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In the past, real estate companies were the gatekeepers of information about available housing. If you wanted to enter the home purchase market, you had to pass through the industry's gate. Today, the tools of technology have opened the information gate and put out a "Serve Yourself!" sign. Consumers can surf the Web and review the majority of resale property listings. Prospective buyers can visit Web pages, enter their dream home criteria and intelligent agent software will screen listings for the right property match, then email the information to prospects. In many cases, if the prospect likes the home, he or she can walk through it using 360° photo technology. In addition, consumers can access tax databases, locate comprehensive school information, compile a property market analysis, review detailed neighborhood maps, even apply for a loan, and arrange for homeowner's insurance online. Where's the Beef? This source-of-information shift is forcing us to rethink the value which brokers and agents bring to the real estate transaction. Or, as consumers might ask, "What are you doing to earn your fee?" The good news is that the real estate professional brings a great deal of value to the transaction. If we step back and analyze consumer needs, we can construct a parallel list of services which constitute value for consumers. For example, let's look at the homebuying side of the transaction. Let's assume that the prospective homebuyer will do an increasing amount of the information gathering and property screening. This is a safe assumption. In 1995, only two percent of homebuyers reported screening properties on the Internet, in 1997, nearly one in five buyers reported using the Internet to select homes to view. In 1999, we can guess the percentage is substantially higher. Outsourcing Information Gathering Losing the gatekeeper position can be a scary prospect. But, if we step away from the old paradigm, and view this shift as outsourcing the information-gathering role to the consumer, we can actually see some advantages. The biggest advantage is time savings to the agent. Advise and Counsel When an agent starts with a reasonably well informed consumer -- someone who's done some basic information gathering - then the agent's first task is to supplement the information and help put it into context. The agent fills information gaps and then counsels with the consumer to turn that information into knowledge upon which decisions can be based. The agent knows why seemingly similar neighborhoods have different average prices, which homes are true comparables, or what to look at when evaluating new construction. The agent provides the experience and expertise that turns nformation into actionable knowledge. This consulting role is critically important in helping the consumer make a smart decision. Deal Making The next major value-added task which the agent performs, is negotiating. The agent understands the contract, can help develop a negotiating strategy, can represent the buyer at the negotiation table, and offers negotiation skills which keep buyer/seller emotions from getting in the way of an agreement. (To properly play this role, we must assume a buyer broker relationship exists.) Managing the Transaction Once the contract is signed, the professional's tasks become focused on getting the transaction closed. The real estate professional now assumes the responsibility of coordinating or managing the process. The consumer turns to the broker to explain the process, simplify it for them, guide them through it and keep it on track and on time. One-Stop-Shopping Today's consumers expect even more. They want added value in the form of convenient one-stop-shopping for homeownership services. Buyers want to be able to buy a home, apply for a loan, secure insurance, schedule inspections, take care of home repairs or renovations, hook-up utilities, landscape, arrange moving, and maybe even schedule on-going maid and other services all in one stop. Help them with all that and you've added tremendous value. If you're tempted to say, "Cross-selling has been tried before, and it didn't work," recognize that today's consumer is ready for cross-selling. In fact, they are almost pulling the service into the marketplace. Also, brokers have gone through the learning curve in determining how to better deliver one-stop-shopping. One-stop-shopping is an idea whose time has finally come. If brokers don't offer it, expect a new kind of company to pop-up to fill the void and capture the profits. Current NAR research with homebuyers revealed that 78 percent of homebuyers like the idea of one-stop-shopping, 32 percent would actually pay more for the convenience. (How long has it been since someone offered to pay you more?) The most important fact highlighted by this NAR research was that 66 percent of recent homebuyers viewed the one-stop-shopping concept as so desirable that they'd choose their next broker/agent based on the availability of a full range of homeownership services. The consumer is ready for one-stop-shopping. A Task List We might summarize the value real estate professionals bring to the transaction as follows.
