“We are a tech based brokerage”
The newest buzz phrase slash catch phrase in the real estate industry is “technology based brokerage” or “real estate tech startup.” I’m seeing this more and more in email signatures, on real estate websites, on Twitter bios and the like. I want to talk today about what is and what isn’t a technology based brokerage in an effort to kill this new fallacy of the “tech based brokerage” that is sweeping the nation faster than BP is leaking oil into Gulf waters. First of all, there is nothing wrong with being excited that your company now has an iPhone app and that everyone uses email and owns a computer, but just because your office printer doesn’t use paper with little round holes up the side doesn’t make you a tech brokerage.
What qualifies as a true “tech based brokerage”?
I should pause at this moment to note that skimmers and broker cheerleaders have already skipped to the comments section to talk about how tech savvy they are and how wonderful and supportive their brokerage is and how THEY truly are number one. I point this out because the inherent flaw in the real estate industry has always been one-upsmanship-itis, me-too-osis and/or i’m-the-number-one-top-everything-epsy. I think it’s actually a course taught in real estate school that attempts to help agents to swim instead of sink, but I digress…
In a recent offline study, we asked real estate professionals to rank their expertise in technology on a scale of one (not tech savvy) to five (tech expert) and 100% ranked themselves a four or five. That’s 100% of agents studied that consider themselves tech experts but we knew for a fact that only one of the people studied knew any coding languages or could create something on their own. I know a lot of technologists that would gasp with frustration that an entire industry finds themselves to be on their level.
As an industry, there is confusion between being able to market online and being “tech based.” If your brokerage is using email, Facebook and Twitter and saying that constitutes as “tech based,” then Houston, we have a problem. If your brokerage is developing mapping technologies independent of what any association or third party aggregator does, or your company is creating an augmented reality application for mobile home seekers, or if your brokerage is finding a unique way to automate the documents process then we have a starting place. But if your big box broker came out with an iPhone app and your team is still using the Treo 600, then we have a major disconnect.
There is a big difference between saying “our brokerage uses online marketing” versus “our brokerage is technology based” but the study participants didn’t differentiate, but simply called themselves experts.
Hypothetically, let’s say I come across a plumber with a blog and I can connect with him on Twitter and Facebook and heck, I can even chat with him on his website which is connected to his phone so he can still be floating the river with his kiddos while connecting with me. He calls himself the “tech based plumber” because of how “tech savvy” he is. But when I connect with him, I ask him about the exciting new technologies he’s using in plumbing and he tells me that it’s a set of skills he has fine tuned over 23 years. I ask if there are any new techie tools that can like scan an underground pipe for blockage or if there’s a chip he can put in a septic system to read levels and alert him? He says no, that plumbing isn’t as technologically based as I’m thinking and that robots are not here yet, etc. But I walk away frustrated because I was under the opposite impression based on him marketing himself as a “tech based plumber.”
“But I’m on the Twitter!!!”
Brokerages are feeling like they are innovative because they entice consumers online and have a sexy Facebook page and even are on “the Twitter,” but internet marketing is not innovative, it’s common sense. My plumber should be marketing online, as should you, as have many for a decade or more now, but if your company isn’t truly innovating or carving out new ways to develop tech tools for the process, it can’t be called a “tech based brokerage.”
Brokerages, you don’t have to apologize and make up for lost time just because you weren’t on Twitter first or because you didn’t have a blog until 2009 or even that you didn’t have a non-template website until 2008. You are not technologists, you’re real estate professionals and the world expects you to be a real estate expert, not a technology expert. This is the same as my expectations on my plumber to fix the major leak in my kitchen, not sit at home and code a phone application that helps me diagnose leaks myself- I don’t need a diagnosis, I can SEE that this place is flooded, just fix the damn thing.
I would argue that Redfin (who I’m openly not a huge fan of) is one of the only truly tech based brokerages out there, like it or not. You may hate their business model, but they have in house developers that are creating new ways to change how people search, and they’re willing to test out and invent new ways of interacting, whereas most brokerages adopt a shiny new tool like an iPhone app that was developed on an open source platform and is nothing more than a duplicate of every other real estate app but with their logo slapped on top of it.
