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May We Please Start Saying 'My Pleasure' Instead of 'No Problem'?
Customer service in real estate is paramount. It's a key differentiator promoted by the vast majority of brokerages and agents. It's vital because real estate is a relationship business. I've written about this before, but growing up and working for my dad in the hotel business, I was taught how essential it was to provide exceptional customer service. That has made me acutely aware of the overall decline in excellent customer service in our society at large.
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The Biggest Marketing Success in the History of The National Association of REALTORS
The National Association of REALTORS has always been among the most powerful influences over congress (seemingly tied with the Teachers Union). NAR has done more for home ownership rights in America than any other group. Now NAR can turn its resources to fixing the largest problem in America today--homelessness.
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Houston 2020: A Historic Dive into America's Biggest Boom Town
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Real Estate Technology: Why Disruption Isn't the Answer
Nowadays in real estate, the idea of an end-to-end solution is the metaphorical Holy Grail. Companies enter the market, promising to shake up everything the industry knows about a real estate transaction. And when this happens, these companies are labeled as disruptors.
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What Real Estate Brokerages Can Learn from 'The Avengers'
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Why Isn't Redfin Bigger?
In the Beginning... Ten years ago, if pitched you a company that is building a fully integrated technology platform in the real estate sector and would soon have hundreds of millions of visitors to its website annually with so many leads it passes them off to agents at other brokerages, you'd probably open your wallet to invest. If today I told you that company has a less than one percent market share (0.81 percent by value of homes sold per Redfin), you'd likely be disappointed. Why? Because with all the tech, capital, leadership, and traffic, Redfin has been unable to meaningfully take market share across the country.
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How iBuyers Die
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Let's Start Tipping Brokers
In the past, we've talked about the compensation model for brokers (here and here). As Redfin continues to grow, the fixed-fee/discount model is continually positioned as a superior one. There's REX and its $2,000 fee, Homie and its $1500 fee, and a slew of others who are hitching their wagon to the trend that fixed-fee aligns best with the incentives of the client: why pay more simply because you spend more? The issue, as is well documented, is that there is often a stigma with 'discount' that implies lack of quality services provided when compared to the traditional brokerage model. What drives consumers crazy with the latter is the fact the agent gets paid more the more you spend, not necessarily due to better service. Is there a third structure that would optimize the alignment of incentives? Yes: tipping.
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What's Wrong With Real Estate Tech?
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The First $2 Billion Realtor: The Numbers in Perspective
When Gary Keller, founder of Keller Williams, presented Ben Caballero with the coveted Pinnacle Award for Real Estate Entrepreneurship five years ago, his comments were prophetic. Looking at Ben in front of a sea of KW agents at their Mega Camp event in Austin, Texas, Gary Keller explained the award. "Keller Williams decided a few years ago," Keller said, "that if no one else was going to try and identify and acknowledge and respect the top real estate agents in the industry – not in Keller Williams, but in the industry. That if no one else is going to do this, then we're going to do it, and we're going to do it in the most unbiased way possible."
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Lone Wolf's New CEO Jack Blaha
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Disruption Is Not Coming to Real Estate
The basic tenets of home buying and selling have remained unchanged for over a century. However, new models are emerging that redefine the role of the agent, offer alternative buyers to sellers, and provide new channels for both consumers and professionals to interact. "Disruption" is a trending word throughout the industry,  but how disruptive are these new business models? I'll cover two well known challengers—discount/fixed-fee brokerages and For Sale By Owner ("FSBO")—dissect a trending third, the iBuyer movement, and enter a fourth, platforms, into the competition.
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Influencing the Future: Insights from 2 of Real Estate's Most Powerful Voices
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The Ethical Dilemmas of Modern Real Estate Technology
The other day as I sat in the airport waiting to board my plane, I stumbled across Paige Marie Pitcher's Ted Talk, Driverless Cars: breaking the fundamental rule of real estate. In her talk, Paige discussed the opportunities and impact self-driven cars will make on city infrastructure, real estate, and lifestyle. Emotionally, she ended her presentation saying how driverless cars could allow her friend who is bound to a wheelchair regain mobility.
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Do We Need a National MLS?
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Life Is a Continuous Pivot
It's the time of year again to reflect on all that has happened, as well as look forward to next year's opportunities. My reflection is full of interesting events and outcomes, with a surplus of stories from personal and professional experiences. Experiences that were joyful, difficult, and packed with learning. Each one brought a need to change direction or strategy – essentially, pivot. When people use the term 'pivot,' it is used mostly in a conversation about a start-up company. It is commonplace for a start-up company to have to make a 'pivot' in their formative days as a business.
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Why Is Real Estate So Obsessed with Innovation or Disruption?
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Fair Listing Attribution
by Andy Woolley, Vice President of Industry Development, Homes.com The National Association of REALTORS is considering changes to the Multiple Listing Service policy, related to the display of listing broker attribution when MLS listing data is displayed through IDX, VOW, and in syndication with third-party entities and individuals. Homes.com believes that each display of a listing should include prominent credit and attribution to the source of the listing. Such attribution should include brokerage name, contact information, and, when desired by the brokerage, a link to the display of the listing on the brokerage website.
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Compass Is Really a Branding Agency for Agents
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MoxiWorks Refutes Compass' Claims Regarding Technology and Market Share
Wow, just saw this and HAD to comment. It's rare that we see brokers go at each other so publicly about their competitive claims, but I have to say this letter is pretty interesting. The real estate industry is rife with hyperbole and marketing claims. Our industry's preference of opinion over fact is one of the main reasons I started a research practice within WAV Group. The birth of business intelligence is allowing brokerages new ways to substantiate or refute claims like the article from MoxiWorks. Moxiworks is using MLS data married with business intelligence tools to refute claims that, in the past, would have been difficult to prove or disprove.
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Days of Disruption
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Overcoming Urgency and Maximizing ROI
The holiday season was dominated by articles on "How to make 2018 the best year it can be." Whether it was the five top marketing tools for the year or 10 tips to grow your business, everyone looks at year-end as an opportunity for a fresh start. Many of these articles were aggressive on getting people to sign up before year-end so they have a clean slate in 2018. I'm all for New Year's resolutions, but change doesn't have to happen at year-end and the urgency I've seen in some of these articles may be setting brokerages up for failure.
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Is Technology Helping or Hurting the Real Estate Industry?
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Top 5 Real Estate Quotes from 2017
As 2017 comes to a close, we wanted to look back on all the wisdom that industry leaders have shared over the past year. Here's a compilation of our favorite quotes from real estate and marketing experts.
