Technology vs. Hands-On Care. Why Can't the Consumer Have Both?
In a recent article in RIS Magazine, Brian Buffini, founder and chairman of Buffini and Co., made a very interesting observation: Despite the fact that 80-90% of real estate buyers start their home search online, how many, when browsing homes online and finding one that they like, would actually go to the next step and click "Add to Shopping Cart?"
I have been a long time coaching client of Brian Buffini's Referral System. Brian teaches that instead of spending huge bucks marketing to strangers, real estate agents are wiser putting their money into marketing to people who already know them and the referrals they send their way. His system has been extraordinarily successful for me -- for the last five years, my personal business has been 100% referral based.
I originally built my business online and have long been an early adopter of technology. Known as a "tech queen" I have long been in favor of using technology to do functionary tasks better, faster, and cheaper.
The problem is that in the current environment, there seems to be no middle ground. On one hand, traditional real estate companies and associations are still telling the public that if they want the hands-on personal care that is the backbone of Buffini's system, the consumer needs to get full-service and can only pay by commission, effectively not allowing them to take advantage of the do-it-yourself opportunities (and cost savings) that the plethora of property search and valuation sites provide. And they don't address the fact that many consumers want quality services and may in fact want full service, but just don't like paying by commission.
On the other hand, the myriad of third-party companies that advertise that their sites and services can replace what a good real estate professional provides are also missing the boat -- while technology can provide data, and lots of it, without a professional to interpret what it means, the consumer can lose a lot of money on his largest financial asset.
Consider valuation site Zillow: It does a great job of saying that it's "Zestimate" is just a starting point and is not an appraisal. Unfortunately, the message isn't always getting through -- we agents are continually running into self-described "Zillow-ites" that argue with our price analysis of their home, saying the "Zestimate" came in much higher (and more to their liking).
Lending Tree continually advertises that when "lenders compete, you win" encouraging the mindset that lenders are commodities to be shopped by price and clearly sending the message that cheaper is better. Discount real estate firms, promising a big rebate if you use one of "their" agents, are sending the same message about real estate agents. These messages are creating what Walt Backowski, president of the Metropolitan Consolidated Assn. of REALTORS® (Troy, MI) calls the “Artificially Empowered Consumer.”
As I discuss in my book Ripping the Roof Off Real Estate, lenders and agents, like other fiduciaries such as CPA's, financial planners, or attorney's are not commodities. The quality of their service, level of expertise, talent and experience can make a huge difference in whether you get good value and peace of mind with your loan, purchase, or sale, or get financially hung out to dry.
It's time for a middle ground which the rapidly emerging field of Real Estate Consulting can provide -- harnessing the incredible power of the Internet to allow those consumers that have the time and desire to market or find their own homes to do so, while bringing in a real estate consultant to provide the vital fiduciary contract-to-close duties. The consultant can also provide choices in how their services can be paid for.
The statistics are clear: Agent-assisted properties net far more than those that are sold entirely by owner, and that’s after paying the agent’s commission or fee. Whether it is USA Today’s 2003 study that found agent-assisted properties netted 21% more, or the National Assn. of REALTORS® 2006 Home Buyer and Seller Survey that found that agent-assisted properties netted 23% more, the bottom line is that having a real estate professional on your side will save you far more than it costs.
The trick is using technology and the Internet for what it does best, providing access and compiling data, while bringing in a real estate professional to interpret what all that data means and handle the contract-to-close responsibilities that are so vital if the consumer is to get the best deal when they buy or sell a home or make other real estate decisions.
(Mollie W. Wasserman is a pioneer in the development of Real Estate Consulting. She is the founder of the Accredited Consultant in Real Estate (ACRE™) designation, and author of a new book Ripping the Roof Off Real Estate - How a Multi-Billion Dollar Industry Came to Have an Identity Crisis. Mollie is a real estate broker, ABR, e-PRO 500 (Select 50), iSucceed Mentor as well as one of only 200 Cyberstars™. You can view her blog, The Consulting Times, or team's web site.)