Picture this. You wake up one morning and realize you forgot to buy your 9-year-old niece a birthday present. She loves origami, so you find some premium paper online. You pay a little more money to have it gift-wrapped — and a lot more to have it delivered overnight because it’s worth it to make sure your gift arrives on time.
At the same time, you decide to buy a new air mattress because the one you just took on your camping trip sprung a leak. You find a moderately priced one with good reviews, then save more money by choosing traditional delivery, because you won’t need it for at least a year.
This is the typical buying process today. It can be for small gifts like paper or camping supplies, or bigger purchases like a computer or even a car. Whether it’s Amazon, Instacart, Apple or Carvana, our current shopping experience shows that we now have three major expectations:
- We should be able to find what we need online — fast.
- We should be able to maximize our convenience, albeit by paying more for it.
- We should be able to control the timing of how and when we receive something.
Shopping for most goods is a process filled with options. You can buy new or used. You can check out professional and consumer ratings. You can buy the cheap or the premium version. You can have it delivered tomorrow or in two weeks. And when it comes to selling, we can go all the way back to eBay to see how auctions and controlled access build market demand and perceived value.
The consumer has been steadily gaining power for years. The companies who give them this power have become more valuable and more dominant. And no one’s expectations are coming down any time soon.
The simple fact is this: The more quality, control and convenience we want, the more we’re willing to pay for it. Even in an industry as slow-moving as health care, we’re used to the idea of choosing from gold, silver and bronze plans based on how much we care about depth of coverage versus monthly premiums.
Now, do these trends and principles apply to real estate? Not really. Consumers can do more online browsing, but their experiences beyond that seem antiquated compared to how they buy nearly everything else — especially since the pandemic pushed even more things online. With the exception of some innovations on the margins, the real estate model hasn’t changed in over 50 years.
Why is that? Why isn’t buying and selling a home through a major real estate brokerage more like shopping on Amazon or Instacart? Why don’t consumers have more options tailored to their desired levels of convenience, control and speed?
Are homebuyers and sellers really that homogeneous of a group? Of course not! Some want 100 percent convenience. They don’t want to clean the garage and declutter the basement. They don’t want to abandon a family dinner and go for a long drive to make way for a last-minute showing. Nothing is more valuable to them than avoiding these headaches, and they’re willing to pay for it.
Others want total control over the timing of a home sale. They don’t like feeling restricted on finding their next home. When they find it, they want to be able to buy it regardless of whether their current home has sold or is even on the market. And when they do sell their current home, they want to be able to choose the closing date to create more certainty in life.
Still, others want the Goldilocks option in the middle. They’re willing to sacrifice some amount of convenience, and they don’t care as much about the timing of a sale and a purchase. They just want the best possible price.
Does every traditional brokerage offer multiple products for these different types of consumers? If we, as consumers, want options in terms of speed, price and convenience, then why is our industry so slow to adopt the same principles?
As the pandemic has made clear, companies who tailor toward the consumer succeed in both good and bad economic times. If you provide the best overall customer experience, you win — always. Yet, you’d be hard-pressed to find anything even close to “gold, silver and bronze” offerings from a real estate brokerage. Why?
This might be controversial to say out loud, but I’m going to say it anyway: Just as consumers are starting to see how the traditional financial services model is weighted toward creating commissions for advisors versus delivering returns on their investments, they’re also starting to see that the traditional real estate model is designed more for agents than for them.
As a result, the more people experience the convenience of buying other items, the more real estate looks restrictive and out of touch with their needs. (And the truth is, the model could serve agents a lot better, too!)
If real estate wants to thrive and compete — and keep attracting top talent — then it needs a makeover. Sticking a sign in the yard is the equivalent of hearing the internet dial-up tone. We’re in a high-speed, high-definition world, and we’re never going back.
It’s not enough to change with the times. We need to lead the change and “productize” our offerings to meet consumer tastes on speed, convenience, control and price. Our customers deserve it. More importantly, they expect and demand it.
Kris Lindahl is the founder and CEO of Kris Lindahl Real Estate, the #1 team-owned real estate brokerage in Minnesota and #12 nationwide.