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Holiday Lights Obsession, Explained
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Seasons of Real Estate: Winter is Coming...
We can learn how to run a successful brokerage by reflecting on a farmer's seasons. Just like a farmer, your goals and objectives are different every season, and what you accomplish each season goes a long way to determining your overall success. The Seeding Season To be successful in real estate, you need a sphere of influence, a network that you build by reaching out and meeting people. This is the seeding season. Here, you engage in digital and non-digital activities that get your name and face out there. In marketing terms, these are called 'impressions.' Like a farmer, these are the seeds you hope to grow to yield profit.
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How Will iBuyers Affect Traditional REALTORS?
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The New Vision of Lone Wolf
By Patrick Arkeveld, CEO, Lone Wolf Think Big... Two years ago, I walked into Lone Wolf for the first time. Taking the reins of a 28-year-old company, one that was already on the short list of the most successful technology companies in the real estate industry, was a phenomenal opportunity. Though I was new to real estate, I understood software and thought that was enough. It wasn't. I realized that I needed to know the real estate industry to know Lone Wolf. So, I networked. Listened to the experts. I asked questions, attended events. I researched and read everything I could get my hands on. Through it all, I gained a deeper appreciation for the industry and the company I now led. But I also discovered something very surprising: Lone Wolf had to forge a new path forward.
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Steve Murray Appointed to Lone Wolf Board of Directors
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How Great Agents Challenge Discount Brokers
Last week, WAV Group founding partner Marilyn Wilson and I had the privilege to speak to a packed room of nearly 1000 real estate agents and brokers at the Real Estate New Technology (R.E.N.T.) conference in Paris. (If you visit the website using Google Chrome, you can translate it.) The show had about 4000 attendees and more than 200 vendors. It was very well done, and I encourage you to set time in your calendar to attend next year, if your budget permits.
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Why Millennials Deserve Respect
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Did Zillow Open the Door to Their Own Demise?
One of the greatest philosophers of all time was Georg Wilhelm Friedrich Hegel (1770-1831). For brevity, let's call him Hegel and be thankful to the University of Berlin where he lectured. I will suspend with the deep philosophy I learned in college and summarize Hegel as the author of a triad of historical development referred to thesis, antithesis, and synthesis. In our observation, the MLS is the thesis, Zillow is the antithesis, and what happens next will be the synthesis. Moreover, I will argue that Zillow may have opened the door to their demise with the Instant Offers test.
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Zillow Is a Broker – So What?
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5 WRONG Assumptions I Made about Brokerages (as a Millennial)
At the time of writing this blog, I have only been working at Lone Wolf Technologies a little more than a month. So I am still quite new to the real estate industry. Today, I took a moment to reflect on what I have learned about the industry so far. Here are some of the false assumptions I, as a millennial, had about brokerages—as well as some solutions that brokerages can implement to counter these common misconceptions. 1. I Don't Need a Brokerage THE ASSUMPTION: Brokerages aren't necessary. As a millennial, I like do-it-yourself alternatives like kijiji.ca, self-learning podcasts and even brewing my own coffee. If I was to sell or buy a house in 2016, I would have also liked to do that myself. THE REALITY: Brokerages aren't just middlemen. They are essential to the buying and selling of real estate. Brokerages assist with negotiations, stagings, showings and many other services that ensure both home buyers and sellers are satisfied with the buying or selling of their home. THE SOLUTION: Brokerages can better inform the millennial demographic of their value through their agents—with marketing materials and good CRM tools.
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March Madness, Competition, and Upstream
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Those Spring Weather Patterns Have Appeared
Each December, various industry thought leaders issue their predictions with respect to what is in store for the industry over the next year. Generally speaking, only about 47 percent of these predictions end up being even close to true. A much safer bet for the predictor is to wait until March, see what is actually in the air, and then project those forces and directions. By way of example, for 2017 there are four current initiatives that, as March approaches, appear positioned to have significant relevance and/or impact upon the American real estate industry and marketplace. The first of these four forces would have to be the efforts of our friends from the Zillow Group. Much of Zillow's success in 2017 will have to come from momentum gained from a terrific 2016. In 2016, after slowly climbing the market ladder for some ten years, Zillow exploded into an amazing level of success. The Premiere Agent and brokerage programs gained significant altitude. The Zillow self-service program with its game changing tools was launched to an almost immediate success. We are informed that a number of new and exciting programs and products will be introduced over the next few months. With a current market cap of $7.3 billion, it hardly matters that one of the things that Zillow is celebrating this month is having lost less money in 2016 than in any other year. Most amazing of all is the fact that Zillow's recent success doesn't just apply to Zillow Group, it applies to the entire industry. Zillow's victories are not just making Wall Street happy, they are reconfiguring an entire industry to approach the transaction in a fundamentally different fashion. That is impressive stuff.
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DocuSign's New CEO: 'Why I’m Proud to Sign on'
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The 5 Best Real Estate Quotes for 2017
Well it's official – we're in the last month of the year! Before we toast 2017, we wanted to give you some quotes from years past to motivate you into the New Year. Enjoy! "A Realtor is not a salesperson. They're a matchmaker. They introduce people to homes, until they fall in love with one. Then they're a wedding planner." This idea of matchmaking might help as you plan for 2017. When thinking about your outreach or network, think about how you can connect with them over a longer period of time. Think about how you can move them to the center of the conversation so you truly understand what they're looking for and can be the eyes and ears when you spot it. Real estate professionals need to understand not just what properties are available, but what types of personalities will respond to those properties so you can truly create a love connection. "Technology is a simply a tool supporting human brilliance." When you think of automating some of the day-to-day tasks you do to stay connected with your network, remember that this communication is simply supporting a human connection, not replacing it. So the more you can personalize and customize your outreach using technology, the better.
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Why Zillow is Wrong About Halloween
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Working with Those Wonderful Millennials
As a consultant working with a number of large brokerage and support organization clients across the country, I have an opportunity to interact and collaborate with a dozen or so different staff structures on a wide range of projects that stretch from research to development to event planning and execution. Over the past few months, I have become increasingly aware of (1) how many members of the Millennial generation I have been working with, (2) how often their interpretation of the work experience differs from my Boomer version of the same, and (3) how frequently my judgmental behaviors regarding these folks are just plain wrong. By way of convenient example, over the past month I was engaged in producing a strategic business conference for a large client. During the 60 days leading up to the conference, many days and hundreds of hours were spent creating what I very much hoped would be a really spectacular event. At almost every step of the way, I found myself chomping at the bit as a depressing number of my Millennial co-workers failed to meet my "expectations" or managed to annoy me with what I interpreted as childish and immature work habits. But then came the event itself. It not only exceeded my expectations, but also managed to "wow" the client's management team and virtually every one of the 80 or so attendees. Virtually every one of the 18 program segments, the very sophisticated coupling exercises that tied them all together, and the highly diverse cast of nine nationally recognized experts (that ranged from national CEOs to top researchers and recognized designers) performed without a hitch. The entire production was a thing of beauty. I have received more positive comments and compliments regarding this program than for any other program over the past five years. So, on the morning after the show, I undertook to figure out why I had been so wrong and how this Millennial-rich crew had managed to pull out what I thought was an impossible success.
