As we prepare for summer 2005, it is appropriate that we take a second to consider outcome measurements. What would we like to be able to say about the market of 2005? What single achievement would we like to lay claim to when sales volumes are measured and the year’s sales statistics are calculated?
While increased sales and commissions may be number one on the emotional list, there can be no question that the business challenge of the year is all about conquering and harvesting the Internet lead. Brokers across the country are gearing up with new technologies, best practices and management procedures, all designed to finally move the illusive internet lead into the win column.
Nowhere is this effort more focused than in the Cendant community. Cendant has just fired up a symbolic competitive missile with its new LeadRouterTM software, a product designed to put Cendant franchisees, Century21, ERA, and Coldwell Banker brokers, in charge of Internet lead management.
All of these efforts recognize a central fact of the 2005 marketplace; this may be the year when the “Internet real estate consumer” comprises almost two-thirds of the American real estate marketplace. As brokers prepare to compete in this new environment it is critical that they do everything possible to familiarize their managers, agents and support staffs with the procedures and best practices necessary to generate, scrub, filter and incubate the Internet lead.
As important as nurturing the lead is, knowing the personality, research, buying and negotiating traits of this internet-oriented consumer. It would be futile to capture the Internet lead if managers and agents don't know how to work effectively with its accompanying customer.
The California Association of REALTORS® (CAR) released the 2005 edition of its Internet Buyers Survey project, in advance of the summer season. CAR, one of the most sophisticated Realtor organizations in the country, has an exceptional research program and its latest effort is no exception. Every real estate professional in the country should study this report at great length and should model their 2005 sales approach on the profiles it presents.
Just a few of the study’s highlights disclose that:
• There is a dramatic difference in the behaviors and decision making processes of the traditional versus the Internet buyer.
• There are some significant differences between first time buyers and subsequent buyers.
• Internet buyers are more likely to be first-time buyers, and are younger, higher compensated, better educated and more likely to be married than traditional buyers.
• Internet buyers, defined as those who used the Internet as a significant part of the homebuying process, spend 4.7 weeks looking for homes and neighborhoods before contacting an agent. Traditional buyers spend 1.6 weeks at that task, but once the Internet buyer engages a REALTOR, they take only two weeks on average, to find a home compared to seven weeks for the traditional buyer.
• The median age of Internet buyers was 39 years compared with a median of 46 years for traditional buyers. The X’er generation buyer is more likely to depend upon the Internet than the Boom buyer.
• Internet buyers spent an average of 5.8 weeks considering buying a home before contacting a brokerage or agent, nearly three times more than traditional buyers, who spent 2.1 weeks in this stage of the homebuying process.
• Internet buyers spent two weeks looking for the home they ultimately purchased compared with seven weeks for traditional buyers.
What do these findings mean to the real estate service provider?
• The Internet buyer is doing much of the research work formerly associated with the agent. This will have a definite impact upon the agent’s “value proposition,” an issue which will be addressed either directly or covertly by the buyer.
• Agents must take more time with the Internet buyer to clarify respective roles. The fact that the consumer has done the research does not necessarily mean that they understand the data that was gathered or that their analysis using that data was correct.
• Agents should encourage the Internet buyer to take their research to the next level. At the same time the Agent should be prepared to assist the buyer to use the information gathered in an appropriate fashion.
• Agents should make every effort to be conversationally familiar with the various Internet resources so they can intelligently discuss this aspect of the transaction with their buyers.
The issues raised in the CAR study combined with the industry’s existing knowledge of the contemporary consumer and the growing influence of the Internet should convince both brokers and agents that the summer of 2005 will not be just another selling season; it will more than likely provide a healthy crop of internet homebuyers. This means, it’s time for traditional REALTORS to gear up to meet the needs and desires of those buyers, while preparing to compete with those who attempt to take those younger, online consumers away from them.
