The race is on, and agents are becoming the clear winners. All the companies in real estate — new tech brokerages, legacy franchises and indie brokers — are all trying to cozy-up to the solo practitioner and their small teams.
At Inman Connect last week, new Realogy CEO Ryan Schneider said his focus is on agents and building technology to support them.
Realogy CEO Ryan Schneider. Credit: Realogy
Schneider said that leveraging untapped real estate data and enhancing the agent experience across Realogy’s litany of brands will take center stage as the giant battles for market share against Keller Williams and a growing army of tech-enabled competitors
The day before, Compass CEO Robert Reffkin made it clear that he is focused on the best agents and building technology to help them do their job. The New York-based tech brokerage has expanded its footprint to all major metro markets and has unrolled a scorched earth agent recruitment strategy.
Compass CEO Robert Reffkin speaks at ICNY18. Credit: Kailya Warren/Inman
“Tech-savvy agents able to deploy state-of-the-art tools like artificial intelligence will replace the traditional brokerage firm over the next decade,” said Reffkin from the Inman stage.
Zillow has been unwavering in its focus on top performing agents, building software that helps them convert leads and close deals. The portal titan brings customers, lead conversion tools and a closing platform for an end-to-end promise for its Premier Agents. Sure, it courts broker owners for their cooperation on the data front, but examine the Zillow P&L, you won’t find much of a revenue line from brokerages.
Zillow CEO Spencer Rascoff speaks at Inman Connect. Credit: Jenna Bascom/Inman
Keller Williams has always been 100 percent agent-driven and promises tech and tools to help its customers (agents) succeed. That strategy has helped the company make the claim that it has become the largest-by-agent-count real estate network in the world.
This year, agents are like the Best Solo Performer at the Grammys, when you consider the three most important real estate companies and one super capitalized upstart all share more or less the same strategy — woo top salespeople.
Then you add fast growing and tech-and-customer obsessed Redfin — which just last week boasted of how much more its agents make on average than anyone else– and it’s a clean sweep for agents.
What is going on here?
For one, smart money has realized no matter how disruptive real estate technology may become, agents are not going away.
Some brokers’ heads are sitting on the disruption guillotine, but not good agents.
Gary Keller, founder of Keller Williams. Credit: Inman
This is a dramatic shift from the old days, when agents were treated like grunts doing all of the work but not recognized for the value they bring.
Similar to other disrupted industries, they made the least and worked the hardest. Cab companies abused their drivers, publishers ground down their writers, and newspapers have never treated their journalists very well.
When I came into the industry, it was common to hear brokers and franchise executives privately poke fun of their own agents, their colorfulness and their eccentricities . These smug execs believed that they were the smart ones and that the agents were bozos and idiots.
A common refrain was that managing agents was like “herding cats.”
The only tiger in the zoo has turned out to be the successful agent.
Shoddy agent treatment is what in part gave an opening to new companies like Zillow, Compass and Redfin and before that a post-recession group of young boutique brokerages who understood technology and agent culture, and delivered both to their agents.
Vanessa Bergmark of Red Oak Realty. Credit: Vanessa Bergmark
But many old-guard brokers did not build a strong agent environment with enough loyalty and trust to keep good salespeople. Plus, brokers invented the independent agent model which created a million lone rangers.
So, it has been relatively easy for new companies to do an end-run around the legacy brokers.
Now, these new companies are competing with each other for the heart of the agents, offering more value and more benefits like insurance, company equity and 401ks, along with technology and tools.
Historically, brokers and franchises never invested much in technology and in online customer acquisition. Those precipitous decisions in the Internet real estate timeline are proving to be as misguided as the newspaper publishers dismissing Craigslist.
Now you have well-capitalized new entrants like Zillow, Redfin, and Compass all building their own proprietary technology. They promise platforms for agents that do not require them to go elsewhere for support and services.
Schneider is emphatic about building his own internal technology capacity at Realogy beyond the Zap platform, and touted his recent CTO hire as evidence of his commitment to that strategy: Dave Gordon, who previously worked with Schneider at Capital One. They mastered customer data to sell more credit cards.
And smart, savvy brokers are not standing idly by as these new players try to eat their lunch. The smart ones are recasting themselves to face new competition.
Small boutiques like Red Oak Realty in Berkeley and Oakland, California emphasizes its “seriously local” brand to differentiate itself from national companies.
The firm recently did a company overhaul, including changing its iconic logo after 40-plus years, with the help of creative agency 1000watt. It’s repositioning itself as “a straight talking, data driven brokerage that lives and works in the community they serve while backing their agents on all front,” said broker owner Vanessa Bergmark. “A David and Goliath approach in the world of big brokerages and Wall Street.”
Thaddeus Wong of @properties. Credit: @properties.
Large fast growing brokerages like @properties in Chicago gobbled up share from the old guard over the last ten years by offering agents technology, digital marketing and culture. They are now using those same tactics to fend off the new tech brokerages.
“Tech in real estate is not new, we’ve been building technology for ten years,” said @properties co-founder Thad Wong. “We have an end-to-end solution for our agents and all of our systems talk with each other.”
He said that many companies “upped their game” over the past decade when Zillow entered the market.
Another fast moving real estate company is Seattle-based Windermere that spun off its technology division to sell agent tools to other brokerages throughout the country.
All of this means that for the first time in a long time, real estate agents may finally be getting the respect they deserve. For the hardworking salespeople looking for work, 2018 is shaping up to be their year.