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Real Business is Personal and Authenticity Lasts a Lifetime
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The Confident House Hunter: A Better, Different Way to Buy
It was a sunny day on beautiful Bainbridge Island two years ago when I met with Dylan Chalk. It was at the New Rose Café, a nearly secret lunch spot hidden among the plants and outdoor sculptures at the historically significant Bainbridge Gardens. Dylan had an idea for a new book about home buying and he was seeking my professional counsel, as well as my writing, editing – and eventually – promotional skills. As a member of the National Association of Real Estate Editors (naree.org) for more than a couple of decades, I have received enough books about buying a home to fill a very large bookcase. There was a time in fact that my mailbox would be jammed with more than one book, and I would immediately wonder how my colleague, the late-great Bob Bruss, who was the definitive real estate book reviewer, managed to plow through all of that content, as surely he could have stuffed many bookcases with what came into his mailbox. When Dylan first asked for the meeting, I found myself thinking about the often quoted Commissioner of the U.S. Patent Office, who in 1899 said: "Everything that can be invented has been invented." Didn't we have hundreds of books written about home buying already? Healthy skepticism To say I was a bit skeptical going into this meeting would be a significant understatement, but I wasn't going to discourage Dylan – at least not without first hearing him out. After all, I had just hung my shingle officially as Kevin Hawkins Public Relations just a few months before joining Marilyn and Victor to form our WAV Group Communications division, so this was a business meeting with a potential client, or so I kept reminding myself. But what would evolve from this meeting was quite unexpected, in retrospect.
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Managing Innovation Generated Team Conflict
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What I Learned From Muhammad Ali
When I was growing up in Chicago in the 1960s, professional boxing was a big sport that my dad followed and, heck, like a lot of kids, I enjoyed many of the things my parents did. My dad exposed me at a very young age to a gold medal Olympic boxer named Cassius Clay, who would later changed his name to Muhammad Ali. Ali was the classic showman who pontificated by using the most quotable quotes. That talent, mixed with a boxing acumen we had not seen before, made him a PR person's dream, but his activities also made him an occasional PR person's nightmare. He was in the mix of the turbulent 60s, and I vividly remember his charisma and cockiness: from when he announced his name change (denouncing his "slave" name) in the midst of the Civil Rights movement, to his arrest for evading the Vietnam War draft. This made Ali an incredibly polarizing figure, buoyed by his braggadocious approach when the cameras came on. But in the end, it turned out that Ali's taunts and beliefs were really nothing more than the truth. Time vindicated his actions. But through it all, Ali just didn't talk the talk, he walked the walk with a confidence that was simply magnetizing. Looking back Full disclosure: I was, am, and always will be a Muhammad Ali fan, so I write this with extreme prejudice. I kept a scrapbook as a kid, an old spiral-bound calendar planner with a red cover my dad had discarded, which I found the other day. Inside, I pasted an eclectic mix of newspaper photos—Apollo missions, photos of all the 1968 presidential candidates like Nixon, Humphrey and Wallace, Chicago Blackhawks legend-in-the-making Bobby Hull getting his mouth wired shut from a broken jaw while his young son looked on in sadness and, most importantly, photos of Ali and my other favorite boxer, 'Smokin' Joe Frazier, and the punishment his face took after beating from Ali in March 1971 at Madison Square Garden.
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What Happens if Your Tech Leader Is Hit by a Bus?
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Risk-Taking Is Back and So Is Rampant Innovation
My wife woke up this morning to the voice of Alec Baldwin telling her, "Wake up, Sunshine. Let me tell you something, I've been up since the crack of dawn..." before I shout out, "Off!" and silence Alec in midsentence. No, Alec isn't in our bedroom. Alec's voice is an alarm option in Alexa, our household's digital assistant that's built into both our Amazon Echo and Dot. It's simply the coolest -- and most practical -- innovation I've seen in decades. Alexa is a vibrant example of the rampant innovation emerging today. Life-changing stuff: self-driving cars, VR immersion technology, drones, nanobots, sensors, and the Internet of so many more "things." But innovation requires risk for fuel. So for much of the last decade – with the exception of a handful of companies that were cash flush – innovation was stymied. That's because hardly anyone could afford to take risks. We were too busy making sure we could just put food on the table, so to speak. After all, baby's got to eat. Risk taker, rule breaker An exception was Amazon, one of the world's greatest risk-taking firms. Alphabet (Google) and Apple are two others, but what is so powerful about Amazon is how its very culture embraces the reality that innovation is most often the result of massive failure. Just listen to what Amazon's founder, Jeff Bezos, said about 18 months ago: "A few big successes compensate for dozens and dozens of things that didn't work." Kindle tablet = $$. Amazon's third-party marketplace = $$$. Amazon's data center business = $$$$$. And he added this: "Bold bets ... pay for a lot of failures. I've made billions of dollars of failures at Amazon.com." Think Fire Phone, hotel-booking site Amazon Destinations, and Amazon Auction, which was designed to compete with eBay, among dozens of others.
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Real Estate in Crisis: Is Nothing Better Than Something?
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Upstream: Our Own Manhattan Project
In 1939, American intelligence already knew that Nazi Germany had learned the secrets of splitting the atom. By early 1940, still a year before America entered the war, and despite the impact of negative voices, concerns relative to the potential dangers of this research had reached the highest levels of the American government. Despite what we now understand was common sense, it took advocates an amazing level of energy, time and effort to find someone in the government who was willing to listen to and believe the potential dangers represented by what became known as the "Atomic Threat." By late 1941, driven by President Roosevelt's passion, America had launched a full effort to understand, design and build the World's first atomic weapon. At the beginning of 1942, these diverse efforts were combined into what became known as the Manhattan Project, one of the greatest administrative innovations in American history. Because it represented something new and innovative there were, from the very beginning, endless delays and challenges until the Manhattan Project was formally adopted. As is still the case today, projects that represent a step in a new direction are bound to run into interference commensurate with the level of anticipated disruption it is likely to cause. By the time the Manhattan project was completed, over 130,000 workers had been employed and over $260 million 2016 dollars had been expended. But numbers alone do not constitute guarantees.
