Cathy Daniel, an agent at Brentwood, California-based RidgeWater Real Estate Services, said she learned the hard way that using a company email address can come back to bite you.
Leaving behind a company email address after she switched to a new brokerage caused one of her prospects, an older couple, to hire a listing agent who shared Daniel’s name and hair color (blonde), she said.
The couple had called her previous brokerage after failing to reach Daniel through email. They were matched with another Cindy, whom the couple mistook for Daniel, according to Daniel.
“The sellers’ faces were like, ‘Oh, my god,’” Daniel said of their reaction to seeing her when she showed their home to a buyer. “We thought we listed with you.”
If Daniel had not been required to use a company email address at her previous brokerage, she decided, she would not have lost the listing — a property that she said sold for $1.5 million.
Daniel’s cautionary tale raises a question that carries increasingly heavy weight in the digital age: How much should agents rely on their brokerage for technology like customer relationship management systems, transaction management platforms, agent websites and email addresses?
The question has a corollary for broker-owners: What types of technology, if any, should they provide to their agents, and under what sort of framework?
There are no clear-cut answers, but Inman’s latest special report seeks to provide some clarity around what the answers might be for you. We surveyed 2,535 respondents between January 20 and February 2, 2016, then analyzed the results and condensed them into a two-part report — one for agents and one for brokers.
In the first part, we lay out tactics that real estate agents may want to incorporate into their tech strategies and list the pros and cons of getting tools directly from third-party vendors, rather than through brokerages.
In the second part (coming next Wednesday), we explore how brokerages can improve their tech offerings and sketch a number of models that brokerages can use to offer digital products to their agents.
Major findings of this report include:
- Agents should make sure they can hold onto their contacts, get adequate tech training and seek to negotiate discounts on products.
- The degree to which an agent should source tools directly from vendors largely depends on her experience, productivity and affinity for technology.
- Broker-owners can burnish their tech offerings by improving simplicity, training and integration, and generating leads for their agents. (Part 2)
- Independent brokerages are well equipped to snap up cutting-edge products and motivate their agents to use them regularly. (Part 2)
- Franchisees can serve up bundles of tools at affordable rates, thanks to packages handed down by their franchisors — but they may be inclined too lean to heavily on these offerings. (Part 2)
Before diving into the nitty-gritty for agents, we offer three pointers that might help agents make the best of the technology that’s out there.
Make sure you can take your contacts with you
Daniel’s experience testifies to the perils of using a company email address.
Even when companies officially require agents to use company emails, go-getters may be able to finagle an exemption. Daniel said she was able to pull this off at one brokerage, having vowed never again to risk leaving “everything behind” by using a company email.
For similar reasons, agents who use a company-wide customer relationship management system (CRM) should make sure they can easily take the information stored in the software with them if they switch to another brokerage.
Some brokerages may prohibit agents from exporting contacts from company systems, though that’s a somewhat “dated practice,” said Craig McClelland, chief operating officer of Atlanta-based Better Homes and Gardens Real Estate Metro Brokers, a 1,900-agent brokerage.
Agents at Metro Brokers are supposed to use company email addresses. Would McClelland bend if asked to waive that requirement? There’s only one way to find out: ask him.
You might think that many discounts on products are only available to agents at big brokerages or franchisors that can use their bargaining power to wring deals out of vendors.
But that’s not always the case. Daniel said she regularly negotiates discounts on products that match those enjoyed by agents at larger firms.
“I mean that’s what we do for a living: we are negotiators,” she said. If you pay retail price, she argues, “then you’re not really good at what you do.”
Some savvy agents offer to promote products in exchange for discounts, said Marc Davison, a co-founder of 1000watt, a marketing and design firm that works with a wide array of real estate vendors and brokerages.
“If you do a deal, I’ll tell 20 people,” an agent might tell a vendor, he said.
