Last night I was alerted by Laurie Davis to a post on Motley Fool titled, Will Real Estate Agents Be Necessary In The Future.
The article featured an interview with Spencer Rascoff, CEO of Zillow. He was being asked to explain why Zillow had decided to work with real estate agents instead of attempting to replace them as he had done with HotWire. He correctly outlined the critical difference between the travel transaction and the real estate transaction and went on to describe why he felt there would always be a real estate agent involved.
There will always be a real estate agent in the transaction because, for most consumers, it’s just too important and too expensive and too infrequent and complex to screw up, so they need an agent.
Now, what is changing though — and Zillow is undoubtedly accelerating the change — is what type of agent can be successful in 2014. It’s quite different than the type of agent that was successful before the Internet.
Today, a good agent has to be an expert negotiator. They have to be a great marketer. They have to have deep local expertise. They have to be a transactional guide to a client.
Whereas, before the Internet, a great agent just had to be an information gatekeeper; someone who had access to the secret database that you and I didn’t have access to. Those days are long gone. Now we have access to all the same information as a real estate agent because of mobile devices and the Internet, so the role of the agent is changing.
I have a fundamental disagreement with the statement, “before the internet, a great agent just had to be an information gatekeeper.” Spencer is a bright guy, likely brighter than I am and decidedly more successful. So, I don’t actually think he believes what, for me, is an obviously incorrect statement. My bet is that if Spencer were pressed, he’d agree that being a GREAT agent has never had anything to do with gatekeeping.
My Pre-Internet Experience With A Great REALTOR®
In 1984, I purchased my first house. This, of course, was long before we all received “access to all the same information as a real estate agent.” And, as a result I was forced to find an agent before I could really even begin searching for my house. But access that information was certainly not all I expected from my agent. In fact, the notion that I would spit out some criteria and they would give me back a list of houses wasn’t even a part of my thinking at the time. I now know that this is what I should expect from a search engine, but at the time, I would never have imagined that would be the value of a great agent.
I’ve told this story many times from the stage, but I’ve never written about it before. I had a truly great first experience with a REALTOR®. She came to my apartment to meet me and discuss what I was looking for in a home. I told her I wanted a single family home. I wanted a one story house, with two bedrooms, and a basement. And I discussed my budget with her at length. She gave me a strong sense of confidence that she understood my desire and my limitations.
[vision_pullquote style=”3″ align=”right”] My pre-internet agent was far from being a simple gatekeeper to information. [/vision_pullquote]
The following day I receive a phone call from my agent and she began to tell me about a few homes, but the one she really wanted me to see was a duplex in Speedway, Indiana. I had not considered either a duplex or Speedway and I objected to going to look at it. She then explained that I would really enjoy the neighborhood, that it was close to my work and that the wood floors would match my Mission Oak furniture. I collected Mission Oak furniture at the time and she made note of that while she was at my apartment, but I thought nothing of it. She then went on to say that the renter had a two year lease, were very nice and that rent would more than pay for the mortgage, even though the price was slightly out of the range I had told her I could afford.
Reluctantly, I went to visit the home, met the renter, saw the wood floors and made an offer the following day. My agent in 1984, far from being a simple gatekeeper to information, was listening to my needs, had unique local knowledge, handled the entire negotiation for me, keeping in mind my specific financial goals, and held my hand through the entire transaction, teaching me along the way. It is by far the best real estate purchase I have ever made. And she was the best agent I’ve ever worked with inside a real estate transaction.
The Internet Has Not Changed What Defines A Great REALTOR®
If anything, what the Internet has really done is time-shift the point at which a great agent gets called upon to display their real value. If I had Zillow or Trulia or realtor.com at my disposal in 1984, I might never have seen that home. I would have pre-filtered my search and taken a list of homes I wanted to see to a real estate agent. I might have even expected them to simply “unlock the doors” for me. But I would have been making a huge mistake. The same would be true now.