So please, if your brokerage is not innovating anything or actually creating technologies (and by creating, I don’t mean hiring a college kid to put your logo on an existing app), you’re not a “tech based brokerage,” you’re a brokerage that uses online marketing and you don’t owe anyone an apology for not being “tech based” …unless you continue use of the phrase illegitimately.
Ken Montville
June 21, 2010 at 3:00 pm
Do I get points for reading the whole thing? 🙂
This, IMHO, is a debate about semantics. Most people in the world either don’t know, don’t care or don’t have the time to learn how to buy and/or sell a house on their own. Thus, we have this huge real estate profession (industry?) filled with experts. Yet, we, inside the profession know that there are some that are, um, more expert than others.
I’ve often heard that if you know even slightly more than the person you are helping (or billing!) than you are the expert. Note all the social media gurus, coaches (life or career specific) and, yes, tech companies that promise all kinds off SEO, graphic design, CRM and the rest of it.
The bottom line is that I’m not surprised that many real estate professionals also consider themselves to be tech experts and even tech based since most of our peers are barely getting past the e-mail phase. I’m not surprised that brokerages consider themselves to be tech based when, after all, the home selling and buying public interact with them through technology (i.e, the Internet or their smartphones).
If the definition of “tech based” is some innovative coder pounding away on a keyboard (or do they move things around with their fingers on a huge transparent screen like in the commercials for some aerospace companies and on some TV shows???) then no one in the real estate world really qualifies. Nor should we. We’re in the business of transferring real estate from a seller to a buyer.
If we interact with our clients using technology such as the electronic signature technology using laptops with IDX solutions (see AG sidebar) then I think we can call ourselves “tech based” or some other similar euphemism.
On final thought. If being on Twitter is cutting edge, we’re all in deep doo doo!
Lani Rosales
June 21, 2010 at 3:05 pm
Ken, yes you get points for reading the whole thing. 🙂
Perhaps it’s my English Literature degree and current job (not AG) as a digital communications consultant, but I firmly believe “semantics” are important- there are lawsuits based on single words, so why wouldn’t an industry be called to the mat based on an abuse of a phrase?
I feel that you understand what I’m saying, but I think that simplifying it as a game of semantics is short sighted- agents know that setting expectations is important. Hell, if word choice wasn’t important, the marketing industry as a whole would be as dead as a door nail. Billions of dollars flow through our economy every year based on word choices.
Where we are in complete agreement is that real estate professionals are in the business of transacting and if technology helps that is GREAT, but using technology doesn’t equate to creating technology, thus my argument that the industry is abusing a term. Believe me, people care.
David Pylyp
June 23, 2010 at 8:05 am
Wow That was a good read!
I thought I was tech savvy but in the context of your article my applications are innovative uses of existing systems for marketing.
I am pleased I can create my own offer and sales documents (laptop) print and present; create Youtube.com/dpylyp video’s to profile properties and send a mail merge or Bulk email. Video can be embedded or linked. Blogs are flourishing!
I do struggle with HTML coding and finding those TINY errors, but the websites are doing really well with almost 250K page views this year.
When I compare that to others who struggle with Outlook or TP and Database management, I just shake my head, BUT, I have been “computerized” for 20 years.
It appears, I am merely a user.
David Pylyp
Living in Toronto
Middleton WI homes
June 21, 2010 at 3:04 pm
Great post – including that totally classic photo of Bill Cosby! Although I have not seen any brokers in my area claiming to be “tech-based”, I can easily imagine how the term might be popping up everywhere as a result of so many different aspects of the industry going digital and many brokers’ tendency toward braggadocio and exaggeration, as you so aptly point out. As an independent broker (and former trading floor technology specialist), I admit a great deal of my time (and $) go towards figuring out how I can better leverage technology to improve my services and enhance my bottom line, including a fair amount of coding. But that is a far cry from developing my own iPhone ap or IDX. At the same time, hopefully I am not violating anyone’s sensibilities with this byline (which I have been using since the relaunch of my website in January 2009): “At Lake & City Homes Realty we combine traditional real estate marketing with cutting-edge Internet technologies to achieve outstanding results for our clients.” Your thoughts?
