OpinionBrokerage

Real estate, reimagined: What the future of the industry holds

Consumers want an industry where they, not the agent or the brokerage, are responsible for setting rules of engagement
  • If you look at the basic issue of home sales, only three things are required: a defined market area, common sales platforms and an agreement between all involved.
  • An agent’s understanding of social platforms will be critical in his or her ability to define a market.
  • Going forward, agents will become their clients' quarterback for multiple communications platforms.
  • Agents will need to repackage their services into consumer-justifiable segments.

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An old friend from college (a dentist) feels compelled to send me rants about the real estate industry. As if his industry doesn’t have its own overly priced, unnecessary procedures!

But one particular recent rant was very different. It was well-written — a rarity for sure — but it was really the tone that set it apart.

Negativity I get; people have been grumbling about our industry for years. But this tone was more of a passionate, vindictive hate spew, which I fear is becoming a new cultural trend.

Don’t miss the author’s “Where Are MLSs Headed?” panel at Inman Connect New York

Why the hate?

The core reason for much of the discontent stems from the fact we, as a society, have the desire, know-how and technology to re-create the real estate industry.

And this time, we want an industry where it’s the consumer, not the agent or the brokerage, who is responsible for setting the rules of engagement.

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It’s almost as if the public is telling us; “I think we should see other people.”

So, how would an industry start over from scratch? A far-reaching topic for sure, and one that you would think is beyond the scope of an agent.

But if you look at the basic issue of home sales, only three things are required: a defined market area, common sales platforms and an agreement between all involved.

Reimagining real estate sales by neighborhood

Real estate is a comparative sale. In this regard, homesellers need their neighbors. For sales messaging to be effective and efficient, it makes sense to compare collections of neighbors.

Luckily, much of real estate is already organized in neighborhood-friendly formats: subdivisions, condominiums, legacy areas or mixed-use communities.

These existing realty communities represent potential “markets” or brands from which a new type of real estate experience can be established.

Today, we live in a much more fractured and branded environment than generations past.

Agents should use this dynamic to their advantage. It seems logical any future direction of our industry would accommodate the localism that is inherent in real estate.

And while the idea of agents “farming” particular areas or ZIP codes is not new, the execution of that activity through social media has become an art form. Successful next-generation agents will be equally versed in both real estate and all forms of social media communications.

An agent’s understanding of social platforms that will be critical in his or her ability to define a market. An agent-branded market is going to need a communications system from which buyers, sellers and agents can share information.

How changing communication could change real estate

Prior to the personal computer, the old real estate industry created the hundreds of different and disparate MLS systems and platforms still in use today. But if the industry were starting over in the information age, it wouldn’t favor any one communications platform over another. And it certainly wouldn’t prohibit the use of any newer technology.

We now live in a world of nearly endless options. The market or community at large will dictate the communications platforms they want in any new real estate world going forward.

The good news is, it’s “pick a card, any card” time.

The days of the MLS being the only communications platform has long passed. Today we have Facebook, Instagram, Twitter, plus any number of websites and YouTube channels.

Going forward, agents will become their clients’ quarterback for multiple communications platforms.

However the consumer wants to communicate will ultimately be the direction of the future.

Fear not, the MLS will continue to play its role — it just won’t be the only communications channel.

The elephant in the room

The final, and most critical, element in any re-imaged real estate experience is the relationship between the individuals involved. People need to work and people need to get paid.

The elephant in the room: percentage-based agent commissions. Consumers hate it. Moreover, they are tired of putting up with and listening to the verbal gymnastics it takes agents to justify it.

It’s over.

In the future-world of real estate, agents will need to repackage their services into consumer-justifiable segments.

The public wants a flat-fee commission structure. How can an agent make that happen and still earn a living?

The answer, not surprisingly, is through technology. With a well-defined market and a suite of social tools, any agent can begin to re-define an entirely new real estate experience.

Could a flat-fee service work for people of a defined area? I suspect we will soon find out.

Make no mistake, the real estate community is going hate any flat fee or consumer-driven idea. Traditional million-dollar neighborhoods, to real estate agents, could be challenged by common sense and the utilization of technology. Detractors will sell fear and doom at every step. The integrity of those trying anything different will be questioned at length.

You can almost hear, “God help the homeowners who lose everything with fly-by night brokerages.” (For the record, this doesn’t happen, but old-schoolers continually claim it does.)

In the end, any new real estate idea will need to be supported by homeowners who identify themselves as “early adopters.” Only over time, with the success stories of those early faithful, can any new real estate idea hope to cross into the mainstream. It will take time.

 

Don’t miss the author’s “Where Are MLSs Headed?” panel at Inman Connect New York

Jeff Bergstrom is Broker/Owner of Wynd Realty. You can follow him on Twitter @WyndRealty and on Facebook.

Email Jeff Bergstrom.