Give a Realtor a personal referral and with social media he will sell the world. Play on the Archimedes quote “Give me a place to stand on, and I will move the Earth”. Archimedes was talking about a lever. The new leverage today is social media standing on the internet. Facebook, Twitter and Google+ give everyone long levers. Sales are won with relationship and trust. Communication and relationship are facilitated by social media. The price of admission is time, consistency, and a little money (when you figure out who you are looking for and how to advertise).
Experienced real estate agents operate on past customer relationships. Trusted referrals will always be the most powerful force for buying behavior. When was the last time you asked about a restaurant or movie? Probably not long ago. How was your experience with that car repair place? Before you spend your money you get references.
Some date nights at home, call for a movie at Redbox. Before I spend a couple of bucks and more importantly an hour or two of my life, I check a few movie rating app sites for other opinions. Once you trust a source you keep going back to that well.
I placed a picture of a home on Pinterest. The details intrigued a person who called me and eventually purchased for $340,000. The only cost of the Pinterest post was my time. Was it worth the effort? Was it a lightning strike never to happen again? While you keep asking “what is Return on Investment”, I will keep posting pictures on Pinterest. (or for the lightning strike analogy, I will keep dancing in storms with a golf club above my head)
Social Media is a product of our desire to connect. Reaching out to care about your customers in relationship is the very essence of real estate. It is the perfect lever in your hands. Social media is a powerful tool to move people and homes, while standing on the internet using email and blogs. Give a Realtor a personal referral and with social media he will sell the world.
Chattanooga real estate reflects national trends. Chattanooga is like many mid-western tertiary markets. We do not see the big booms or the steep falls that coastal or some primary markets tend to experience. Chattanooga is a mirror of the national economy. Chattanooga home sales under $100,000 fell in 2013. The national first time home owner market is down. Chattanooga home sales over $200,000 is up. The U.S. luxury home market is doing well. I noticed late summer Chattanooga home sales slowing. Two weeks later I am reading a National Association of Realtors report that U.S. sales are slowing.
Real estate franchises reflect the same. I grew up in a real estate family. My Dad was an agent in the 70s. Both of my parents are brokers and have owned a company since the early 80s. I have observed closely the real estate franchises of Century 21, Better Homes and Gardens, GMAC, and Prudential. Keller Williams is a brokerage model that has been on the rise nationally over the last 5 years. It has been that way in Chattanooga as well. Real estate may be “local”, but overall national trends seem to play out in Chattanooga.
Another trend I see is independent real estate firms sprouting. They are growing alongside the wave of technology changes. As I drive down the road I notice more Facebook business window ads. Creative entrepreneurs are serving customers with less overhead. Technology is allowing them to be more direct.
The change in trends reflects a shift in how we “package” and “market” trust. As an example, the franchise Better Homes and Gardens conveys a message of trust because of its well established magazine and cookbook. Keller Williams (is not a well known household name brand) but it packages bits of ownership to its member agents. It is a way of conveying “trust” to its teammates. I believe technology changes are a result of people demanding more honest and trustworthy personal interaction. Brokerage firms will follow because agents and customers demand it. People are creating new forces to mold the real estate business. The Scenic City is not immune. Chattanooga real estate reflects national trends.
Real Estate Brokerage Must Deliver Service and TrustReal estate brokerage model will change to accommodate trust and service. Serving home buyers and sellers with trustworthy service will be a generous business for years to come. How Realtors and brokerage firms get paid will most likely change. Change is being driven by the human need for honest communication and is being facilitated by technology. Here are four observations to make the point.
One: Ebay and AirBnB. Models that are built on trust. They work because of stamps or stars of trust conveyed by stories of other people.
Two: Google took inventory of all real property and Zillow Make Me Move is a system that is begging for trust. Ebay and AirBnB proved their models. I hear grown Realtors calling Zillow and Trulia the porn sites of real estate. What? Give me a break – what that tells me is that they are gaining traction and weak agents are becoming fearful. Do not even come back with poor data integrity, etc. (Granted…buyers miss some deals because Zillow updates run slower than MLS) The services still provide value.
Three: Real estate brokerages can charge much less money if everything they did was compensated. 40-50% of all listings, energy , advertising is wasted on properties where the seller does not have sufficient motivation or ability to sell for the market demand. Sellers would sell “if” they get their price (to buy the next place or simply pay off the lender) Home shoppers not buyers: real estate agents may spend lots of time and gas showing houses to someone that does not “have to” buy a home. There is room for creative agreements with sellers and buyers and their brokerage firms if motivation and non-payment risks are reduced.