Lani Rosales
June 21, 2010 at 3:06 pm
My two cents:
Your tag line makes it clear what your use of technology is in that it is used as marketing… I think that’s a better example of how the word “technology” could be used in a forward facing campaign.
Chris
June 21, 2010 at 4:26 pm
If someone tells me they’re a “tech-based” business, I’d assume it was purely “virtual” as in little to no personal interaction with their clients (like Redfin…). Agents ought to be careful if they call themselves tech-based since I can’t be the only one who thinks that.
But I don’t hear agents describe themselves that way where I work – it’s always “tech-savvy.” And I’m sure those agents would rate themselves 4 or 5 on that scale even though almost always – always – they’re really maybe a 2.5…
Matt Stigliano
June 21, 2010 at 5:00 pm
@LaniAR – Didn’t you hear? If you can use Outlook, you’re a technological whiz! I see your point and agree that many want to make themselves look tech-smarter than they are. Just throw the word “ePro” out into a crowd of agents who are into technology. The laughter is guaranteed to drown out any argument you could make as to why ePro is the way to go.
My favorite part of your post though? “…one-upsmanship-itis, me-too-osis and/or i’m-the-number-one-top-everything-epsy… – you couldn’t be more right if you tried.
I’m off to build some new apps and reconfigure my local board’s IDX feed (in other words, I’m going to rebrand something and then hire a company to do my IDX). If you have any questions, just email me at maTtStiGL1aNo47857@aol.com – you can use Outlook to do that in case you didn’t know.
Linsey
June 21, 2010 at 5:24 pm
Oh boy Lani….must jump in here. It’s ironic because M Realty actually could be considered a technology based real estate company given some of your definitions…and yet I cringe a little and actually would rather NOT define ourselves as such. Garron will have to jump in here to appropriately have his voice heard on this, but from my perspective, all this tech talk, all the tools, all social media in the world doesn’t change the fundamentals about this business. It’s still requires an ability to interact with live people. The change isn’t as significant as it’s currently perceived.
To the extend that we use technology at ‘M’, we don’t expect agents to become ‘techy’. It can become dangerous territory for agents to become too focused on the tools and the tech rather than what it’s all really about – connecting with people, staying connected, and helping them buy or sell real estate. Assisting them with tools that help them do that is only part of what we are doing as a brokerage.
I think we provide great technology and internet resources, but I also think it’s about brokerage that has a unique culture, a focus on providing consumers quality information, and a intention to provide internal agent support and coaching. How unfortunate would it be if we hid all that great stuff behind the buzz words of today – a ‘tech based brokerage’.
BawldGuy
June 21, 2010 at 6:07 pm
The key concepts here are A) Words mean things B) Perception oftentimes trump the actual meanings of words. Go figure.
Most folks who know me, you above most, realize one of my nom de plumes is TechTard. Yet, most of my local peers think I’m a technology based real estate company due to the nature of my business and it’s source. 1-5? I aspire to a 1.5 on my best days, as you’re well aware.
The pubic’s perception though, is that RE firms with multiple websites, a blog, and using Doc-U-Sign, scanners, smart phones, iPads, and the rest, are indeed ‘hi-tech’ operations. Frankly, I think it’s the faux technogeeks who’re bent outa shape by brokerages calling themselves ‘technology based’. Real TechGeeks couldn’t care less, as the posers don’t know what they’ve forgotten. I do take your point though, in the narrowly defined frame in which you’ve delivered it.
The only ‘code’ I know is the signs I used to flash my catchers telling them what pitch to call next. 🙂
www.hermanchan.com
June 21, 2010 at 6:30 pm
lani
i think this topic is part of a larger phenom amongst the real estate agents. it’s puffing oneself up. it’s like all those agents who take a wkd course on ” luxury real estate ” and all of a sudden they are ‘certified’ and brand themselves as ‘fine home specialists’ all over their business cards, websites, flyers, tombstones…..when in reality they’ve never hocked an artsy-fartsy home at all. dubbing oneself illegitimately def irks me, but alas, i can’t say i am surprised brokeragess are co-opting this new buzz term……
Matt Dollinger
June 21, 2010 at 8:43 pm
I really like the ideas and the comments here (especially those of my girl from the OC – woot woot!)