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What the Real Estate Industry Could Learn from FIRST Robotics?
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A Goal Without a Plan is Just a Wish
A French writer wrote this line – "a goal without a plan is just a wish." It often pops into my head when I read a trade story about a hot new real estate tech company that upon closer inspection, isn't a company at all, but an idea in search of a business plan. I also find myself thinking about the same thing when I walk through a conference where startup firms are lined up. I pay a game in my head call "product or product feature." It seems that so many tech startups in real estate are really just a feature that should be rolled into another product that is offered by an established company. Most often with these new tech startups, there isn't enough "there there" with the product to justify building a company around. Real estate tech conferences need a professional match-maker who walks around to counsel these firms solely on what product their product feature would best fit, and find a way to marry their innovation off that company. You're no Google At one conference, I challenged the founder of one of these firms on the viability of his product when it became clear he had no idea how he was going to generate revenue. The CEO argued that Google didn't have a revenue plan. Google. Really? You are going to compare yourself to Google? I bit my tongue and almost found myself paraphrasing President Ronald Reagan's retort by saying "You're no Google."
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Full Circle on the Consumer Experience
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Does Your System Look Good?
WAV Group has been doing a lot of MLS and broker business solution RFPs recently—like 20 of them in the last three months. We used to do vendor selections the old fashioned way. We would develop a feature checklist and ask vendors to fill it out. Then we would look at the answers to discern what the answer means. Seeing a “Yes, we have it” will often mean that they can sort of do it, or that they do it but differently, or that they do it exactly the way it is expected. We still have the 400-point checklist, but we try not to use it anymore unless the customer insists. Out pivot is to having a customer (MLS or broker) write down their story. The story is related to their company size, their culture, their competitors, and the features of operating their business that are most important in servicing customers, creating agent productivity, and being competitive. Impressions mean more than anything else in vendor selections. When you spend hours every day looking at technology solutions, you quickly learn that most of them are the same in terms of functionality. Sure, some companies have differentiators, but they are typically short term. But simply stated, most solutions offered to MLSs and brokerages today are ugly. There has been a lot of advancement in front-end consumer facing applications. These are beautiful, responsive, user friendly, and delightful. Then the agent logs in and all of that is lost. The back office solution is ugly, unresponsive, cluttered, confusing, poorly organized, and gross. Log-in on a mobile device and the experience is horrid.
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Do You Know What Your Real Estate Consumers are Reading?
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Digital Disruption Prepares to Strike Again
No less than five issues of this column in 2015 raised concerns and awareness regarding the continuing march of digital disruption across the industry's landscape. With that in mind, it is with mixed emotions that we start out 2016 with yet another example of how digital disruption has already—or will, over the short-term future—change virtually every aspect of the traditional real estate and transaction. The would-be target of this report is a tradition that, while it has long been controversial within organized real estate and the overall marketplace, has over the past three years reached a state of almost open warfare within the agent ranks. The object of all this attention is the longstanding, unwritten rule of the REALTOR® culture that an individual who has applied for membership, paid their dues and sworn to uphold the Code of Ethics is entitled to full faith and credit with respect to the real estate industry and marketplace. It then followed that no other REALTOR®, regardless of background, training or credentials would be discussed within the circle in terms that would suggest that they had any higher status or ranking than the newest recruit. This tradition continues to play out in the industry's representation of itself to both consumers and the marketplace. Over the past few years, research conducted by such industry notables as Steve Murray of the Real Trends organization have established what everyone, including consumers, already knew—that being that only about 20 percent of REALTORS® (AKA, the counselors) ever reach levels of unquestionable expertise and skill while the remaining 80 percent live out their REALTOR® experience as facilitators.
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Why Real Estate Isn’t a Zero-sum Game
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It’s the Season for Giving: Branding Motivators That Work
Straining your brain trying to come up with a thoughtful holiday gift for your clients that won't break the bank? Before you internally combust, check out these real estate selling tips from top branding and promotional products company Motivators, a 35 year old industry expert offering over thousands of promotional items available to you as soon as tomorrow. Show your holiday spirit with these great promotional products for the real estate market: Magnets - Realty sign and business card magnets are great for mailings or handing out to listing or buying clients, providing a useful item and keeping your number in plain sight. Memo boards - Mini memo boards die cut into realty-inspired shapes keep your information front and center on desktops and work areas. Pens - (You're looking for one right now, aren't you? Enough said.) Jar openers - Printed with your logo and the "Rules of the House," these functional and fun promotional items are a customer favorite. Drinkware - A popular choice due to their practicality, drinkware such as cups, travel mugs, and reusable bottles can't be beat!
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Real Estate Transactions Are Now on Top of the Stress List
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Millennials and Home Buying Revisited
The great statistical debate continues on the impact of Millennials today on home buying. About a year ago, I wrote about the conflicting data ("Millennial Marketing Madness") that argued Millennials were not going to drive the majority home sales in 2015, despite what marketers and self-interested parties were claiming. Fast-forward to today, and it looks like the hardcore data was accurate and the marketers missed the mark. Today's headlines have taken quite a turn from those we saw last year. Now those pundits who said Millennials would be driving today's housing market are scrambling to explain why they are not or aggressively marketing to Millennials to tell them why they should buy. Among recent headlines: Millennials face tough obstacles to buying a home (Boston Globe) Whether They Want to Rent or Buy a Home, Millennials Are Basically Out of Luck (Slate) Why Millennials Are Having a Tough Time Buying A Home (The Street) 4 Reasons Millennials Still Aren't Buying Houses (Forbes) Millennials better off buying a home than renting (Houston Chronicle) Why Millennials should buy a home today (Builder magazine) It's Better for Millennials to Buy Than Rent—For Now (Bloomberg)
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Management Migration: A Sign of the Times
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What's Next for DotLoop?
