Tribus Real Estate Brokerage Technology

Starting in December every year, I take this time to plan for the coming year, what strategies worked this year, where do I need to change, how did my marketing budget work out etc…

Some examples of changes that we’ve previously made at this time of year:

• Focus on alternative financing programs when subprime borrowers could no longer obtain credit
• Programs for short sales and foreclosed homes
• Adding drip email programs
• Deleting printed postcard programs

This is a great time of year to review the year that was in real estate both for you and in general.  While it’s not necessarily a good idea to go chasing every fad that’s out there, sometimes looking for a multi-year trend to capitalize on can be very profitable.  For example, short sales and foreclosures are at the forefront of our minds right now but in 3 years from now they might only be a blip in the total nationwide sales (likewise 3 years ago I wonder how many agents knew what a short sale was).  But I bet there are plenty of agents that survived this year because they went after this shift in business.

So as you review the tools and systems you have in place in your business, don’t take anything for granted.  Don’t just assume you need this product going forward.  Unfortunately, on many sales calls I am involved with, I speak with people who have spent thousands and sometimes tens of thousands of dollars on products that just aren’t working for them.  They don’t want to leave it though because of the investment.  Understand the concept behind a sunk cost.  If you an make $100k by dumping your current product and investment $25k,  and your current product is only making you $25k on a $25k investment, you should obviously move to the new product (assuming you have the budget to make the move).

Which of your systems, tools and marketing are working?  Are you still spending $1000s on print advertising?  If so why?  Study after study proves broadcast printing that it’s a losing money effort.  In speaking with agents and brokers nationwide the only true return I see from any print advertising is farming a hyperlocal area.

Have you considered an E-Farming system?  Systems like Constant Contact, MailChimp, and MadMimi, offer low cost solutions that offer broadcast emailing.

Do you have a Customer Relationship Management software designed for Real Estate?  Setting reminders etc for client follow up can help you break the curse of most agents, that only 6% of clients return for a follow up sale.

Are you syndicating your listings?  Many of you probably are, but to just one or two sites.  Why not get your Seller’s the exposure they deserve?  Imagine the marketing you could do by increasing your online presence.

Do you offer virtual tours?  Did you know that listings on national websites get viewed 299% more than those without?

Why not take the next few weeks, and consider dumping some of your expenses and looking into new options that are available.  Review what worked for you and what didn’t.

Make a business plan for next year and try to stick with it.  Take a look at the article Linsey Planeta wrote over at AgentGenius on Planning for Your Next Year in Real Estate and creating obtainable goals.

As we open each of our affiliates we plan on giving everyone a recap of lessons learned, technologies instituted, etc.

Over the past 2 months, Tribus representatives have been working hard to kickstart our 2 newest affiliates, one in Dallas, TX and one covering Los Angeles’ Westside with communities like Beverly Hills, Bel Air, and Malibu. (We’ll have another post on our new Dallas affiliate coming soon.)

After meeting with the representatives of Partners’ Trust it was clear that they were willing to subscribe 100% to the changing business of real estate.  They were ready to embrace social media, they realized that profitibility was something that needed to be considered, they understood their market, they were a great candidate for working with our company.

One of the important aspects of their company is that each associate is a partner in the firm.  This means that the infighting, waste, etc that occur in other real estate companies are mitigated.

Partners Trust immediately integrated each of our tools including our accounting system, GPS enabled mobile application, contact management, IDX, website and more.

On September 1st we launched the website.  We worked together with an outside design firm to build an integrated strategy.  When complete there will be more than 30 websites covering hyperlocal areas in the West LA market.  Each website pulls in our IDX to allow local searches.  For example, when visiting one of the local sites you’ll find links to specific areas such as Brentwood Real Estate Search. And Even as specific as a community within Brentwood such as the Mandeville Canyon Real Estate Search.

One of the big questions we’ve been asked recently is about the design of the Partners Trust site.

Here’s the thought process behind the design that we worked together with their ownership team about:

1. They wanted a separate site to focus on assisting buyers – thus www.LosAngelesRealEstateVoice.com was created that answers the three questions that every buyer cares about when visiting a real estate brokerage website a) What homes are for sale b)What’s my home worth? c) How’s the real estate market?
2. They wanted the main site to showcase 3 of their listings right on the main page and above the fold (the portion of the website that can be seen without scrolling)
3. They wanted to focus on their concierge service that offers unparalleled service

At Tribus we wanted to utilize some other resources on the site so we suggested the addition of web videos about each of the 8 main areas the company sells.  We also wanted to bring in the blog posts the company wrote so that anyone visiting the site could easily see new information.   We also wanted to make it easy for individuals visiting the site that might be ready to make a purchase to be able to find a home search as well as users could find market statistics.  In just 10 days we had already procured 2 quality leads for the company through our many channels.

