TECHNOLOGICAL DISRUPTION means anyone – including vendors – can master the basics of property marketing. So the new value proposition for real estate will be agents as a coach, guiding vendors through a stress-free sales process. Kylie Davis explains.
The traditional business model for real estate is being seriously challenged. It is no longer enough for real estate agents to take photos of a property, write a description, post everything online (or in print) and turn up for the open for inspections, before negotiating a final price based on their gut instinct about the market and charging a full commission.
In this new economy, it is not just about getting the expected – or better – price; it’s about outlining the road ahead for vendors, helping them understand key decisions they will need to make and circumventing challenges through the combination of a rigorous understanding of market data, a tested process and personal experience.
In short, the real estate agent of the future is a local market expert who is equal parts counsellor, coach, advisor and coordinator, helping their vendors make confident decisions and allaying their fears and anxieties. They are truly a property concierge.
A mind-shift that can help real estate agents think about this is described by Accenture as the ‘outcome economy’ – the shift from selling products or services to selling outcomes. Using this model, the role of an agent is not about getting a property sold – that’s a given; it’s about delivering a quality experience to the vendor around that process.
This raises the question, though, as to whether the commission business model is the most appropriate way for agents to charge in the future.
One alternative model now being flagged is to use the structure of your existing business to deliver additional services to vendors over and above what they can get themselves.
If the outcome for home-sellers is to move onto the next stage of their life by selling their property for a premium price with the least amount of stress possible, agents are in the driving seat to offer a range of services.
This includes assisting with finance, insurances, conveyancing, repairs and maintenance to prepare the property for sale, moving assistance, the shutting down and setting up of utilities including water, power, phone and internet, and so on.
Typically, vendors have had to source all of these services themselves, but the question really is, why? They are generally dreaded and often complicated tasks which many vendors find time-consuming and stressful when they are already stretched and anxious. As such, these tasks more than qualify as the ‘pain points’ regarded as a key motivator in industry disintermediation.
The average real estate agency, in comparison, has experience in managing these elements through its property management division, and has contacts and knowledge of local trades and services that could easily be developed into referral systems.
As such, the new business model for real estate agents could be a combination of commission for property sales and property management, plus a ‘clipped ticket’ or fee model for referring and coordinating valued-added services.
Many real estate franchises have moved into this space, offering finance and mortgage help to clients, but it does not need to stop there. At Ray White, their Concierge service offers buyers follow-up services including insurance, depreciation schedules and conveyancing; but even this is the tip of the iceberg.
Under this model, the value of real estate agents will be determined by the quality of the ecosystem of services they have been able to build up around them, and how they create signature experiences for their clients.