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