Make sure you have access to training and support
To get the most value out of CRMs, lead-generation platforms, transaction management systems, CMA tools and the like, you need to learn how to take full advantage of the many features they have to offer.
One of agents’ biggest gripes about digital products is that they can’t get the training and support they need to learn how to use them properly.
So if you want to adopt a new app or service — either through your brokerage or directly from a vendor — figure out how much help you’ll get with learning how to use it. Video tutorials and webinars alone might not cut it.
While all agents can probably benefit from following these guidelines, how agents should source their technology is more of an open question.
There are three basic strategies, each with its own advantages and disadvantages, for acquiring tech tools: through your brokerage (or, if applicable, its franchisor), directly from vendors or a combination of the two.
The vast majority of agents fall into the third camp, with nearly half of agents at both independent and franchised brokerages spending, out of pocket, more than $100 a month on technology, Inman’s survey found. That’s an expense that far exceeds the typical size of a fee some franchisors charge for a basket of tools.
Using your brokerage’s tools
Terry Reed, an agent at West Palm Beach, Florida-based Keller Williams Coast Partners, has fully embraced the tools and services provided to him by his brokerage (Keller Williams Coast Partners) and franchisor (Keller Williams Realty).
He uses eEdge, the “lead-to-close agent business solution” that Keller Williams Realty offers to all of its franchisees and agents, to manage contacts, create marketing materials and electronically shepherd transactions to closing.
He said he also pays fees for additional products offered by his particular franchisee, but not necessarily by all Keller Williams franchisees. The costs include $1 a month to syndicate his listings, $18 a month for enhanced listings on realtor.com, $1 a month for daily lists of sellers leads (typically expired, withdrawn or for-sale-by-owner listings) and $3 a month for access to a library of flyer and postcard templates.
These costs are on top of the mandatory $15 a month fee Reed says he pays for access to eEdge, and a mandatory $10 a month “consortium fee” — some of which Reed believes goes towards covering the costs of digital products made available to him.
These two fees would constitute what’s often called a “technology fee.” Agents often pay them in exchange for digital toolkits from their brokerages. Franchised brokerages tend to charge technology fees more often than independent brokerages.
Sixty-two percent of agents and associate brokers at franchised brokerages pay a single fee for tech tools, products or services provided by their brokerage and/or franchisor, compared to 31 percent of agents and associate brokers at independent brokerages, Inman’s survey found.
Reed embodies the type of agent that can benefit most from seizing on company-wide digital products. They tend to appreciate the convenience of neatly packaged toolkits, and want to make full use of offerings that they are paying for, whether that’s through technology fees, commission splits or transaction fees.
Using his brokerage’s tech offerings “… was kind of a no-brainer at the time because I really needed to learn what I was doing,” said Reed, referring to when he joined Keller Williams around five years ago from a brokerage that hadn’t offered any digital tools. “If I’m paying for it; I’m going to use it … I’m just a frugal person.”
Indeed, many agents who embrace a basket of tools provided by their brokerages — particularly agents at franchisees or large independent brokerages — may be getting more bang for their buck than their peers.
Some of the largest brokerages “pay 50 cents or $1” per agent for tools that an agent otherwise might have to pay $40 a month to procure independently, said Victor Lund, a partner at real estate consulting firm WAV Group.
But plenty of agents are underwhelmed by products provided by their brokerages and choose to buy tools and services directly from vendors instead.
Then, “you’re paying kind of double,” said Laura Hall, a partner at Terra Firma Global Partners, a 45-agent brokerage based in Sebastopol, California. “You’re paying for what you don’t want and you’re paying for what you want.”
Brokerages competing on tech
Tools provided by brokerages, both by independent firms and franchisees, often meet the technology needs of many agents, our survey found.
A majority of agent and associate broker respondents with franchised brokerages (58 percent) and close to half of those with independent brokerages (48 percent) said their brokerage provides or pays for at least 60 percent of the tech tools they use.