Four: Social Media will push Brokerages to adapt “systems” because buyers and sellers will “connect” more frequently. (Pushing on the door of reducing the costs of finding the “Willing” party) Which will demand a service of transaction liability coordinator. Some title companies may niche and grow what some will see as a growing FSBO (For Sale By Owners) market. On the brokerage side, I can see a DIY brick and mortar model where the seller and buyer pay for a menu of services complementing Zillow. (Similar to local Ebay stores that handle the sale of an item for you for a fee). Agency law, fiduciary responsibility, and liability insurance will need to cover the scope of services rendered.
[** Learning moment for agent compensation: The local Chattanooga MLS reports that there has been 5,144 homes sold year to date with total volume of $872,600,261. Multiply that number by 5% or 6% and you get roughly $34-$53 Million dollars of commissions. Divide that by 1,500 real estate agents and they average $35,000 each. Multiply $35,000 by 70% split that is nearly $25,000 a piece gross before gas, taxes, advertising , healthcare, etc. Agents are paid 1099 not W-2. You can see the model is pretty efficient, especially when a high percentage of activity is NEVER compensated. Imagine your boss walking in on payroll day and saying let’s roll the dice to see if you are worthy of being paid today!]
The bottom line is that technology is changing how we serve people in real estate. I used my smart phone to check the level of a door jam, shine a light into a crawl space, check a HUD for closing, and text a message to another customer (All during one home showing). My buyers are calling me with information from Zillow, and Trulia on their phones. They are demanding a response. Please understand, that I am NOT predicting that smart phones will replace real estate agents. Nor, I am predicting a sharp reduction in the “cost” of sale of your home. Ebay does not seem to be making large dents in retail malls, and AirBnb has not toppled Marriott.
Home buyers and sellers will pay for great service and trust. People will demand it. They may actually pay more than a “typical” commission to sort out all the “noise”. Tech is changing real estate; therefore, the real estate brokerage model will change to accommodate trust and service.
Palm Pilot Wind ChimePeople connection drives real estate technology change. The devices are faster, brighter, and upgrades rain down faster than a summer shower. All the rain is washing into creeks of social media, tablets, smartphones, and laptops. The river of technology is wide and moving pretty quickly. All of the waters of tech flow straight into the open mouths of people insatiable in their thirst to connect. The demand to tell their story, connect with their tribe, family, loved ones, and express themselves in visual art, music, words, and dance.
The picture of the Palm Pilot reminded me of a cool tool that I used to own. A creative artist is using an old Palm Pilot as a wind chime. I took the picture for the benefit of a friend that actually has a working Palm Pilot. In her defense she uses it as a device to open Supra Lock Boxes for her real estate business. Real estate is all about people and properties. The Palm Pilot held an amazing amount of people and could sync your email contacts with your database. A portable private phone book. I loved my ability to carry thousands of people with me. (metaphorically of course)
Fast forward to 2013. I showed a home this afternoon. Parents are walking around holding an iPhone and Face Time showing their daughter the view. Giving a limited experience to their loved one who was 2 states away. Connection..
Last night we were eating dinner and someone remembered the cartoon dog character named Smedley. Some could not recall the character. My daughter had no frame of reference. Smartphone to the rescue. A few seconds later we were all watching a clip from Chilly Willy on Youtube. ( I would not necessarily recommend taking the time to watch it. Muttley has a better dog laugh)… We connected a memory and brought a story from the past into the present connecting generational stories.
If you are on Facebook, how many “friends” have you connected with that you have not seen in years. Perhaps decades! Connection… We crave it, we need it. We simply need to encourage, reach out, tell stories, laugh, cry and inspire.
Real estate needs connection. It demands it. We can share the experience of looking at a new home. We watch videos, listen to stories and read the words.
Real property has a place. The axiom is Location, Location, Location. So true. People have connection. The real estate business is about connection, connection, connection.
People connection drives real estate technology change.
Video Helps Sell HomesSell your home with video. Video tells a story. The story can take you on a journey. The trip should engage your senses and curiosity to cause you to explore the question “Can I see myself living here?”
The purpose of the video below is to help the viewer understand the neighborhood and then tell the story about the home itself. My thought in this first effort was to focus on creating a desire to visit.
