Traditional real estate brokerage is history, just like the Model T is history. Consumers know this. Home owners and buyers have known this for several years. What is interesting is that so many real estate brokers don’t know this.
Real estate brokers who operate under the traditional model are still using a 20 year old business model, but the business world, and in particular, the real estate world, has dramatically evolved in the past two decades.
How does the traditional model market listed properties? This old worn out approach markets property by:
1. Entering it in the local MLS;
2. Advertising it once every 6 weeks in a little newspaper ad.
That’s it! Let’s pause here to answer the objection a traditional broker would immediately have at this point. He/she would say, “Oh, no. We do much more than that. We send out “Just Listed” post cards to neighbors, we send out price changes to other agents through our email system, we put the house on the broker tour, we hold an open house, we run ads in the newspaper, . . . we have it on our website, oh yes, we do so much more.” They would also talk for several minutes in a fast and nervous voice, but when they finished, you would not be able to repeat what they said, because it didn’t really seem to make sense.
Yadda, yadda, yadda. All of these things are just more of the same, and all of this is part of the 20 year old business model.
There’s nothing wrong with such tactics, but the world has changed in the last two decades, and buyers and sellers have become very savvy. Buyers and sellers do not necessarily understand how the world has changed in real estate sales, or what marketing tactics work or don’t work, but nearly everyone is aware that the traditional approach is no longer effectively connecting with buyers.
It’s much more than just ineffective marketing that is at issue. A simple concept called CRM, or customer relationship management, became a popular subject about 15 years ago. The dialogue focused on meeting the client’s needs and communicating regularly with the client during the relationship, keeping the client informed, building a positive relationship, and doing such a great job that the client would eagerly send referrals. Today, 15 years later, the vast majority of real estate brokers have NO customer relationship management system in place.
Again, consumers don’t necessarily understand how it should be, but their gut feeling is that something is wrong, and they are not being treated the way they should be. Clients do not like being ignored for months at a time.
The 20 year old model focuses on the real estate agent, rather than on the client. For example, the old model suggests an agent promote himself or herself, brag about his sales record, or boast in other self-centered ways. But consumers have one question, “How are you going to help me sell my home?” Traditional real estate brokerage doesn’t understand that it’s not about me, the agent, but it is ALL about the client. The client is and should be the center of mass for all decisions made. It is the client’s best interest that should be the focus.
Consumers sense this, and they don’t like it.
The world has dramatically changed in the past two decades. Clients expect more. They expect brokers to sell their homes using cutting edge technologies and in such ways that strong and positive relationships are built during the process. Technology and the Internet have dramatically changed the way the real estate business is done. Most brokers are only slightly aware of the significance of this. In a feeble effort to demonstrate they are using the Internet, they have techies build a website that is no more than a static brochure on the Internet.
Consumers will not be fooled by counterfeits. Consumers are demanding more. How real estate is bought and sold is dramatically changing, and consumers know it. Unfortunately, most brokers and agents do not.