(This is Part 1 of a four-part series.
(This is Part 1 of a four-part series. See Part 2: Real estate maps go from bland to grand; Part 3: Online magazine puts new twist on real estate advertising; and Part 4: Real estate’s future driven by Tablets, Dashboards.)
The movers, shakers and innovators gathered last week in San Francisco for Real Estate Connect. The way you will be doing business in the future is about to undergo a radical change. Are you going to be an early adopter who gains the competitive edge? Or will you be the agent who is hanging on to your buggy whip trying to whip a dead horse into action?
What does the future in real estate look like five years from now? While no one has a crystal ball, the next four columns will give you a snapshot of the trends, new products and ways that your business may soon be different.
One of the most important influences on real estate today is search technology. This term refers to how consumers locate information on the Web. The typical Internet search often brings up so much data that there is no way to process through all of it. For example, the term “San Francisco real estate” yields more than 2 million results on Google. The user is left to sort through which of the results are the most relevant.
How search occurs is changing dramatically. The new trend is toward customization and personalization. Customization refers to displaying results tailored as closely as possible to what you are seeking. This means results closest to your search criteria will be displayed in rank order. For example, if you go to Realtor.com and search for a property with 3 bedrooms, 2.5 baths, a swimming pool, formal dining room and three-car garage, the search engine will display the listings that match 100 percent of your search criteria first. It then places the remaining listings in rank order by displaying those listings that have the highest percentage of matching characteristics.
Personalization is the other big trend when it comes to search. Instead of aggregating leads (this term refers to collecting leads without classifying or sorting them), the new generation of search vehicles indexes leads and assists agents in developing better customer relationships. For example, if you have ordered a book from Amazon.com, their Web site will recommend other books that may be of interest based upon your past behavior. This is known as personalization. This technology has now made its way into the lead-generation business. Several new technology companies now rank listings based upon how well they match your criteria on a percentage basis rather than displaying them exclusively by price or bedroom-bath count. These tools can rank order listings based upon how well the listing meets your key criteria. The more time you use the tool, the more it knows about you and the better job it can do on your behalf. This new technology is faster, smarter and less visible to the user.
One huge advantage for agents is that search is the great equalizer. On the Web, individual agents who spend money on pay-per-click advertising can be placed immediately adjacent to multimillion-dollar advertisers. With the advent of local search (i.e., search engines that search only a specific geographical location), agents are in an even better position to gain clients from this powerful tool.
2. Fifty percent of the Internet leads are going down the drain
This is a disturbing statistic. Agents and companies alike are spending millions of dollars generating leads. The challenge is the large proportion of leads that receive absolutely no follow-up. Many of the lead generation companies are attempting to hold agents accountable for the customers they are supposed to serve. One broker, who implemented Cendant’s new Lead Router system that contacts agents immediately when they receive a telephone or Web inquiry, discovered it could take up to 18 attempts to find an agent who would respond to the lead in a timely fashion. Making matters worse, agents seem to be caught in the “right now” business trap. If the lead does not agree to do business on the first contact with the agent, more than 50 percent are never contacted again.
What we do know about Internet leads is that they expect immediacy. In other words, they want someone to reply right away. Twenty-five percent expect instantaneous response. Fifty percent expect response within two hours, and 100 percent expect follow-up within one business day. The truth of the matter is 70 percent of today’s agents take two days to respond, and 58 percent don’t respond at all.
Part of the challenge in responding is that most Internet searches take place outside the traditional real estate day. The majority of Web users are online conducting their searches between 7 p.m. and 1 to 2 a.m. If this continues to be a trend, real estate offices may want to rethink when they are open for business. For agents, they may want to consider hiring a virtual assistant in Australia or New Zealand where the time difference is 10 to 12 hours different from what it is in the United States.
3. Fun products
Tired of lugging around metal magnets to give your customers? If so, there’s a new product from the Inventables called a gel magnet. The magnet is actually squishy and can be used to keep doors opening and closing silently rather than banging. This takes real estate magnets to a new level and will truly be a novel conversation piece among your clients.
Interested in seeing more of the future? Watch for next week’s column.
What’s your opinion? Send your Letter to the Editor to firstname.lastname@example.org.