Real Estate Firm of the Future

An increasingly competitive marketplace is ramping up the pressure on real estate firms to improve the speed and efficiency of their operations. In response, firms are investing in new technology to incorporate modern approaches to their business model that all carry their own elements of risk.
 
From targeting prospects and customer lifecycle management to productivity methods and brokerage services, we explore the risks associated with these current and future processes.

Lead Generation
While the traditional real estate lead generation method consists of a file of client names and contact details gathered at a recent open house, real estate professionals now have numerous options to help obtain leads, via third party integration and Internet Database Exchange [IDX] integration. It is important to ensure that the entity supplying leads has the legal authority to do so. Real estate professionals can be sued if a vendor is using descriptions and photos of homes on a multiple listing service [MLS] or information from a database without proper permissions. 

Facebook and other social media platforms are continuously growing tools used by real estate agents to obtain leads, but due care and responsibility is imperative as any derogatory comments about a property, location or agent can come back to bite. For example, an agent saw a Facebook post that described a property as the, “nicest on the block,” and responded by leaving a comment saying the property is, “the nicest on a block that needs to be torn down.” When the home did not sell, the listing agent and seller filed a lawsuit against the commenting agent for interference with the sale as well as defamation.

Brokerage Services
Home buyers today do not look like homebuyers of 5, 10 or 20 years ago. Nearly 40% of current homebuyers are tech and social media savvy millennials – those born between 1980 and 1998. From this group, many would have grown up watching home improvement TV shows while sharing their lives on Facebook and other social media platforms; therefore, in order to reach this fast growing market, a brokerage must have a robust internet and social media presence. However, simply having a social media profile is not sufficient in engaging most millennials – you need to give them something they desire e.g. when describing a listing, make sure to include information around neighborhood details such as local greenspace, restaurants, bars and gyms. 

Baby Boomers and Generation X comprise the other end of the market. While Baby Boomers, now in their late 50s to early 70s, are likely to be looking to downsize and/or looking for a retirement community, Generation X-ers, now in their early 40s to mid-50s, could be thinking about a vacation home and/or downsizing. Real estate agents must have a plan to target these groups through appropriate marketing channels that are both appealing and familiar to them e.g. while direct mail or simple email marketing will resonate with Baby Boomers, Generation X-ers should be comfortable with digital marketing and social media.

Productivity
In years gone by, a productive real estate agent had a fax machine in their car. Today, productive agents have both phones and tablets, but it’s how they use them that can make the difference.  

Keys to improving productivity include:

Organization – sync data on your phone, tablet and computer and use cloud based tools such as Microsoft Office 365 or Google Apps that allow you to access your data on any device, any time. Risks arise if your data is scattered across numerous devices. 

Communication – Find a tool that easily tracks all correspondence whether internally with colleagues or externally with clients and prospects. Ensure correspondence records are synced and safely stored across all devices – proper documentation reduces the chance of disputes and makes defending claims easier. 

Marketing – Many automated marketing tools now exist – find one that works for you and use it effectively. To reduce risk, be sure to obtain authorization to publish photos and videos and carefully review any content before it is distributed.  

Managing Your Business – Use cloud based file sharing and storage applications such as Dropbox to share information with colleagues and clients. Applications like DocuSign enable easy and secure electronic signatures, providing more time to focus on other tasks.

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Digital Marketing
Print advertising, direct mail campaigns and other traditional marketing methods remain effective, but in today’s real estate market, digital marketing is key. Millennials grew up in the digital age and they expect to see organizations online and on social media platforms. However, simply having a social media account is not sufficient – it needs to be active and posts should be impactful and display clear benefits to your audience. Millennials typically carry out much of their home purchasing research on their mobile phones and only contact a real estate agent when ready to view a specific property. Promote yourself as a go-to resource for the millennial buyer – not just somebody who will open the door for them, but somebody who will inform them about the trendy tapas restaurant nearby or the local boutique coffee shop. 

Lifecycle Management
In real estate, lifecycle management used to mean the lifecycle of a current sales transaction. If you were lucky and provided good service, the client you helped purchase a home would remember you years later when it came to selling their home. Fast forward to 2020 and lifecycle management can mean years of digital marketing and being a go-to resource for clients on a number of topics. Yet, stepping into other roles by offering services you are not qualified or licensed to perform carries various risks. Agents are typically not appraisers, lawyers, home inspectors, mortgage bankers or moving coordinators, therefore it is safer to help clients seek out a professional to fulfil these services.

Learning
The latest trends in real estate learning are not how to interpret page 23 of the new state association sales contract or how to sell vacation homes, but how to use big data and predictive modelling. Data about people and locations has never been more available, and capturing this information and utilizing it effectively is key to successfully growing your real estate business. Big data and predictive modelling can identify highly qualified leads and potential home sellers before they have even decided to sell.

For example, a couple in their mid to late 50s whose youngest child is entering their senior year in college might not be thinking about downsizing, but with this information, a predictive model could suggest that this couple will be ready to move in 18 months. Predictive models can also forecast where this couple might want to relocate to – perhaps they vacation in the mountains each year or maybe the beach? Real estate brokerages that utilize big data and predictive modelling will have an advantage in the marketplace. Again, liability risks can arise when using such tools, such as privacy, redlining and discrimination, so you must ensure each potential client is treated fairly. 

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