Inman NYC 2020 – The Big Six Takeaways

Inman Connect New York offers a great global forum for discussing the state of real estate and the best ways to navigate its exciting, tech-enabled future. Adfenix co-founder Gabriel Kamienny revisits his key takeaways from the event.

Inman Connect New York 2020 saw key real estate thought-leaders and tech experts come together to discuss the state of real estate and the best ways to navigate its exciting, tech-enabled future. Adfenix co-founder Gabriel Kamienny invited some of our biggest Swedish clients to experience the 5-day event with us first-hand. In no particular order, here are his big six takeaways…

A-Plus, Gold Medal, 5-Star Customer Service

Some of the larger brokerages in the US, Coldwell Banker being one successful example, are looking to accompany their existing offering to customers with Concierge Services

… these additional services promise an improved customer journey, with the goal to win more listings 

From helping sellers to buy, securing the right photography, or connecting them with relevant 3rd party providers, these additional services promise an improved customer journey, with the goal to win more listings. 

Positioning the real estate agent as a custodian to oversee the customer’s end-to-end property journey, adds a peace of mind for the less experienced customer, and a level of convenience for those with busy schedules.

Concierge services helps to reinstate their agents as an essential part of the customer journey

By providing this enhanced level of service, it helps to reinstate their agents as an essential part of the customer journey. It starts as a compelling listings winner, but allows the agent to build a long-lasting and trusted relationship with their clients. This personal interaction can prove valuable in getting referrals, repeat business, and revenue from 3rd party providers, while also addressing the growing threat from portals.

Attack of the iBuyers!

The iBuyers have been here a while. But they’ve multiplied. And now they’re growing. And growing fast.

Do we need to worry? Does this change everything we think we know about real estate? Of course not. But it does pay to stay informed. Here’s what you need to know…

Currently, iBuyers such as Redfin, Zillow, Opendoor, Offerpad and many smaller outlets will make an offer on a property, sight unseen, no open house, no buyer viewings, no delays. The catch is that you may not be offered market value and you only have 5 days to accept their offer. 

Do we need to worry? Does this change everything we think we know about real estate? Of course not. 

So. who benefits? Well, if you’re looking for a quick sale and you have limited access to the house you’re trying to sell, or no time to do the necessary tasks to make it presentable, as your options go, a guaranteed quick sale is hard to beat.

What does it mean for agents? 

It’s only going to be the perfect option for a small number of customers. For everyone else, it’s flawed. We believe the agent’s personal approach, expert knowledge and trusted relationship are going to prove their value for the majority of customers. 

 It’s only going to be the perfect option for a small number of customers. For everyone else, it’s flawed.

By clearly identifying those clients for whom a guaranteed, quick sale is all that matters, agents can factor that into their offering for sellers, as a guarantee that their house sale isn’t going to take a frustratingly long time. 

They can also pour their attention into the clients who expect a little more from selling a property than what the iBuyers can offer. Who knows, those agenting skills might even get the client a fair market price for their house…

Money Money Money

It still puzzles us why the financial models for real estate commissions are so different around the world. Thankfully, a couple of speakers at Inman this year shed some light on the subject for us. If you’re wondering what the actual difference is between a listing agent and a buyer agent, or what staircase commissions are… keep reading.

It still puzzles us why the financial models for real estate commissions are so different around the world. 

In the US, there are two agents in each transaction. The listing agent handles the seller’s interests, while the buyer agent looks after the buyer’s. Elsewhere in the world, one agent handles the sale of the property in full; acting as a mediary between both parties, they receive bids from the buyer and present them to the seller. 

Effectively, the US model sees two professionals negotiating for their respective clients; the buyer agent looking to bring down the price, the seller agent looking to increase. The final price determines commission - typically 6% - which is split equally between the agents, incentivising them both to settle on a higher final price. “But let’s not dwell on that,” says the buyer agent to his client, “Champagne!” 

“But let’s not dwell on that,” says the buyer agent to his client, “Champagne!” 

Sweden’s staircase commission has yet to arrive in the US. The idea is to incentivise agents to get higher prices for their vendors. At sale prices up to 3 million SEK, the seller pays 2%, anything above 3 million, the seller pays 15%. 

Interestingly, the single agent model in Sweden allows the agent some flexibility to offer a seller with a property valued around 3 million SEK, the option to pay a flat rate commission of 2.5% regardless of the final price. Potentially a big loss, but perhaps the offer that wins them the listing. The US seller agent doesn’t have this flexibility, as a reduced commission will attract less buyers. 

Portals: The New Heavyweights? 