As the website matures over the coming months, we’ll keep you updated as to how things are going.

An encounter happened to me this week that got me thinking, why is real estate so different from state to state, or even county to county?

Consider a major difference in MO:

• In St Louis and St Charles each party in the contract pays their own title expenses and each choose which title company they want to use.
• In the Kansas City area both parties usually use the title company chosen by the Seller.  The Seller is also responsible for all fees.

Consider a major different in CA:

• In the LA area parties use an escrow officer that is usually paid on a commission to procure deals for the company.  This party handles all the processing of the paperwork but does not provide directly any title insurance.
• In San Francisco most individuals use a title company which does all of the paperwork and also provides the title insurance policy directly through their company.

Now lets look at the differences state to state:

• Licensing: some states require as little as 40 hours of training to be able to sell someone’s most important asset, furthermore some states require little to no extra training to manage teams of agents.
• MLS: some MLSs provide excellent access to information.  Some don’t even allow you to list if a property is a foreclosure, thus preventing clients from being able to make sure searches.
• Branding: some states allow agents to advertise without indicating their brokerage company name in any of their advertising, other states require that the brokerage name, logo, and phone number be listed on all advertisements.

My suggestion is just like there exists a UCC (uniform commercial code) for business, why can’t their be a UREC, a Uniform Real Estate code?  Meaning the laws from state to state, and operations would be somewhat standardized.  I’m certainly not suggesting that every state must have the same rules, however some standardization.

Consider that if I have gone through and become a designated broker in MO, it might take years before I can achieve the same certification in TX.  Furthermore, many of the reciprocal Securities brokers don’t have this problem.  Lawyers can apply to work “pro hoc vitae” where they are allowed to practice law in another state for a temporary basis.

Some states are already seeing that this is a need.  I’ve seen some allow for commercial real estate agents to apply to sell one property in a different state. (MO and other states call this “portability”)

Why not make it an easier process to have licenses in multiple states and why not create a uniform code for most transactions?

So previously we’ve discussed Salary based Realtors being a new potential trend for big companies, and the pending huge growth of independent Realtor firms.  However, we have yet to cover the possibility that the Internet will wipe out the Realtor.  (Let us start off by saying we think this is a terrible proposition for the consumer as it will bring numerous problems into the fold.)

Consumers are demanding home information and more and more it’s coming from sources other than a Realtor.  Look at Zillow.  

People want answers to three questions regarding the real estate market:

•  What homes are for sale?
• How’s the market right now?
• What’s my home worth?

Previous to Zillow, consumers had to call a Realtor to get a valuation of their home.  That Realtor would have to do a CMA of the property and then the homeowner would have to deal with the salespitch of the Realtor.  Zillow saw that consumers wanted instant answers and no sales pitch.  So their business model served that purpose.  Later they started to answer the question of “How’s the market?”  with their real estate market reports.

Now, many Realtors will argue that Zillow’s valuation is far off actual value.  Zillow itself admits it’s “Zestimates” are off by 8-20% depending on the market.  But homeowners are either oblivious to this fact or they just don’t care.  Their need is being satisfied.  This alone should worry Realtors that don’t look to answer the home owner’s craving.  Consider also that as Zillow nails down their data to become more accurate, we could see Zestimates within 5%.   Zillow’s data comes from public record searches right now.

As valuations are becoming more accurate, and Zillow is answering the question of “How’s the market doing?” look at the question of “What Homes Are For Sale?”  Consider that according to Hitwise, a website tracking company, of the top ten real estate related websites just two are brokerage companies: ZipRealty (A salary based brokerage company) at #4 and ReMax at #7 !  Agents can now place their listings on Zillow.   Zillow is number #3 because it’s answering all three questions.  Zillow has repeatedly said they aren’t interested in entering the brokerage business.  And in fact they are doing what they can to try and push agents.(A smart move on their part since their income relies on advertising from brokers.)  Zillow’s Director of Community Relations, David Gibbons is quick to point out that “a Zestimate is and always will be an estimate.”  He goes onto mention, “…our Advice, Directory and Mortgage Marketplace (not just for sale listings), are all designed to connect homeowners with reputable and knowledgeable local professionals. There’s a large variance in the range of expertise among pro’s in the RE industry and so a major reason 73% of (CA) sellers use Zillow is to find a Realtor they can trust.”  Clearly let’s state that in no way is Zillow looking to be a replacement for the Realtor.  We simply bring them up in this post to point out the fact that Zillow is filling a need that the consumer had.

