If you’re looking for good advice, it’s usually not a bad idea to turn to those who are experts in a given field and emulate their strategies and their behaviors. In doing so, you just might find success. You want to be a world class swimmer? Check out Michael Phelps’ training regimen and you’ll have a pretty good template as to how to become a natatorial superstar. Writers have all sorts of advice for those wanting to find inspiration, overcome writer’s block and become the next Hemingway. In the world of business, those of us who live in Rochester have a first-row view of the inner workings of Danny Wegman’s mind. Those business strategies that he deems salient become manifest when it is that you’re looking for pomegranate molasses in aisle 14A of the Pittsford store. Customer service is, obviously, the prevailing ethos that informs everything that Danny, Colleen and their 49,000 employees do. Through the years, I’ve taken a good bit of ribbing from friends about my passion (obsession?) for Danny and his business model but, truth be told, it’s served me well. After 29 years in the business, I’ve enjoyed being one of the top two real estate agents in the region. I’ve sold more than half a billion dollars in residential real estate and 78% of my business is referral-based. Like the Wegman family, keeping my clients in the forefront of my mind has been the key ingredient that has informed my decision-making and behavior for almost three decades. And, it’s been a great strategy.
As Virgil stated, “Tempus Fugit” or, as best as I can remember my high school Latin, “Time Marches On”. The way that we conduct real estate today, in many ways, has little resemblance to the antiquated file cards that agents used to conduct business back in the 1970s. While it’s true that information, expertise and service continue to be the commodities that agents have provided their clients, technology has vastly changed the means by which information is delivered. Not only have 3-D interactive tours replaced tin boxes filled with lined note cards but the information, itself, is no longer owned and controlled solely by agents. Homeowners are able to upload photos of their home onto their electronic neighborhood bulletin board, NextDoor, or onto their Facebook account and there’s a fairly decent chance that they’ll create some interest in the property. During periods of time when there is low inventory, homeowners dramatically increase the opportunity to sell on their own. As a result, one of the great commodities that my colleagues and I have brokered (information) is much more readily available to the public. In other words, who needs a buggy whip when Karl Benz is manufacturing a vastly superior means of transportation?
So, as we begin to think about the future, it’s worth considering whether real estate agents will become the carbon equivalent of the Palm Pilot and Blockbuster Video. The answer, in my mind, is both yes and no. First, we’re living in unusual times when the number of homes on the market for sale is at a historic low. Once the market returns to a more traditional equilibrium between the number of buyers and sellers, the more traditional model of real estate exchange is also likely to return, wherein principals are utilizing the services of an agent. That being said, it seems inevitable that the number of licensed realtors will, in the coming years, plummet. Like stock brokers and travel agents before them, those who are left standing may likely be those who have a very specialized skill or those who provide stellar customer service. They will find that their skillset is both valued and amply rewarded. Conversely, the market will not be kind to those who have simply been skating and provide no value-added benefit.
Like financial planners who replaced old school stockbrokers, those real estate agents who provide razor-sharp, unsurpassed proficiency and service will also continue to be gainfully employed in the industry. Thankfully, my team and I have almost thirty years of experience in which we’ve thrived because we’ve done more than simply broker information. We’ve gone above and beyond on behalf of our clients to ensure that the financial, emotional, and personal details of every transaction are addressed. In other words, technology will be used as a tool to assist a great agent not an instrument used to replace them. As the Wall Street Journal reported earlier this week, “Opendoor is the latest well-funded startup in real estate to conclude that no matter what kind of technology it introduces, it risks losing out on business unless it deepens ties with agents.”
Obviously, a real estate purchase is one of the largest financial transactions that one can make during their lifetime. It can easily go awry, and thousands of dollars can be lost. However, the right professional can also put thousands of dollars into a homeowner’s bank account. I pride myself in knowing how to manage a bidding war and my clients have, oftentimes, reaped tens of thousands of extra dollars because of the subtlety and nuance that comes with experience. Helping a client set aside emotion and nostalgia, encouraging them to make aesthetic upgrades that will help them to net more than they’ve spent, knowing which improvements to make, which should be ignored, and what aesthetic choices will reap the greatest returns are skills that only come with a lot of experience. Likewise, trailing corporate spouses oftentimes need help networking while they’re looking for employment, divorcing couples need unemotional mediators, and first-time homebuyers need a shepherd to guide them through the real estate process. In short, principals to a real estate transaction often don’t know what they don’t know until a deal falls apart or a buyer asks them for a $10,000 credit to remediate a mold problem. This is where real estate professionals are able to flex their muscle and why it is that expertise and service will remain valuable commodities.
Regardless of the arguments that can be made as to why agents will continue to be necessary, the fact remains that one of the reasons to use a real estate agent, our ability to broker information has, in part, been taken from us. So why should sellers continue to pay the same amount of money for a commodity that agents no longer exclusively control? In my mind, they shouldn’t. For this reason, I’ve decided that I will begin to engage in conversation with my sellers about my sales commission. There may be circumstances in which a full 6% commission is warranted. However, the majority of contracts will probably be reflective of a rate discounted from long-standing standards. While I realize that many of my colleagues will be upset by my decision, two things come to mind. First of all, it was inevitable. In reality, I think that some agents have already begun to sporadically employ a similar commission structure. Stated otherwise, I’m probably not the first. Secondly, like the customer-centered philosophy espoused by that grocery store with a flagship location on Monroe Avenue, it’s the right thing to do.
As the wise Roman poet said, time does march forward. I’ve always been one to embrace change and I’m looking forward to navigating the ever-evolving world of real estate where technological innovation continues to enhance the process of buying and selling property. It will create an enhanced financial position for consumers while, at the same time, providing great opportunities for those agents willing to change with the times. If you have a moment, jot me a note or give me a call at 461-6375. I would really appreciate hearing from you and knowing your thoughts. Thank you!
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