Just a couple of decades ago, travel agencies could be spotted on virtually every corner in cities big and small. It was just the way you did it for those big family trips to Disney, the business trips to Detroit or that bucket list European tour for the church choir.
Then the web happened. Then quickly after, the meteor that is mobile struck our planet. Travel agencies went the way of the dinosaur seemingly overnight. Now, only a few relics remain.
For the most part, the answer is simple to understand.
Consumers Now Prefer DIY, Convenience and Demand to Deal Direct
When people started selling on the internet and then the web made it to the phones we carry around with us everywhere, it changed our habits as buyers. At the same time, it changed the way successful businesses offer goods and services for us all to consume. Think Amazon, Autotrader, Zappos, LendingTree, SelectQuote and eBay.
We very quickly became buyers who expect:
- The control afforded by “do-it-yourself” searching, browsing and buying.
- As few middlemen (and women) as possible.
- The cost savings of going as directly as possible to the source or a major seller with buying power.
- To decide for ourselves – and only for ourselves – what we want.
- More speed! Better time management and less time wasted on unnecessary processes.
- To engage assistance only when it is needed or wanted.
- More choice. Period.
- More private transactions.
Just as with travel where Expedia, Kayak, Orbitz and a hundred more sites and apps make it possible to book for yourself, exercise more choice, save money and get more direct convenience, in real estate consumers are now pushing the industry toward a similar inflection point.
Learn more: Generation C: The Connected Consumer
Put simply, more and more consumers want to see all the homes available (not just the ones in MLS and pushed by one agency or another), they want to search and identify the homes themselves and they only want to engage an agent to complete a deal when they’re good and ready.
Increasingly, too, they’re questioning the cost of that last part of the process.
What does that mean? Well, it means that there’s an opportunity for businesses to more directly connect buyers and sellers by getting found better, faster on the web – like we’re doing here with HomePocket – and that the times ahead, well, they will be a-changin’. Guaranteed.
Real Estate Isn’t Evolving Quickly Enough
Real estate is the single largest human sales force in the world. But, much like travel agencies and local insurance companies, the same web and mobile-driven forces are acting on real estate too, shaping it each and every day.
Despite some significant differences between the transactions involved in travel and those highly-regulated and legally complex transactions in real estate, consumer behaviors and tastes are pushing the industry ever-forward toward the same sorts of conveniences.
In short, buyers (and sellers too!) want the most choice-filled, direct, convenient, hassle-free and cost-effective transaction possible.
The problem is, real estate is fighting its own evolution in many ways intentionally and unintentionally.
For example, there’s a highly inefficient near-monopoly in the form of over 2500 local MLSes, or Multiple Listing Services, that controls home listing dissemination.
Despite just about every brokerage having a website and a mobile app, the whole de-centralized, fee-heavy MLS system acts to keep homeowners who are selling their own homes out, keep agents and brokers paying very high fees into the system for very little modern digital marketing in return and all but guarantees there’s always several middlemen between sellers and buyers looking for homes.
In short, it’s a highly inconsistent, closed-loop system that was founded – no lie – in the 1800s and that has evolved very little despite technology advances. It’s also very ill-equipped to keep up much longer with an economy increasingly driven by the kinds of consumer wants and needs the internet has fostered.
Because of this, the technical talent, expertise, and resources that have propelled other consumer sectors just are not drawn to real estate, so it languishes, stuck, at present, roughly in the early 1990s as far as technology goes.
What’s more, effective marketing strategies and technologies that are commonplace in eCommerce and retail companies (even your neighborhood shops) do not exist in the antiquated MLS community – and it’s falling behind more and more each year.
What effect does this have on home buyers and sellers? At present, real estate consumers are beginning to ask themselves the most dangerous of all questions in business: Why can’t I just ______?
In the case of real estate, typical questions these days are:
- Why can’t I just see all homes for sale in a given area – FSBO, Pockets, and MLS – in one place?
- Why can’t I list my own home and get great marketing exposure without having to pay MLS an arm and a leg?
- I usually find my home anyway online, so why can’t I just contact the seller directly or an agent after Ive found what I want?
- Why can’t we just pay to have an agent handle the paperwork and get a reduced commission?
- And much more
The MLS example above is just one of many that shows just how much parts of the industry are stuck in the past. It also sheds a bright light on where this is all headed.
As consumers want more convenience, more directness in their real estate buying and selling, only the realtors and real estate firms that adapt, adopt and improve will survive the conditions after the meteor strikes.
Even realtors – who most certainly do provide a very valuable service and help keep us all out of very serious legal trouble by expertly handling state, federal and local laws for your deal – can benefit from the directness – it’s just most of them aren’t yet aware of how to do it. The real estate marketing world is confusing, noisy and expensive on purpose, so most realtors end up lost in the noise.
As the evolution happens, even now, most consumers buying big-ticket items prefer to do extensive research online and come to a decision before contacting a local seller (or agent). What does that mean?
Well, it means your digital presence in the places and ways consumers want to find you is more important than ever before. Direct, easy access where they expect to find you are now the key.
As a plus, having consumers find you more easily online, more conveniently and who come to your door with simpler transactions doesn’t mean you’ll suffer in the long run due to commissions, it means you’ll be able to do more deals faster.