Can you find an answer to these three questions on brokerage websites?  (Although you can on some agent sites: See Here the big three buttons.)  Not really…. Companies with huge technology budgets could create a product that offers similar functionality to Zillow with more accurate data.  They could have ALL listings for sale instead of just those syndicated to them.  They could provide real data on how the market is doing that updates immediately.  The data could be given down to the neighborhood level, not city wide like Zillow does.  Yet, do you see this offered? No.  Today, even brokers without technology budgets can find companies like Altos Research to provide amazing data on how the market is doing. 

That brings up the next point:  As consumers learn where to get answers to their three main real estate questions, can someone provide them a solution to put the full transaction process online as well?  Redfin offers something like this.  You can complete much of the transaction online and in doing say buyers and sellers receive a commission refund (in states that allow it) of 50%.  There is still a Realtor involved, but as that moves forward does the Realtor become necessary?  Can Buyers and Sellers facilitate their own transaction process listing the home online, schedule the showing of the property online, offering a standardized contract online, setting up a standardized inspection resolution process, and proceeding to closing?

If real estate agents don’t step up to gain trust through customer service and education increases.  This is a very real possibility.  As Zillow answered the demand, so will someone else.  Take a look at the example of ForSaleByOwner.com .  They stepped out onto a branch in 2008 by suggesting through a press release that you could list it on their site for a low fee, yet they would put it in the MLS for you which would then push it out to sites like Realtor.com  This created a HUGE uproar in the Realtor community.  How could they do something like that?  One of the last remaining tools in the Realtor arsenal that can’t be provided by someone else is MLS access.  By our understanding what the company was doing was actually listing the homes through a Realtor in California who would then put the listings in the local MLS regardless of where the home was listed. This would then push it out to the syndication sites including Realtor.com.  But they were responding to a perceived demand by consumers that had a distrust of agents or a belief they provided little to no value.

Now let’s take a second to make an argument here for why the Realtor is necessary:

1. No matter how much a computer can process data, it’s never is as good as a human that understands the market and can shape the data into real world.  Data tells a story but it takes interpretation to weed through fact and fiction.
2. Hiccups happen in transactions.  Realtors are the glue that hold them together.  When Buyer and Seller want to come to a meeting of the minds sometimes it takes an outsider to meld the two parties together.  Emotions can run high when dealing with the biggest investment of one’s life.  For example in today’s market agents are seeing “low-ball” offers.  However, these offers might in many cases yield a transaction when the two parties come together.  But on first look if the transaction is only online, the Seller might walk away from the table thinking a transaction will never come together.
3. Buyers need a hand to hold when going through properties to look for things to avoid.  4 layer roofs, troublesome foundations, improper electrical fixtures, etc.  These are things that Realtors are trained for, but many Buyers don’t know about.  A Realtor can help to avoid huge problems down the road by helping in this capacity.  They can also help at inspection time when realizing what to watch out for and what isn’t a big deal.  On a report, GFI protection needed sounds scary, but in actuality it’s usually not something worth fighting over.
4. Even with all the technology on futuristic shows like Star-Trek there are still doctors there.  Professionals know what they are doing because it’s their lives.  It’s experience that can’t be programmed into a computer and the average Buyer and Seller just don’t have.  It’s the same reason why most individual investors put their money in mutual funds instead of individual stocks.  They know they don’t have the time or energy to watch the market and trade accordingly.  A professional like a Realtor is necessary in the transaction.

However, if brokerages don’t start answering the concerns of Buyers and Sellers, competition will heighten and you will see companies offering products that try to supplant the Realtor.

Tribus offers affliates a unique, full-service, end-to-end solution for operating a real estate brokerage company.  A full IDX website, integrated customer relationship management system, mobile real estate search application, virtual tour creation, and more.

At Tribus, we understand that small to mid-sized brokerage companies have to be careful with their spending.  Every dollar is important.  That’s why we charge no up front franchise fees, and no monthly fees (if your company grosses over $250,000).  We collect only when your company is selling.  Therefore, in December and January, when sales are light, you don’t have large checks to write.

The whole goal of Tribus is to allow brokers to do what they do best, manage, train, and recruit agents.  Let our systems and marketing teams handle the rest.

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