Still Not Sure How Important The Internet Is In Real Estate Sales?
September 15, 2008
The California Association Of Realtors recently released their “2008 Survey of California Home Buyers”. The data found in this survey isn’t all that astounding to those who have actually been using such information to improve their business. However it further underscores how many real estate agents are out of touch with reality in regards to what today’s consumer wants and expects.
I can hear it now. The stubborn cold-calling, door knocking old school, 3 yards and a cloud of dust, real estate agent angrily discounting the data in the survey. “It doesn’t apply to me”. “Real estate is local”. “My market is different.”
You know them, you’ve probably read their baseless, rantings on multi-agent, back-slapping, hoo-rah sites wherein no amount of data, survey results or trade information relates to them. You know them, they are the ones who still probably have AOL email addresses and may in fact still think that AOL is the Internet.
They’re the ones who are just finding out that you can take screen shots of images on your computer or believe there is “Google Juice” for “an open house this Sunday in Boise”.
If you’re still reading their blog posts and listening to what they have to say after you read this information then you deserve the lack of income you are enduring.
Does that upset you? It should! It’s time you as a real estate agent who wants to run a “business” wakes up and takes notice of what is REALLY going on in the industry.
The CAR Survey was conducted using a sample group comprised of recent homebuyers. 1,249 who used the Internet and 351 who did not and went the traditional route.
Like I said earlier, the data is not startling, but it is remarkable. Here is what the survey found:
1. Home buyers expect and want real estate agents to answer the friggin telephone or respond by email! People, can you imagine calling your local hair salon or dentist’s office or lawyer’s office and not being able to get in touch with anyone and if you do, no one returning your call?
We all know that real estate agents are some of the worst communicators on the planet. Unfortunately, the consumer knows this as well.
96 percent of Internet buyers expected a response within four hours or less…31 percent of the Internet group expected an IMMEDIATE response!
84 percent of participants ..let me say that again…84% of buyers said that they considered the agent’s response time to be either a “very important” or “extremely important” factor in their decision-making process.
I recently took 20 random listings off of the MLS and called each one of them. I called on Friday morning and Saturday morning. 40 phone calls in all. 2 agents answered their phone and only 4 called back.
Do you really think the real estate industry is slow or have agents simply given up? Until real estate agents grasp the idea of communication as a business tool, there are going to be a lot of real estate agents existing under the poverty level. This is an easy fix. You see what the consumer wants. Deliver it! Real simple. You don’t need a business coach to learn how to be accessible and answer the phone or an email!
2. “I don’t work with buyers because I’m a lister and buyer’s waste my time”. Nothing signals the label of dinosaur quicker than these words being spoken or written by a real estate agent. If you hear a real estate agent uttering these words, back away, no run away, lest you be struck by the rapidly approaching comet.
Today, gas prices across the USA are rising because of the recent hurricane. Refineries are not able to produce gas so the price goes up because the inventory can’t meet the demand. Unfortunately, in most markets across the country, the same supply and demand impact is not present.
In fact it is much to the contrary. There is so much inventory that it has dwarfed demand. So why are some “mega-producing” agents heralding the fact that they are “listers”. Doesn’t their statement pretty much mean that they don’t understand Business and Economics 101?
Now let’s look at that nutso mantra of “buyers are hard to work with” BS that we keep hearing. I have a question…too hard to work with compared to what? The NAR says that the average buyer’s agent spends 14 or so hours with a buyer. So just what is the buyer taking you away from? Oprah? Dr. Phil? You’re other job?
The fact is that the recent CAR study shows that “Traditional” buyers take as much as 10.3 weeks searching for a home and wanted to see almost twice as many homes with their agent (23.3 homes) as Internet buyers (12.7 homes).
200% more, twice the amount of work…Hello McFly!! , I ask again. Buyers are too much work? Maybe you are working with the wrong buyers!
3. Today’s consumer is not satisfied with the performance of their real estate agent. Again, not surprising. In the CAR survey, customer satisfaction with the home-buyer process dropped in EVERY category and dropped 16% from the preceding survey last year. Wow!
Almost 80 percent of those who were not happy with their agent’s performance said the agent “did not negotiate aggressively on their behalf”. That’s completely understandable since most real estate agents are not trained negotiators.
I recently watched a David Knox video and he amusingly pointed out in one of his workshops, that going back and forth with counter-offers is NOT negotiating. Don’t you think if you are going to be in this business that you might want to learn some negotiating skills?
