If you’re responsible for real estate brokerage operations, you owe it to yourself and to your company to read this post by Glenn Kelman at Redfin. I have said for a while now that I believe Redfin to be one of few viable models for real estate brokerage of the future, and this post helps confirm that belief. It’s a long post, and worth reading in full, but here’s the money graf:
But outside of calling one agent after another, the CB CEO has no way of knowing what his agents are doing; most work as contractors, for franchises, recording their deals in spreadsheets and notepads. Redfin on the other hand has a system for scheduling home tours and writing offers, which means we also have a system for storing data about every tour & offer. Months before the numbers are recorded at county courthouses or by federal agencies, we know when bidding wars are back, or when tire-kickers have taken over the market. We can see the whole elephant, and we’re minutely sensitive to when he’s about to roll on top of us or stampede through the jungle. [Emphasis added]
Fact is, far too many real estate brokerages pay lip service to the importance of technology. Even the ones who do invest are putting money and resources towards marketing technology rather than information technology. In the long run, I think the companies that survive the Great Recession will be ones who invested in information technology, rather than just another pretty website.
A lot of real estate people say that they’re in the knowledge business, that what clients pay them for is their expertise, information, and knowledge of local markets, of real estate, of transactions, of laws and regulations, and so on. Well, act like it then. Invest in knowledge and information and data. If your spend on marketing is 100 times your spend on knowledge, it’s sorta hard to be convincing as someone whose value rests on what you know.
MLS data is great; it’s valuable, in fact, it’s invaluable. But Redfin collects data outside of what’s in the MLS. What’s stopping you? “Well, Redfin has millions in venture capital” is not a good excuse, since The GoodLife Team in Austin, a tiny little brokerage with less than a dozen agents, also collects that data. There’s a reason why GoodLife is now up for an Inman Innovator Award.
An excuse I do hear often whenever I discuss collecting data from brokers is that their agents simply won’t do it, or can’t do it, or have no time to do it. I term that an excuse because, well, it is one.
Fire them! If your brokerage is in the knowledge business, if you pride yourself on your local knowledge, if your brand promise to clients is that you and your agents are fully on top of what’s going on locally, then why would you continue to tolerate the existence of agents who don’t care about collecting data? It’s like being in the customer service business but tolerating rude and unfriendly staff. Get rid of them.
Of course, if your brokerage is not in the knowledge business, that’s fine. But do tell your clients that so they’re not misled as to what to expect from you and your people.
Finally, let’s not confuse a blogpost about the new restaurant down the street with actual knowledge your clients are likely to care about. The client is looking to hire a real estate expert, not a local tour guide.
Read again what Glenn Kelman wrote:
Months before the numbers are recorded at county courthouses or by federal agencies, we know when bidding wars are back, or when tire-kickers have taken over the market. We can see the whole elephant, and we’re minutely sensitive to when he’s about to roll on top of us or stampede through the jungle.
Yes, a huge part of your value as an individual real estate agent is to be able to interpret the data for your clients and offer your wisdom, rather than just raw data. But without the data, what the hell are you interpreting? And if you’re simply outsourcing data collection to some third party vendor (which, by the way, includes your MLS) who is selling the exact same thing to all of your competitors, how are you different from them?
Do yourself, your company, and your clients a huge favor. Invest in knowledge. That doesn’t mean just buying computers and off-the-shelf databases. It also means spending time — your time, your agents’ time, your staff’s time — to collect and interpret the information. It means turning data into knowledge.
In a tough market, where nothing is particularly certain, clients want experts who know what they’re talking about. They also want to know on what basis an expert is rendering an opinion. Do give that to them, please.
And if that means not investing in some newfangled animated property flyer technology… well, so be it. More knowledge, less pizzazz. More substance, less dazzle. For the good of us all.