The agents who innovate and adapt will dominate the real estate industry of the future.
The real estate industry is rapidly evolving, and top agents are employing new strategies succeed.
We scoured the websites, social media sites, and even the Zillow profiles of 25 “WSJ 200” super-agents, and spoke with some of our most successful real estate clients. Here, we will share what we learned about how to dominate in the real estate industry of the future.
The agents of tomorrow will not be competing with technology itself, but with the people doing the best job coordinating it. The best and brightest are finding ways to outmaneuver the people and business models stealing market share, instead of the impossible task of trying to outperform technology. This article will describe, in detail, exactly how they are doing it.
This dominant agent of 2019 and beyond must be able to offer far more than their click-and-sell counterparts. Their value proposition include:
- A deep understanding of the nuances of the local market, and a strategy in place to maximize buyer engagement and sale price
- Strong ties in the local real estate agents industry
- Extra services that aren’t available at online brokerages (like staging, access to trusted contractors, pre-listing exposure, a moving truck, etc)
- Extensive, professional, multi-media marketing packages for each listing
- Commitment to marketing every listing package across every relevant channel
- Experience and resources to navigate the complexities of each transaction
- Cutting-edge technology and platforms for each step in the process, from pre-listing to closing
- The ability to show that they get better results that the industry average; results more valuable than the commission they charge
Additionally, the top agent of the future will consistently and aggressively communicate their value through multiple marketing channels.
Below, we’ll go through the ways the top agents we studied offer and communicate extensive value. But first, we’ll examine what real estate industry of the future might look like.
The Real Estate Industry of the Future
1. Improved Real Estate Transaction Technology
Real estate sales technology is increasing at a rapid pace. Most agents are struggling to keep up.
As we’ll discuss in the second half of this post, embracing new tech is an essential part of staying competitive in the future. We’ve listed some major technology trends shaping the future of real transactions:
Enhanced Transaction Engagement
A new tech buzzword is CX, or “Consumer Experience,” which means using creative digital elements to help people interact with your brand online. Many brokerages are embracing CX “transaction engagement;” shifting their online focus from selling to serving. We are already seeing this play out in some brokerages’ websites, as they strive to make their online presence interactive, engaging, and personal. An example of this is Collections by Compass, which allows buyers to compile their favorite listings and share them “Pinterest style” with their agent, friends, and family.
As the “I” (intelligence) in “AI” becomes more and more advanced, it’s becoming increasingly cost effective to augment listing packages with virtual reality. This includes 3D tours like those by Matterport, and, soon, immersive walk-throughs with VR headsets. Another VR application getting attention in real estate is “virtual staging,” where agents can use tools to digitally furnish and decorate photographs of empty homes.
Listing packages with VR augmentation will get more attention than listings with standard 2-d photos, especially from the next generation of buyers.
Predictive Analytics (PA) gives agents the ability to forecast which homeowners are most likely to sell at a given time. PA services like SmartZip currently use basic public information (like the date of the home’s purchase and the area’s market turnover), but the future of PA is much more exciting.
In the coming years, the algorithms used in predictive analytics will factor in things like the owner’s web browsing history, social media activity, and family profile. The next generation of PA will be a powerful companion to neighborhood-wide farming efforts, and will likely not be the sole prospecting tool of successful agents. Showing up at the point of sale, without having built a foundation as the area’s trusted expert, will reduce the odds of getting the listing. Multiple agents will be using the same data, and it’s safe to assume they’ll be courting “likely sellers” at the same time.
Top agents are currently blanketing entire communities with their value proposition, in order stand apart from the competition when it’s time to knock on a door. This strategy will become increasingly important in the coming years, as more agents begin using predictive analytics.
Voice assistants like Alexa and Siri are the fastest growing digital search interfaces worldwide. A recent study by Tracticia estimates that by 2021, 1.8 billion people will be using chatbots regularly. This trend has already started to emerge in real estate.
For example, the new platform AskDoss provides instant, accurate answers when people ask it a real estate query in their normal voice. More and more real estate portals and websites are expected to incorporate chatbot technology into their search functions in the coming year. The top producing agents of the future are learning how to optimize their listings for voice-assisted search engines.
2. Web-based Flat-fee Brokerages
It’s a tough pill to swallow, but online brokerages charging low, flat fees are likely to gain more momentum in the coming years. The sex appeal of these companies is enormous, as they promise seamless transactions for ridiculously low fees. Their efficacy is questionable, but even so, they’re forcing full-service brokerages to up their game.
According to Zillow, 70% of sellers who attempt to sell their own home end up hiring an agent. We may begin to see a similar phenomenon with online flat-fee brokerages, as sellers sign up hoping for a quick, cheap, hassle-free, and top-dollar sale – only to end up with an under-exposed home that languishes. Of course, there will be exceptions, but odds are most sellers will end up getting what they pay for.
Nonetheless, e-brokerages are here, and they are here to stay. As sellers try out these services, agents at the lowest-performing end of the spectrum will be hit the hardest.