Watch Divorce Court or re-runs of L.A. Law..do something! If you’re not going to learn how to properly negotiate then you are doing a disservice to your soon to be former client. I can’t tell you how many times I have heard a real estate agent tell me how “insulted they were by my low ball offer”. No…what’s insulting is that you don’t know how to negotiate aggressively and you expose yourself as an amateur by making such an utterance.
Why do I say “soon to be former client”? The CAR survey found that only 71 percent of the Internet buyers would use the same agent again. That would not be all that bad except for the fact that this is down 21% from the same period last year.
If you think that’s bad, it only gets WORSE when you speak to traditional buyers. Among the “traditional” buyers, only 27 percent reported they would use the same agent again…which is down 20% from last year and down an alarming 52% from 2005.
Business people do not ignore this kind of data. However, many real estate agents will.
3. You need a well marketed, SEO intensive Blog or website if you are going to survive as a real estate agent. There it’s said. It’s in black and white. What are you going to do about it! Going to keep hanging out singing Kumbayah on some mass agent community network or are you going to actually up your game and get your site up to today’s standards. Your choice but guess which agents are going to succeed?
Homebuyers who used the Internet in the home-buying process reported that the first Web site they visited was Google (40 percent), followed by Realtor.com (28 percent), Yahoo Real Estate (8 percent), and Zillow (5 percent). Four percent reported that they first visited the Web site “of a home that I was interested in,” while 3 percent reported that Craigslist.org was the first site they visited and 13 percent were unsure.
Hmmm, when 40% of the market is using Google to find homes just what do you think they were searching for? If you have to think too hard for the answer you may already be lost!
They’re not looking at single property websites, they’re not looking at your broker’s website, they are not looking at your company’s main website. 33% of respondents cited an individual real estate agent’s Web site was cited as the most useful Web site during the home-buying process.
4. Yard sign calls, brochures, pamphlets and the like are of little or no interest to today’s consumer. They won’t deliver you business! The survey found that 90 percent of buyers in the Internet group found their real estate agent using the Internet, while just 9 percent found their agent through a for-sale sign and 1 percent through an agent’s marketing materials.
Ok, so what are you going to do with this information? We already know that most will discount it as it not being relevant to their endeavors. Some won’t believe it and others won’t even know how to respond. That’s fine.
It’s the others out there that this is written for. That small percentage of maverick real estate agents who use contemporary data and means to actually run a real estate business. You know who you are. Take this data and run with it. You are and will continue to distance yourself from the pack and this survey confirms you are on the right track.
For the rest of you, please, by all means, continue with your ignorance and old school methodology. It’s expected and counted on. Seriously, how else are we in the New World Order of Real Estate going to overtake you if not for your ignorance.
For that, we thank you.
Hi Barry, I read this report a few weeks ago and as you stated not much news there. Let’s talk about this “lister” thing you got goin’ on. Did you know that for every Buyer that purchases a home there is a Seller that has it listed with a REALTOR(R)? So doesn;t that fact alone negate what you are saying? There is and always will be money in taking listings. The key of course is in the listings are you taking. And right now those are REOs and Short sales. Both of these types of listings are flying off the shelves. With REOs being the big money maker.
Now having said that my personal business is now about 50% buyers. But this is only because I don’t have an “in” to the REO market.
The heavy hitters in my market and I would venture to say most markets are listers. Controling the inventory (and commission) is still the place to be.
Also, remember when CAR reports 84% of folks start their search on the Internet they are referring to buyers NOT sellers. Sellers list with folks they know or have heard about. Rarely do they use the Internet to find an agent unless they are absentee sellers.
Hey BB…typical “lister” response. I have seen the mantra you stated on quite a few blogs.
Here’s the rub. Let’s factor in all of the expireds, withdrawns, and cancelled listings and when it is all said and done let’s throw in days on market for a little flavor.
Most of the data that is coming out is showing a GROWING number of consumers being left unfulfilled by their listing agent.
yes, there will always be a role for some agent to list a house. However the compensation for that role and the “need” of that role is under attack. Too many agents look at today’s numbers and don’t react like true business professionals and see the trending data.
While some “heavy hitters” may be listers, we are seeing their volume trend downward. That can not be disputed. Their role is changing and the consumer is demanding that change despite the resistance from many old school agents.
Like I said in the article. I am not here to debate those who think otherwise. That’s fine if many want to hang on to their long held beliefs.
It’s the mavericks we are speaking to. The tech savvy, proactive go getter that wants to move 100 plus units per year snaring that 84%.
