September 2, 2021
“Disruption” has recently been the buzzword of choice around business headlines. And real estate brokerages have been doing their best to “disrupt” the status quo by embracing alternative real estate purchase and sale options at a breakneck pace. Evolving options to traditional real estate processes promise to simplify the complexities of real estate transactions for consumers, but which ones make the greatest impact? How will agents maintain their expert status and continue to be a trusted guide for their client’s journey?
Disruption has become the norm for brokerages to deal with, but how do they keep pace with what is happening around them? The proptech world began evolving first with third-party companies syndicating previously private MLS information to the public. Next, discount commission brokers offered a “cheaper” substitute for consumers willing to “DIY” their real estate transaction experience.
And now the current trend is the rise of the iBuyer and the Power Buyer models. iBuyers aim to take the risk of pricing, showings and buyer complications out of selling a home by offering to purchase the home themselves. Arguably, the seller trades time and certainty for market value. Power Buyers take the idea a step further and focus on increasing certainty in the home seller’s replacement property. Power Buyers can give home sellers, who are also home buyers, an edge in blazing hot markets by turning their financing contingent offers into cash offers, and by offering unique trade-in programs and bridge loans.
That said, there are three ways traditional brokerages are modernizing their habits to adapt to market demands and prepare for future transformations.
Traditional brokerages looking to build longstanding relationships with their agents know that they need to offer technology to keep their agents happy, efficient, and able to meet consumer expectations. The critical concept is support and flexibility. No longer just relying on brand recognition and niche marketing tactics, brokerages are investing in support, flexibility, and the consumer experience.
Brokerages are adopting and in some circumstances partnering with proptech alternatives under their brokerage label instead of fighting innovations that are driven by advances in technology. Smaller independent brokerages will need to lean into training their agents on explaining the pros and cons of the alternative options, adopt them where appropriate and possible, and focus on concierge-type services to streamline their traditional transactions to continue to be appealing to consumers. Agents who are working in metropolitan markets, where alternative models tend to be launched, and who feel they are losing business to those models may feel constrained to seek brokerages that are tech-advanced with progressive options for their client base.
Innovative brokerage and team leaders continue to recognize that consumer experiences are at the heart of the iBuyer and Power Buyer trends. Innovators will support agents to manage their business with technology and create accountability. Meaningful capabilities and oversight of how independent contractors represent the main brokerage is being given more consideration than ever before. Many consumers have had negative or cumbersome experiences with the closing process and it often reflects negatively on traditional real estate models. Brokerages will need to assist their agents in adopting technology to help increase the certainty of closing and provide seamless and consistent transaction outcomes.
Successful agents are prioritizing technology that organizes communications and identifies important milestones in transactions. Traditional high touch offerings are further enhanced by digital offerings, which also increase an agent’s efficiency. . Tools such as Reti360 create integrated out-of-the-box workflows, checklists, document sharing and deadline tracking, and are the foundation to providing guidance and increasing the certainty of closing as well as providing a better consumer experience. Another benefit of a well organized transaction? Building a reputation for being easy to work with.Friction free processes may just help an agent’s offer stand out in a crowd of competing offers in this red hot buyer’s market.
One driving force of change for brokerages is the realization that social responsibility can be a determining factor when consumers are choosing the path of who to trust with their personal transaction. Studies have shown that consumers are willing to pay more for a service or product if the company is environmentally and socially responsible, as well as offering the features they want. Consumers want to save time and money, but they also are conscious of supporting businesses that make the greater good a priority.
Thus, successful agents are embracing more opportunities to become socially invested in the areas they serve. Traditional brokerages that get involved in their local community will build familiarity with consumers who may otherwise “google” the most straightforward answer for their real estate problems. Transparency, modeling best practices and most importantly being easy to work with will build trust and long-term loyalty. The combination of stellar business practices and community involvement is the gold standard of building a sustainable business model.
Traditional brokerages will need to be on the offensive for the foreseeable future as the industry progresses. Customer service and understanding the ever-evolving consumer expectations, including transparency and accountability, will need to be a critical part of agent workflows. Giving an agent a canned website and dated business plan will not carry them through the ever-evolving landscape. Brokerages will need to ensure that their agents “get” why consumers want and use alternative models to complete their transactions and offer the same benefits.
Brokerages, both traditional and emerging alternatives, will need to be cognizant of the changes within the industry. Recent disruptions including new commission structures, consumer fees, and the use of technology to streamline the closing process have the opportunity to earn more loyalty and trust from consumers and some will even be frustrated or generally disinterested in offerings that lack a modern approach, which makes this even more critical. Be a champion of change, find tools that work and grow with your business, and be prepared for the next shift in our industry. It may be here sooner than you think.
Reti360 digitizes real estate transactions from contract signing through closing to provide a better closing experience for all participants. Our platform modernizes the transaction by connecting teams of agents, housing consumers, and service providers at every step of the process, from initial contract signing through closing.
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