The real estate brokerage model is facing disruption in more ways than one. Alternative business models are offering new strategies and technologies to provide more information to consumers than ever before. Some brokerages are even finding ways to bypass the concept of an agent altogether.
From my experience in redefining the traditional roles associated with real estate, I believe that companies should adapt their practices and rethink their current business model. Here are a few key ways the traditional brokerage model is changing and how firms should adapt to the latest practices.
Specialization
More and more brokerages, including my own, are exploring ways to rely less on independent agents and more on the specialization of skills. Real estate professionals can’t be everything to everybody, nor should they. Honing specific skills, such as data research, listing management, branding, creative design, etc. allows you to effectively manage, market, communicate and sell your assets. It also allows employees to focus on their strengths, building client relationships and sales, rather than competition and commission.
Specialization also extends into a company’s ability to better service clients who are generally underserved in their niche markets. Having extensive expertise in one sect of the market builds trust among potential clientele. If a buyer believes you have the most expertise and data when it comes to a market’s nuances or specific type of property, they’re more likely to realize that your brokerage is the best of all the other options.
Branding
In the increasingly competitive real estate landscape, branding and marketing is becoming essential to staying alive in the industry. Brand awareness is a key benefit of social media marketing: “87% of marketers rank more exposure for their businesses as the primary benefit of their social media efforts,” according to Social Media Examiner’s 2018 survey of more than 5,700 marketing professionals. For example, through use of social media, photography, videos, print materials, etc., real estate firms would be able to create a more unique set of branding material that differentiates themselves from their competition. Traditional real estate firms often employ third-party marketing services when they should be utilizing their own in-house technology to ensure everything is kept under one roof. In my experience, this not only builds a more distinctive brand image, but also maximizes the potential to reach new clients.
One of the most important aspects of branding is knowing your client base. Establish an online presence that creates a memorable experience for your clients. Instagram, for example, is the perfect platform for branding and marketing purposes, and more real estate brokerages are working hard to build their followings. The photo-driven platform has over 1 billion monthly active users, offering a wide audience of potentially untapped customers. Keeping this in mind, while anyone can have a presence on social media, it takes a carefully curated strategy to build the kind of online presence that turns “likes” into sales.
Technology
The idea that technology is changing the real estate industry is not breaking news, but when used correctly, it has the opportunity to offer more valuable information to clients, especially outside the traditional model. Technology and data has to be utilized in a relevant way within each micro-market that you are servicing, because it can be a negative force if used incorrectly. For example, I find online listing syndication websites to consistently provide inaccurate information and suggested pricing that has no merit, which can negatively impact the sale of a property. To counterbalance any irrelevant information, you have to present your buyer with granulized information and the necessary tools to review them in a digestible way.
Historically, a major role of real estate agents was to provide information that wasn’t available to individuals, like listings, prices and details on properties. Now, the sheer amount of information available to consumers online is going to change the role of the broker, and in turn, the brokerage. Today’s buyers are looking for intelligence; they want to understand a property much more holistically. Relying on a data-driven model helps bring transparency and understanding to relatively arbitrary markets — granted that you’re providing accurate and relevant information. Creating as much measurable value directly for your clients and leveraging technology surrounding data collection should remain a priority.
Looking Forward
Disruption of the traditional brokerage is a tidal wave that we know is coming toward the industry. Generalists who service every price point with a lack of resources and accountability will find it increasingly difficult to add value to their clients. This is why it’s important to emphasize a company-wide approach to real estate, rather than the traditional mindset, which only elevates individual agents and does not positively service clients. By having a company-wide model that dismisses the agent-centric approach and a dedicated focus, I find that this brokerage model enhances the ability to deliver tangible value that is increasingly sought after by discerning clients. As the industry continues to shift and buyers and sellers become more educated about how the traditional model works, consumers will begin to hold the industry’s professionals more accountable for their level of service, value and results.