Anyway – personally I believe that the word innovative needs to be stricken from real estate as a whole until there is an agreed upon definition.
(Here’s where I’m going to get publicly flogged – bring out the cat-o-nine-tails)
I cringe when I see SOME of the people that make it onto “innovator” lists or companies that are labeled as “innovative”. According to the Wikipedia definition of the word “Innovation” here: https://en.wikipedia.org/wiki/Innovative
Here is the point we tend to miss: “The goal of innovation is positive change, to make someone or something better.”
The root of all of this debate is the agent/agency/broker. I guess you can argue that all of this iphone app (you’re forgetting over 75% of the population you know) ipad app (you’re missing 98% of the population) twitter profiles (missing 65% of population) and facebook pages (missing… oh let’s say 50% of the population) layar app (are you serious?)
The constant here is the agent/agency/broker. They are the one that needs innovating and I’m betting this doesn’t have shit to do with technology… well maybe, but not in the sense we’re discussing.
Want to be the most “innovative” brokerage in America? Use Camtasia to tape all your training sessions, use Wellcomemat.com to host all of these videos, invest in paper free documentation of contracts, disclosures, etc – WHILE – using GoToWebinar (or even IN PERSON TRAININGS) to show your agents how to actually USE them, and most of all teach your agents some fricking excel skills to manipulate market data and price your frigging listings effectively.
THAT – would create better agents, a better brokerage, and where it wouldn’t be as “flashy” as driving around in a leased BMW looking at listings on an iPad, it would make the customer transaction and experience “better”.
That brokerage ain’t gonna make it to someone’s list I bet… but if this is true, “The goal of innovation is positive change, to make someone or something better.” – then I think that agent/agency/brokerage is leading the pack.
Matt
* All views and snarkiness expressed here is a view of Matt Dollinger @mattdollinger and not of my employer or anyone else that chooses to hang around with me in public… with the exception of @robhahn who would… and will… argue anything I say anyway simply because he’s a contrarian (sp).
Dan
June 21, 2010 at 9:03 pm
Hello, I’m new here and I just want to learn from you guys and hope that I could share something.
First I read the whole article. 🙂
Second, I am only minimally involved in the real estate business or in the tech business.
Maybe I could posit my outsider point of view to the whole thing. I perfectly agree that semantics plays a huge role not only in the world of real estate, but in marketing in general.
But, if you were to ask me as a newbie, as an outsider or as a client, what the bottom line is, the relevance, quality and application of the service provided aided by the platform made simple to understand, comes top notch. Sure, tech based brokerage company A has its own in house development team. Sure tech based brokerage company B has created technologies that could predict real estate trends using social media analytics, but in the end… you get my point.
Sean Dawes
June 21, 2010 at 9:05 pm
Personally I know how to code to an extent and run my own marketing company which we can develop apps etc.
But the point I wanted to raise is I think why you do not see real estate brokerages who are tech based is because the brokerage model is a dying model.
I think you will start to see more tech based companies being built to put pressure on the old real estate brokerage concept. As information becomes easier to be obtained, the business will completely shift.
Just curious on what others thoughts are on the fact that we are not seeing new brokerages run by startups out west as they know there is no money in long term growth with the traditional system or am I reaching too far to try and make that assumption?
@SeanDawes
Fred Romano
June 21, 2010 at 9:10 pm
I would defiantly consider our company “tech based” but don’t really use that catch phrase. We are always working on incorporating “tech tools” to make our flat fee listing service unique. Plus we look at the current set of technology and see how we can use that to monetize our services while adding value and benefits for our clients.
Ken Brand
June 21, 2010 at 9:17 pm
In the land of the blind, the one-eyed man is King.
How can someone be the greatest #1 of all time, exceeding expectations, if they aren’t a technology-based marvel, among other wondrous titles and self proclamations.
Sorta, like calling yourself a social media guru or zen-mistress.
Words.
BawldGuy
June 21, 2010 at 9:24 pm
…the brokerage model is a dying model.