Several weeks ago, we announced our intent to acquire DotLoop, a technology company that helps real estate professionals and their clients communicate and collaborate more quickly and easily to close the deal. We're very excited about this addition to Zillow Group. Helping real estate professionals make better use of the Internet and technology is part of our mission, and we've spent close to a decade building the best possible advertising experiences to help brokers and agents grow their business. Now with DotLoop's digital transaction management, we're helping them streamline their business, enabling them to focus on peoplework rather than paperwork. DotLoop may now have a parent company, but it remains the same great service with the same client commitments. We respect the rights of brokers, agents and consumers. As has always been the case with DotLoop, data will only be used in ways that are permitted by the license in place with agents and brokers. DotLoop will continue using the data for DotLoop services. Nothing has changed. While it's still early days, we're looking forward to helping expand DotLoop's innovative offering within Zillow Group, providing additional value to current customers and making it available to our more than 10,000 broker partners and the agents they represent, as well as to our approximately 100,000 agents who advertise on Zillow and Trulia.
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What is the Deal with Millennials?
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The Potential Perils of Being Out of Control
The American residential real estate industry is currently going through a quiet but particularly dramatic phase of its contemporary history. Brought about by the now almost two year old announcement by the Consumer Financial Protection Bureau that, effective August 1, 2015, it would be developing and enforcing a new set of lender mortgage disclosure and RESPA audit rules, the various segments of the industry are demonstrating a number of reactions and responses. Over the past two years, the mortgage and title sectors invested significant energies and resources into creating processes and procedures that will ensure that its business practices will be in compliance with the new rules. Both deserve a hero's medal for the millions of dollars and human resources that they have invested into making sure that the return of regulation to the industry is accomplished with as little disruption as possible. The fourth player in this historic drama, the real estate services or brokerage sector, has also executed on a number of significant reactions and responses. Instead of acknowledging the new rules and doing their best to comply, by and large, the brokerage sector has elected to effect a combination of ignoring the rules and denying any potential impact or liability. In its defense, the brokerage sector was, to some extent, relying upon representations by its advisors in organized real estate that nothing in the Dodd Frank consumer protection act of 2010 applied to them. For much of period since July of 2013, brokerage sector inquires were met with an absolute assurance that there was a specific provision and a political promise that nothing in the CFPB program was relevant to brokerages and agents.
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Who Will Install the Giant Rats of Real Estate?
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The Fine Art of Due Diligence
On June 24th of this year the Consumer Financial Protection Bureau (CFPB) proposed a two-month extension of the effective date of its "Know Before You Owe" mortgage rules. The proposal, if approved by the agency's internal processes, will extend the effective date of the rules to Saturday, October 3rd. The rules, also known as the TILA-RESPA Integrated Disclosure rules, require easier-to-use mortgage disclosure forms that clearly lay out the terms of a mortgage for a homebuyer. The RESPA rules (circa 1974) speak for themselves. The news of the extension was met by the real estate industry with a number of responses. A significant segment within the industry didn't notice it at all, choosing to ignore the rules as they have done from their initiation some two years ago. Another segment within the industry simple elected to ignore the notice. Finally there is that segment that realizes that these rules will have a significant impact upon their businesses, but are as of yet, uncertain what actions to take. This piece is directed to this last group. If, after all of the information, commentary, and "wake up" calls that have been distributed, a brokerage firm or its management team still believe that the new rules will have no impact, then the foundations of one amazing surprise have been laid. Try not to gasp when you see the amount of the fine. The following information is provided for those brokerage executives and managers who recognize that they must take some action, and soon, to avoid a regulatory catastrophe.
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Stand By For Position RPR Verification
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No HATERS in Real Estate Please!
After just coming back from the NAR MidYear meetings, I harken back to one of our greatest spiritual leaders of all time, the Dalai Lama. He has an amazing quote that I feel bears repeating: "We can let the circumstances of our lives harden us so that we become increasingly resentful and afraid, or we can let them soften us and make us kinder. You have always the choice." For those of you that are following the latest real estate news, NAR MidYear was a very exciting meeting. There were great strides taken with the Broker Public Portal and RPR's AMP program. There were great discussions about ways NAR, through its RPR division, could provide a whole new way to help brokers become more efficient, differentiated, innovative and maybe even more profitable. Just days before the NAR Mid-Year conference, Zillow announced that it would provide public records to MLSs – another potential game changer in the industry. Are these programs "real" yet? Will any of these programs make it? Will they roll out as originally outlined? Not likely. Like all software products and new businesses, their business model, revenue stream, and even core value proposition might change.
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Time to Market
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Is Your Firm Engaging the New Status Quo?
Like many business, cultural, sporting, academic and social activities, there is a season for real estate industry update and status conferences. During the disclosure season, each of these events adds just a bit more clarity to the ultimate question: What is new regarding real estate brokerage and marketing operations? With the adjournment of last week's National Association of REALTORS® Legislative Meetings & Trade Expo (AKA Midyear Meetings) in Washington, D.C., the industry's 2015 update season came to a close. During the past 90 days, a plethora of meetings including, but not limited to, Inman Connect, T3, Gathering of Eagles and last week's NAR meetings provided the industry with a glimpse into the current status of a brokerage business and operations environment that has found itself mightily impacted by a wide range of trends, directions, and forces. There can be no doubt that each of the hundreds of observers who participated, attended and/or evaluated these events came away with a slightly different impression. The industry media over the next ninety days will be awash with impressions and opinions. Be that as it may, there are a number of conclusions that are high enough up the intellectual pole to be universal. The objective of this piece is to attempt to present these new foundational realities. The following five statements are nominated to head the "most impactive" list: Various presentations by senior industry (as opposed to organized real estate) leaders contributed to an overall understanding that, moving forward, brokerage operations in many ways will end up further afield from the traditional model than previously imagined. This, in turn, leaves a sense that current efforts are in the nature of "getting ready" for the ultimate, rather than being the ultimate. There is an increased understanding at the highest levels that the industry is not maximizing its profit potentials. The current record level of public ownership of industry infrastructure and its demands and expectations regarding profitability is impacting virtually every aspect of the industry. Increased levels of direct and intense consumer interaction are forcing the industry to meet new levels of interactive and experiential demands and expectations. The value propositions of the franchise, brokerage and agent sectors are losing traction in the eyes of their respective customers.
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What’s in a Portmanteau?
