Real Estate Changes On Fast Track
(Most things in life, even the best things, go through change.)
Although many people groan that the change is not necessary or that it will not be effective, the end results are usually positive and revolutionize the industry or product.
The Internet has made that previous statement true in countless businesses and industries. It has already affected the real estate industry with up-to date MLS listings and mortgages available online.
The September 28, 2006 Realty Times article, "Change in real estate: full speed ahead," written by Jessica Swesey explains how recent and future changes to the real estate industry are taking places so quickly that you may not even notice the construction process.
"The real estate industry is at a crossroads of change. All the latest home sales forecasts point to steady change in market conditions ahead; a new generation of consumers are entering the market; and with each day a new real estate technology, Web site or business is born."
Many industry professionals see the changing market and emergence of technology as a way to expand and grow their business.
The one thing that has not changed is the necessity to identify and market to the target audience.
"'Every generation has their own values and preferences,' John Ansbach, vice president of RECON Intelligence Services, told a crowd at RISMedia's Real Estate Leadership Conference in New York Wednesday. Real estate brokers need to understand generational differences when dealing with consumers today because it will dictate how they want to be treated, he said. For instance, baby boomers value dedication and hard work, while Generation Xers value independence and Generation Y values praise, he said."
Ansbach continued to explain how if you do not recognize and market towards these generational differences, you will not be able to separate your business from every other one.
"Along with consumers, business models in real estate have changed a lot with the Internet, said Steve Ozonian, CEO of discount brokerage Help-U-Sell."
Even though the market has been tough for the past year, the Internet has indeed revolutionized the way people buy and sell properties. If you are a seller and do not advertise your property on the Internet, you better have a friend or family member interested in buying because those are the only people who will notice your "for sale " sign.
"'This is not to say that the traditional model is wrong,' Ozonian said, but many traditional companies are trying new things and those that aren't looking to change are the ones that may be in trouble."
The real estate industry is also going to try and re-invent customer service. Consumers are starting to groan about high commission rates, when they are doing some of the work the agent use to do, by doing research and finding properties online.
"If an agent charges a 6 percent commission on a million-dollar home sale, the consumer wonders whether it really costs that much to sell the home. 'The consumer has every right to pose this question to a Realtor,'" Allan Dalton, president of Realtor.com, said.
"Ozonian also pointed out the failure of being able to define what the consumer is getting for the commission. 'The consumer wants a breakdown in the $60,000 commission on a million-dollar listing and that is where the agent fails miserably. That's where the model is broken,' he said."
The standard charged commission rate is now around five percent for most real estate companies, but there is still a lot of work to be done to fix the broken model.
The Internet is changing the real estate industry in many facets. It will still take time, but eventually the Internet will allow the market to be more efficient for both consumers and agents.