Agents selling a few homes a year probably don’t produce online home tours or use drone photography, and they probably don’t have deep ties in the local market. Lacking in experience and resources, they are less likely to have developed effective pre-listing procedures or pricing strategies. Their value proposition is no better than the online alternative, and as a result, they are an endangered species. This means that high-caliber agents have an enormous opportunity to pick up market share from hundreds of thousands of competitors who will leave the industry.
Agents aiming to dominate in the changing industry will need to market more strategically and aggressively than ever before. Sellers – especially those listing a home for the first time – may not be aware of all the marketing, staging, consulting, strategic pricing, and legal, title, and financial legwork a high-quality agent does. Nor may they be aware that the time investment and hard cost of these services are incurred by the agent, regardless of the final commission. Top agents will need to communicate to sellers that an online flat-fee brokerage will not get them the same result as an experienced, top-rated agent.
3. A New Generation of Buyers and Sellers
The industry itself isn’t the only thing changing… people are, too. Millenials currently comprise 36% of buyers, and the largest percentage of sellers are ages 38-52, with a median age of 45 (according to NAR). This means that people born from the mid-90s through today (“Generation Z”) are the up-and-coming home buyers and that the preceding generation, Millenials, are the next wave of sellers.
Gen Z, in particular, has been dependent upon technology since birth. The way these young generations work, socialize, build families, and even the way they eat is different from the Baby Boomers and Gen-Xers agents have been catering to for so long.
According to research from HotPads, the average Gen Z-er will buy a home after 11 years of renting their first apartment. This means they’ll enter the market a year sooner than Millenials, presenting a healthy demand for real estate in the coming decade.
These buyers will be looking for open floor plans, green space for their pets, and walkable streets lined with good restaurants. They will be happy to sacrifice space for amenities, and with most of them delaying children, they won’t be too concerned about school districts. They will be drawn to interactive, multi-media home listings, and will take full advantage of VR, chatbot, and CX technology. These young buyers will expect instant and seamless online lending, bidding, and closing experiences.
By the mid-2020s, many Millenial sellers will be looking to trade up. They will want an outstanding price, and even though (like previous generations) they won’t want to personally work with the buyer, they will want real-time play-by-plays of each negotiation.
With the ever-increasing degree of convenience enjoyed by Millenials, they are likely to expect fast sales with little or no legwork involved. Where previous generations may have been amendable to spending a month on repairs, Millenials may pay a premium to have the work done twice as fast – or even be willing to skip it altogether and take a price-hit.
While online platforms will meet many of the next generation’s needs, they will not “include” a local, experienced professional who is highly incentivized to ensure the best possible price, the fastest sale, and the fewest complications.
Whether it’s taking the time to pin-point the home’s ideal list price (regardless of what the algorithms say), or untangling a messy title issue, there are some things software will never be able to do. With so many demands and so little patience for error, a human advocate coupled with robust technology is exactly what the next generation needs. The problem is, they may not realize this. Tomorrow’s successful agent will need to work hard to communicate why it’s important to hire a real estate “expert advisor.”
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Planning Today for Tomorrow’s Real Estate Industry
1. Shift from “Real Estate Salesperson” to “Real Estate Expert”
We talked about how low-volume agents (the ones who operate as transaction managers versus experts) may be brought to extinction in the near future. Serious agents running full-fledged businesses, however, have an opportunity to embrace the changes in the industry and achieve new levels of success.
The hard truth is that today, technically, no one really needs an agent to help them buy or sell a home. The same is true of financial advisors, accountants, secretaries, or for that matter, doctors.
With so much information available online, and software so intelligent it can close out a fiscal year, it’s a wonder anyone needs professionals for anything anymore. Or is it? While technically, nearly everything – even brain surgery – can be done by computers and robots, it isn’t. We want and need experienced, accountable people in the driver’s seat of our most complicated affairs.
The most cutting edge online real estate platforms of the future will be able to do amazing things, but they won’t be able to compel a buyer to come out of pocket when an appraisal comes in low, host a catered broker open, or coordinate an army of trusted contractors to make a home market-ready in three weeks.
For the low price of flat-fee transaction websites, sellers will not be receiving robust listing packages or hyper-local, broker-to-broker exposure.
Traditional commissions make professional photography, video editing, and face-to-face marketing possible, and many sellers won’t want to sacrifice the benefits of these services. Most importantly, with a flat fee, an online broker has no incentive to price the home strategically or negotiate aggressively.
The top agent of the future will not try to compete as a “transaction handler,” because he can’t. In the coming decade, straight-up real estate “salespeople” will seem as irrelevant as the horse and buggy.
Instead, agents who will dominate in 2020 and beyond are branding themselves today as the area’s leading real estate expert and trusted advisor. This means showing prospects, rather than telling, that they are the “experienced, accountable human” prepared to “sit in the driver’s seat” of one of the most complicated affairs of the prospect’s lifetime.
2. Leverage New Real Estate Technologies and Services
The next generation of buyers and sellers will want pretty much every aspect of the sale handled quickly and efficiently. Gen Z, in particular, could get annoyed by paperwork or even a trip to a title office. One major selling point of a virtual broker is online exposure, and the successful agent of the future needs to be able to offer the same level (or higher) of internet marketing for listings.