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Warren Buffett is a Great Read
The explosive developments within the American real estate industry over the past several years have produced remarkable opportunities, some significant threats, exciting new directions, astounding knowledge, and some really impressive insights. These developments have been brought into the industry by some remarkably competent minds that have, to our everlasting benefit, undertaken to share their experiences, inspirations and efforts through a number of especially impressive publications and presentations. History is certainly one of the treasures that make life rewarding. However, being able to observe current events by accessing the thoughts of those who are actually creating them takes the power to observe to an even more exciting level. One of the things that makes being part of our industry during this "high impact" era so exciting is the opportunity to share the knowledge and experiences of key industry thought leaders while they are still engaged in their achievements. Over the past several week, three of these unique experiences have presented themselves and deserve special notice. They will be the subject of this and next month's column. The industry leaders whose thoughts have contributed to the following observations are Warren Buffett of Berkshire Hathaway, Mo Anderson of Keller Williams and Spencer Rascoff (along with Stan Humphries) of the Zillow Group. Mr. Buffett is the subject of this month's observations and comments. His thoughts as reported here were not taken from a leather bound collector's volume, but rather from the very recently issued (last week) 2014 Annual Report of Berkshire Hathaway, Inc., his iconic corporate masterpiece. Perhaps no greater compliment could be paid to any business leader than to recommend his annual report (such documents are famous for being mind numbing and irrelevant) as a source of knowledge, insight and, yes, entertainment.
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Want to stay relevant? You need a kick in the pants.
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The Jaded Consumer
There are three general areas where a consumer might get frustrated, and yes... jaded. After I wrote about my jaded friend who sold his company, I got a lot of feedback from brokers who felt I was speaking about them. They told me they also felt jaded, frustrated, and not quite knowing what to do. It's been making me wonder that if so many brokers are frustrated by today's circumstances, are consumers jaded too? What do you think they are looking for and are they getting it? I think they are looking for a few key things, but not too many real estate professionals give it to them. 1. Consumers want real information...not pressure Real estate, school, crime, neighborhood, and other information someone would need when looking for a new home is readily available and free. Consumers don't need real estate brokers and agents to obtain the information they need. If you agree with this statement, how can you, as a real estate broker and/or agent, satisfy that need? How can you provide all the information they need, when they need it? And they want to consume it all without feeling pressured by an agent. Am I providing information you think is useful for your business, and in the way you want that information? Do you think I am trying to sell you something?
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Driving Management Collaboration
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My jaded friend...
I have a good friend/client named Tom (not his real name) who sold his real estate brokerage a few years ago to focus on other areas of real estate. His main reason for selling? He was jaded and saw no way to make money in the brokerage space. He feels the traditional model is destined for collapse because the downward pressure on profits (i.e. lower commissions and higher splits) is, in his words, "unsustainable." In fairness, Tom's medium-sized real estate brokerage competed against a couple of very large regional players who were very aggressive recruiters offering high splits. Those companies, in addition to the discount and virtual brokers chipping away at agents, caused him to throw up his hands in frustration. He couldn't see how he would ever make any money when dealing with agents that, in his opinion, cared mostly about how high a split they could make. To make matters worse, his partner was also one of the top-producing agents in his company and couldn't get into the 21st century. Tom was constantly battling an old-school mentality, where culture and brand loyalty were put aside in favor of an agent-centric approach. A focus at odds to his own philosophy of building a strong company brand for his real estate brokerage. He sold his business and is now much happier, albeit, still pretty jaded about the whole state of our industry.
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Are You Prepared to Launch Your Flight to Quality?
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The Real Estate Transaction Has Been Commoditized
What are you doing about it? Every agent is different. Every consumer is different. Every house is different. But the process and the transaction is not. It's about the same wherever you go. Think about it: Is there much difference between how you do a real estate deal and your competitors? Is there much difference between your mortgage partner does the mortgage and their competitors? How about the settlement service provider? NO, NO, and NO! Due to RESPA, CFPB, MLS, and board rules, among other things, the real estate transaction has been commoditized. So what are you doing about it? Think about it. Your real estate transaction has been commoditized. What does this REALLY mean? Consumers already feel like they are paying too much in commissions. If the real estate transaction has been commoditized then, eventually, if not sooner, it will all be about price. Let's play that out a bit...anyone who is a traditional broker will be in trouble. Many are in trouble now because they haven't figure out the way out of this mess.
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Millennials and the Curated Web (and Why I Chose Pinterest over Google)
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Are You Ready to Become a Predictive Farmer?
The 2015 NAR Annual Meeting in New Orleans was, at many levels, a far different experience than any of its century of predecessors. There was a clear and consistent vibe that after all of the years of talking about transition and disruption that the long predicted tsunami of change had indeed arrived to create something "far different." Moreover, that this far different thing was going to be broker centric with a strong consumer flavor rather than consumer centric with a strong broker flavor. You could hear it in the presentations and programs. You could sense it in conversations and hallway huddles. You could feel it in the demeanor of the late night gatherings. Interestingly enough, one came to understand that those who were not receiving this vibe were also those who were probably never going to get it. Perhaps it was the specter of the recent News Corp related purchase of Move.com. The realization that the industry demographic had expanded to include yet another team of powerful global experts for whom the industry's traditions and legacies paled in comparison to its long denied financial potential. One could not help but feel the gaze of Rupert Murdoch looking down on the trade show floor, working a checklist of what was relevant and what was fluff. At the same time, the vast expanse of brilliant white and generally unoccupied carpet that comprised the massive Berkshire Hathaway exhibit area served as another reminder that the industry dynamic also includes a major player for whom the annual meeting might be seen as more of a cultural event than a business opportunity. The Berkshire booth reminded one of the presence of a king's massive yacht at the Cannes film festival--hauntingly beautiful yet mysteriously vacant. There was work being taken care of elsewhere.
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Two Contemporary Trends Converge to Contribute to the New Real Estate Industry
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Millennial Marketing Madness
The fervor about marketing to Millennials peaked for me during the National Association of REALTORS® Convention in New Orleans last week. Surely you've seen some of the recent headlines: "Millennials could hold the key to housing recovery," "Millennials need to be wooed," "Insights about Millennials' path to homeownership," etc. One of the seminars at NAR had this in its title: "Generating Referrals from Millennial Home Buyers." Say what? Try this headline: Millennials are broke. Yes, Millennials (a.k.a. Generation Y), those who ages range from about 19 to 38, may comprise the largest segment of the U.S. population at 86 million strong, but they don't have any money. They are student debt rich and cash poor. Worse, they don't make much either. Millennial Malaise I was awakened by this fact by one of my favorite daily bloggers, economist Elliott Eisenberg, Ph.D. who pens a 70-word blog five days a week (see econ70.com). He shared these facts: In 2010, households headed by those under age 35, the Millennials, had median income of $37,600, now it's just $35,300. Worse, 41.4% of them have student loans, up from 33.6% in 2007 and 23.3% in 1998 Their student loan balances are up from $10,000 in 1988 to $17,300 in 2013. Moreover, just 38.6% hold equities, down from almost half in 2001. Their median net worth is a paltry $10,400 Re-read these numbers: Median income is $35,300 and median net worth is $10,400.
