In the real estate space, there are always emerging trends and changes on the horizon. Tom Ferry, who is the world’s number on real estate coach, partners with different companies and agencies, including Zillow and Bank of America, who specialize in uncovering the latest and greatest movements in the real estate industry. In our recent conversation, he explains the top 3 emerging real estate trends and what you need to do in order to catch the train before it leaves the station!
Trend #1 – We are moving from a “solo entrepreneur” market to a “team market”
Everyone that is productive is gravitating towards the development of a team. As a result, many investors and business professionals in general are going from the “I am the General that has to do everything” mentality, to the “I am going to surround myself with a team of experts” mindset.
Having an experienced team instead of going at it alone has obvious advantages. The main benefit is that a team will out-produce an individual all day, every day. Imagine how unproductive a hospital would be, for example, if the surgeon were responsible for checking you in, measuring your weight, height and blood pressure, and then coming in and saying, “alrighty then, let’s start the surgery!” If that was the case, civilization would probably come to a screeching halt very fast.
As an investor, you need to ask yourself, “am I doing this all by myself or do I have a team?” If you don’t have a team, at the very least, follow up by asking these additional questions:
- What are the roles that I would want filled?
- How would I find these people?
- How would I pay them?
- How would I structure my new team-oriented business?
- How will I ensure that these experts will do the things that they need to do?
Tom believes that this is a major trend that is occurring all throughout real estate and that all investors, large and small, must start to contemplate how to incorporate this advice into their business.
Trend #2 – The squeeze of the real estate commission
Another massive change is the overall squeeze of the real estate commission. However, would it shock you to hear that more and more agents that have a measurable degree of separation, in terms of numbers and data to back up their ability to sell a home for more, to sell it in less time, and to do so with a 5-star review on Zillow, are charging 7% as the listing commission? Why? – Because they can!
Everyone else around the country is feeling the squeeze and the compression of commission, so if you are in the commission business, that is a major issue that needs to be addressed. However, similar to the 7% commission agents discussed above, there are methods and systems that you can put in place now in order to ensure that as an agent, you don’t get pushed out of the industry. As an agent, seek out these processes. For other real estate professionals, find the comparable issues in your industry first, and then seek out possible solutions that the competition is neglecting to address.
Trend #3 – Decreasing Speed-to-Lead Rule
About 30 days ago, Zillow completed and published one of the most detailed analyses of the generational behaviors of buyers and sellers – from millennial all the way up to matures – that Tom has ever seen. And if he had to approximate, less than 2% of the professionals in the real estate industry will take the time to read and study the results. The data includes insight into what consumers are thinking and doing, how they are acting, and how much mobile interactivity they have. However, Tom’s biggest takeaway was the data on how important it is that if a consumer clicks on your name on an add, you must respond as soon as possible, literally.
The old speed-to-lead rule – that is, how quickly you respond to a customer after the lead was captured – of less than 5 minutes is really more like 2 minutes and under. According to this study, the difference between contacting a lead in the appropriate modality in 2 minutes verses responding in 10 minutes, 20 minutes, or and hour, is astounding. Out of 100 inquiries, responding in 2 minutes or less results in, on average, 48 appointments. Whereas responding in 10, 20, or 60 minutes results in only 2 appointments out of those same 100 inquiries.
When you start to see that kind of data, you have to say to yourself, “holy @$%&, I have to make some changes, NOW. Tom recommends that everyone read this study from beginning to end, because most likely, you are that investor consumer that Zillow wrote about!
Disclaimer: The views and opinions expressed in this blog post are provided for informational purposes only, and should not be construed as an offer to buy or sell any securities or to make or consider any investment or course of action.