Similarly, tools like Matterport, drone photography, and virtual reality tours are excellent ways to add value in the new era of real estate. The top agents of tomorrow will enlist professionals to create a high-tech listing presentations. They will have their tech-savvy virtual assistants optimize those listings for the most relevant platforms and chat-bot search engines, and they will be deploying to the most relevant channels.
The value proposition of tomorrow’s successful agent is her ability – and accountability – to get clients’ the best deal in the least amount of time. This doesn’t run counter to the “disruption” of new technology; rather, it is grounded firmly inside new and useful technologies. Obviously, emailing a form for e-signature instead of showing up with a pile of paperwork adds to an agent’s value instead of degrading it.
3. Use “Storybranding” to Communicate your Value
Beginning with his first book, Storybranding, Creating Stand-Out Brands Through the Power of Story, Jim Signorelli started an entire movement in marketing. He’s written a follow up book, Storybranding 2.0, and hosts seminars and workshops on his method. I recently joined Discover Pubs at the Accellerate conference in Nashville, where Dave Ramsey spent a full day teaching Storybranding to 500 of the country’s most successful agents.
Essentially, Storybranding is about making your prospective clients the “hero” of your brand, and positioning yourself as the “guide.”
Here’s an example of what Signorelli means: imagine your market as Middle Earth (the setting of The Lord of the Rings). In this fantasy, your client would be Sam (or perhaps Frodo); the one who is at the center of the story and gets all the credit and glory. You would be the Gandalf, the wise wizard who makes the hero’s victory possible.
This means that in your branding and marketing, your message is about helping the client get what they want, and not about achieving any “big wins” of your own. All too often, agents focus on all the great things they have done and will do, instead of focusing on what the client is hoping to achieve.
In their profiles, marketing publications, emails, and even their social media, the agents planning to succeed in the future will be focused on helping the client get what they want. They are currently publishing market updates, local stories about the community, and helpful information for homeowners. In doing this, top agents are delivering the message: “I’m here for YOU, and I know what I’m doing.” The effective real estate “Gandalf” will emit confidence in her abilities, back up her claims, and “show” a whole lot more than “tell.”
4. Market Strategically, Consistently, and Aggressively
Consider that a prospect’s decision to hire an agent begins with “awareness,” before they are even planning to sell. Most homeowners in a given month aren’t actively seeking an agent, so promotional marketing won’t apply. Content about the housing market and community will.
By engaging with listing prospects early in the buying “funnel,” agents can establish a connection with homeowners long before it’s time to list. According to recent research from Demand Metric, 82% of consumers feel more positive about a company after reading custom content.
As we discussed above in the section on “Storybranding,” trust is earned by showing rather than telling. Content marketing, or marketing with articles and videos about topics important to your prospects, is a great way to convey your expertise.
Research shows that content marketing works – in fact, it generates three times more leads per dollar and costs 31-41% less than paid search (Eloqua 2016). Real estate agents who master, integrate, and publish good content across multiple channels will rise to the top in the years ahead. They will dominate the industry by building trust and getting engagement.
So what are the best channels? Facebook advertising has become crowded, and consumer inboxes have become hyper-sensitive to junk mail. Agents should continue to leverage these channels, but top agents planning for the future are looking for more effective ways to reach prospects. Targeted YouTube advertising, direct mail, chatbot-optimized podcasts, press releases, strategic partnerships with influencers, community events, and local media sponsorships are expected to be some of the best lead generators in the years ahead.
Of particular intrigue is direct mail. It’s often dismissed as irrelevant in today’s “wired world,” but that couldn’t be further from the truth. The DMA’s most recent report shows that direct mail response rates out-perform any form of digital marketing by more than 700%.
Although Millennials are inseparable from their devices, a 2017 USPS consumer survey reports that 87% of Millenials like receiving direct mail and 90% believe it’s reliable. According to this same survey, over 60% of Millenials prefer sifting through print mail versus email. Today’s buyers and the next generation of sellers enjoy and respond to direct mail, perhaps because it isn’t digital.
Because direct mail works so well, it’s become a core component of top agents’ marketing programs. Many of the nation’s highest producers are farming with custom publications, which are ideal for content marketing and Storybranding. They provide plenty of space for local articles, while also leaving room for success stories and calls to action.
In an interview with Discover Publications, Gary Keller of Keller Williams suggested agents mail custom publications at least quarterly. Our recent survey data backs up his advice: agents mailing custom publications to farms of 3,000+ homes report 150-400%+ ROI with consistent use (Discover 2017).
Dominate the Real Estate Industry of the Future
A recent Oxford Study predicts that the traditional role of today’s transaction-focused Real Estate Agent will become obsolete within a decade. But just like in the legal, accounting, medical, and financial service industries, no amount of technology can replace the expertise of a true real estate fiduciary.
By adjusting your business become the leading, end-to-end home sale expert (versus a sales rep who places homes on an MLS), you too will be a dominant force in real estate industry of the future.