The video is professionally shot and produced. This makes a huge difference!
As I am writing this August 17, 2013 there are over 7,100 views in two months of the video. I am paying for Google adwords to get the video seen by people in the area or relevant viewers like regional golfers.
The home as of the writing is still for sale but we did have three interested parties come take a look today at an Open House.
There are several points to highlight regarding video:
1. 7,200 views on limited budget (less than $300 in 2.5 months) to mostly local traffic is worthwhile viewership. Exposing local Realtors to video is also good because they have 80% chance of bringing our buyer.
2. Seller is well served because we are getting more targeted exposure to property. (In this case, males make up 55% of viewers and ages 35-54 makes up over 50% of viewers)
3. The cost of views for Facebook advertising is more expensive but far higher engagement! On my business page http://www.facebook.com/brianrhodeskelly I experienced a great number of comments and feedback on the video.
4. Mobile devices like iPads, and smartphones are driving video consumption. Over 138 million in the US alone. I hope they are not watching the video while driving to work.
5. Realtors get to project their personality to others and establish some rapport. This is a professional agent’s selfish perception, but if that agent has credibility to buyers and other agents then the seller is well served as well.
6. Some agents are asking their sellers to get involved and tell the story of “why” they purchased the home and hidden aspects and features some folks never realize until they live there a while.
Video to sell your home will be with us until hologram marketing comes out. Time to engage and do it!
Foosball, Trulia and Zillow are not of the devil. The post title is a play on the quote from Mama in the 1998 movie “The Waterboy”. (Don’t worry if you did not catch the quote, it is one of Adam Sandler’s intellectual type flicks) {Telling on my movie taste here: if Adam Sandler or Jackie Chan are not in the film, it could be suspect} Some real estate professionals may think organizations such as Trulia and Zillow are “bad for business.” The real estate business as we know it is live and well and God bless Zillow and Trulia for joining the fray. Here are five observations from this grizzled real estate broker.
1. Home buyers and sellers love Zillow and Trulia: Regardless of your opinion of data integrity, value accuracy, etc., there is no disputing that millions of buyers and sellers are using the apps. They must have some type of value, otherwise people would not download them. Judging from my experience it is not entertainment value.
2. Robots are robots: Regardless of the power of third parties to influence our customers, they do not have the relationship with local people. Licensed real estate agents do. Hint to agents: focus on relationships.
3. Zillow and Trulia provide value: Recent friend of mine used “Make Me Move” application with Zillow. The buyer that responded had agent representation, so he called wanting me to represent him. Zillow is not representing anyone regarding their “guess” to square footage, or their “Zestimate” of value. My license is still on the line with my measuring tape in hand and on the “ground”.
4. Agents provide value: We are paid well for our knowledge, skill, and trust in relationship in context of fair dealing. My most recent listing is 12 years old. The owners purchased a new 2,400 square foot home for $300,000 in 2000. Over the last decade the owners finished the entire second floor, which added space to a new total of 3,800 square feet. There is no data that Zillow can pick up that “justifies” a price of $465,000 for the original 2,400 sqft home. That is local product knowledge delivered by a licensed pro.
5. Whip’em fair and square: Groaning agents over competition bore me! Trulia is a huge wordpress blog that strategically uses agents across the country to add value to it. Stop! Build your own blog and put a hurtin on Trulia and Zillow. Reclaim your territory and bring the fight to your neighborhood. One million Realtors or two million licensed real estate agents far out number the assets of Trulia and Zillow.
Zillow and Trulia are not of the devil. They are products of what current consumers are demanding in knowledge about real estate. Start a blog, get a Twitter account and let’s serve our customers well!
Gary Vaynerchuk is an entrepreneur. He built a $70 million dollar wine mail order business from his family’s $3 million dollar liquor store. He did this using a daily internet show, and Twitter. The story of this exploit is told in a New York Times’ Bestseller Crush It.
Crush It is a great read, as well as Gary Vaynerchuk’s latest book, The Thank You Economy. Gary quickly helped me understand that our grandparents are better suited for social media and business applications than we are. The man is correct. Most business owners and salespeople cannot fully appreciate the old “word of mouth” integrity of generations past. Social Media is all about personal, honest and real transactions.
Gary Vaynerchuk is a proud family man. He enjoys promoting that side of his character. He is married and has two young children (Misha and Xander), and currently resides in New York city. He explains in our recent conversation and interview his sense of “responsibility” for future generations and how social media impacts that role.
