| Some 30-odd years ago, MLS listings were | | | | something you do once every eight or 10 |
| printed on small cards that fit in shoeboxes, | | | | years. So you don't develop an actual skill |
| and Realtors were their gatekeepers. Thanks | | | | set to do it. So the question is, how fast |
| to the Internet, agents as well as consumers | | | | can we enable customers to get up to speed? |
| have access to all kinds of information. | | | | What's happened is that the market has been |
| | | | dissected into different types of consumers. |
| As a result, real estate firms are changing | | | | Some guys say, "Do everything for me." Some |
| the way they interact with customers and | | | | say, "I want to be hands on." Before online |
| reevaluating their roles in the age of | | | | MLS listings and virtual tours, if you |
| information. "Whereas before clients depended | | | | wanted to know something, like how big the |
| on Realtors for information, they're now | | | | yard was, you'd have to call me. Now it's, "I |
| finding their own information and then coming | | | | saw this house on the net. It's 10,000 square |
| to us for services," explains Chee, CEO of | | | | feet, it's three-bedroom, it looks like what |
| Prudential Locations. "That's meant a lot of | | | | I want. Now what else can you tell me?" So |
| changes for the industry and has made the job | | | | now firms need to decide to include or |
| of a Realtor much, much more complex." | | | | exclude different ways that customers want to |
| | | | do business. Some companies are accomplishing |
| Around 1995, when the Internet first hit | | | | that by offering services a la carte. A menu |
| real estate, it was the kickoff of consumers | | | | of services is a maturing thing, but, at the |
| getting much more involved in the | | | | end of the day, the business that survives is |
| transaction, because it brought more | | | | the one that treats its customers the right |
| information to the customers. Discount | | | | way, and that might mean more education. When |
| Brokerages Has all this paved the way for | | | | you talk about a la carte, it's not as simple |
| Discount Brokerages to take over, akin to | | | | as ordering off a menu, because the |
| what has happened in the securities business? | | | | individual services are all kind of connected |
| Discount brokerages offer all the usual | | | | to each other. When you split them up too |
| services and expertise at a fraction of the | | | | much, it becomes very complex. So as long as |
| cost. Has that forced traditional real estate | | | | the consumer knows how they're connected, it |
| firms to rethink the way they do business? | | | | can work. Is the empowered consumer the main |
| Will agents become order takers and brokers | | | | factor behind falling commission rates? |
| just the vehicle for executing the real | | | | Overall commission rates are falling, and |
| estate transaction? Discount brokerages are | | | | have been falling for almost four years |
| not a new phenomenon. They arise every time | | | | across the board, but it's very similar to |
| the market gets hot like this, because | | | | looking at the statistics for real estate. |
| there's so much inventory. And then the | | | | People say, "Oh, the average price fell by |
| market switches over, and they disappear. The | | | | $20,000," but it really didn't, because the |
| thing people need to understand when they're | | | | composition of the market changed. |
| working with discount brokerages is Econ 101. | | | | |
| Econ 101 like the grilled cheese sandwich | | | | Commissions are falling, but the structure |
| that had the Madonna on it and sold on eBay | | | | of services is also changing. Consumers are |
| for $33,000. It's an extreme example of how, | | | | getting smarter. So one of the things |
| when you open the market up and have more | | | | progressive brokers are doing is getting |
| people see it, you get the highest possible | | | | customers as smart as anybody in the market. |
| price. In a discount situation, generally | | | | The way we do that is by giving them tools |
| speaking, that's not the case. Ask a | | | | that are easy to use. In example, giving them |
| potential listing client: So what's more | | | | all the solds, all the listings, charts and |
| important--the commission, or getting the | | | | graphs to get the client smart. Because when |
| higher price for your house? | | | | they're smart, they're decisive!Written for |
| | | | |
| Consumer Education=Good BusinessHow are | | | | By James Christensen |
| traditional brokerages positioning themselves | | | | |
| to remain relevant and important to consumers | | | | Real Estate Expert and educator. Our |
| in this new landscape? What's interesting is | | | | training site offers a valuable service to |
| that customers feel empowered because they | | | | individuals looking to get into the Real |
| found their house on the Net. But if you | | | | Estate industry. |
| think about the real estate purchase, it's | | | | |