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Digital Disruption Will Soon Be Touching a Brokerage Very Near to You
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Convergence: Driving Positive Energy and Outcomes From Knowledgeable Leadership
Convergence is the term applied to what happens when two significantly powerful real estate industry forces come together in a defined space and create a new energy or reality. A coupling or convergence process might be coincidental, such as the current convergence between the forces of consumer centricity and the fast growing emphasis on brokerage profitability. In the alternative, convergence can be purposeful, such as the recent announcement of News Corp's purchase of Move, Inc. Either way, moving forward, convergence will be one of the most powerful dynamics impacting our industry. The origins of any specific convergence really won't matter to the average reader as much as its ramifications and impact. Predicting a probable convergence event represents a specific skill set. Monitoring the industry universe for possible convergence events should be on every leader and decision maker's "top 5" list. It is essential that visioning and anticipating how potential convergence events might affect the industry, the marketplace and the transaction occupy an ever-greater share of every industry leader's time and energy. Such were the circumstances in Southeast Texas earlier this month. During the course of the week two dominant regional events, the Large Brokerage Summit and the Strategic Leadership Conference presented substantial evidence that a convergence event was about to occur. In this case it was the convergence between the activities of the Consumer Financial Protection Bureau (CFPB) and the increasing need for brokers to gain control of their businesses in the face of increased regulation, consumer power and ROI issues.
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Are You Harvesting Your Own Digital Disrupters?
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Are Your Agents "Fluffernutter" Marketers?
Why am I bringing up Fluffernutter and what does that have to do with YOUR business, you ask? According to Wikipedia, "The term Fluffernutter has sometimes been used disparagingly to describe something that lacks substance and has minimal to no cultural value." For those of you who don't know, Fluffernutter is a sandwich made with peanut butter and marshmallow creme, usually served on white bread (typically Wonderbread.) Lately I have had a lot of conversations about what a lackluster job most real estate agents do with post-close marketing. For those unfamiliar with the term, post-close marketing describes ongoing efforts by agents to keep in touch with their clients, using relevant and timely information that is important to the homeowner. In other words, no cookie recipes. I don't think anyone can disagree with this assessment; we're all familiar with the NAR stats. To make matters worse, brokers don't help much either because they don't want to spend the money or agents won't give them access to their database. And we all know that most consumers would use the same real estate agent again but they don't. There are two main reasons for this: Most real estate agents don't do anything to stay in touch after the close; or, Those agents that do stay in touch only send forgettable fluff nobody cares about.
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Sometimes Profitability is NOT as Important as Market Share
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Is Your Marketing Program Responding to Disruption?
One of the most prolific subjects in today's business literature is that of digital disruption. It is affecting almost every profession, business and entrepreneurial pursuit in the North American economy. It is so prevalent that business journals across the entire political and economic spectrum are suggesting that business planning and marketing execution must assume its impact. Given this situation the logical starting point for this piece is to ensure that every reader has a clear sense of what digital disruption is and how it functions. Sometimes information of this importance is best provided by outside multimedia sources and so it will be with this month's contribution. In order to ensure that each reader has a handle on the concept of digital disruption, it is highly recommended that they take eight minutes (total) to view the following two videos: Digital Disruption   Smarter, Faster, Together – A Total Disruption Trailer
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Are You Aligned With Your Consumer or Your Past?
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Can You Handle Drinking from the Internet Firehose?
We're distracting you with warnings about distractions now? This College Humor video was making the rounds the other day. It's pretty good, in an intentionally un-self-aware meta kind of way, since College Humor has been baiting us into opening new browser tabs since before browsers even HAD tabs, with content like this from when I first got to college more than ten years ago. Just seeing that video takes me back. In August of 2000, when I watched this for the first time, there was no YouTube. You literally downloaded this video file to your laptop, and it was up to you to figure out what to do with it. There were no advertisements in it, no annotations that popped up. Just the fact that it was digital video of a place you recognized (this was filmed at my school a few years before I got there, from what I understand) was kind of amazing. And yet, everybody saw it. It went "viral" before the capacity for dumb videos to go viral even appeared to exist. For a few months after I got to school, I had the literally unbelievable combination of Napster, and high speed internet. Two weeks before, I was downloading MIDI files of Green Day songs with my parents' dial-up modem, and all of a sudden, I could get literally anything I wanted, whenever I wanted in like, two minutes. Meet the last of the analog children Lately, I've realized that there's a sub-generation of people, of which I just so happen to belong to, who all experienced this kind of thing. We didn't grow up with the level of distraction that's par for the course right now, because it didn't exist. But when it finally arrived, we were the perfect age — somewhere between fifteen and say, twenty five — to learn how to adapt to it. Today, as functional adults, we can handle the information hose almost as well as kids who really DID grow up with it, but we're lucky enough to be in it, not of it. In theory at least, we know what we're giving up by plugging in.
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Leadership Lessons from a Former U.S. President
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Real Estate is a Frickin’ Slog!
I watch my friends, clients, partners in utter amazement as they deal with changing markets conditions, the national portals, the MLSs, their agents, and the list goes on. It’s a tough, tough, business to be in. I spoke to a high level executive friend of mine the other day and asked him how he felt the industry could address customer satisfaction. His answer, “That’s a tough one since we have to deal with all these independent contractors.” Then I asked someone else about why their capture rate on his mortgage venture was only in the teens. “Well, these independent contractors…” Yeah it’s tough… but so what? Sure they are independent contractors but you need to figure it out! Easier said than done you say? I agree. However, let me give you a few things to think about: Way back when when the real estate agent/brokerage had access to all the information, why didn’t someone say, “If we provide more information, consumers will feel compelled to deal with us rather the guy down the street that wants me to play by his rules.” Instead, what did our industry do? It let Trulia, Zillow, and others transform the way consumers searched for real estate and now they sell your listings back to you!