Every time I hear or read that I hear the sound of gold fallin’ into my vault. Something’s been ‘just about to overtake the ‘brokerage model’ for my entire four decade career. Same with the flying car. Wishful thinkin’ has been, um, unsuccessful so far. Time to try somethin’ else, guys.
Geez.
Sean Dawes
June 21, 2010 at 9:31 pm
@BawldGuy
True but in those 4 decades you have not seen the tech growth you have seen now.
I can easily sell a house using a flat fee MLS for a couple hundred, professional photos, graphic design work and running comps using trulia (not the zestimate junk on zillow).
Just most people are still thinking they need to hire a realtor for everything. Sure you need someone to go over the legal paperwork but other than that why cant the model shift to an hourly rate business where the seller hires a realtor to draft up the paperwork and run title, home inspection etc.
How does gold fall into your vault? Not saying I would jump ship, just curious what will happen as things become more transparent.
Sean
BawldGuy
June 21, 2010 at 9:46 pm
Hey Sean — I can see your point, but it doesn’t hold water. First, transparency is a joke, and a bad one at that. It’s akin to saying your car’s engine will run better and help sell more cars if only the block was transparent. It doesn’t improve the quality of the result, or how fast the sale happens, or doesn’t happen. Transparency, for the most part, is a false issue used as a weapon by those wishing to control you.
Any honest brokerage operating with integrity will disclose what’s required by law, probably a bit more. The public is wildly satisfied with that. Besides, less than 6% commission has been tried for decades, failing spectacularly without exception. It can be used in markets where homes can be sold by blind, mute 8th graders, but not much in neutral or buyers’ markets — period. Ask Redfin about that. 🙂
I hear gold cuz highly skilled, experienced, and long term successful agents simply won’t work for you on a low fixed rate. ‘Course, that begs the question about the low rates, as I’ve already shown they simply don’t work. Much smarter people than I have tried just about every reduced fee/commission model there is, and they’ve failed. Why? The revenue stream just won’t cut the mustard, unless they’ve opted for a non-profit model. They end up with the dregs of the business workin’ for them, which frankly, is exactly what they can afford with that model.
My clients want results, plain and simple. They want integrity, expertise, and experience — but mainly, just results. The rest is happy talk by those who’ve already proven they can’t compete in the market. (NOT referring to you.)
Am I makin’ sense?
Fred Romano
June 21, 2010 at 9:49 pm
Sean is right! Change is a happenin fast. As far as the listing side… It’s easy to sell with the right tools and online broker. We have people rave about our services all the time.
Oh and I DO code my own website 😉 Makes a huge difference folks!
BawldGuy
June 21, 2010 at 9:55 pm
Like your site, Fred. How long have you been doing things this way?
Fred Romano
June 21, 2010 at 10:00 pm
We started about 3 years ago doing flat fee services, and it’s been going very well here in CT. I had my best year in RE last year, while this year looks like I am on track to at least match that!
I think the big difference is we provide great customer support. In fact, we just had someone list with us who was listed with an “out of state” flat fee service, and they said that company was just terrible to deal with.
Sean Dawes
June 21, 2010 at 10:02 pm
@BawldGuy
Whats your first name? Transparency question haha jk.
Yes you are making sense but I disagree with the transparency fact. No one is trying to control me (didnt really get what you meant by that). I am who I am at home when with clients. There is no reason to have a fake persona that many agents have when they put on a suit (not saying you do…just talking about what I see). I have some clients where I am casual with and other times when I do put on the suit. Suit doesnt make the professional, the professional makes the suit. I share all my info about who I am via facebook so clients get to know me more than those cheesy real estate photos that most use (I dont use pics of myself in a suit in ads, business cards etc.). I don’t try to buy a BMW because thats what all other realtors do here in order to have that image. I build sports cars in my spare time and I dont mind driving a modified car around down. Thats what I mean when I talk about transparency. Too many people try to be someone they arent.
I agree that its tough to get the less than x% model to work but thats because we would need a whole culture change and most agents wont shift. But I think over time is can shift. Will it happen overnight? Nope. But can it happen…sure. Homeowners will realize it. Look at legalzoom for example. How many people now do not use attorney’s to incorporate and use legalzoom to do so and save? Filling for an LLC or C-corp isnt that hard. And before someone says that its not a great thing to do, one of the most successful young entrepreneur’s has used it to setup his company. Any guesses?
