

One of our blog posts that received the most amount of commentary to date was on the
changing agent value proposition - a hot topic in the midst of a shifting economy, consumer behaviors and business models. For the first Trulia Power Panel of 2007, we decided to ask several of our
advisory board members the same question since most of them have succeeded through a real estate cycle or two:
- Sherry Chris, COO, Coldwell Banker Real Estate Corporation
- Van Davis, Former CEO, Foxtons; Former President & CEO, Century 21 Real Estate
- Jonathan Miller, President/CEO, Miller Samuel Inc.
- Michael Pappas, CEO/President, The Keyes Company
- Bob Peltier, President, Edina Realty, Inc.
- Bill Plattos, COO and General Manager, First Team Real Estate
- Kaira Sturdivant Rouda, COO, Real Living, Inc
The question: With property information available across the Internet and new discount real estate services popping up everywhere, how should full service agents reframe their pitch to buyers and sellers to communicate their true value proposition in the home sale transaction?
Sherry Chris - COO, Coldwell Banker
When I think about the future of our business, it is a balance between technology and the services provided by a real estate professional that always comes to mind. Smart agents will demontrate to buyers ansd sellers how technology enhances the services they provide, and those services will continue to include negotiating, consulting, communicating and the knowledge and history of areas and properties. Technology is great, but the human element is what will continue to drive this business.
Van Davis - Former CEO, Foxtons; Former President & CEO, Century 21 Real Estate
The Internet has empowered real estate buyers and sellers by virtue of the vast amount and array of information it provides. That said, information is only one of the keys to a successful real estate transaction. The utilization and dissemination of the information is what can make or break the purchase or sale. Real estate buyers and sellers are confronted with complex data as well as changing terminology. The average person is challenged by the rapidly changing national market conditions and even more importantly the changes in their local markets. So why should you use a full service versus limited service real estate professional? Because there is no free lunch.
When brokerages discount their fees there is a reason. It is because you get less; less traditional marketing, less on line marketing, less experience, less attention, less professionalism. When competing for listings full service agents must explain thoroughly and accurately what they do, why they do it and how it benefits the client. They must have comprehensive knowledge of what their discount competitors are doing and not doing. A small increase in sales price resulting from the full service agents efforts will generally more than compensate for the higher fee paid for the service. And after all isn’t it appropriate that more efffective agents get paid more since ultimately they net their sellers more!
Jonathan Miller - President/CEO, Miller Samuel
Many of the alternative brokerage services for buyers and sellers were born in a booming real estate market where the seller was empowered by their strength in the transaction and more willing to experiment. Now that market conditions are weaker, sellers feel less empowered about the transaction and may be more reluctant to try something that is so new. Yet it’s foolish for full service agents think that that these alternative services are going away; many will thrive. Often, full service agents can not compete with many of these alternative service models on a cost basis, nor should they.
As a non-agent, I am not sure how to reframe the full service agent pitch, but I am certain that it needs to be clear and must happen immediately because the industry is changing right now. Most buyers and sellers do their homework on the Internet prior to contacting any service, including full service agents. Full service agents are there to counsel and negotiate, to hand hold and shuttle along the transaction. As more and more information flows into the public domain, their message needs to move from one of “exclusive access” to information to one of “interpreting and acting” on information quickly using a wide variety of tools and expertise that will create a successful transaction.
Mike Pappas - CEO/President,The Keyes Company
Tailor your message to the audience. The generations buying homes today range from young adults in their 20’s to retirees looking to relocate.Emphasize that in today’s market, there is much more inventory. If you are a seller, you can get the most for your home by insuring it is professionally marketed and competitively priced. A trained real estate associate can provide invaluable expertise in these areas.
The power of the Internet combined with the knowledge of a real estate professional will enable buyers to evaluate and select the best option for their financial health and lifestyle. The associate project manages the entire transaction — buyers and sellers can focus on other priorities.
Bob Peltier - President, Edina Realty
There is a difference between information and knowledge. We can all access information, but we need an experienced REALTOR® to provide the knowledge necessary to make an informed real estate decision. Today’s REALTOR® must be savvy in pricing, marketing and negotiation skills. What the REALTOR® provides today is networking that he or she has established through relationships with another REALTOR® to provide critical input the consumer needs at the right time to make the right decision.
Bill Plattos - COO & General Manager, First Team Real Estate
We have seen this cycle repeat itself for 30 years. If it didn’t, we would still be using MLS index cards. For buyers, the only new element is the number of consumer choices available: do-it-yourself, discount broker and traditional agent. Sellers have a number of choices, too: do-it-yourself, discount agent or top agent who can offer the marketing accountability sellers expect.
But the reality is that nearly 80% of all real estate transactions are done by full service real estate EXPERTS who, armed with knowledge and great tools, will offer more than any discount service can ever provide. And as the REAL ESTATE EXPERT, a full service agent should focus on providing expertise in real estate negotiation, marketing, neighborhood information and legal issues relating to mortgage, title, etc.
E.g., Would you hire a paralegal to handle a divorce…or would you hire the best attorney you could afford? If you were going to invest your life savings on your dream home, would you hire someone who lacked negotiation skills, insights about your neighborhood or knowledge of real estate law? Of course not.
Bottom line: Many real estate professionals believe that we should get paid for having the information, but that is a fallacy. The client has all of the information. The true value of a full service agent is to advise, faceplate, negotiate a win-win contract, close it properly and finally, do a true follow up — not for days, but years.
Kaira Sturdivant Rouda - COO, Real Living
A professional real estate agent’s true value proposition is his or her local market knowledge, negotiation skills, marketing savvy and financial planning skills. A huge competitive advantage continues to be agents who can demonstrate acumen and expertise online. Let’s face it: it’s easy for consumers and agents to focus on the wrong venues and hype. And, things change daily. Key elements agents must be able to master and pitch to clients today include: immediate e-mail response time, a robust personal and brokerage Web site, a blog, a listing search marketing strategy, and online contextual and key word advertising. It’s critical to be where today’s consumers are - and she’s there - online. And the majority are, as always, seeking a professional real estate agent’s help.