Friday, September 7, 2007

When The Tide Goes Out, You Can See Who Is Swimming Naked

Real Estate is an industry that is undergoing significant change. A historically unusual spike in home pricies and the number of listings over the past decade attracted a significant number of new agents to the business, resulting in widely varied levels of training and competence. At the same time, advances in technology have changed the behavior of buyers and sellers, challenged acceptance of the value real estate professionals add in exchange for their commission, and threatened to disintermediate traditional brokers from the transaction.

Katie Hafner writes in the 9/7 edition of The New York Times that "As Housing Market Cools, Far Fewer Become Agents." She cites statistics from the state of California that show the number of people taking the real estate sales exam in California went from "a little more than 2,000 a month in the late 1990s to a peak of nearly 20,000 in April 2005, according to the California Department of Real Estate. But by July 2007, the number had dropped to 8,000. Similar patterns are seen in other states."

She further explained that the agent's net commission typically comes to 1.5%, which is not a small number when average home values are $500,000. However, the National Association of Realtors (NAR) estimates the average agent makes $49,000 per year. This is not poverty level, but it does illustrate that the average agent only closes a few transactions per year.

For a broker/owner, this is a recruiting and retention challange, a training and continuing education challenge, and a marketing challenge.

There are plenty of internet applications that can be the adversary of the traditional broker, from "A"to "Zillow," but webcasting can be the traditional broker's friend.

Using the internet as a broadcast tool to drive content to one's market, educate potential home buyers and sellers, and establish the realtor's brand as the thought-leader in that particular community is an inexpensive way, relative to other forms of marketing, to remain engaged with the market place and to give potential leads a reason to keep coming back to your web site.

The statistics say that up to 70% of people who begin looking on the internet at web sites do not yet have an agent. Over the many months of incubation until that person becomes a real prospective buyer, regular webcasts archived on your site will keep them engaged and increase your rates of conversion.

In addition, web based distance learning applications can help a broker maintain consistent agent training without requiring an investment of several thousand dollars per month in training room space in an office.

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