- Old boring practices still work best in real estate.
- Technology accounts for 13 percent market share of new buyers, but your sphere is more like 53 percent.
- Only 6 percent of methods sellers use to find agents include technology.
I continually find myself caught in limbo between conducting my business the way I think it ought to be run and the way statistics show successful businesses are running.
As a progressive millennial agent, it’s in my DNA to find exciting innovative spins to old boring business practices, but I am also a closet math nerd so I get equally excited about statistics.
At the end of the day, statistics show things for what they are and numbers never lie. So when the National Association of Realtors 2015 Profile of Home Buyers and Sellers was released, I immediately dived in and analyzed the data to assess my current business and how it might need to change for 2016.
The overwhelming consensus of the data showed that the old boring business is still alive and well in the real estate world. In fact, technological advances in real estate barely even showed up in the results despite them being so prevalent in the headlines this past year.
Gaining business
Acquiring new clients is the lifeblood of real estate. Without clients we have no business. So let us first look at the results of how both buyers and sellers choose their agents.
1. Buyers
(Exhibit 4-12)
The only categories mentioned that are technology-related are Internet website (10 percent), search engine (1 percent), mobile or tablet application (1 percent) and social media (greater than 1 percent).
That means that all of the money and innovation in the world invested in technology only buys you a 13 percent market share of new buyers. On the contrary, your sphere alone (friends, relatives, neighbors and past clients) makes up an astounding 53 percent.
2. Sellers
(Exhibit 7-1)
The manner in which sellers found their real estate agent is even less technology related than buyers. A mere 6 percent of methods sellers used to find their agent involved any form of technology. Obtaining clients from your sphere, however, jumps to 66 percent for sellers.
(Exhibit 4-16)
Notice, in naming the most important factors in choosing an agent, only 5 percent of clients made any mention of technology at all — and even this was solely technology used for communication.
Conducting business
Acquisition of new clients is a major part of real estate, but agents still must conduct the business that they obtain. Do clients recognize the importance of technology in our practice? Is technology helpful in our day-to-day and are top agents utilizing it?
1. Client opinion
(Exhibit 4-17)
Clients do seem to see some importance in our technological prowess, but look at the eight other categories that trump technology.
Out of the top nine important real estate agent skills and qualities, skills with technology is dead last, ranking as 40 percent less important than “knowledge of local area,” which came in second to last.
It appears that though we should have skill with technology, in our clients’ eyes our time is better spent elsewhere.
(Exhibit 4-11)
This chart does not mention technology at all. Not once. Buyers indicate that the way they most benefit from real estate agents is simply being helped to understand the process.
2. Real estate agent opinion
Last year I interviewed a handful of the top agents in the country to write an article gauging what kind of technology is being used within the top 1 percent of real estate agents.
I expected to get an inside scoop on rare and expensive mobile apps that are aiding these elite agents with their high-volume practices.
What I found was quite to the contrary. A few of the agents didn’t use apps whatsoever, and the rest that did simply had CRMs, social media and DocuSign. The popular response to my question revolved around the old boring business practices.
Final assessment of information
I referred to old boring business multiple times. You might be wondering what that even means? Well, here is a list of the No. 1 categories of every graph utilized in this article:
- Referred by (or is) a friend, neighbor or relative
- Reputation of agent
- Honesty and integrity
- Helped buyer understand the process
The numbers are in, and they don’t lie. Do you want 2016 goals to increase business? Put emphasis on connection with your sphere, use honesty and integrity to build your character — and thus your reputation — and help your clients understand the real estate process. Statistically you’ll have a great year.
Dusty Baker is a high-volume real estate agent and established blogger.
