There is a paradigm shift underway in the real estate industry. The role that the Internet is playing in buyers’ home searches is fundamentally altering the industry. We as Realtors need to recognize this change in behaviour and adjust our ways to meet the needs of our consumers.
This does not mean that we are destined for extinction, just that our role is changing. We need to acknowledge that while buyers may find the house themselves, we can still find and define our evolving place in the purchase and sale process (advisor, counsellor, negotiator, etc.). Not doing this may be disastrous for our industry.
Look what happened to the music industry when they failed to listen to what consumers wanted. They even began suing customers who opted to download, instead of acknowledging the changing demands of their customers and providing them with an alternative. They left the door open for iTunes to come along with an answer that addressed consumer demands.
We would have to have our heads in the sand not to realize that there are alternatives being prepared and made available to consumers right now which are threatening and potentially very damaging to our industry.
One such company is Homing Cloud. If you do nothing else with these notes, please click on this link, go to their site, then click on ‘Watch The Guided Tour’: http://www.homingcloud.com/
Now you can see what we are up against. And not potentially: this website is up and running.
This quote from Philip Kotler was thrown out at one of the sessions down at the National Association of Realtors conference and I think it is very applicable in this discussion: “The essence of effective marketing is understanding what consumers want and then delivering it.”
Some key statistics from NAR’s Profile of Home Buyers and Sellers, 2010 to demonstrate this trend:
1) What was the first step taken by buyers when looking for a house?
- 36% looked online first
- 19% contacted a real estate agent first
Observation: almost twice as many people go online first when looking for a home as opposed to calling an agent.
2) What age range did those first step buyers who looked online before contacting a real estate agent come from?
- Every age range – from 18-24, 25-44, and 45-64 – went online first in their search. The only age range that contacted a real estate agent first in their search was the 65-or-older bracket.
3) What source of information did buyers use most frequently when house hunting?
- 74% frequently used the Internet
- 69% frequently used their agent
Observation: Buyers go online more frequently when house hunting as opposed to contacting their agent.
4) Which source of information do buyers find more useful: real estate agents or Internet?
- Tied! 81% found both equally useful
Observation: Buyers feel that the Internet is just as useful as an agent!
5) Among buyers who found the home they ended up buying themselves, what percentage found that home on the Internet?
- In 2009: 36%; in 2010: 41%
Observation: More buyers are becoming successful at actually finding the home they end up buying on the Internet.
Further Observations On Trends:
- Changing consumer behaviour was the strongest trend evident at NAR
- We must try to recognize what consumers want
- We must figure out how to give our clients what they want
- Listen: if we don’t, they will go somewhere that does
- Look for ways to communicate with the consumer in the way they want to be communicated with.