You could say that Gary Vaynerchuk views his current work as carving his own statue out of social media substance. He is rapidly carving it with his words. My recommendation is to listen to his prophetic voice and watch him chisel. He is quickly building a legacy of value.
Brian: Gary Vaynerchuk is 37 years old and he is a New York Times and Wall Street Journal best selling author who has written “Crush It” and “The Thank You Economy” which are incredible reads and essentially tell the story of taking his family’s business to his own mail order wine business, the $70,000,000 business. Basically from Twitter, a New York Jets spittoon and a lot of moxy, this book is really kind of telling of Gary’s self made or born entrepreneurship. You talk a lot about legacy, and I’m kind of curious, is it from the past from where you’re from and your parents and you certainly honor your parents in all of your talks and I respect that and appreciate it, or how much is it about what you’re doing now and how much you’ve also talked about how your behavior is being shaped today because everything’s being recorded and being projected into the future to Xander’s great grandkids.
Gary: Yeah for sure.
Brian: And the legacy thing.
Gary: I would tell you that selfishly and at some level from the vanity aspects that I have in my DNA I would say that it’s a little bit more of the latter. Right? I think that it’s important to me to tell the story of the prior, but when I do talk about it, I do talk about it selfishly. I do realize that given the fact that the way technology is being structured and content, I’m aware that I will become the patriarch of my family. Not my parents. You know? Because the majority of content that’s going to be out there of the Vaynerchuck family in 100, 200, 300 years there’s going to be a lot more me than anybody before me which then sets me up for that situation so one, respecting the heritage that I come from and making sure I story tell enough for future generations, but more importantly those are stories my actions and the things I do and the things that are being documented and this interview in itself. You know I’m very aware that my great-great-great-great grandchildren are gonna actually listen to this interview. And to me that is outrageously powerful, and something that I take an enormous amount of pride and an enormous sense of responsibility to execute in the best way that I possibly can.
Brian: That’s awesome. I was blown away by your Facebook post the other day and you were looking back and you were talking about your family and just, how do you keep in check? Keep that balance?
Gary: I have to assume that self-awareness is a personality trait that I am very in tune with. Right? And so, I would tell you that it is my north star to my success. It has kept me out of trying things that I’m not as good at. It’s allowed me to understand how I’m being consumed by the general public. And it’s something that I rely on heavily. It’s not something that I have a process for. I just think it’s innately ingrained into my everyday.
Brian: Okay I’ve gotta ask this. As the poppa of two of the future leaders of the free world in Misha and Xander, do you have in your heart expectations that you want to communicate some things? I’ll never forget my grandfather took me out in the garden and I was six years old and he started talking to me about how to choose my future wife. It was a bizarre, kind of a crazy conversation, but you know he was laying the framework
Gary: That’s funny. I’m very much a chip off your grandfather’s block. I will do those kind of things. Absolutely. Now, at the same token, there’s going to be very simple lessons. I have no ambition for what they achieve financially or career-wise. I have enormous ambition for what they achieve as human beings.
Brian: You’re also a husband to one wife and this is coming up Mother’s Day. You got any plans for Mother’s Day?
Gary: Yeah. The whole family including my sister, her brother, her parents, my parents, my brother and sister, and then even Sandy who is my brother-in-law’s wife, her sister, and her parents, they’re all coming to our apartment in New York City to celebrate Mother’s Day. So I’m just very excited for a lot of family time this week. It’s an enormously good time.
Brian: Simple little question. Why do you think Gary Vaynerchuk is on the planet?
Gary: You know? I don’t take myself that seriously i guess. My first reaction to that question is you know I think I’m on for the same reason that everybody else is on. You know? We’re here right? We’re individuals. I don’t think I have this enormous calling. I think I have enormous talent that I feel very required to execute against. I know that I can impact people. I’ve known that from a very young age. I’ve always had leadership skills. You know, but I’m, I feel like I get pulled in equal directions in what’s like my overall legacy to the world. Remember how there was that term that you’ll get your 15 minutes of fame? Now I think everybody’s gonna be famous to 15 people. Right? Meaning that everybody in this new world where there is this media and information has a fan base or potential of a fan base, so maybe mine will be a little bit bigger, it will be smaller than a lot of people’s. I don’t feel a huge over-arching belief system of what I’m here to do. I feel as though I’m here to do the right thing by my family. I feel clearly that I’ve been gifted with communication skills that allow me to impact others, and so I play in that space. I think I’m here to like you know scratch my own itches, and allow myself to be happy with my period of time on the planet. So, that’s kind of how I think about it. A mix of those things.
