
June 10, 2008 at 8:30 pm
Of course you can share!
I remember about six years ago as a new agent, when the Association asked me to talk for 20 minutes of the use of technology in marketing… I could barely figure out where to start, non the less about what I could relay in 20 minutes. It was the first RE class I had taught and after 20 minutes folks were dumb founded about what we had gone over. That lead to more and more lecture opportunities on the subject and now we’re teaching 8 hours classes – it’s still not enough time to get everyone on board. It’s just too broad a topic…
I wish that more folks would take some initiative to learn on their own.
Barry Cunningham
June 10, 2008 at 9:06 pm
I was asked earlier why I even bothered to come to AG. The person making the inquiry was being a smart A#s. This video you posted is one of the reasons I come here. If you can’t learn, or cease to learn from others your existence is wasted.
This video blew me away! Did you do this> It’s amazing!
Thanks Matt
p.s…I see you have been digging deep into Stefan’s book..it is indeed a treasure.
Bob Schenkenberger
June 10, 2008 at 9:27 pm
Matt, I find the old addage “You can lead a horse to water, but you can’t make him drink!” is appropriate with the “old school” broker. The fact remains that it is still quite possible to do business as usual, and the need to change has not been sufficient to make most do so.
The good news (for those embracing the re.net world) is, by the time the need for change hits the market over the head, those who are proficient with the new technologies will take over the market place and drive many long standing companies out of business! And they won’t know it happened until it is too late!
Matthew Rathbun
June 10, 2008 at 9:32 pm
Barry – unfortunatly I didn’t put this together. It is fantastic and I’ve used it (at least half of it) in many, many classes. There are a few others that are equally as powerful, that I’ll share in the future. The free recourses for education out there are fantastic.
I am a HUGE fan of Stefan’s information. I’ve had the pleasure of being at a conference where he presented. He’s a great “independent” resource. I am an instructor for most many of the programs that REALTYU offers, they are about the best courses out there!
Bob – I think we’re at the cusp of that change now, we’re about a year away from the point of no return, where tech savvy agents and long standing agents with a solid client base will be the two major powers in the industry – all the others will fade away. The long standing agents who have adapted up to this point, but not yet dived into technology, will start hiring tech savvy support folks to keep them going. This is just my educated guess. Thanks for your thoughts!
Barry Cunningham
June 10, 2008 at 9:45 pm
Some of the information in the video was simply staggering. i found myself stopping, rewinding and saying no way..no way..very compelling stuff.
You know Bob’s comment above and your response are what I am thinking and been saying. I’m done fighting with people …either they will come around on their own or they, as you have said, will cease to exist.
That video should be mandatory viewing for the hardliners (I won’t mention names)..no need to.
Love the video and the message and how you tied it in..in fact your post could have been just two words.
Watch This!
Charles Woodall
June 10, 2008 at 10:37 pm
Good post Matt. The situation is even worse here in my area. If you were to call each and every broker in this market, I’d be willing to wager hard earned money that 95% couldn’t tell you what VFlyer or Point2agent is, and the majority of those that could don’t use either.
I have searched twitter and facebook fairly thoroughly, and have yet to find another agent from my area. That’s out of an association of over 300 members. I have found a few on some of the local social sites, but they aren’t talking about real estate.
I can really only draw one conclusion from this…that I am positioning myself to capture a lot of business in the coming months and years.
Chris Shouse
June 10, 2008 at 11:17 pm
My broker would walk dispute the numbers and tell you it would cost him more to generate leads than it was worth. He is busy out selling himself screw the agents:) I think I really need to find a new one don’t you?
Frank Jewett
June 11, 2008 at 12:19 am
When was the last time a service provider didn’t tell you that their service was valuable? Shouldn’t people in the selling business have a better than average ability to detect when they are being sold?
Is anyone surprised that NAR technology surveys would demonstrate the value of REALTOR.com?
You thought those surveys were being done for your benefit and the findings were a happy coincidence?
Russell Shaw
June 11, 2008 at 12:45 am
I don’t believe the problem is “old school brokers”. Our industry has changed in a very dynamic way and I am not referring to technology. I believe the biggest change our industry has experienced is the 100% company. That is just now getting going in some areas – in my community, where it started – most agents are with 100% companies. But not the big name companies like Realty Executives (where 100% started many years ago) or Re/Max (who made is popular all over the world). The largest company in Arizona is Homesmart (well over 3,000 agents now). 1st USA Realty Professionals has about 2,000 agents. There are at least a dozen more like this in my area with huge numbers of agents and few people who are not from here would even know their names.
