SAN FRANCISCO — Real estate professionals are looking for ways to remain indispensable to their customers, even as they embrace the technology some once saw as a threat.
That was the perspective of industry leaders participating in a panel discussion, “Fight, Flight or Partner?” Thursday at Inman News‘ Real Estate Connect conference.
When technology began forcing changes in the real estate business, freeing up information to consumers and threatening long-established business models, the first instinct of some was to fight. Now, a slowdown in housing sales — and predictions that technology will allow a smaller number of agents to handle the business that remains — has others talking of flight.
For agents and their brokerages, the alternative to fight or flight is to partner. The key to succeeding in the changing environment will be for agents to build stronger partnerships with their brokerages, and for brokerages to work with companies that can help them use the latest technology, panelists said.
“I think for the most part the industry thinks you have to be clever and build (customer) relationships at the local level … but you also have to have the back room in order,” said Steve Ozonian, chief executive officer of discount real estate broker Help-U-Sell. Brokerages need to provide agents with lead management, an automated transaction platform, and “Web capabilities that make me look bigger than life.”
Dottie Herman, chief executive officer of New York-based Prudential Douglas Elliman, agreed.
“There’s nothing better than a personal referral,” Herman said. “However, because people want information, and want it ASAP, you could have a client you’ve worked with for many years who can’t sleep, and they see a property on the Internet at 2 a.m. and just e-mail another agent who they have no relationship with.”
In New York City, Herman said, top brokers “live with their Blackberries, and are in touch with clients 24/7.”
The Internet, Ozonian said, “has lowered the entry barrier to receiving the information, so the consumer does more than they used to and comes more prepared. Most Realtors should be more efficient … the customer is doing some of work they used to do.”
While technology may increase the productivity of individual agents, Herman said the increased reliance on the Internet requires money and expertise that makes it hard to go it alone.
“I think today it’s real hard to be real tiny,” Herman said. The idea of going it alone “is almost ridiculous. I believe you have to partner with your company and co-market yourself.” A Realtor should look at herself as a “business within a business,” she said.
Despite some indications that the housing market is entering a cooling off period — Ozonian predicted a slowdown that could last two to three years — Herman doesn’t think that means it’s time to look for other work.
“That’s when I started (in real estate), when everyone was leaving,” she said. “Interest rates were going up to 19 percent.” Change is opportunity, Herman said, and the Internet makes it easier for new brokers to compete.
“Seasoned agents are not used to it,” she said. “People will do a search before they buy a property, and if you keep in touch with them, you’ll find 85 or 90 percent never buy. But it’s a numbers game.”
Lennox Scott, chairman of Seattle-based real estate brokerage John L. Scott, agreed that technology poses challenges for some veteran agents.
“Last year we said at our summer retreat that 2006 is going to be the year of the individual agent,” Scott said. “The people having trouble this year are about 25 percent of the experienced agents. They weren’t doing CRM (customer relationship management); they weren’t quick responders; and they weren’t holding open houses to build their pipelines. That’s what we focused on with coaching those agents.”
Although it’s getting easier for consumers to shop for a home on their own, many aren’t equipped to handle the complications that can arise when closing a sale. Most people don’t realize that brokers put together a team of experts who can research, finance and insure deals on their behalf, Herman said.
Justin McCarthy, strategic partner development manager for real estate at Google, said he saw how complex the process can be when a house his brother wanted to buy took nine months to close because of issues with the seller.
“He never would have figured out that himself without that coaching (from an agent),” McCarthy said.
Realtors need to do a better job making that point, Herman said.
“If people have the information that Realtors pretty much had a lock on, you have to have a value added,” she said. “I believe people today will still pay, and want to pay, for a service they perceive is a value to them.”
Where technology comes in, said Google’s McCarthy, is helping consumers find not only the house they want, but the people who can sell it to them. The company’s Google Base is a site where Realtors (and anybody else) can bulk upload listings that will show up in Google search results.
With Google Base, McCarthy said, “Our proposition to our consumer … is we’re going to deposit you in the place you’re most interested in. We’ll show you some real estate, and then take you to the people who have it.”
The industry has moved from viewing technology as a threat to using it as a lead generation and productivity tool.
Panel moderator and Inman News founder Brad Inman put it this way: “This morning a guy said to me… ‘It’s not that the Internet is going to get rid of Realtors, it’s going to get rid of Realtors that don’t use the Internet.’ “