What I have personally witnessed over my years of working in and around the real estate space, is that the most productive, highest earning agents in the majority of offices have operated their businesses with little to no regard for the shiny objects offered at technology focused real estate conferences. They are not early adopters, but they are not afraid of to use proven technology either. And they have paid little attention to the warnings of their impending disintermediation at the hands of third parties. They can do this because they know that their success has never been directly associated with the tools at their disposal. Their success has always been predicated on their ability to do the very things Spencer says must change to make them great agents today.
Those skills have always been what has differentiated a simply average agent from a GREAT agent. Zillow (and I’d argue, Trulia and realtor.com) has certainly played a role in accelerating the change in the way consumers interface with the real estate transaction at various points, but they have not played a role in accelerating any truly meaningful change in what defines a great agent in 2014.
Or what made an agent great in 1984.
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Featured photo: Some Rights Reserved – Bruno Girin
Jeff, 100% agree with you. It’s always been about listening more than speaking, the little details is what creates trust & confidence in the professional you are working with.
The mortgage industry experianced the same thing when mortgage rates where posted online w/ Lendingtree 1998, 7 years before Zillow, Trulia, etc.
Previously successful loan officers remained successful. This forced new loan officers who wanted to become successful to become better listeners & clear consultative communicaters who are able to back up statements with facts & data since the mortgage become a percieved commodity.
Same thing applies to agents now. Those who where successful before, will continue to be successful but now the educated consumers are able to weed out new or mediocre agents BEFORE they enter a transaction.
Interesting comparison, Jessie. The issue we’re really discussing here is the line of demarkation between good and great. It’s almost silly to think that great could ever be determined by the access to information that everyone else in the same fraternity enjoyed. The qualities that define greatness in any industry are always intangible.
I’m reminded of the seen from The Incredibles where the villain, Syndrome, errantly thinks that giving everyone heroic technology would make them super.
Syndrome: Oh, I’m real. Real enough to defeat you! And I did it without your precious gifts, your oh-so-special powers. I’ll give them heroics. I’ll give them the most spectacular heroics the world has ever seen! And when I’m old and I’ve had my fun, I’ll sell my inventions so that *everyone* can have powers. *Everyone* can be super! And when everyone’s super…
[chuckles evilly]
Syndrome: no one will be.
What made the super heroes truly super had nothing to do with their powers and everything to do with their values. 🙂
Jeff, this is excellent. I’ve read you for a while, but this was too good to stay silent. We’re preaching the same realtor-value gospel. I’ll mention this article from my realtor branding talk tomorrow in Tulsa (Xplode Conference). Thanks for writing this.
I’m honored, Bill. Thank you. The words came easily on this one.
While I agree with your premise, I also think the role of the REALTOR® in a consumer’s ability to search for homes is completely taken for granted today. Listings are only on sites like Zillow because of the hard work of agents and brokers to market those listings far and wide. The marketing of listings online is a technique that dates back to the earliest days of the Internet. It’s been happening for twice as long as Zillow has even existed. Many of today’s DIY shoppers don’t realize that the homes they find on these sights are there because of the hard work expense that REALTORS® incur to put them there. Without this process, the user experience of the portals would feel a lot more like Craigslist. Obviously, there is a difference between perceived and actual value here. It’s easy for consumers to overlook this, but we as an industry should not.
Todd, of course you are right. I only wish I had said it. 🙂 Thank you.
Right on Todd. Very well said.
Agreed, great is timeless.
What has changed is the access to information allows consumers to determine who “is” going to be great vs. who “was” great.
Consumers can ask more intelligent questions based on information previously wasn’t available creating a filter to actively find “great” before entering into a transaction vs. after or as you stated:
“time-shift the point at which a great agent gets called upon to display their real value.”
This change creates more great agents and which is win/win for everyone.
All good points, Jesse. Thank you for taking the time to come and add your perspective. It’s appreciated.
If there were no real estate agents there wouldn’t be anyone to pay for the web sites that are supposed to replace us but can not replace us because without our money they can not survive. I like to tell the home buyers that the internet is not for home buyers it is for real estate agents, home sellers and Spencer Rascoff.