If someone wants to as you say “control” inventory have at it. To me, sitting idly by hoping someone comes by, hoping that some one calls, hoping that eventually 120 days or more down the road that the eventuality that the house will sell BEFORE it expires is like waiting for the ace on the river card.
I like to be a bit more aggressive at the table.
Barry,
It’s not a matter of it being a “typical lister” response or not it’s a matter of you using data related to buyers to discount working with sellers. The CAR report is buyer specific. My point is that for every buyer that purchases a home there is a seller that is listed. These sellers, by far, did not find their REALTOR(R) via the Internet. Print ads, post cards and the such DO work for sellers. I advertise in a local HOA monthly paper for Poinciana. The ad is specific to sellers and goes out to 15,000 homeowners once a month. I also do mailers to expired listings. Both of these things work and work well.
I agree completely that the Internet is where to be to attract buyers. It’s also a fact that Internet buyers are looking for listings. So wouldn’t it make sense to have listings?
And to say that yard signs won’t deliver business is just foolish. I sold 2 of my listings last month to buyers that called off the yard sign. Yard signs certainly won’t support my business they do however generate some business.
I also agree that many consumers are not happy with their REALTOR(R). I don’t see this as a new trend though. It’s always been that way. Unfortunately, there are many in our business that suck. And bad communication skill is probably the number one area where they suck the most.
I don’t agree at all that commissions are declining. In fact, in my market and price range, I know that to be an incorrect statement. Commissions are increasing.
Inventory is at all time highs but most of it is just taking up space. In my market there are about 1200 properties on the market. Half of those are grossly overpriced and another 10%-20% are “short sales” that aren’t really short sales. So if we get rid of those there’s really only about 400 homes that are saleable. That number my actually be too high.
The Internet is an awesome way to get business BUT it’s not the only way. The key is to find a niche and be diversified in the ways you attract customers within that niche.
By the way, why are you messing up a good thing by becoming a REALTOR(R)?
Hey BB..like I said in the article..many will discount this data. It’s not for me to convince, it’s for the reader to accept or not accept.
The homebuyers who said that yard signs are menaingless stated what they felt. Not my numbers..it wa sin the survey. Like I said..it’s up to the reader to agree or disagree. I am not here to convince.
Some will read and as business people interpret the data and come to conclusions that they feel help their business. You obviously have your own conclusions. Fine by me. If it works in your business then who am I to say otherwise.
Some people in the Amish country are happy living without medical intervention. I would venture to say that many if not all of them are quite happy.
Personally I like the advancement of modern medicine. Nyquil is the bomb!
As for taking the plunge and getting a license…hey, somebody’s gotta take voer Fort Lauderdale..might as well be me!
OK Barry. Now I know I’m not stumbling over my words as I am a pretty good communicator. So let me try this again. I do NOT dispute this report in any way. In fact, I totally agree with it. BUT I don’t see the data as a reason to not work with Sellers. I do however see it as reiterating to my sellers where their properties need to be to be found and of course that’s as many places on the Internet as I can get them.
You are implying that agents that take listings are dinosaurs and that’s just not true. We’re REALTORs for Pete’s sake. Property is what we sell(although in reality we are selling ourselves) but anyway having inventory is very important.
Most “listers” that say they don’t work with buyers are just being truthful. It’s very difficult to work with more than a few buyers at a time. Working only with buyers is limiting unless of course you have agents working with or for you. I hand pick the buyers I do work with and refer the rest out for a 25% fee. However, if I had a choice, I’d much prefer to refer all buyers out and just concentrate on listings but in this market good saleable listings are hard to come by, at least in Poinciana.
BB…I never said not to work with Sellers. I said one needs to understand the basic laws of supply and demand which many agents do not.
“Did you know that for every Buyer that purchases a home there is a Seller that has it listed with a REALTOR?”…sorry..have to disagree!
I also said those who say they won’t work with buyers becasue they are too much trouble. You wrote..”Property Is What You Sell”….well that’s not entirely true of most listers is it?
BB, there really not much point to this discussion is it? I mean you wrote ” had a choice, I’d much prefer to refer all buyers out and just concentrate on listings”…so you are dead smack in the demographic of agent that I said would have a problem grasping and adapting to this kind of data.
You will obviously continue with what works for you and as also stated, that is to be expected. No debate…of course I wish you well.
psst…everybody else….see what I mean?
As I said earlier, I am not here to convince or debate.