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Data Isn’t the New You
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Understanding the Home Ownership Life Cycle
Law of Averages Successful Realtors play to the law of averages. Agents that understand their value and in turn can articulate their value find a way to consistently get in front of as many contacts as possible. They start understanding their sales funnel very well. They know that for every measureable input (number of phone calls, each paid search dollar, door hangers placed etc.) that they are going to get a predictable output. They set their income goals and start maximizing their inputs. All good sales people understand this. Smart sales people understand for their business to be enduring they have to be able to magnify each sale into a lifetime of relationships that lead to both referrals and further deals with the client as their real estate needs progress. Understanding the Home Ownership Life Cycle If you pay attention to the needs of your clients throughout the course of each home ownership lifecycle, you will find many more ways of interacting and creating value for those clients. A customer's second home ownership cycle might look something like the diagram to the right. There are unique opportunities at each of these stages to solidify a customer for life. The obvious ones are on the right of this diagram. Some of the long term difference makers are on the left. Where you might not be an expert at helping in these areas, your sphere of influence certainly should be. Partnering and creating synergistic value at these stages can create an enormous amount of value for you and for your partners. Mortgage, decorating, moving, and construction partnerships, to name a few, if worked right, can lead to an incredibly profitable career in real estate. Gone are the days that a calendar, a Christmas card, and a refrigerator magnet will be enough to win you your client's next transaction.
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The Case for a REALTOR® to Lead Realtor.com®
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We Have Convergence: All Hands Rig for Collision
Convergence: When two or more forces come together and create a new, more powerful, force. No real estate brokers or agents were injured in the production of this article. (This comment does not, however, apply to what is apparently about to happen.) Convergence factor #1: Shortly after the return of the real estate market in 2012, it quickly became obvious that the market that had returned was nothing like the market that had crashed in the late fall of 2005. Across the country, sales figures dramatically increased while inventories remained extremely low and prices began to precipitously increase. This market was quickly classified as a "Hyper-Market." Convergence factor #2: Accompanying these symptoms, and appearing amazingly early on in the new market, were observations that suggested that real estate professionals at both the brokerage and agent levels were demonstrating behaviors totally inconsistent with their own, the consumer's, and the industry's long-term interests. The most alarming of these behaviors were the "Off MLS" marketing activities that by early 2013 had rapidly spread and, in some markets, were impacting over 30% of transactions--a level that clearly threatened the stability and function of the Multiple Listing Service (MLS). Major markets began to experience brokerage commercials that promoted the availability of "coming soon" properties not yet on the market. It became obvious to many observers that some real estate professionals were so focused on making up for the lost time and income brought by the 2005 crash that they were willing to risk destabilizing critical institutions and lifelong relationships.
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What’s Your Brand’s Value Proposition?
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The Quintessential Visionary
I recently had the opportunity to attend the Keller Williams Family Reunion event in Phoenix. Those who have attended this event in the past will best understanding its unique and amazing dynamics, though such is not the focus of this piece. Traditionally one of the first programs at the Family Reunion event is the annual vision presentation produced by Keller Williams Chairman of the Board Gary Keller and his team of writers and researchers. Sitting in the venue watching over 10,000 people attempting to capture the meaning and relevance of every word, one cannot help but wonder whether or not there is one word that fully defines this presentation. It is part lecture, part newscast, part comedy routine, part coaching, part motivation, part sermon and all with a giant dose of admonition. The word Gary Keller chooses to apply to this lightening bolt of consciousness is vision, and it is certainly all of that. Defining, refining and communicating a clear and powerful vision is one of the fundamental and essential duties on which a business leader must deliver. Yet, as one experiences the various personalities, images and words of our industry's leaders, it isn't clear that all brands, franchises or entities are being guided by a vision rather than status quo or automatic pilot. Even if these fine organizations have evolved, such a vision it is definitely not clear that it is being communicated to either its internal or external constituencies. Very few managers, franchisees and/or agents can even begin to articulate their brand's vision and direction. What is clear is that in the current market atmosphere of "tipping point" level change and historic transition, all of our industry's business leaders and executives should be focusing on the basic elements of visioning, vision implementation and vision communication.
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Stop being so #$%& cheap already!
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The Growing Legacy of Off MLS Marketing
It arrived in the spring 2012, to the collective relief of an entire industry. After five years of unstable and conflicted market conditions, the market seemed to finally have "returned," and with it came the promise of new opportunity and prosperity for all within the industry. A palatable sense of relief flooded across markets as hundreds of thousands of Boomer generation real estate agents realized that they would have one more opportunity to make the big time. It quickly became obvious that the market that had returned was nothing like the market that had crashed in the late fall of 2005. Across the country, sales figures dramatically increased while inventories remained extremely low and prices began to precipitously increase. We now know that this activity was being driven by pent up consumer demand, the reticence of homeowners to enter the market, artificially low mortgage rates, and ridiculously low prices. Accompanying these symptoms, and appearing amazingly early on in the new market, were observations that suggested that real estate professionals at both the brokerage and agent levels were demonstrating behaviors that were inconsistent with both their own and the industry's long-term interests. The most alarming of these behaviors were the "Off MLS" marketing activities that, by early 2013, had rapidly spread--in some markets, impacting over 30% of transactions, a level that threatened the stability and function of the Multiple Listing Service (MLS). Major markets began to experience brokerage commercials that promoted the availability of "coming soon" properties not yet on the market. There was a growing sense that a rapidly increasing number of real estate professionals were so focused on making up for the lost time and income created by the events of 2005 through 2011 that they are willing to risk destabilizing critical institutions and relationships to meet their objectives.
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Shareholder Value and the High Performance Agent
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Understanding Your New League: This Is Not Fantasy Football
Give this article a bit of patience; its relevance to your day-to-day lives will become clear shortly. Wall Street was abuzz this month about yet another genius strategy employed by the iconic Berkshire Hathaway organization. It seems as though Berkshire Hathaway is purchasing a division of Phillips 66 using Phillips shares it already owns to finance the deal. The shares in question were acquired when Berkshire made an investment in energy giant Conoco in 2008, an investment that was widely viewed by Wall Street insiders as one of the worst in the long and phenomenally successful history of the Berkshire organization. In fact, in Berkshire's 2008 annual report to its shareholders it reported the transaction as a "major mistake." What occurred during the five years after the "mistake" serves as a lesson for everyone in the residential real estate business. In an attempt to make lemonade out of lemons, Berkshire sold off much of its Conoco shares during the years following the transaction. Even with these efforts, it was reported that losses from the investment exceeded one billion dollars. However, unnoticed by many was the Phillips stock that Berkshire got from the spinoff. During the same period, Berkshire carefully acquired additional Phillips stock that, by the beginning of 2014, left it in a very good position to make this latest deal. Now, for some of those shares (both original and subsequently acquired), Berkshire is getting a very profitable chemical division of Phillips. It is interesting to note that this is not the first time Berkshire has executed on this strategy. Another of its over 80 owned units, Lubrizol, also benefited from similar tactics. By following these strategies, Berkshire has been highly successful in eliminating its competition. These are strategies that the real estate industry should expect to see.
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