The median age of first-time buyers is approximately 31 years of age. According to NAR, the median age of Realtors is 56. The issue for the real estate industry is: Will these two groups be able to bridge the gap and work together?
Until recently, the "I am the real estate expert" model dominated the industry. Before the advent of IDX (Internet Data Exchange) and third-party vendors that publish listings data, consumers had to rely on agents to access what was on the market.
Not only were the agents the experts in terms of what was on the market, they also controlled access to it.
This situation gave rise to the "expert model" in real estate. This is a perfect fit for people born before 1965 (boomers and traditionalists), who value expertise. As a result, real estate professionals have often marketed themselves as "Your local real estate expert."
While this approach still has value for older clients, "expertise" may be less prized among Gen X and Gen Y. Gen Xers may prefer to do their own research and make up their minds independently, for example, while members of Gen Y may decide by surveying their friends. (Of course, these are general trends and there are always exceptions.)
The disconnect occurs when older agents work with younger clients. For example, it’s common for older agents to point out how well they know the market, their experience in maneuvering through the red tape of closing a transaction, and that the price they recommend is the right price if the client wants to close the deal.
This approach turns off younger clients. In fact, many younger clients are put off by what they perceive to be parenting behavior.
Older agents are often focused on building a relationship with their clients. As a rule of thumb, most Gen X members prefer to keep their own counsel. They’re interested in information that will help them to make better decisions — not in having a business friendship.
Gen Y also wants information. However, they don’t want it from an expert. Instead, they value peer-to-peer feedback. Consequently, the agent must approach the Gen Y client as the agent would approach a friend with whom they are on equal terms — not as an expert to a beginner.
If you can contribute to Gen Y’s peer group, you may be invited in as a valued resource. Again, you’re not likely to be invited as the "expert," but rather as a friend who sells real estate.
Innovate or slowly fade away
The challenge is that if you don’t innovate now to meet the needs of the next generation of real estate consumers, your business will slowly dwindle to nothing.
Jimmy Macklin, the Gen Y founder of Tech Support Group for Real Estate Agents page on Facebook, described it this way: "I’ve always felt that our only true competitive advantage is our ability to innovate. Nostalgia is poisonous and it’s boring."
Describing today’s top producers who have failed to step up and become involved with the social media, Art Aviles, a real estate broker/owner at ANA Realty, summed it up like this: "The top 10 percent of yesterday, and today, might very well not be the top 10 percent in the near future. Why?
"Generation X, Y, and watch out for Z! We are social media junkies and will not fly with you if you are not tech savvy. Remember that they are some of the present clientele, yet most definitely all of future business. One last thing: Social media and real estate tech is still a baby (who) just recently learned to walk and passed its "terrible twos." Wait until it’s in puberty! Bye-bye if you didn’t innovate by then."
Bridge the Gap
For older agents, just learning all the new social media terms can be daunting. On the other hand, doing face-to-face listing presentations, handling confrontational negotiations, and mastering the basic real estate fundamentals can be equally daunting for younger agents.
As one astute member of Gen Y put it, "The Gen Y (members) have the pipeline, but they don’t have the skills. The boomers have the skills, but many of them no longer have the pipeline."
The solution to this challenge is a new type of team that pairs a member of Gen Y (born 1977-94) with a boomer (born 1946-1964).
While a common scenario is a parent joining with a son and/or daughter as the heir apparent to the business, an increasing number of Realtors are finding that partnering with someone who is 25 or younger than they are is smart business.
If you’re feeling puzzled about how to best work with clients who are 25 years or more apart from you, why not try partnering with a member of the other generation and share the best practices that each of you bring to the table?
That’s a win-win for you, the other agent, and for the consumers you serve.