The Traditional Real Estate Model Has Changed
The foundation of the real estate economy is based upon the commission earned from the buying and selling of property In every transaction, there is a buying side and a selling (listing) side Real estate companies focus more on the listing side because listings also attract buyers In most markets, if you control the listing market you will have market share (more transactions) The company can also increase market share by recruiting more agents . .Most companies’ recruiting efforts focus on promoting their market share, brand awareness and office culture Agents are attracted by the potential of business opportunities provided by a company’s listings This value proposition is particularly important to newer agents who do not have the benefit of repeat clients and referral business In the past, agents had the opportunity to obtain customers (primarily buyers) by servicing walk-ins, and ad or site sign calls These walk-ins or calls resulted not only from the volume of listings, but also from Realtors controlling the general sales process . .Until recently, the real estate sales process was controlled by Realtors because Realtors controlled the information Only Realtors had complete access to MLS Listings and housing information Even if a buyer saw a house in an advertisement, it usually never contained an address This forced the buyer to call or visit a real estate office for more information and to interact with an agent Buyers were forced to work around the Realtor’s schedule in order to start looking at houses Realtors would also selectively eliminate homes from consideration to help narrow the choices for buyers Although this service was appreciated, it limited the information and amount of homes a buyer would be able to consider The Internet has forever changed this process . .Technology has created a generation conditioned to be instantly gratified This generation wants and expects to maintain control over the process and have access to the information The resources available online has subsequently minimized the occurrence of walk-ins and calls resulting from advertisements Traditional real estate companies and traditional Realtors must therefore adapt to these tech-savvy home buyers . .Unfortunately, there is a generation gap forming between buyers and Realtors The average age of a first time home buyer is around 32 years old The average age of real estate agents is 53, and the average age of real estate brokers is 62 . .For traditional real estate companies to compete effectively, they must learn how to market to the Internet generation and start attracting younger people into the industry .
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