Businesses around the world have been hit hard by the global pandemic and its wide-reaching ripples. Some industries have come to a standstill, resulting in layoffs and temporary or permanent business closures. Meanwhile other industries continue to operate in non-traditional ways. Real estate is one of them. Why? Because people will always need a place to live.
As we gain familiarity with this new reality, agents must pivot their previous business practices to address their current clients’ needs alongside the evolving rules of social distancing. Real estate is an essential service, and there are a number of ways we as industry professionals can navigate the new realities of our practice.
Now more than ever, consumers rely on the expertise of a professional agent. Beyond the scope of the transaction, agents must educate their clients on the unpredictable market and the new regulations of COVID-19. By facilitating honest dialogue upfront and consistently throughout your partnership, agents will empower their clients to move forward with their shelter decisions, despite obvious challenges.
The future of the real estate agent
Prior to COVID-19, the real estate industry was experiencing a seismic shift due to technological advancements. With the introduction of iBuyer programs, some buyers and sellers saw the benefit of cutting out the middleman. Traditional agents and brokers were tasked with verifying their value to remain competitive against tech-first services.
The average person will only be involved in a few real estate transactions in their lifetime. Most homebuyers lack the experience or knowledge to execute a transaction of this magnitude on their own, especially in a tumultuous market. That said, agents will need to work twice as hard to earn the trust of clients during this time. Agents can take advantage of extra downtime by training themselves on technology that will help them virtually facilitate tours and transactions.
Virtual resources — such as 3D home tours, e-signatures and listing search engines — have been at agents’ disposal for quite some time. Stay-at-home orders simply forced agents to apply these tools to their daily interactions and recognize their benefits. Agents hoping to be successful during and after the pandemic will need to adopt these technologies and use them consistently to meet customer demand and expectations.
I recently spoke with a RE/MAX agent who had just closed a deal completely virtually. The client had never met the agent or viewed the property in person. In fact, the client had never even visited the city! When I asked the agent how he managed to pull this off, he said it’s because the client trusted him implicitly and felt that the technology he used really help them get a feel for the home.
The bottom line: The expertise of real estate agents is imperative at this time, but client-agent trust must be built first.
Operational changes within the traditional brokerage
Brokerages have traditionally used brick-and-mortar offices for agents to interact with colleagues, do research, host client meetings and more. However, despite the initial uncertainty presented by the pandemic, the last couple of months have proven that most real estate services can be managed effectively from a home office. As the world begins to reopen, now is the time for brokers to reassess the structure of their operations.
There will always be Realtors who want to work from an office, but as far as related costs go, there is an opportunity for brokers to alleviate some overhead expenses by shuttering large offices that often go unused; especially as remote workspaces gain popularity. Instead, brokers can opt for reimagined or smaller shareable offices for agents who are interested in working in a traditional setting.
The challenge that brokers will now need to solve is how to build a sense of community and camaraderie across their organizations. Brokers may consider enhancing programming around building “office” culture, such as virtual happy hours or hosting meetings outdoors where social distancing rules can be observed. I believe we will begin to see this shift over the next 12-24 months.
During this time, many brokerages are housing agents who do not take the profession as seriously as others. To stay profitable and protective of their brand, brokerages will need to find a way to sift through the sub-par agents and make way for top-performing talent.
One way to manage talent is to leverage internal reporting systems, such as Investor Management Services, to keep track of transaction data. This will give owners an idea of which agents stand out above the rest. If an agent does not produce within 12-16 months, this is often a good indicator of their future performance. Although times of crisis may present unprecedented obstacles, brokerage-owners will likely find that their good agents will only get better.
Although the phrase “new normal” has been exhausted, it is a cliche worth paying attention to. The truth is, when the dust from the pandemic settles, we will exist in a new world. In fact, we are already there. The agents who prove their essential nature, remain innovative by leveraging cutting edge technology and adapt well to operational changes will be the ones who not only survive, but also thrive.