Right on Teresa. You are spot on.
Modern-day living overflows with complications, maxed attention-bandwidth, information overload and seemingly infinite choice. Expertise and service-delivery-with-certainty are more valuable than ever. Thanks Jeff.
You might want to think about writing a book with that message. 🙂
Great post and comments – Great folks will always do well regardless of the business and Jeff your comments were right on target! We need to focus on our Consumer relationships and remain the Trusted advisor they are looking to find to assit them in the process.
“My bet is that if Spencer were pressed, he’d agree that being a GREAT agent has never had anything to do with gatekeeping.”
‘Great’ may not have anything to do with gatekeeping, but there is a fundamental shift in our value proposition when we are no longer the one and only source of the information. Today, one must find some way to have intrinsic value that can be articulated in something other than platitudes, but actually demonstrated. And that is tough to demonstrate it in a powerful enough way before one is hired in the first place.
If the data were not such a part of our past value proposition, agents and brokers wouldn’t be bawling about it as much as they do, nor would we see the pocket listing strategy used amoungst small groups of power agents the way we do.
But, I’m still of the mind that the value has to shift away from data and agents and brokers would do well to focus their attentions on SPECIFIC ways to enhance customer experience.
Nice post, Jeff!
There is certainly no question that the authority that is automatically given to those with the control of information has been removed by the Internet. I would never argue that. But that authority was equally spread among all REALTORS®. It was never an individual differentiator. So the playing field was level in that regard.
I obviously think you are right in saying that the value has to shift away from data, but that is certainly not new. It’s only highlighted by the Internet, not caused by it. This problem of finding “some way to have intrinsic value that can be articulated in something other than platitudes” is a problem that is not unique to real estate. Every service industry has this problem.
And, thank you. 🙂
Great points. May I ask what other ways you are finding to add intrinsic value? I constantly strive for the same for myself/business and I’m always up for learning from other true RE professionals. Thanks much!
There is a world of difference between finding information about real estate or homes for sale and having the experience and knowledge to use this information. The days of the gatekeepers are over and have been over for some time.
Success still boils down to having the experience and knowledge to use all of the available information to guide clients to a successful real estate transaction.
There is such tremendous value to these conversations, whether it’s Jeff, or Spencer, or the guy who wrote the article in Forbes a few weeks back. We need to be constantly challenged in our thinking and be able to articulate intelligently to our clients & prospective clients the specific nature of our value proposition, and then, more importantly, to actually demonstrate that value in ways that truly benefit them….
Well said, Rich.
For years, I have told home sellers that every agent has access to the same tools and information. It’s how we choose to use them, along with our experience and knowledge of our markets, that bridges the gap between good and great.
We can spend our time beating our chests about how “great” we are, but until we actually provide that experience to a client it’s all just rhetoric.
I’m with Linsey, in that it can be difficult to share that experience, especially given the NAR stat that 66% of consumers work with the first agent they talk to.
I love that you added this point. “What I have personally witnessed over my years of working in and around the real estate space, is that the most productive, highest earning agents in the majority of offices have operated their businesses with little to no regard for the shiny objects offered at technology focused real estate conferences.” New, shiny objects don’t make you great, they enhance your greatness and spending time chasing them could be detrimental. Great read, as always. I passed it along to my peeps. Thank you!
Thanks for your note card yesterday. 🙂
Let’s say that you didn’t need to be a great agent to succed. A good thing about the Internet is you cannot succed being just a gatekeeper, you need to be a great agent today anywhere in the World.
To add my voice – I thought a marginal agent could survive as a gate keeper, but just having the information wouldn’t make you great. I note that before the internet we had agents markedly more successful than others – and I’m pretty sure it’s not because they kept the gate close better than the next guy.
I’m also a fan of knowing what to do with the information once you have it. I can find weather apps and radar all over the place, but I’m not sure I want to trust my view of radar to tell me when a tornado will be in my area. I still prefer a trained pro to interpret that for me.
I think that’s a darn good analogy, Greg.