Curious if you think the smaller commission model won’t work because of the operating expenses or not? You mention in one paragraph the revenue stream wont cut the mustard?
Results can happen from pricing effectively, proper presentation and knowing other things (financing options…like 203k reno’s etc). Not saying everyone can just do it alone but I dont think its a far stretch for someone to do anymore on their own now. Year ago it was a lot harder.
Side note – hope you dont think im arguing…i just love having open debates…its what allows me to grow and learn from others as they give me the other side of the coin
thanks for chatting 🙂
Sean
BawldGuy
June 21, 2010 at 10:22 pm
Great Fred — let me ax you a question. Can I assume you’re listing roughly 300 homes or so annually? I’ll bet more. At $400 a clip, that’s $120,000 a year in gross revenue. Assuming you have overhead, that figure surely drops to under six figures — before tax. Meanwhile, you’re codin’ your rear end off, givin’ great service, and ensuring they all sell, right?
What percentage of your listings have sold in the three years you’ve been doin’ this?
Fred Romano
June 21, 2010 at 10:29 pm
I have no overhead (work from home), rarely need to drive (less gas), and work more “normal” hours than most agents (M-F maybe Sat morn). I list more than 300 a year for sure. I don’t really track the solds so I can not say for sure what % sells, and I am not getting into that conversation here.
You can not compare our service to yours when it comes to stats… like apples and oranges man.
Sean Dawes
June 21, 2010 at 10:28 pm
BawldGuy
Raise some good points with the GOI and then what the NOI would be of the business.
Coding doesnt have to be done for every listing. Setup the system and maintain it. Most of the RE website can have feed systems setup and thats what he mostly has coded into his platform.
Also think about it this way. Even if he pulled in $80k a year. Remember he can make that from the beach, sitting in his lazy boy watching tv or while he is sleeping whereas we are running buyers around looking at homes, doing showings on weekends etc.
Do I think a realtor can generate more income, sure.
BawldGuy
June 21, 2010 at 10:31 pm
You make a great point. Thanks, and good luck.
Michele Nixon
June 21, 2010 at 10:31 pm
I read the whole thing. Points for me! Yeah!
I didn’t read everyone elses responses. Points lost! Oh, well.
But, I have to agree with Ken (our first responder) in that we are supposed to be in the “busy-ness” of assisting our clients in real estate transaction. It’s not our job as brokerages to develop the technology – it’s our job to use the technology to make our client’s lives easier by helping them sell their homes or buy their homes.
So, I think it’s a bit unfair to chastise brokerages for claiming to be “tech-based” based on your definition of what “tech-based” should be. Your definition is more akin to software or technology development. It’s like chastising really good pilots for flying airplanes really well. They don’t build the plane. They use it to it’s fullest capacity. Maybe that’s not the best analogy but, that’s the best my brain can come up with at the moment.
I think you need a new windmill to tap at. And perhaps…some decaf. 🙂
BawldGuy
June 21, 2010 at 10:50 pm
Sean — I asked what percentage of listings taken were actually sold, cuz I strongly suspect it’s far below his higher priced competitors. Since about 1984 or so, my firm has sold over 90% of the listings we’ve taken. And yeah, there are all kinds of listings we haven’t taken, cuz the sellers won’t do what needs doin’. Folks paying $399 to list their home on the local MLS, aren’t exactly outraged when it produces nothing. It’s my guess the vast majority of them don’t sell, and don’t care about their $399 either. Heck, I just had a client in another state use one of those guys, and he sold his rental! But he followed my instructions before listing it. 🙂
The next super-low, flat rate brokerage that succeeds in a market bigger than Hump Bug, Tennessee will be the first. That is, if success is not measured by the dollars netted by the brokerage owner, but by the percentage of home sellers with net checks from escrow. Fact is, if it was so effective for the home seller, anyone charging even $1,000 flat fee would be puttin’ their job app into Von’s by now. 🙂
Bottom line? Super-low flat rate brokerages fail big time if measured by the percentage of homes actually sold on their watch. Let’s see the transparency there. 🙂
Sean Dawes
June 21, 2010 at 10:54 pm
Well thats simply because realtors work on commission. So I can sell 100% of the homes I take on if I just take on homes that the sellers allow me to price it where I want. Price it 10% ahead of the competition and it becomes a debit machine system. More days on market means more money out of realtors pockets. So they want to price it competitively as its not a big deal if they don’t get that extra $1,000 in sales price as it sold in 5 days and they walked with their x%.