Those knock off companies; the ones who copied part of the original Realty Executives idea (John Hall & Associates, where I’ve been for over 30 years is one of them) are the companies with loads of agents. That isn’t true anywhere but the Phoenix area now. In 20 – 30 years that will BE the industry all across the country.
The brokers with 100% companies are not in the house selling business. Unless a broker is going to give leads to an agent (and very very few do) that agent is going to have to go and get their own business. The brokers are in the agent hiring and retention business. This is the wave of the future for our industry. Companies that are “broker centric” will amount to less and less and the companies that are “agent centric” will be the industry.
I find very few brokers who have the slightest idea of what is involved in teaching someone how to be successful. Few of them were successful as agents, which is how they became brokers. So what they have to pass along is what they know. What they know – if they are successful as brokers – is how to run a brokerage firm. That isn’t how to get and get rid of listings – different subject entirely.
Most agents will fail. That has always been true in this business and it will likely always be true. 9 out of 10 are gone by the third year. That isn’t new. So the people you are wanting to see “get with it” are always the few not the many.
Russell Shaw
June 11, 2008 at 12:48 am
Also, I have NO idea why I don’t show up in the Recent Comments at the top of the page anymore. Is that now reserved for the Top Commenters? 🙂
Frank Jewett
June 11, 2008 at 1:25 am
Russell, I believe RE/MAX shifted to 95/5 some time ago, according to the RE/MAX “Everybody Wins” book, but from what I hear, brokers weren’t making a ton of money even during the boom market. They have been overbidding each other for agents to the point where the splits don’t make sense. Now bear in mind, that observation is relative to the high overhead footprint which not only persisted, but probably grew worse during the boom. Simply put, many upscale brokers gave away too much while rolling the rest into overhead in a dot-com style “lose money to gain share” scheme.
I haven’t spoken to any turnstyle brokers to find out if their 50/50 model faired any better, but I haven’t heard about any local Century 21 offices downsizing. 😉 The number of people sitting for the licensing exam here in California has fallen by 90%, so the turnstyle brokerages will probably end up hurting one way or the other. The end result may be more generous split offers for new licensees who have a halfway decent marketing plan. You can’t play the numbers game unless you have numbers.
Ask Rich Jacobson to feature your comment. 😉
Julie Chapman
June 11, 2008 at 4:21 am
From a broker old enough to have been taught computer classes using punch cards, I am an active member of Active Rain, Facebook, Myspace as well as being focused primarilly on internet marketing. An old dog can learn new tricks……things are changing for the better.
Jennifer in Louisville
June 11, 2008 at 4:46 am
One of the best articles I’ve read in a long time. [I’m a numbers person. :)] The agents that think its all about them, really are getting a rude awakening right now. Its all about the consumer and providing them with the best service.
Matthew Rathbun
June 11, 2008 at 5:18 am
Frank, I thought the same thing about NAR’s numbers and Realtor.com; however most independent surveys about stock purchases, travel etc… all have roughly the same numbers for consumers use of the internet versus a stock broker or travel agent, etc…
I only used numbers from the report that I felt made sense and not the numbers that promoted NAR. I think NAR is a great promoter, but the buck is mostly raw data and I don’t think they would just lie about the results.
Realtor.com is junk, and mainly because it’s try to make money off the Realtor and not actually deliver data to the consumer. The Seller didn’t give you their listings to become buyer bait and far too many agents are fighting over “their lead” on line. The buyer never visited Realtor.com to become a client, they want information. This basic principal is why Zillow is positioning itself to kick RDC’s butt, because of a more client-centric approach. I could and have gone on and on about what RDC should be, so I’ll stop myself here.
However, I do know that NAR has gotten roughed up a bit by these reports because many brokers and even some leadership think that this report is promoted the extinction of the Realtor.
So, I hear what you’re saying, but the numbers make so much sense to me, more so when put up against other independent studies of on-line consumer interaction, that I think there as accurate as they can be for this kind of study.
Matthew Rathbun
June 11, 2008 at 5:31 am
Russell,
(the math is killing me…) I do think the “quantity versus quality” approach to agent recruitment is a huge problem, nationally. In our board of about 1600 members we’ve seen a large exodus of solid experienced mangers leave their companies to become salespeople again at other companies. Many are friends who I respect and when I ask why they left and what their largest obstacle will be they reply with: “I left because I was tired of agents whining and I know that I can do better” and “Learning the new technology.” It’s the same over and over again.
I am in fear that (I know I’ve said this over and over – sorry) these brokers who are stepping down or retiring are taking out all the wisdom that experience grants and in exchange we’re getting inexperienced agents becoming company leaders with knowledge versus wisdom. I can recite all the code sections and marketing trends that are out there, but if I am not weathered enough to know how to convert that knowledge into good customer service and making money – than it’s useless.
