Technology Tuesday is a publication of the Massachusetts Association of REALTORS®. The first Tuesday of every month we will cover at least one technology issue in depth. If you have any questions about these or any other technology issues, please contact the free MAR Tech Helplineat 866-232-1837.
Fix Listings to Fix the Market
Alan Greenspan once said that the fastest route to greater efficiencies is through a recession. His point, that improvements only occur when “necessity” makes them happen, is something that real estate professionals can no longer pretend isn’t happenning. It has been almost three years of the “slowdown.” What will it take to turn around the market?
The starting-point to fix a market is at the smallest level. In real estate that means fixing listings. By changing the standard of listing practices, brokers can address two other broken areas of the business: agent performance and days-on-market. Everything starts (and ends) with the listing. Market downturns have always been overcome through improved use of technology. It’s time to apply that to listing inventory fast.
Who sets the new standards of listing practices? Buyers. Since buyers makes sales happen, by bringing money to the table, then only by addressing how buyers wish to buy can we fix listings and create more sales. Examining how buyers find homes, organize data, ask questions and discuss price using technologies that start at the listing is important. Essentially, modern listing practices are determined by buyer habits. With that in mind, choosing and implementing the right technologies becomes fairly easy.
Let’s start with changing how listings are found by buyers. NAR research continues to tell us how buyers found the property they actually purchased. Last year, 24% of buyers found it on their own using the internet, and 36% found it through an agent. The other half of the market split between open houses, television, direct mail and print media. Now we all know that buyers look online for homes before contacting an agent. But have you studied recently how they look online? Simply put, it’s all about pretty pictures. Maps, satellite imagery, room photos and videos are more important to the modern buyer than search tools based upon property descriptions. Buyers assemble data using imagery, not spreadsheets. They aren’t database people and advanced search tools are mostly underused. Providing market information, such as inventory comparisons, in tables and text is almost as useless as some of the descriptions written on online inventory (go read some). In fact, pictures are so important that REALTOR.COM recently added a sorting tool by photos. While agents continue to sort inventory by price, bedrooms and baths, buyers sort their searches by listings that feature more photos and videos.
With this knowledge, it’s easy to think of ways to fix your listings (and simultaneously fix agent habits). Start by mandating that every listing feature no less than 20 photos and all twenty must be posted up front or it doesn’t go online. Sellers will love it, buyers demand it and agents reluctantly learn how to click their cameras. It will make the listings more likely to attract buyers online by competitively outflanking hordes of single-photo listings. Buyers will be more likely to visit properties for which they have more information in a format they prefer and understand. They love photos. What’s a LgFmRm anyway?
Next, examine how listings create interaction between buyers and agents. Enhanced inventory will attract consumers but only salespeople can build relationships with them. The fix for this problem is a little tougher: Immediately suspend every agent who has yet to purchase a Blackberry. No broker or agent can be reasonably shocked at this suggestion. When were agents going to get around to it? In two hours agents can be back to work – with their new smartphones – and available to buyers who are not inclined to play voice mail tag with them. Why post listing online if you’re going to ignore inquiries for hours? Buyers are nice people: They will give you a few minutes -15 to 30 - to respond. And if you do they’ll also give you lots of loyalty as the majority of buyers work with the first agent who gets back to them.
The most powerful enhancement for a listing is making the agent maximally available. Smartphones make agents available anywhere and in any format – voice, email, instant messaging and cellular text messages. So a connection to the agent’s smartphone becomes a powerful service tool for listings. It puts the people back into the relationship that online marketing hopes to initiate.
How will enhancing listings with photos and videos, plus connecting them to agents with smartphones, affect the “elephant in the room” - days on market? It’s all about sales. The internet doesn’t sell homes; agents do. The internet doesn’t answer questions; agents do. The internet can’t discuss price; only agents can. And that’s how listings are actually sold; by taking someone’s interest, answering their questions and negotiating on issues such as price. There’s no doubt that price is the number one negotiable in the market. The evidence itself is a current days-on-market level that hasn’t been seen for a decade. No buyer will pay more - for a computer, a car or a house - than the market price indicates. With the internet they can, for any commodity, see all choices of features and price.
Adding photos and access to wireless agents is the only way to get to the price discussion stage. The internet doesn’t negotiate offers. To decrease the number of days a property sits on the market requires more discussions on price (i.e., offers). The smartest way to help sellers price properly is to provide them with lots of price discussions by real buyers. Agents should “ask” for a price reduction; they provide market data that indicates the price at which the property will sell. Market pricing can be enhanced through multiple price discussions, but only if the inventory attracts them and agents respond to them. Using this information, the process of adjusting selling prices, and reducing days on market, becomes almost self-correcting.
At its most basic the real estate market is comprised of individual listings. When a market seems ‘broken’ the first place for repairs is always the foundation. Enhancing listings, with better visual information and agent interactivity, is the first step in addressing a range of issues like reducing marketing costs, generating leads, overpricing challenges and inventory stagnation. To start fixing the market agents competitively using a digital camera and a Blackberry should have the marketplace up and running again in no time.
This article was authored by Matthew Ferrara of Matthew Ferrara Seminars, Inc.
Reprinted with permission of Matthew Ferrara Seminars, Inc.