Sellers using flat fee service price their homes. So of course you have a higher sold rate with realtors. They price to sell. They do not necessarily price to get maximum dollar for the homeowner.
Flat Fee MLS vs Brokerage and the comparison of homes sold is not really something you can compare. Now if there was a flat fee that said “in order to use us, we price your home and you come to an agreement and thats where we list it” I could def see your point. But sellers are just overpricing their homes when using flat fee and its not any of the flat fee services’ fault.
Sean
BawldGuy
June 21, 2010 at 11:02 pm
Sean — This isn’t about anything other than results. Nobody cares how the cat got skinned, just that you either have a wall covered with cat skins or ya don’t. The rest, as I’ve said before, is happy talk. Sellers don’t do well selling their homes with flat rate firms cuz flat rate firms don’t have the batting average their higher priced competitors have. Furthermore, if you ask the sellers, they care big-time about whether or not their home sells.
Marketing, hiring quality sales force, effective marketing, basic overhead, etc., etc., is the reason why success has eluded the low priced flat rate brokerage. Of course, if you only survey the owners of said brokerages, success is defined a whole different way.
The public is under the assumption that the successful sale and closing of their homes is the main issue.
BTW, I too love these conversations.
Sean Dawes
June 21, 2010 at 11:08 pm
They sure do care how the cat got skinned especially if they could have saved a few g’s to get the job done. Batting average has nothing to do with flat fee versus realtor but has to deal with presentation of the property and price. Like stated above, realtors price competitively. Take on only listings you know are 10% ahead of competition and your a 100% closer. Sure sellers care about selling. But if you asked them if they could sell and save a few grand they would opt for the latter.
Marketing isnt that hard for properties. Not rocket science. High quality photos, syndication out to RE websites, drop in MLS, run an open house, have clean house that shows well.
Also you can create a brokerage with almost no overhead. The brokerage model is so old and has so many expenses that are a waste. Look at any successful startup. Ask them where their staff is – all over the US and work remotely. Ask them if they pay a ton on advertising – word of mouth (not talking about properties but marketing to brand the brokerage).
Sean
BawldGuy
June 21, 2010 at 11:12 pm
Listing the way you do would indeed result in an enviable batting average. I applaud that approach. Have you been doing it for long?
Sean Dawes
June 21, 2010 at 11:14 pm
Once I posted that I realized I should have posted a disclaimer as I was being sarcastic.
I don’t do that approach but many realtors do price everything ahead and that will obviously result in a high sales %
I show comps, and we come to an agreement and I work the listings to get the maximum price I can for my sellers
Sean
BawldGuy
June 21, 2010 at 11:16 pm
🙂 I love sarcasm, but we miss so much of it while using the written word.
Sean Dawes
June 21, 2010 at 11:19 pm
Agreed 🙂
I thought you actually were thinking I do that approach. haha.
Kevin Kaplan
June 21, 2010 at 11:39 pm
Here is an idea – how about a “client based” brokerage? There I said it. Of course technology plays an important role for the consumer experience and for agent efficiencies. In the plumber example above I would be more impressed if he said he was a client focused plumber and uses technology to improve his communication and service to clients.
…and what @Matt said (except the Rob part, I don’t want to get into an arguement with Him…) . we just added 2 in house staff trainers to work with agents on using technology to improve their business, have an extensive video training library, use virtual meetings etc.
Stephanie Crawford
July 6, 2010 at 1:05 pm
Kudos to Kevin’s comment. I think we loose focus on the client’s needs sometimes by spending all our time trying to “wow” them with our toys.
Stephanie Crawford
June 22, 2010 at 12:17 am
LOL. I can totally believe that 100% think they are 4s and 5s. But I also think that the majority of agents that are active here on AG are far more tech savvy that the average agent out there practicing in Anytown, USA.