It’s like the consumer who gets a handful of listings from Zillow or Realtor.com and thnks they can go buy a house, because they have some knowledge….
I want to be careful not to beat up anyone’s business model, but it does seem like everyone get’s into real estate to be “independent” not knowing that there is a lot to learn and that continuing to apply knowledge and generate wisdom are key elements to being out on your own.
My broader point, is that agents must rely on a broker their first few years (at least) to be successful, but if the broker isn’t keeping up with trends and still learning what TODAY’S client needs are, then we’re just getting agents trapped in the same cycle that is damaging the profession.
I fully agree with you in regards with what the Brokers are doing and that their focus isn’t on coaching – I think partially because they are busy learning a different skillset and not generating a successful culture in the office; but rather figuring out how to keep the lights on.
Paula Henry
June 11, 2008 at 5:59 am
Matt – This is great info. I am forwarding to my team.
Whether or not brokers get it – some agents do – and those agents will be our next brokers, running more efficient brokerage models. They may not be huge – they will be more profiable.
Chris – find a new one!
Bill Lublin
June 11, 2008 at 9:42 am
@Matthew – What a great post. Thank you for taking the time to aggregate the information in such a coherent package. My Internet and Marketing Directors have already been sent links and told to review the information. Talk about an on-line learning experience – Gee I wish you lived in another Commonwealth – Maybe one with Soft Pretzels ,Cheesesteaks, and Teams that tear your heart out –
Not to swim against the tide, I would however point out that agents as well as brokers can be resistant to technology. In our company we provide lots of technology, to our agents, and as always, it seems that it is the few who are early adopters, and then a few more who become later adopters, and a number of people that never seem to understand that change is inevitable, and embracing it is much better then trying to resist it. So I guess the point there is that its not about agents and brokers, its about people and their ability to try new things.
If I may be permitted a sports analogy. In basketball, less skilled players look at the ball as they dribble it. The players with more skill dribble without looking at the ball (after all they know where it is!) but spend there time looking at the other players, because observing the field is the way to know where there are opportunities and dangers. Or we ould go the the Hockey analogy. Like Wayne Gretzky said, “Skate to where the puck is going, not to where it is.”
@Russell You are always a Top Commentator as far as I am concerned.
I do have to say that I don’t think that the success of a business is based on the compensation model for agents, though no one can argue that the 100% concept introduced by Realty Executives and made famous by ReMax had a great impact on the Industry, changing compensation structures even in more traditional companies.
I still think that the success of any business is based upon the execution of a prudent business plan by the business owner(s) with an eye towards maintaining a healthy enough profit structure to weather the vagaries of the market. I do believe that the application of technology can make a company and its agents more effective as this post demonstrates, and that such application is a business imperative.
@Julie Chapman On a different post yesterday someone said you can’t teach an old dog new tricks – But you and I know different. Thanks for pointing that out 😉
@Chris – I agree with @Paula get a new one – I wish I had an office in Las Vegas
@Matthew I forgot – about the math – do what I do Sit at the computer with your socks off so you can handle the larger numbers 😉
Matthew Rathbun
June 11, 2008 at 9:47 am
Bill I understand that agents can be difficult to change, but Brokers (in my book) have higher calling to be at least knowledgeable to new trends and practices. They typically sit the culture of the agents in their offices.
Bill Lublin
June 11, 2008 at 10:00 am
@Matthew I agree with you completely – I really wasn’t saying that either one should be resistant to change. And you’re right, if the Broker expects to be a leader, they need to lead. And while I’m not sure they alone create the culture, they certainly are the most influential in determining the direction of the culture.
I guess I was just sharing the other end of the frustration that those of us in this forum feel when we try to move forward and others don’t move at the same speed . As Dorothy Parker answered when asked to use the word horticulture during a game of Can-You-Give-Me-A-Sentence? “You can lead a horticulture but you can’t make her think.”
Diane Aurit
June 11, 2008 at 3:52 pm
I’m glad I found your link on Twitter. As others have said you may not have written anything we haven’t already read but it is powerful to have it condensed in such a concise way. Sometimes I don’t even think it is about the age of the brokers but rather the mentality of the community within which they work. My “young” broker told me I spend too much time on my computer and a 27 year-old agent in my office said the blogging “was for agents with too much time on their hands”. As I shared in a post on AR I sometimes feel like I am on a treadmill that has been turned on high because there is so much to learn EVERY DAY. Clearly, from your video stats, it’s only going to go faster so I better get in shape!
brian@comment
September 15, 2009 at 9:29 am
I find it somewhat disconcerting that the largest majority of Brokers feel that a smart consumer is an obstacle.