Nick Bailey, the chief customer officer of RE/MAX, believes the industry has never been noisier for agents. In conversation with Inman, from backstage at the R4 conference, Bailey admitted it’s an industry often built on fear, but that doesn’t mean there isn’t a lot of noise.
“If there’s not a boogeyman in the industry, we’ll make one up,” Bailey said, adding that the strong market we’ve seen over the last 12 to 15 years “allows for a lot of new entrants” that are creating a lot of noise.
RE/MAX has a few targeted strategies to sort through that noise, which Bailey shared on stage at R4, during a sort of mock late night show, complete with a monologue, house band and multiple guests. He presented five key things for agents to focus on, and he expanded on many of those thoughts in conversation after the presentation.
The flip of the agent role
Following a similar theme as his talk at Inman Connect in New York last month, Bailey highlighted how the role of agents in the homebuying chain has changed. It used to be that consumers came to agents to find homes first, but now consumers are going directly to portals like Zillow or realtor.com to find a home.
For that reason, RE/MAX isn’t focused solely on the agent as its customer, but also the consumer.
“At the end of the day, the foundation of our system is highly productive agents,” Bailey said. “That’s always going to be first and foremost.”
But he admitted that the launch of things like the consumer-facing app and website revamp are aimed at providing a better quality of service to consumers. It’s also the reason that RE/MAX included three automated valuation models (AVM) on its website.
“Now more than ever, we have to be thinking of the consumer experience,” Bailey said. “If the consumer wants to see [an AVM] they’ll stay on our site instead of going to someone else’s.”
Dealing with millions of leads
In 2011, there were 4.8 million homes sold and 4.5 million internet leads, according to Bailey. In 2018, there were 5.4 million homes sold and an astounding 89 million estimated internet leads.
“You are in a space to get business picked off,” Bailey said. “You are at risk of losing some of your consumers to that number of leads and additional agents.”
“Here’s the deal: If you’re not calling the people you know, somebody else is,” Bailey added. “If you’re not taking your customers to lunch, somebody else is.”
There are multiple ways to increase lead conversion, according to Bailey, which include using technology to meet with and communicate with consumers in the way they want to communicate. That also means sometimes using video, which Bailey said agents have typically been averse to for a number of reasons.
‘Don’t worry about data’
Agents should be worrying less about the deluge of data and where it flows in the industry and focusing more about their own client base, according to Bailey. For too long, agents have been protective over that data and who is selling it to whom.
“Data is gone folks,” Bailey said. “Don’t worry about data, worry about your database.”
Knowing when exactly to contact agents in that database was the impetus behind the company’s acquisition of artificial intelligence startup First, which uses machine learning to score consumers and help inform agents when their current clients are getting closer to transacting.
“You have more commission sitting in the palm of your hand than you know what to do with,” Bailey said.
Improve your sales skills
To give agents tips on how to improve their sales skills, Bailey brought real estate coach and speaker Jared James, a one-time RE/MAX agent, out on the stage. James focused on two specific skills, the first of which is recognizing that the quality of your sale is determined by the quality of questions you ask prospective clients.
“We’re in an industry where too many people are winging it,” James said. “They’re trying to just get along with people, get them to like them.”
Agents can use specific questions to set expectations with consumers, which essentially creates an agreement where, if the agent can meet those expectations, they’ll get the business. It also gives the agent insight into what really matters for the consumer, so they can focus on only those things in a listing presentation.
James also urged agents to know their worth and not allow consumers to undercut their commission.
If a consumer tells you another agent will do it for less, you respond, with a smile, that at least that agent knows what they’re worth, James said.
You then tell the consumer that you know what your worth is and what their home’s worth is, and lucky for them, you’re going to fight for their home’s value like you fight for your own, according to James.
What’s coming in 2020? Massive generations of homebuyers
Bailey is predicting a high-demand market in 2020 and agents will continue to be at the center of that market.
There’s a great wealth transfer coming, according to Bailey, with money going from baby boomers and generation X to millennials and generation Z over the next 40 years. The millennial and gen Z populations are much larger in size than the two that preceded them, Bailey said.
“Who’s buying more houses now than anyone?” Bailey asked. “Millennials.”
“Which generation is using agents at the highest percentage they ever have?” Bailey added. “Millenials.
The only thing actually different about the two younger generations when it comes to homebuying is that there’s just so many of them, according to Bailey.