Joe Loomer
June 22, 2010 at 7:07 am
I (sob) tried to read this post on my Treo and had to wait until I could get on my four-year old desktop at home.
Guess I’m getting a new phone today – and perhaps heading to Barnes and Noble for a copy of “HTML for dummies.” Or should I just wait for HTML5? Or is it HTML6?
Navy Chief, Navy Pride
p.s. read the whole thing Lani – now I understand why you were pissed at your Twitter buds about your profile pic 😉
Fred Romano
June 22, 2010 at 8:13 am
@BawldGuy We have a fair amount of sellers who are very savvy and have done this before, but to compare our flat fee service to that of a traditional agent is not fair.
Our sellers choose this option to save at least half the commission, and they generally offer 2.5% to 3% to the buyers broker. So if the house if priced right, shows well, is easy to show, has great photos, and uses our marketing services, it should sell. That being said, the buyer pool is slim right now…
Another issue I have – Unethical agents. They are contacting our clients and telling them they must be with a full service broker to be successful. After being harassed over and over, some of them give in and list with one of them.
While we have had a fair amount of sales (39 this year), we have also had a few (about 20) cancel to go with a full service broker or decide not to sell right now. Of course there are always a few that expire too. I currently have 155 active listings, and about 10 under deposit.
Like I said before, there is movement towards this type of service for sellers, and we strive to be number one in CT. Read some of the client testimonials and you’ll see flatfeerealty.com/feedback
BawldGuy
June 22, 2010 at 12:37 pm
Don’t know a cool way to put this, Fred. But any model putting just 39 listings into escrow with almost half the year gone, while listing over 300 homes a year, ain’t exactly material for testimonials.
If an agent tried to poach my listing while it was active, we’d soon have some very intense non-verbal communication. 🙂 I’m with you on that one all the way.
Matt Stigliano
June 22, 2010 at 12:50 pm
Fred – If all these agents are harassing your sellers, can’t you take the agents to their local board on ethics violations? I certainly wouldn’t tolerate it.
Fred Romano
June 22, 2010 at 7:17 pm
It’s just not worth the effort. I have no time for that.
Mike
June 23, 2010 at 7:52 am
Sure, the flat fee service is much more tempting now, due to the tech advances, but most sellers won’t do it because they know better. Sure they may “save” half of the commission, but they will most likely lose elsewhere. It is also VERY time consuming and very frustrating.
Sean, you seem to think that pricing at or near market value is a bad thing. Do you think that OVER pricing does anything but keep the house on the market longer? Most likely, the sale price will inevitably be market value anyway, but it took months of it sitting on the market with few showings until the sellers realized where the actual market was.
Many agents “buy” listings by suggesting a higher list price, even though they can’t provide comps to back it up, because they know that, that is what the seller wants to hear. Eventually the seller allows the list price to be lowered and it eventually sells at market value.
I don’t have anything against the flat fee services, as long as they are honest with their clients, but I doubt that most are. I think that they could still be successfull if they were honest. If they tell a seller that 20% of their listings sell, (If it’s even that high) that should not be a big surprise. When they are only paying $400-$1000, and are not provided with much advice or guideance, what do they expect?
As long as sellers know that they are getting exactly what they pay for, I don’t have a problem with this model. As we all know, there are many obvious, as well as unforeseen obstacles in closing a real estate transaction. It gets more difficult every year. Good luck selling a short sale with a flat fee service.
Once under contract, can a seller contact the appraiser to assist in getting their home to appraise? Heck most agents don’t, and don’t even try, or think that it is illegal to contact an appraiser or leave comps as well as other pertinent facts. It is NOT illegal at all for the agents to do so. I even did it succesfully from a buyer side, when my clients wanted it to appraise. Do sellers understand the contract, disclosures and addendums?
There are so many pit falls that many agents are too incompetent to foresee, let alone a seller. That’s why so many of them fail. Even if they do sell, most likely they lost that commission that they thought they were saving, by listing on the cheap. Each to his own though. My advice, get a GOOD agent to represent you.
Mike O’Hara