The other day Rob wrote a post on how Competition in Real Estate is Changing. I don’t think anyone would disagree. And it reminded me of a comment that I can’t find on another post which simply asked “What can brokers even do about it?”. That’s a sincere question worth talking about, from this Recovering Broker’s perspective. And lucky for you, I’ll do it in far fewer words than a typical Notorious post.
As far as competition goes, What can brokers even do about it?
This may sound simplistic, but stick with me for a minute. I have been in way too many meetings this past year where I hear brokers and agents refer to iBuyers as house-flippers, confuse Redfin’s 1% listing fee with Redfin Now, often think Redfin is a portal instead of a brokerage, call Zillow the devil, and just seem confused and overwhelmed about everything that is happening around them. I can’t really blame them; there is a lot going on and it’s all changing quickly. But we have to do better.
If there are true iBuyers (Opendoor, OfferPad, Zillow Offers, Redfin Now, Knock) in your market, learn about the process for each of them. Learn about the offer prices, negotiation points, and the experience for sellers and buyers. Is it great? Does it suck? When your agents are sitting across the table from a potential client and they ask about these programs, they need to be ready with real answers.
If there are flat-fee or lower-cost competitors in your market, find out what those experiences are like. If they’re seamless, is there something you can do to deliver flawless execution through your agents? If there are breakpoints, are you exploring them to see how you can do it better? Do the ancillary services flow easily from contract to close and beyond? What do these companies do between transactions? Can you implement something better to help your agents and their clients stay in touch?
Brokers have to understand the dynamics of their local marketplace, and help the agents navigate them with their clients. I know it’s hard because agents are entrepreneurs and likely want to do their own thing. But it’s your job as a broker to have answers for your agents.
You Have to Have Answers
I’m sure by now you’ve seen the video of Alex Rampell, General Partner of Andreessen Horowitz, talking bout how technology is changing consumer behavior in terms of the real estate industry. If you haven’t watched it, spend the 30 minutes. And pay particular attention around 15:00 when he talks about the need to have answers.
When a consumer asks about home staging, or when the best time is to list her home, or what to expect when she prices it below market value, or the best marketing channels, your agents have to have answers. And the answers need to be backed up by data. He mentions staging specifically, and talks about a portfolio company of his that did A/B testing to see if it helps sell a home faster and for more money. You have to test and track the results and be able to relay the outcome to the consumer. You have to rely on actual data when you’re asking the consumer to pay for additional products and services.
Consumers are looking to agents to provide real data and answers to their questions. And if your people don’t provide those answers, they will find someone who will.
Find Arms Dealers
In March I did a presentation at Clareity Workshop called “Want vs Need : Brokerage Edition,” where I said that brokers want silver bullets but they need lead bullets. Brokers are all trying to build The Platform, hoping it will be the silver bullet they need to protect their businesses. But they need lead bullets like AI and machine learning, so they can deliver on consumer expectations. They need arms dealers, aka partners, who have the means to provide data and insights.
Later that month I listened to a brand CEO tell agents to create a lead capture page offering iBuyer services, and to tell anyone who submits a request that their home doesn’t qualify. That is bullshit advice. If you have no intention or ability to have a true iBuyer program, don’t create a janky bait-and-switch offer. Find a real partner in your market instead. Opendoor and Zillow Offers both use partner agents. See what it takes to become a partner in your market. Better yet, see what it takes to be THE partner in your market. That’s true service.
Brokers have to research companies that have the data, products, and services required to do business in our changing environment. I have asked a few companies what they have available to broker partners, and there are things even I didn’t know about (and I do a lot of research on this for clients). They’re available now. And they’re looking for brokerages to work with across the country. Do your due diligence and find arms dealers with the kinds of ammo you need to supplement your current business practices.
We can’t be afraid of the new ways of buying and selling. We have to embrace them because they’re here to stay, and consumers demand the freedom to choose. Fear paralyzes us from finding creative solutions. Fear keeps us stuck in our old ways of thinking. Fear keeps us from doing the work. And that doesn’t serve anyone. Find arms dealers and don’t be afraid to ask for what you need.
Simple, But Not Easy
There is a difference between simple and easy. It is simple to say that you want to remain relevant as a broker. But it’s not easy to make that happen. You may have to look at alternative business models and fee structures so you can attract and retain more productive agents in your area. You have to spend time getting to know new players in the marketplace, and see if there are partnership opportunities. You have to have answers to consumers’ questions backed up by real data, then teach your agents how to provide them in a consumer-first (instead of me-first) way.
I know I’m asking brokers to do hard things. And there are no easy answers to any of it. In the book, The Hard Thing About Hard Things; Building a Business When There Are No Easy Answers, Ben Horowitz comes right out and says that nobody cares that your work is hard; they still expect you to do it. You are going to struggle. You are going to want to quit. You are going to look for the Easy Button. I know because I have sat where you sit in the front seat of the struggle bus.
You have to do the work. But I promise it’s work worth doing.