Traditional real estate is on its deathbed! Artificial intelligence will replace agents! Zillow will join forces with Amazon or Google to become a brokerage and game over! Really?
I recently interviewed Bahareh Kamoei, a millennial real estate broker who launched her Palm Desert brokerage with her two sisters.
For me, our conversation crystallized a feeling I’ve had that the industry has lost its focus on what matters most — not who’s the biggest, who has the greatest technology or the most VC money, but who serves their clients best, who stays in business for the long haul and who makes a positive difference in the communities they serve.
In last week’s Inman leadership survey on real estate tech disruption, Jake Breen, a Berkshire Hathaway Home Services agent in Utah, worried that “It only takes one big conglomerate — Zillow teaming up with Amazon or Google — to announce they’re starting a consumer-direct model, and it’s game over: no more real estate industry.”
Breen’s concern encapsulates the industry’s obsession with who controls the data and the existential threat that AI, big tech and big data seemingly pose to the future existence of traditional real estate.
Attention goes where money flows
To paraphrase a concept from quantum physics (energy flows where attention goes), attention goes where money flows.
There is so much money flowing into new disruptive tech and brokerage models in real estate, the industry’s leadership has become hyper-focused on where the Wall Street money is rather than on Main Street where the success or failure of these disruptive models will be determined.
What matters most to millennial clients
I asked Kamoei about her take on what matters most to the millennial client base she serves.
Kamoei’s observations about her clientele, coupled with what I continue to hear as I conduct one-on-one on-going interviews with the industry’s leading female brokers, paints a very different picture about where the industry should be focused to best serve the next generation of homebuyers and sellers.
According to Kamoei:
- The no. 1 thing that we are looking for in an agent is a trusting relationship.
- As a group, we may visit different sites such as Redfin or Zillow, but when it comes time to transact, we seek trust and connection first.
- We place a high value on the quality of our experience. In the age of Yelp reviews on everything, we are concerned that discounts or rebates may compromise the quality of our experience and the service we will receive.
- We want an agent who will best represent our interest. Although technology is important, it must complement our experience.
- We’re so busy working, we don’t have time to figure out which houses are best for us. Instead, working with an agent is a convenience factor that frees us up to enjoy other experiences we value more highly.
- We want to see that our agent cares as much about our community as we do. In other words, we want our agent to be active in serving our community at charity events or raising money for important causes.
Kamoei’s comments echo the findings from the 2017 NAR Profile of Buyers and Sellers. For sellers, the reputation of the agent (34 percent) is the most important factor in choosing a real estate agent to sell a home, followed by the “agent is honest and trustworthy” (18 percent).
For buyers, “agent is honest and trustworthy,” (19 percent), the agent’s experience and agent’s reputation (17 percent each) come in at no. 1 and a tie for no. 2. Only 2 percent were concerned with the “agent’s association with a particular firm.”
When ranking overall qualities consumers want in an agent, “honesty and integrity” came in first with 97 percent of the survey participants saying it was “very important.”
“Skills with technology” came in dead last, with only 45 percent saying it was “very important.”
The bottom line: Trust, connection and quality of experience are what matters
As all the hype about the money and the disruptive tech models continues to grab the headlines, where the rubber meets the road hasn’t really changed. Our tools may be different, but trust, connection and customer experience still trump technology and data.
To understand why this is so, look to Clotaire Rapaille’s research on culture codes and why Americans buy. Rapaille is the marketing consultant to 50 of the Fortune 100 companies and earns up to $200,000 in consulting fees per day to assist major brands in honing their brand identity and sales strategies.
Rapaille’s research shows that Americans have three different culture codes that trigger a sale.
- Fix it
To illustrate this point, when you look at the presidential campaigns dating back to Bill Clinton’s run, Clinton was “The man from Hope.” Barack Obama’s campaign, based on hope and change, and his book, Dreams of My Father, tapped into two deep American culture codes.
Donald Trump ran on fix it — “Make America Great Again.”
In fact, I predicted Trump could ride “fix it” all the way to the White House back in September of 2015 based solely upon the strength of Rapaille’s work — I never dreamed it would actually happen.
You’re really not selling real estate
Rapaille would argue that we are not selling real estate — we are selling the dream of American homeownership. The problem with where the industry is currently focused is that technology, data and information aren’t the stuff that dreams are made of.
Instead, our clients are buying their vision of the American dream where they can make memories of friends and family members enjoying a summer barbecue, celebrating a special life milestone or simply enjoying a great book by the fireplace on a cold night.
Dreams can be illusive, however, especially in today’s low-inventory market; hence, the importance of having an agent who is trustworthy, who has the skill and expertise necessary to close the transaction, who communicates with his or her clients the way they want to be communicated with and who delivers a five-star buying or selling experience that clients want and seek.
As Marc Davidson recently observed, “Portals are not the enemy. They aren’t even your competitor. If you’re afflicted with portal-noia, you may have forgotten who your customer is and why they need you…”
“The only industry is your industry. Your business. Your market. Your employees. Your agents. Your community. Your world. Play there. That’s the world in which you possess power, influence and leadership. Inside this reality is where you will find the time, space and freedom to thrive.”
Bernice Ross, President and CEO of BrokerageUP (brokerageup.com) and RealEstateCoach.com, is a national speaker, author and trainer with over 1,000 published articles. Learn about her broker/manager training programs designed for women, by women, at BrokerageUp.com and her new agent sales training at RealEstateCoach.com/newagent.