Even larger shares of agent and associate broker respondents at franchised brokerages (91 percent) and independent brokerages (77 percent) said they use tech products provided by their brokerage daily or a few times a week.
And both groups handed relatively high marks to the technology provided by their firms. Tech tools from franchised brokerage earned an average rating of 7.02 out of 10 from respondents, while those provided by independent brokerage notched a score of 6.65 out of 10.
Inman attracts an audience that skews tech-savvy, and our survey, published in a post with the title, “Which real estate franchise (or indie brokerage) provides the best agent tech,” may have attracted a disproportionate share of brand advocates. It’s possible the survey’s results paint an overly rosy picture of agents’ attitudes toward their brokerage’s tech tools.
But at the least, the results seem to suggest that many brokerages have bought into the idea that providing high-quality tools is important to remaining competitive in today’s business environment.
Using your own tools
Yet brokerages should keep in mind that there are plenty of agents who prefer to cherry-pick many, if not all of their tools, directly from vendors, rather than through their brokerage.
This approach allows agents to use products that may be superior to company offerings and maintain a level of independence from their brokerages that protects their long-term interests.
“I get to pick what works for me, whereas at a larger office, what they pick may not be best for me,” said Daniel, who gets all her technology directly from vendors.
Daniel pays for MarketLeader’s CRM, which she says she has used for more than a decade, and buys leads from MarketLeader and realtor.com.
“It’s a big expense that I wish I didn’t have to take on,” but in reality, she said that this expense saves her money over the long haul.
Between “technology fees,” commission splits, transaction fees or other costs, agents are paying for the products provided to them by their brokerages, whether they realize it or not.
“… in my office I have an 85-15 split, where in other offices, it would be 60-40 split,” Daniel said in reference to offices that would offer a suite of tools for a relatively low fee — or even seemingly free-of-charge.
And the supposed discounts that agents at large brokerages may enjoy aren’t necessarily out-of-reach for agents at smaller firms. You can get them if you drive a hard bargain, like every agent should, she said.
Moreover, Daniel says she gets to write off her technology costs as business expenses — which is not necessarily the case for agents who get their digital tools from brokerages.
Another benefit of sourcing tools from vendors is that you can limit disruption to your digital workflow or contact database if you switch brokerages. Hall of Terra Firma Global Partners said she adopted Referral Maker CRM long ago, rather than CRMs provided by the franchised brokerages she worked at, “primarily because [Referral Maker] is something I can take with me anywhere.”
Why in the world, she asked, would she have invested in a company-wide CRM that she would have had to leave behind?
That said, in addition to potentially having to pay more for technology, agents who buy products directly from vendors may need to be quick-studies. They’ll have to rely on vendors alone for training and support.
“The downside of that is I have to train myself, wherein a larger house, a larger office, they have trainers that come in, which is nice,” Daniel said.
Outgrowing your tools
The more an agent builds out their business and familiarizes themselves with technology, the more they may stand to gain by adopting tools outside of those provided by their brokerage or franchisor.
Gloria Commiso, an agent at Hermosa Beach, California-based Keller Williams Beach Cities, is among the many agents who have outgrown their company’s offerings alone.
While eEdge used to cover most of her technology needs, Commiso has recently started using a number of tools that she gets directly from vendors.
She started paying around $40 a month for a high-octane CRM since co-launching the Coe Real Estate Team last fall with her business partner David Coe. And she uses DocuSign, which she says costs her about $200 a year, in conjunction with eEdge to manage transactions electronically. That’s because DocuSign’s digital signature functionality is better than eEdge’s, she said.
Commiso says she’s not “pulling out” of her brokerage’s bundle of tech tools “because it doesn’t work,” she said. “But my business has changed.”
That said, what can brokerages do to improve their tech offerings? Inman’s survey, along with interviews with agents and brokers, brought a number of options into focus — which we’ll explore next week in the second part of this series.