Brian: Okay, real estate. I want to bring it back to real estate in the last few minutes here. I’m 49 years old. Most average Realtors are pasty white and about 65. And the average buyers and sellers are in their 30’s you know 20’s to 40’s. We’ve got an age gap difference and when I think about you providing solutions for the big boxes and some of the brands I’m kind of curious as to the teams and how they communicate and if there’s problems that come up that you’re having to do solutions for? Here’s another observation I see sales people tend to recruit people their same age. And they’re very comfortable selling to people that smell and age look so I’m kind of curious to what solutions you’ve got there.
Gary: You know I don’t think of it as an age thing to be honest with you I’ve met plenty of you know gray haired 60 year old’s that think like 25 year old gals right? So, I think it’s a mentality thing dramatically more than an age thing. So I think by percentage you’re 100% right. To me it’s about the mentality and the rationale. If i can get any of those people whether it’s a 60 year old real estate agent or a 45 year old executive at a big box retailer or a 40 year old brand manager at a a conservative brand or a 25 year old brand manager at a progressive brand. It all comes down to the same old thing. Which is if you don’t know how to story tell to the consumer that you’re looking to attract, you have no chance of being successful. So, for me, I would tell you that I feel like I know how to sell to 14 year old girls. Right? But I don’t necessarily look like one. I don’t worry about what you are, I’m worried about can you figure out how to story tell to that sector? The end. You know when I was a 20 year old kid I was able to sell, very effectively, to 50 year old men. Right? Who were interested in collecting wine. So, I think it’s about being a chameleon and capturing the voice that can actually dictate success to whatever business you’re in.
Brian: The big box brands that in the 80’s and 90’s were mean something to real estate Century 21, Better Homes & Gardens, Prudential, do they diminish in the next 20 years because as smaller mom and pop brands take hold of social media? Or perhaps the brands I guess I’ve heard you answer this to some degree. The brands learn what you’re doing for the big boxes and
Gary: It’s the same old thing. You’ve got it. It’s capitalism right? The answer is both. Ironically I’m sitting in a car right now driving to a client, a new very senior hire of ours and yesterday he asked a question. What happens when the big agencies figure out what we do? And my answer was, it’s gonna net in the middle. There’s big agencies that are not going to figure it out, aren’t nimble enough, have too much overhead and just don’t have the DNA to figure out how to market and story tell and provide value to their clients. And then there’s small guys like us that will grow to our ability and then there will be a new leadership. There will be a new establishment. And it will be a combination of the two. I think the same answer goes to what you just asked me. You know, some of the big ones will figure it out, and be there. And some of the one’s that have been iconic 100 year real estate brands will disappear. And there will be a small handful of real estate brands that are quite small right now that will net up and become bigger. So that’s what happens when there are savvy innovation in every market. You know there are some sneaker brands and apparel brands that are falling by the wayside right now where there’s a company called Under Armor that was very small five years ago that’s now growing and is going to be a real competitor to Nike. So you know, that’s the same old thing in every market.
Brian: Even real estate. Okay do you ever see where sales people? So i guess i see what you are saying that even sales people who get it who translate this care to the customer via social media you don’t see any sales people being robots?
Gary: Never. Never. Never. It will never happen. It will never happen. Because there’s too much human element involved. I mean maybe, maybe super long term, but there’s nothing that I see in this short term. Let’s call it 5-10 years. That can have that kind of I just don’t see us going we’re so heavily predicated on human aspects right now. And so, it’s gonna take a whole lot i think for us to get there from a computer stand point.
Brian: Got it. Alright, well Gary thank you sir. I appreciate the call. And appreciate the time this morning. Have an awesome day.
Gary: Thanks for everything. I wish you well. Bye Bye.
Give a Realtor a personal referral and with social media he will sell the world. Play on the Archimedes quote “Give me a place to stand on, and I will move the Earth”. Archimedes was talking about a lever. The new leverage today is social media standing on the internet. Facebook, Twitter and Google+ give everyone long levers. Sales are won with relationship and trust. Communication and relationship are facilitated by social media. The price of admission is time, consistency, and a little money (when you figure out who you are looking for and how to advertise).