Let's take this list and look at whom might best perform each task. If our goal is to maximize sales associate productivity while enhancing customer service and satisfaction, then unbundling the tasks and creating different job categories may make sense. Advising and consulting require a high level of expertise. Here is where the sales associate's knowledge and experience are central to a successful transaction. Negotiating also requires a special set of abilities, including good communication skills and the ability to lead the offer/counteroffer process to a successful conclusion. Consulting and negotiating are high-touch parts of the business! These two areas are where the experienced real estate sales associate has the most to offer. It is interesting to note, that one California real estate firm is testing the concept of having a separate contract negotiator who negotiates all contracts for buyers. Tracking the Transaction While advising and consulting are high touch skills, the nitty-gritty tracking of the contract-to-closing process requires a different skill set, one which may under utilize the high-powered sales types who do the advising and negotiating tasks well. For this reason, many firms are turning to transaction mangers or closers who take contracts and guide buyers and sellers through the closing, keeping everyone (including agent) informed along the way. With the special computer software available to make this process easier, it makes sense to centralize and standardize this function. Brokers who have done this say fewer transactions fall-out. Hiring someone to perform this task also has the benefit of freeing your sales associates to do more consulting and negotiating, which should increase their earnings and yours. Gaining Participation Will your people be reluctant to release the contract-to-closing piece of the transaction? Probably. But if you have the right person filling the job and a few agents are willing to try the new system, others should soon follow. Some firms require that new agents coming on board use the closer with the idea that when others see how it works, they'll embrace the idea as well. Most firms charge agents closing fees to offset the cost of this service. One-Stop-Shopping Offering one-stop-shopping should also be off the agents' do list. If history is any indication, agents are generally not comfortable marketing products and services aside from the brokerage function and won't do it. Position the one-stop-shopping products and services as a special package designed for your clients and customers. Offer the package through a customer service representative and ask your agents to simply explain that the firm has a list of real estate and homeownership related products and services which buyers and sellers may choose to take advantage of if they wish. The agent can explain that the package of services is one way the company strives to add value and to say thank you for doing business with the firm. The sales associates can then introduce the customer service person or indicate that the customer service person will be in touch. A well-designed one-stop-shopping program will also function as a client follow-up program, reinforcing both the agent's and company's relationship with the consumer. If the agent perceives that the consumer views the cross-selling program as beneficial, the agent won't be reluctant to turn their contacts over to the customer service representative. After all, the if the program enhances consumer satisfaction, it makes the agents look good and reinforces their relationships. Additional Tasks Now we have three different job functions (agent, closer, customer service representative) offering the added value services which agents have performed in the past. There are two other tasks which we've ignored -- prospecting and showing properties. Showing properties is part of the information gathering stage of the homebuying process. It can't be delegated to the homebuyer (at least not at this point). So, the agent steps in again and brings their showing and closing expertise to bear on the process. (Closing in this case refers to getting the prospect to the let's make an offer stage.) What's interesting about this description of core tasks, is that if we look at the business model adopted by many top producers, they have already built a business model based on unbundled tasks. Many of them have buyer brokers on their staffs who show properties to buyer prospects. Often they have staff members who take over and manage the contract to closing process. Some have even developed networks of vendors who offer a variety of homeownership services. Many top agents also employ business developers whose job is to generate prospects for the top producer's team. Prospecting is another area where unbundling appears to make sense. Prospecting requires yet another set of skills. Sophisticated Marketing Skills With the growth of the Internet, the availability of databases and data mining techniques, and the changing demographics of the consumer, the simple mass marketing techniques of the past won't work. Agents and brokers who depend on the old agent farming approaches won't be competitive. The skill set needed for successful business development will best be found in professional marketers. Expect the national firms to begin to employ very sophisticated data-mining prospecting programs at the corporate level and then refer resulting business down to agents. Brokerage companies will also have to evaluate setting up their own sophisticated business development efforts. (This requires developing a new competency at the firm level.) Company generated business is business you can refer to your associates for a fee (often at 50/50 splits), making this business profitable, even after your marketing costs. From the standpoint of your good associates, being freed from the prospecting activity releases them to consult and negotiate with more qualified customers, raising associate productivity. A win for you and a win for them. If we look again at the task list and anticipate who might best perform the task, our new list might look like the chart accompanying this article. All in all, the agent's job description is evolving as consumers assume the initial information gathering role and as the business becomes more sophisticated and requires more specialized sets of skills. The unbundled model, which many top producers have implemented, may be a preview of how brokers will restructure the transaction tasks for the future. Transaction Tasks
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