It’s no secret that portals have made their mark on the world of real estate. Bringing the listings market out of the classifieds, they have managed to deliver it to buyers with astonishing convenience and almost alarming proximity. 

 the portals know that profitability and market dominance lie firmly in the house of the brokerage 

Their next step is a calculated move to bring the agents - many of whom have understandably mixed feelings about the portal model - on board. This aggressive strategy on the part of the portals seeks to fill out the part of the customer property journey, over which their original model offers no ownership. 

By empowering agents to “own their own brand” outside of their HQ or brokerage, the portals can effectively displace the brokerage, and lay claim to their portion of the agent commission, happily handed over by the now independent agent.

But moving closer to the financial transaction at the end of the journey isn’t the only way portals can monetise their monopoly at the beginning. From working with third parties such as mortgage providers to deliver a full service for consumers that unlocks a lucrative, new revenue stream, to providing the kind of Concierge services we spoke about earlier, the portals know that profitability and market dominance lie firmly in the house of the brokerage.

 what can the HQ or brokerage do to combat this steady decline of ownership and influence over future customers? 

If that is where the future of the portal is heading, what can the HQ or brokerage do to combat this steady decline of ownership and influence over future customers? Taking their own steps towards enabling agents to provide full-service support for customers in line with concierge services is one such way. The advantages of this are two-fold: firstly, the customer receives an enhanced level of service, potentially building referrals and repeat business; secondly, it comes closer to matching what the portal may soon offer to the, as yet, undecided seller. 

Let’s not forget, when it comes to selling houses, the brokerage is the incumbent here, the portals have yet to prove their value in this particular arena.

 Empowering agents through better leads, strong branding, and intelligent social media support sets them up for success

A possible third advantage of providing concierge services is the positive impact it has on the agent, who is less likely to look around at alternative employment options. Losing an agent to a portal, or another high street competitor, or even to a whole new industry as they decide real estate just isn’t their thing, is equally frustrating, and costly, to a brokerage or HQ.

Empowering agents through better leads, strong branding, and intelligent social media support sets them up for success, which breeds loyalty and job satisfaction. 

Agents are the face of every brokerage, and with the right tools and infrastructure, they stand a much better chance of providing the local expertise and personal approach that almost every person in the process of buying or selling their home is really looking for.

Try before you… ? SELL

The ultimate listings winner? The no-commitment compromise? The aren’t-you-a-bit-curious-how-much-you-could-get test?

Also known as off-market, off-portal, underhand, coming soon and pocket listings, properties that aren’t quite available for sale yet are a growing trend in real estate. The idea has been around for a couple of years but with super-rapid growth happening in the Nordics and as a core pillar of billion-dollar-funded US company Compass, these secretive listings are fast becoming a viable means of acquiring exclusive listings for your site. 

 For the agent/ brokerage, it’s a unique listing not available through any other brokerage or visible on any portal. 

Would-be sellers are drawn to the low-stakes temptation of how much interest their property might generate if marketed at a certain price. They might not be in the market to sell, or at least, not yet, but it can’t hurt to see if anyone’s biting… 

For the agent/ brokerage, it’s a unique listing not available through any other brokerage or visible on any portal. If a buyer registers interest, the seller might just think the offer is too good to refuse; house sold. If the seller decides they’re ready to sell in three months time, they are already locked in with that agent. If no-one’s interested, it’s a harmless test to see what needs to be altered before the house is ready to sell for real.

It works for sellers who aren’t convinced they’re ready to sell, for private sellers who don’t want their house broadcast on portals, high value properties that have a limited pool of suitable buyers, or anyone excited by the idea of seeing their property placed in a private sale for an exclusive database. 

The ultimate listings winner? The no- commitment compromise? The aren’t-you-a -bit-curious-how-much-you-could-get test?

While some legislation in Sweden has attempted to moderate the practice, it’s here now, and currently providing a valid way for brokerages to differentiate themselves. Both through securing exclusive listings not available to view on any other site, and in potentially winning future listings from people who haven’t fully decided that they’re ready to sell their home, it’s an innovative departure from the status quo. 

Whatever the future of off-market listings, keep watching: this top-secret practice is no longer under wraps. 

Lead The Way

Some brokerages in the US are tearing up the rule book when it comes to lead distribution. 

…a Top Gun style task force of stronger agents with faster responses and higher success rates 

The new plan sees all new leads go to a Leads Management Team - a Top Gun style task force of stronger agents with faster responses and higher success rates. Their mission is to control the customer journey to deliver ROI for the brokerage. 

 Nothing is more frustrating to an agent or a broker than a warm lead, wasted. 

This premium team formalises process, builds reputation for the brand, and indirectly incentivises other agents in the business to up their game in the hope that one day, they too may join the prestigious Leads Management Team. 

With so many agents in the US, centralized leads management makes sense. Nothing is more frustrating to an agent or a broker than a warm lead, wasted. 

Currently building popularity across the United States, Leads Management is coming soon to a real estate brokerage near you.